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                             COLOR SPOT NURSERIES, INC.

                    SECOND AMENDED AND RESTATED CREDIT AGREEMENT
                                          
                                          
                           Dated as of December 24, 1997


                  CREDIT AGRICOLE INDOSUEZ, as Administrative Agent,

              IBJ SCHRODER BANK & TRUST COMPANY, as Syndication Agent
                                          
                                        and
                                          
                      BANKBOSTON, N.A., as Documentation Agent

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                                  TABLE OF CONTENTS

                                                                            Page

SECTION 1.  Amount and Terms of Credit . . . . . . . . . . . . . . . . . . .   2
     1.01.  Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . .   3
     1.02.  Minimum Amount of Each Borrowing; Maximum
            Number of Borrowings . . . . . . . . . . . . . . . . . . . . . .   6
     1.03.  Notice of Borrowings . . . . . . . . . . . . . . . . . . . . . .   6
     1.04.  Disbursement of Funds. . . . . . . . . . . . . . . . . . . . . .   7
     1.05.  Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
     1.06.  Conversions. . . . . . . . . . . . . . . . . . . . . . . . . . .  10
     1.07.  Pro Rata Borrowings. . . . . . . . . . . . . . . . . . . . . . .  11
     1.08.  Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
     1.09.  Interest Periods . . . . . . . . . . . . . . . . . . . . . . . .  12
     1.10.  Special Provisions Governing Reserve Adjusted Eurodollar Loans .  13
     1.11.  Capital Requirements . . . . . . . . . . . . . . . . . . . . . .  17
     1.12.  Total Loan Commitments; Limitations on Outstanding Loan Amounts.  18
     1.13.  Letters of Credit. . . . . . . . . . . . . . . . . . . . . . . .  18

SECTION 2.  Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . .  29
     2.01.  Voluntary Reduction of Commitments . . . . . . . . . . . . . . .  29
     2.02.  Adjustments; Termination of Commitments, etc . . . . . . . . . .  29
     2.03.  Commitment Fee . . . . . . . . . . . . . . . . . . . . . . . . .  30

SECTION 3.  Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30
     3.01.  Scheduled Payments . . . . . . . . . . . . . . . . . . . . . . .  30
     3.02.  Voluntary Prepayments. . . . . . . . . . . . . . . . . . . . . .  31
     3.03.  Mandatory Prepayments; Reduction of Commitments. . . . . . . . .  32
     3.04.  Application of Mandatory Prepayments . . . . . . . . . . . . . .  36
     3.05.  Reduction of Total Revolving Loan Commitment, etc. . . . . . . .  37
     3.06.  Method and Place of Payment. . . . . . . . . . . . . . . . . . .  37
     3.07.  Net Payments . . . . . . . . . . . . . . . . . . . . . . . . . .  38
     3.08.  Reserve Account; Prepayment Collateral Account.. . . . . . . . .  40

SECTION 4.  Conditions Precedent . . . . . . . . . . . . . . . . . . . . . .  41
     4.01.  Conditions Precedent to Initial Loans. . . . . . . . . . . . . .  41
     4.02.  Conditions Precedent to All Loans. . . . . . . . . . . . . . . .  47
     4.03.  Additional Conditions Precedent to Acquisition Term Loans and
     Supplemental Term Loans . . . . . . . . . . . . . . . . . . . . . . . .  48

SECTION 5.  Representations, Warranties and Agreements . . . . . . . . . . .  52
     5.01.  Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  52
     5.02.  Power and Authority; Business. . . . . . . . . . . . . . . . . .  53


                                     -i-

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     5.03.  No Violation . . . . . . . . . . . . . . . . . . . . . . . . . .  53
     5.04.  Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . .  54
     5.05.  Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . .  54
     5.06.  Governmental Approvals, etc. . . . . . . . . . . . . . . . . . .  54
     5.07.  Investment Company Act; Public Utility Holding Company Act . . .  55
     5.08.  True and Complete Disclosure . . . . . . . . . . . . . . . . . .  55
     5.09.  Financial Condition; Financial Statements; Projections . . . . .  56
     5.10.  Security Interests . . . . . . . . . . . . . . . . . . . . . . .  57
     5.11.  Tax Returns and Payments . . . . . . . . . . . . . . . . . . . .  58
     5.12.  ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  58
     5.13.  Capital Stock; Subsidiaries, etc . . . . . . . . . . . . . . . .  58
     5.14.  Proprietary Rights . . . . . . . . . . . . . . . . . . . . . . .  59
     5.15.  Compliance with Laws, etc. . . . . . . . . . . . . . . . . . . .  59
     5.16.  Properties . . . . . . . . . . . . . . . . . . . . . . . . . . .  60
     5.17.  Securities . . . . . . . . . . . . . . . . . . . . . . . . . . .  60
     5.18.  Collective Bargaining Agreements; Labor Matters. . . . . . . . .  60
     5.19.  Indebtedness Outstanding.. . . . . . . . . . . . . . . . . . . .  61
     5.20.  Environmental Protection . . . . . . . . . . . . . . . . . . . .  61
     5.21.  Environmental Investigations . . . . . . . . . . . . . . . . . .  63
     5.22.  Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . .  63
     5.23.  Governmental Regulation. . . . . . . . . . . . . . . . . . . . .  63
     5.24.  Absence of Events of Default . . . . . . . . . . . . . . . . . .  63
     5.25.  Performance of Agreements. . . . . . . . . . . . . . . . . . . .  63
     5.26.  Securities Activities. . . . . . . . . . . . . . . . . . . . . .  64

SECTION 6.  Affirmative Covenants. . . . . . . . . . . . . . . . . . . . . .  64
     6.01.  Information Covenants. . . . . . . . . . . . . . . . . . . . . .  64
     6.02.  Books, Records and Inspections . . . . . . . . . . . . . . . . .  69
     6.03.  Maintenance of Property; Insurance . . . . . . . . . . . . . . .  69
     6.04.  Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . .  70
     6.05.  Corporate Franchises . . . . . . . . . . . . . . . . . . . . . .  70
     6.06.  Compliance with Statutes, etc. . . . . . . . . . . . . . . . . .  70
     6.07.  ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  71
     6.08.  Performance of Obligations . . . . . . . . . . . . . . . . . . .  71
     6.09.   Fiscal Year; Fiscal Quarters. . . . . . . . . . . . . . . . . .  71
     6.10.  Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . .  72
     6.11.  Interest Rate Protection . . . . . . . . . . . . . . . . . . . .  72
     6.12.  No Further Negative Pledges, etc.. . . . . . . . . . . . . . . .  72
     6.13.  Bank Meeting . . . . . . . . . . . . . . . . . . . . . . . . . .  72
     6.14.  Additional Collateral; Further Assurances. . . . . . . . . . . .  73
     6.15.  Environmental Events.. . . . . . . . . . . . . . . . . . . . . .  74

     SECTION 7.  Negative Covenants. . . . . . . . . . . . . . . . . . . . .  76


                                    -ii-

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     7.01.  Capital Expenditures . . . . . . . . . . . . . . . . . . . . . .  76
     7.02.  Total Interest Coverage Ratio. . . . . . . . . . . . . . . . . .  76
     7.03.  Fixed Charge Coverage Ratio. . . . . . . . . . . . . . . . . . .  78
     7.04.  Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . .  79
     7.05.  Consolidated Net Worth . . . . . . . . . . . . . . . . . . . . .  80
     7.07.  Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . .  83
     7.08.  Investments. . . . . . . . . . . . . . . . . . . . . . . . . . .  84
     7.09.  Prepayments of Indebtedness. . . . . . . . . . . . . . . . . . .  85
     7.10.  Dividends, etc . . . . . . . . . . . . . . . . . . . . . . . . .  85
     7.11.  Disposition of Assets. . . . . . . . . . . . . . . . . . . . . .  86
     7.12.  Contingent Obligations . . . . . . . . . . . . . . . . . . . . .  87
     7.13.  Merger and Consolidations. . . . . . . . . . . . . . . . . . . .  87
     7.14.  Amendments to Organizational Documents . . . . . . . . . . . . .  88
     7.15.  ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  88
     7.16.  No Non-Wholly Owned Subsidiaries . . . . . . . . . . . . . . . .  88
     7.17.  Changes in Business. . . . . . . . . . . . . . . . . . . . . . .  88
     7.18.  Amendments or Waivers of Certain Documents . . . . . . . . . . .  88
     7.19.  Transactions with Affiliates . . . . . . . . . . . . . . . . . .  88
     7.20.  Capital Structure. . . . . . . . . . . . . . . . . . . . . . . .  89
     7.21.  Sale and Lease-Backs . . . . . . . . . . . . . . . . . . . . . .  89
     7.22.  Clean-down Period.   . . . . . . . . . . . . . . . . . . . . . .  89
     7.23.  Certain Payments . . . . . . . . . . . . . . . . . . . . . . . .  90

SECTION 8.  Events of Default. . . . . . . . . . . . . . . . . . . . . . . .  90
     8.01.  Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . .  90
     8.02.  Representations, etc.. . . . . . . . . . . . . . . . . . . . . .  90
     8.03.  Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . .  91
     8.04.  Default Under Other Agreements . . . . . . . . . . . . . . . . .  91
     8.05.  Bankruptcy, etc. . . . . . . . . . . . . . . . . . . . . . . . .  91
     8.06.  Security Documents; Guarantees . . . . . . . . . . . . . . . . .  92
     8.07.  Subordination. . . . . . . . . . . . . . . . . . . . . . . . . .  92
     8.08.  Judgments. . . . . . . . . . . . . . . . . . . . . . . . . . . .  93
     8.09.  Ownership. . . . . . . . . . . . . . . . . . . . . . . . . . . .  93
     8.10.  Certain Actions Following an Event of Default. . . . . . . . . .  93

SECTION 9.  Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . .  94

SECTION 10.  The Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
     10.01.  Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . 127
     10.02.  Delegation of Duties. . . . . . . . . . . . . . . . . . . . . . 127
     10.03.  Exculpatory Provisions. . . . . . . . . . . . . . . . . . . . . 128
     10.04.  Reliance by the Agent . . . . . . . . . . . . . . . . . . . . . 128
     10.05.  Notice of Default . . . . . . . . . . . . . . . . . . . . . . . 128


                                    -iii-

<PAGE>

     10.06.  Non-Reliance on Administrative Agent and Other Banks. . . . . . 129
     10.07.  Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 129
     10.08.  The Agents in Their Individual Capacities . . . . . . . . . . . 130
     10.09.  Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . 130
     10.10.  Resignation, Transfer by Agent. . . . . . . . . . . . . . . . . 130
     10.11.  Syndication Agent and Documentation Agent.. . . . . . . . . . . 131

SECTION 11.  Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . 131
     11.01.  Payment of Expenses, etc. . . . . . . . . . . . . . . . . . . . 131
     11.02.  Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . 132
     11.03.  Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
     11.04.  Benefit of Agreement. . . . . . . . . . . . . . . . . . . . . . 134
     11.05.  No Waiver; Remedies Cumulative. . . . . . . . . . . . . . . . . 136
     11.06.  Payments Pro Rata . . . . . . . . . . . . . . . . . . . . . . . 137
     11.07.  Calculations; Computations. . . . . . . . . . . . . . . . . . . 137
     11.08.  Governing Law; Submission to Jurisdiction; Venue;
             Service of Process. . . . . . . . . . . . . . . . . . . . . . . 138
     11.09.  Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . 138
     11.10.  Headings Descriptive. . . . . . . . . . . . . . . . . . . . . . 138
     11.11.  Amendment or Waiver . . . . . . . . . . . . . . . . . . . . . . 139
     11.12.  Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
     11.13.  Domicile of Loans . . . . . . . . . . . . . . . . . . . . . . . 139
     11.14.  Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . . . 139
     11.15.  Independence of Covenants . . . . . . . . . . . . . . . . . . . 139
     11.16.  Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . 139


                                    -iv-

<PAGE>
                                      SCHEDULES


Schedule A          -    List of Banks
Schedule 4.01(j)    -    Financial Statements
Schedule 4.01(l)    -    Litigation
Schedule 4.01(m)    -    Restrictions on Borrower's Ability to Grant Liens
Schedule 4.01(p)    -    Required Consents
Schedule 4.03       -    Permitted Business Acquisitions
Schedule 5.10A      -    Exceptions to Perfected Security Interests
Schedule 5.10B      -    Prior Liens
Schedule 5.10C      -    Required Filings and Recordings
Schedule 5.13       -    Subsidiaries
Schedule 5.16       -    Real Property Owned and Leased
Schedule 5.17       -    Capital Stock
Schedule 5.19       -    Indebtedness
Schedule 5.20       -    Environmental Exceptions
Schedule 5.22       -    Insurance
Schedule 11.03      -    Bank Addresses







                                     -v-

<PAGE>
                                       EXHIBITS


Exhibit 1.03-1           -    Form of Notice of Revolving Loan Borrowing
Exhibit 1.03-2           -    Form of Notice of Acquisition Loan Borrowing
Exhibit 1.03-3           -    Form of Notice of Supplemental Revolving Loan
                               Borrowing
Exhibit 1.03-4           -    Form of Notice of Supplemental Term Loan Borrowing
Exhibit 1.05(a)(i)       -    Form of Revolving Note
Exhibit 1.05(a)(ii)      -    Form of Acquisition Term Note
Exhibit 1.05(a)(iii)     -    Form of Supplemental Revolving Note
Exhibit 1.05(a)(iv)      -    Form of Supplemental Term Note
Exhibit 4.01(b)          -    Form of Officer's Certificate
Exhibit 4.03(b)(iv)      -    Form of Officer's Certificate -- Permitted
                               Business Acquisitions
Exhibit 6.01(p)          -    Form of Borrowing Base Certificate
Exhibit 7.14             -    Form of Amended and Restated Certificate of
                               Incorporation of the Borrower
Exhibit 9A               -    Form of Security Agreement
Exhibit 9B               -    Form of Subsidiary Guarantee
Exhibit 9C               -    Form of Trademark Security Agreement
Exhibit 11.04(c)         -    Form of Assignment Agreement






                                     -vi-

<PAGE>

                              COLOR SPOT NURSERIES, INC.

                     SECOND AMENDED AND RESTATED CREDIT AGREEMENT


     This Second Amended and Restated Credit Agreement is dated as of 
December 24, 1997, and amends and restates, in its entirety, the Credit 
Agreement dated as of December 31, 1996 (the "ORIGINAL CREDIT AGREEMENT"), as 
amended and restated by the Amended and Restated Credit Agreement dated as of 
February 20, 1997 (the "AMENDED CREDIT AGREEMENT") among Color Spot 
Nurseries, Inc., a Delaware corporation (the "BORROWER"), Credit Agricole 
Indosuez  (formerly the New York branch of Banque Indosuez) ("INDOSUEZ"), IBJ 
Schroder Bank & Trust Company ("IBJS"), BankBoston, N.A. ("BKOB") and the 
other lending institutions listed in Schedule A (each a "BANK"), Indosuez, as 
the administrative agent (the "ADMINISTRATIVE AGENT") for itself and the 
other Banks, IBJS as the syndication agent (the "SYNDICATION AGENT") for 
itself and the other Banks and BKOB as the documentation agent (the 
"DOCUMENTATION AGENT") for itself and the other Banks and, together with the 
Administrative Agent and the Syndication Agent, the "AGENTS").  Unless 
otherwise defined herein, all capitalized terms used herein are as defined in 
Section 9.

                                   R E C I T A L S:

     WHEREAS, the Original Credit Agreement was entered into on December 31,
1996 (the "EFFECTIVE DATE") in order (a) to finance a recapitalization of CSN,
Inc., a Delaware corporation ("Holdings") pursuant to a Recapitalization and
Stock Purchase Agreement dated as of December 31,1996 (the "RECAPITALIZATION
AGREEMENT") among Holdings, KCSN Acquisition Company, L.P., a Delaware limited
partnership ("KCSN"), Heller Equity Capital Corporation, a Delaware corporation
("HELLER") and certain other shareholders of Holdings, (b) to provide working
capital for the Borrower and its Subsidiaries and (c) with respect to the
Acquisition Term Loans, to provide financing for certain business acquisitions
by the Borrower; and

     WHEREAS, in connection with, and immediately following the consummation of,
the Recapitalization (i) substantially all of the assets of Holdings were
assigned to the Borrower, (ii) the Borrower's name was changed from Color Spot
Watsonville, Inc. to its current name of Color Spot Nurseries, Inc. and (iii)
Holdings' name was changed from Color Spot Nurseries, Inc. to  its current name
of CSN, Inc.; and

     WHEREAS, pursuant to the Original Credit Agreement (i) on the Effective
Date, the Initial Borrowers incurred Term A Loans in the aggregate principal
amount of $18,000,000 (collectively, the "ORIGINAL TERM A LOANS"), Term B Loans
in an aggregate principal amount of $16,250,000 (collectively, the "ORIGINAL
TERM B LOANS") and Revolving Loans in the aggregate principal amount of
$3,000,000; and (ii) thereafter, the Borrower incurred Acquisition Term 

<PAGE>

Loans in the aggregate principal amount of $3,200,000 (collectively, the 
"ORIGINAL ACQUISITION TERM LOANS"), all of which amounts remain outstanding 
as of the date hereof; and 

     WHEREAS, in connection with the Borrower's acquisition of Lone Star Growers
Co. and certain other companies the Amended Credit Agreement was entered into on
February 20, 1997 and amended on March 20, 1997, July 31, 1997, August 11, 1997
and September 3, 1997, to increase the Banks' commitments under the Original
Credit Agreement and to incur additional Loans from the Banks, and specifically
(i) to replace the Original Term A Loans with the Existing Term A Loans in the
aggregate principal amount of $35,000,000; (ii) to replace the Original Term B
Loans with the Existing Term B Loans in the aggregate principal amount of
$55,000,000; (iii) to replace the Original Total Revolving Loan Commitment with
an increased Existing Revolving Loan Commitment in the amount of $37,500,000;
and

     WHEREAS, the Borrower proposes to offer for sale $40,000,000 of its Series
A Preferred Stock and the related warrants to purchase common stock of the
Borrower and $85,000,000 of high yield debt securities (the "PUBLIC FINANCING"),
in connection with which, Holdings will be merged with and into the Borrower and
will cease to have a separate existence; and

     WHEREAS, in connection with the foregoing, the Borrower desires to increase
the Banks' commitments under the Amended Credit Agreement and to incur
additional Loans from the Banks, and specifically (i) to repay the Existing Term
A Loans, Existing Term B Loans, Existing Acquisition Term Loans and the
Revolving Loans outstanding on the Closing Date (the "EXISTING REVOLVING LOANS")
with the proceeds of the Public Financing, (ii) to replace the Existing
Revolving Loan Commitment with an increased Revolving Loan Commitment in the
amount of $40,000,000; (iii) to replace the Existing Acquisition Term Loan
Commitment with an Acquisition Term Loan Commitment in the amount of
$75,000,000; and (iv) to replace the Existing Term A Loan Commitment and the
Existing Term B Loan Commitment with a Supplemental Loan Commitment in the
amount of $35,000,000 (which can be drawn down by the Borrower as either
revolving loans or acquisition term loans); and

     WHEREAS, the Borrower desires to use the proceeds of the Revolving Loans to
provide working capital for the Borrower and its Subsidiaries; and

     WHEREAS, the Banks are willing to make available the additional credit
facilities provided for herein on the terms and conditions set forth herein;

     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:


                                     -2-

<PAGE>

     SECTION 1.  AMOUNT AND TERMS OF CREDIT.

     1.01.   COMMITMENTS.  Subject to and upon the terms and conditions set
forth herein, each Bank severally agrees, (i) in the case of any Borrowing under
the Revolving Portion at any time and from time to time on and after the Closing
Date and prior to the Revolving Loan Commitment Termination Date, (ii) in the
case of any Borrowings under the Acquisition Portion from time to time on and
after the Closing Date and prior to the Acquisition Term Loan Commitment
Termination Date in connection with Permitted Business Acquisitions, and (iii)
in the case of any Borrowing under the Supplemental Portion from time to time on
and after the Closing Date and prior to the Supplemental Revolving Loan
Commitment Termination Date in connection with working capital needs of the
Borrower or prior to the Supplemental Term Loan Commitment Termination Date in
connection with Permitted Business Acquisitions, as the case may be, to make
Loans to the Borrower, as specified below, which Loans shall be drawn under the
Loan Facility (including the Revolving Portion, the Acquisition Portion and the
Supplemental Portion thereof), as set forth below:

             (a)  Loans under the Revolving Portion of the Loan Facility (each a
     "REVOLVING LOAN") (i) shall be made to the Borrower at any time and from
     time to time on and after the Closing Date and prior to the Revolving Loan
     Commitment Termination Date; (ii) except as hereinafter provided, shall
     initially be made as Base Rate Loans until 30 days after the Closing Date
     or such earlier time as (x) Indosuez shall have completed any intended
     syndication of its interest in the Loans (as to which the Administrative
     Agent shall promptly notify the Borrower) or (y) is otherwise assented to
     by the Administrative Agent, and thereafter, at the Borrower's option and
     subject to the terms hereof, may be Base Rate Loans or Reserve Adjusted
     Eurodollar Loans; PROVIDED, HOWEVER, that, notwithstanding anything to the
     contrary set forth above, in the event that the Administrative Agent shall
     not have notified the Borrower that it has completed any intended
     syndication as of the date on which the Borrower becomes entitled to elect
     Reserve Adjusted Eurodollar Loans, then for a further period of one month
     (or such longer period as the Administrative Agent and the Borrower agree),
     the Borrower shall only be entitled to elect Reserve Adjusted Eurodollar
     Loans which have an Interest Period which terminates on or before the end
     of such one-month period; and PROVIDED, FURTHER, that all Revolving Loans
     made by each Bank shall, unless otherwise specifically provided herein, (A)
     consist entirely of Loans of the same Type; (B) may be repaid and
     reborrowed in accordance with the provisions hereof; and (C) shall not
     exceed for any Bank at any time outstanding the Revolving Loan Commitment
     of such Bank at such time; and PROVIDED, FURTHER, that all Revolving Loans
     made by all Banks pursuant to the same Borrowing shall, unless otherwise
     specifically provided herein, not be made pursuant to a particular Notice
     of Borrowing if (A) the sum of (x) the aggregate principal amount of
     Revolving Loans then outstanding, after giving effect to the Revolving Loan
     requested by the relevant Notice of Borrowing, (y) the aggregate principal
     amount of Supplemental Revolving Loans then outstanding and (z) the then
     outstanding Letters of Credit Usage, 


                                     -3-

<PAGE>

     related to either the Revolving Portion or the Supplemental Portion of the
     Loan Facility, would exceed the Borrowing Base as then calculated pursuant
     to Section 6.01(m) or (B) the sum of (x) the aggregate principal amount 
     of Revolving Loans then outstanding, after giving effect to the Revolving
     Loan requested by the relevant Notice of Borrowing, and (y) the then 
     outstanding Letters of Credit Usage related to the Revolving Portion of 
     the Credit Facility, would exceed the Total Revolving Loan Commitment.

             (b)  Loans under the Acquisition Portion of the Loan Facility
     (together with the Outstanding Acquisition Term Loans, each an "ACQUISITION
     TERM LOAN") shall be made to the Borrower from time to time on or after the
     Closing Date and prior to the Acquisition Term Loan Commitment Termination
     Date (the date of each Borrowing of an Acquisition Term Loan an
     "ACQUISITION TERM LOAN CLOSING DATE") to effect Permitted Business
     Acquisitions; PROVIDED, HOWEVER, if the Borrower shall have executed a
     letter of intent with respect to a Permitted Business Acquisition prior to
     the Acquisition Term Loan Commitment Termination Date, the Acquisition Term
     Loan Commitment shall remain available to finance such proposed Permitted
     Business Acquisition until the earlier of (i) the expiration of such letter
     of intent by its terms, and (ii) ninety days after the Acquisition Term
     Loan Commitment Termination Date.  Acquisition Term Loans (i) except as
     hereinafter provided, shall initially be made as Base Rate Loans until 30
     days after the Closing Date, with respect to the Acquisition Term Loans
     made as of the Closing Date, and until 30 days after the applicable
     Acquisition Term Loan Closing Date in all other case, or, in each case,
     such earlier time as (x) Indosuez shall have completed any intended
     syndication of its interest in the Acquisition Term Loan made on such date
     (as to which the Administrative Agent shall promptly notify the Borrower)
     or (y) is otherwise assented to by the Administrative Agent, and
     thereafter, at the Borrower's option and subject to the terms hereof, may
     be Base Rate Loans or Reserve Adjusted Eurodollar Loans; PROVIDED, HOWEVER,
     that, notwithstanding anything to the contrary set forth above, in the
     event that the Administrative Agent shall not have notified the Borrower
     that it has completed any intended syndication as of the date on which the
     Borrower becomes entitled to elect Reserve Adjusted Eurodollar Loans, then
     for a further period of one month (or such longer period as the
     Administrative Agent and the Borrower agree), the Borrower shall only be
     entitled to elect Reserve Adjusted Eurodollar Loans which have an Interest
     Period which terminates on or before the end of such one-month period; and
     PROVIDED, FURTHER, that all Acquisition Term Loans made by each Bank shall,
     unless otherwise specifically provided herein, (i) consist entirely of
     Loans of the same Type; and (ii) shall not exceed for such Bank at any time
     outstanding the Acquisition Term Loan Commitment of such Bank at such time;
     and PROVIDED, FURTHER, that all Acquisition Term Loans made by all Banks
     pursuant to the same Borrowing, shall unless otherwise specifically
     provided herein, not be made pursuant to a particular Notice of Borrowing
     if the aggregate principal amount of Acquisition Term Loans then
     outstanding, after giving effect to the Acquisition Term Loan requested by
     the relevant Notice of Borrowing, would exceed the Total Acquisition Term
     Loan Commitment.


                                     -4-

<PAGE>

             (c)  Loans under the Supplemental Portion of the Loan Facility may
     be made as either term loans (together with the outstanding Supplemental
     Term Loans, each a "SUPPLEMENTAL TERM LOAN") or as revolving loans (each a
     "Supplemental Revolving Loan").

             (d)  Supplemental Term Loans shall be made to the Borrower from
     time to time after the Closing Date and prior to the Supplemental Term Loan
     Commitment Termination Date (the date of each Borrowing of a Supplemental
     Term Loan, a "SUPPLEMENTAL TERM LOAN CLOSING DATE") to effect Permitted
     Business Acquisitions; PROVIDED, HOWEVER, if the Borrower shall have
     executed a letter of intent with respect to a Permitted Business
     Acquisition prior to the Supplemental Term Loan Commitment Termination
     Date, the Supplemental Term Loan Commitment shall remain available to
     finance such proposed Permitted Business Acquisition until the earlier of
     (i) the expiration of such letter of intent by its terms, and (ii) ninety
     days after the Supplemental Term Loan Commitment Termination Date; and
     PROVIDED, FURTHER, that all Supplemental Term Loans made by each Bank
     pursuant to the same Borrowing shall, unless otherwise specifically
     provided herein, (i) consist entirely of Loans of the same Type; and (ii)
     together with all Supplemental Revolving Loans made by such Bank, shall not
     exceed the Supplemental Loan Commitment of such Bank at such time; and
     PROVIDED, FURTHER, that all Supplemental Term Loans made by all Banks
     pursuant to the same Borrowing shall, unless otherwise specifically
     provided herein, shall not be made pursuant to a particular Notice of
     Borrowing if (i) the sum of (x) the aggregate principal amount of
     Supplemental Term Loans then outstanding, after giving effect to the
     Supplemental Term Loan requested by the relevant Notice of Borrowing, (y)
     the aggregate principal amount of Supplemental Revolving Loans then
     outstanding, and (z) the then outstanding Letters of Credit Usage related
     to the Supplemental Portion of the Credit Facility, would exceed the Total
     Supplemental Loan Commitment or (ii) if there is any Unutilized Acquisition
     Commitment then outstanding which has not been terminated.

             (e)  Supplemental Revolving Loans shall be made to the Borrower at
     any time and from time to time after the Closing Date and prior to the
     Supplemental Revolving Loan Commitment Termination Date; PROVIDED, HOWEVER,
     that all Supplemental Revolving Loans made by each Bank pursuant to the
     same Borrowing shall, unless otherwise specifically provided herein, (i)
     consist entirely of Loans of the same Type; (ii) may be repaid and
     reborrowed in accordance with the provisions hereof; (iii) together with
     all Supplemental Term Loans made by such Bank, shall not exceed the
     Supplemental Loan Commitment of such Bank at such time; and PROVIDED,
     FURTHER, that all Supplemental Revolving Loans made by all Banks pursuant
     to the same Borrowing shall, unless otherwise specifically provided herein,
     not be made pursuant to a particular Notice of Borrowing (i) if the sum of
     (x) the aggregate principal amount of Supplemental Revolving Loans then
     outstanding, (y) the aggregate principal amount of Supplemental Terms Loans
     then outstanding and (z) the then outstanding Letters of Credit Usage
     related to the Supplemental Portion of the Credit Facility, after giving
     effect to the 


                                     -5-

<PAGE>

     Supplemental Revolving Loan requested by the relevant Notice of Borrowing,
     would exceed the Supplemental Loan Commitment, (ii) if the sum of (x) the
     aggregate principal amount of Supplemental Revolving Loans then 
     outstanding, after giving effect to the Supplemental Revolving Loan
     requested by the relevant Notice of Borrowing, (y) the aggregate principal
     amount of Revolving Loans then outstanding and (z) the then outstanding
     Letters of Credit Usage related to either the Revolving Portion or the
     Supplemental Portion of the Credit Facility, would exceed the Borrowing
     Base as then calculated pursuant to Section 6.01(m) or (iii) if there is
     any Unutilized Revolver Commitment then outstanding.

     1.02.   MINIMUM AMOUNT OF EACH BORROWING; MAXIMUM NUMBER OF BORROWINGS. 
The minimum aggregate principal amount of any Loan shall be the Minimum
Borrowing Amount (other than a Borrowing of Revolving Loans or of Supplemental
Revolving Loans consisting entirely of Base Rate Loans such that the total
amount of Revolving Loans or Supplemental Revolving Loans, as the case may be,
to be outstanding after giving effect to such Borrowing shall be equal to the
Total Revolving Loan Commitment or the Total Supplemental Revolving Loan
Commitment, as the case may be), and Borrowings in excess thereof shall be in
integral multiples of $100,000; PROVIDED, HOWEVER, that (i) the Banks'
Acquisition Term Loan Commitments shall terminate, on a pro rata basis, with
respect to any portion of the Total Acquisition Term Loan Commitments not
utilized by the Borrower on or before the Acquisition Term Loan Commitment
Termination Date and (ii) the Banks' Supplemental Term Loan Commitments shall
terminate, on a pro rata basis, with respect to any portion of the Total
Acquisition Term Loan Commitments not used by the Borrower on or before the
Supplemental Term Loan Commitment Termination Date.  More than one Borrowing may
be incurred on any date; PROVIDED, HOWEVER, that at no time shall there be more
than eight Borrowings of Reserve Adjusted Eurodollar Loans outstanding.

     1.03.   NOTICE OF BORROWINGS.  Subject to Sections 1.01(a), (b), (d) and 
(e), after the Closing Date, whenever the Borrower desires that the Banks 
make Reserve Adjusted Eurodollar Loans under any of the Revolving Portion, 
the Acquisition Portion or the Supplemental Portion of the Loan Facility it 
shall give the Administrative Agent at the Agent's Office at least three 
Business Days' prior written notice (or telephonic notice promptly confirmed 
in writing) of each such Borrowing of Reserve Adjusted Eurodollar Loans; 
PROVIDED that notice given later than 1:00 P.M. (New York time) shall be 
deemed to have been given on the following Business Day.  Whenever the 
Borrower desires that the Banks make Base Rate Loans under any of the 
Revolving Portion, the Acquisition Portion or the Supplemental Portion of the 
Loan Facility it shall give the Administrative Agent at the Agent's office 
not later than 1:00 P.M. (New York time) on the date of such Borrowing 
written notice (or telephonic notice promptly confirmed in writing) of each 
such Borrowing of Base Rate Loans.  Each such notice, which, in the case of 
either a Loan under the Revolving Portion or a Supplemental Revolving Loan 
under the Supplemental Portion of the Loan Facility, shall be substantially 
in the form of Exhibit 1.03-1 (each a "NOTICE OF REVOLVING LOAN BORROWING"), 
in the case of a Loan under the Acquisition Portion of the Loan Facility 
shall be substantially in the form of Exhibit 1.03-2 (each a "NOTICE OF 


                                     -6-

<PAGE>

ACQUISITION LOAN BORROWING", in the case of a Supplemental Revolving Loan 
under the Supplemental Portion of the Loan Facility shall be substantially in 
the form of Exhibit 1.03-03 (each a "NOTICE OF SUPPLEMENTAL REVOLVING LOAN 
BORROWING") and, in the case of a Supplemental Term Loan under the 
Supplemental Portion of the Loan Facility shall be substantially in the form 
of Exhibit 1.03-4 (each a "NOTICE OF SUPPLEMENTAL TERM LOAN BORROWING") and, 
together with a Notice of Revolving Loan Borrowing, a Notice of Acquisition 
Loan Borrowing and a Notice of Supplemental Revolving Loan Borrowing, each a 
"NOTICE OF BORROWING"), shall be irrevocable, shall be deemed a 
representation by the Borrower that all conditions precedent to such 
Borrowing set forth in Section 4.02 and, in the case of a Loan under the 
Acquisition Portion or a Supplemental Term Loan under the Supplemental 
Portion that all conditions set forth in Section 4.03, have been satisfied 
and shall specify (i) the aggregate principal amount in Dollars of the Loans 
to be made pursuant to such Borrowing, (ii) the date of Borrowing (which 
shall be a Business Day), (iii) whether the respective Borrowing shall 
consist of Base Rate Loans or Reserve Adjusted Eurodollar Loans and, if 
Reserve Adjusted Eurodollar Loans, the Interest Period to be initially 
applicable thereto and (iv) the account to which funds advanced under such 
Borrowing shall be deposited.  The Administrative Agent shall as promptly as 
practicable give each Bank written notice (or telephonic notice promptly 
confirmed in writing) of each proposed Borrowing, of such Bank's 
proportionate share thereof and of the other matters covered by the Notice of 
Borrowing.

     1.04.   DISBURSEMENT OF FUNDS.

             (a)  No later than 2:00 P.M. (New York time) on the date specified
     in each Notice of Borrowing, each Bank will make available to the
     Administrative Agent in New York its pro rata portion of each Borrowing
     requested to be made on such date in the manner provided below.

             (b)  Each Bank shall make available all amounts it is to fund under
     any Borrowing on or after the Closing Date in immediately available funds
     to the Administrative Agent to the account specified therefor by the
     Administrative Agent (or, if no account is so specified at the Agent's
     Office), and the Administrative Agent will make such funds available to the
     Borrower no later than 4:00 P.M. (New York time) on the date specified in
     the Notice of Borrowing by depositing to the account specified therefor by
     the Borrower (or, if no account is so specified to its account at the
     Agent's Office) the aggregate of the amounts so made available in the type
     of funds received.  Unless the Administrative Agent shall have been
     notified by any Bank prior to the date of any such Borrowing that such Bank
     does not intend to make available to the Administrative Agent its portion
     of the Borrowing or Borrowings to be made on such date, the Administrative
     Agent may assume that such Bank has made such amount available to the
     Administrative Agent on such date of Borrowing, and the Administrative
     Agent, in reliance upon such assumption, may (in its sole discretion and
     without any obligation to do so) make available to the Borrower a
     corresponding amount.  If such corresponding amount is not in fact made
     available to the Administrative Agent by such Bank and the Administrative


                                     -7-

<PAGE>

     Agent has made available such corresponding amount to the Borrower, the
     Administrative Agent shall be entitled to recover such corresponding amount
     from such Bank.  If such Bank does not pay such corresponding amount
     forthwith upon the Administrative Agent's demand therefor, the
     Administrative Agent shall promptly notify the Borrower, and the Borrower
     shall on such Business Day pay such corresponding amount to the
     Administrative Agent.  The Administrative Agent shall also be entitled to
     recover from such Bank or the Borrower, as the case may be, interest on
     such corresponding amount in respect of each day from the date such
     corresponding amount was made available by the Administrative Agent to the
     Borrower to the date such corresponding amount is recovered by the
     Administrative Agent, (i) if paid by such Bank, at a rate per annum equal
     to the overnight Federal Funds Rate or (ii) if paid by the Borrower (and/or
     any other Credit Party), at a rate per annum equal to the then applicable
     rate of interest, calculated in accordance with Section 1.08, for the
     respective Loans.  The Administrative Agent shall also be entitled to
     recover from any Bank an amount equal to any other losses incurred by the
     Administrative Agent as a result of the failure of such Bank to provide any
     amount as provided in this Agreement.

             (c)  Nothing herein shall be deemed to relieve any Bank from its
     obligation to fulfill its Commitments hereunder or to prejudice any rights
     which the Borrower or any other Credit Party may have against any Bank as a
     result of any default by such Bank hereunder.

     1.05.   NOTES.

             (a)  The Borrower's obligation to pay the principal of and interest
     on all the Loans made to it by each Bank are or shall be evidenced, as the
     case may be, (i) in the case of Revolving Loans, by a promissory note
     (each, a "REVOLVING NOTE"), substantially in the form of 
     Exhibit 1.05(a)(i), duly executed and delivered by the Borrower, with
     blanks appropriately completed in conformity herewith; (ii) in the case of
     Acquisition Term Loans, by a promissory note (each, an "ACQUISITION TERM
     NOTE"), substantially in the form of Exhibit 1.05(a)(ii), duly executed and
     delivered by the Borrower with blanks appropriately completed in conformity
     herewith; (iii) in the case of Supplemental Revolving Loans, by a
     promissory note (each, a "SUPPLEMENTAL REVOLVING NOTE"), substantially in
     the form of Exhibit 1.05(a)(iii), duly executed and delivered by the
     Borrower, with blanks appropriately completed in conformity herewith; and
     (iv) in the case of Supplemental Term Loans, by a promissory note (each, a
     "SUPPLEMENTAL TERM NOTE"), substantially in the form of
     Exhibit 1.05(a)(iv), duly executed and delivered by the Borrower, with
     blanks appropriately completed in conformity herewith.

             (b)  The Revolving Notes issued to each Bank shall (i) be executed
     by the Borrower, (ii) be payable to the order of such Bank, (iii) be dated
     the Closing Date, (iv) be in a stated principal amount equal to the
     Revolving Loan Commitment of such Bank, and be payable in the aggregate
     principal amount of the outstanding Revolving Loans 


                                     -8-

<PAGE>

     evidenced thereby, (v) mature, with respect to each Revolving Loan 
     evidenced thereby, on the Revolving Loan Maturity Date, (vi) be subject
     to mandatory prepayment as provided in Section 3.03, (vii) bear interest
     as provided in the appropriate clause of Section 1.08 in respect of the 
     Base Rate Loans and the Reserve Adjusted Eurodollar Loans, as the case 
     may be, evidenced thereby, and (viii) be entitled to the benefits of this
     Agreement and the other applicable Credit Documents.  On the Closing Date,
     upon delivery of the Revolving Notes, the Existing Revolving Notes shall 
     be returned to the Borrower marked "Canceled".

             (c)  The Acquisition Term Note of the Borrower issued to each Bank
     shall (i) be executed by the Borrower, (ii) be payable to the order of such
     Bank, (iii) be dated the Closing Date, (iv) be in a stated principal amount
     equal to the Acquisition Term Loan Commitment of such Bank and be payable
     in the aggregate principal amount of the outstanding Acquisition Term Loans
     evidenced thereby, (v) mature, with respect to each Acquisition Term Loan
     evidenced thereby, on the Acquisition Term Loan Maturity Date, (vi) be
     subject to mandatory prepayment as provided in Section 3.03, (vii) bear
     interest as provided in the appropriate clause of Section 1.08 in respect
     of the Base Rate Loans and the Reserve Adjusted Eurodollar Loans, as the
     case may be, evidenced thereby, and (viii) be entitled to the benefits of
     this Agreement and the other applicable Credit Documents.  On the Closing
     Date, upon delivery of the Acquisition Term Notes, the Existing Acquisition
     Term Notes shall be returned to the Borrower marked "Canceled".  At any
     time after the Acquisition Term Loan Commitment Termination Date, at the
     Borrower's option or at the request of the Administrative Agent, each
     Acquisition Term Note shall be exchanged for a note in the form of Exhibit
     1.05(a)(iv) and meeting the above requirements, except that such
     replacement note should be in a stated principal amount equal to the
     aggregate principal amount of the Acquisition Term Loans made by such Bank
     (or its assignor).

             (d)  The Supplemental Revolving Notes issued to each Bank shall (i)
     be executed by the Borrower, (ii) be payable to the order of such Bank,
     (iii) be dated the Closing Date, (iv) be in a stated principal amount equal
     to the Supplemental Loan Commitment of such Banks, and be payable in the
     aggregate principal amount of the Supplemental Revolving Loans evidenced
     thereby, (v) mature, with respect to each Supplemental Revolving Loan
     evidenced thereby, on the Supplemental Revolving Loan Maturity Date, (vi)
     be subject to mandatory prepayment as provided in Section 3.03, (vii) bear
     interest as provided in the appropriate clause of Section 1.08 in respect
     of the Base Rate Loans and the Reserve Adjusted Eurodollar Loans, as the
     case may be, evidenced thereby, and (viii) be entitled to the benefits of
     this Agreement and other applicable Credit Documents.  At any time after
     the Supplemental Term Loan Commitment Termination Date, at the Borrower's
     option or at the request of the Administrative Agent, each Supplemental
     Revolving Note shall be exchanged for a note in the form of Exhibit
     1.05(a)(iii) and meeting the above requirements, except that such
     replacement note should be in a stated principal amount 


                                     -9-

<PAGE>

     equal to the Supplemental Revolving Loan Commitment of such Bank on the 
     Supplemental Term Loan Commitment Termination Date.

             (e)  The Supplemental Term Notes issued to each Bank shall (i) be
     executed by the Borrower, (ii) be payable to the order of such Bank,
     (iii) be dated the Closing Date, (iv) be in a stated principal amount equal
     to the Supplemental Loan Commitment of such Bank, and be payable in the
     aggregate principal amount of the Supplemental Term Loans evidenced
     thereby, (v) mature, with respect to each Supplemental Term Loan evidenced
     thereby, on the Supplemental Term Loan Maturity Date, (vi) be subject to
     mandatory prepayment as provided in Section 3.03, (vii) bear interest as
     provided in the appropriate clause of Section 1.08 in respect of the Base
     Rate Loans and the Reserve Adjusted Eurodollar Loans, as the case may be,
     evidenced thereby, and (viii) be entitled to the benefits of this Agreement
     and other applicable Credit Documents.  At any time after the Supplemental
     Term Loan Commitment Termination Date, at the Borrower's option or at the
     request of the Administrative Agent, each Supplemental Term Note shall be
     exchanged for a note in the form of Exhibit 1.05(a)(iv) and meeting the
     above requirements, except that such replacement note should be in a stated
     principal amount equal to the aggregate principal amount of the
     Supplemental Term Loans made by such Bank (or its assignor).

             (f)  Each Bank will note on its internal records the amount of each
     Loan made by it and each payment in respect thereof and will, prior to any
     transfer of any of its Notes, endorse on the reverse side thereof the
     outstanding principal amount of the Loans evidenced thereby.  Failure to
     make any such notation shall not affect the obligations of the Borrower or
     any other Credit Party hereunder or under any other applicable Credit
     Document in respect of such Loans.

     1.06.   CONVERSIONS; CONTINUATIONS.  The Borrower shall have the option to
convert on any Business Day commencing 30 days after the Closing Date or such
earlier date as Indosuez shall have completed any intended syndication of its
interest in the Loans (as to which the Administrative Agent shall promptly
notify the Borrower), all or a portion (which portion shall not be less than the
Minimum Borrowing Amount) of the outstanding Loans owing by the Borrower
pursuant to a single Portion of the Loan Facility into a Borrowing or Borrowings
pursuant to such Portion of another Type of Loan, or to continue all or a
portion of such Borrowings as the same Type of Loan; PROVIDED, HOWEVER, that,
notwithstanding anything to the contrary set forth above, in the event that the
Administrative Agent shall not have notified the Borrower that it has completed
any intended syndication as of the date on which the Borrower becomes entitled
to elect Reserve Adjusted Eurodollar Loans, then for a further period of one
month, the Borrower shall only be entitled to elect Reserve Adjusted Eurodollar
Loans which have an Interest Period which terminates on or before the end of
such one-month period; and PROVIDED, FURTHER, that (a) except as otherwise
provided in Section 1.10(b), Reserve Adjusted Eurodollar Loans may be converted
into Base Rate Loans or continued as Reserve Adjusted Eurodollar Loans only on
the last day of an Interest Period applicable to such Reserve Adjusted


                                     -10-

<PAGE>

Eurodollar Loans, (b) no such partial conversion of Reserve Adjusted Eurodollar
Loans shall reduce the outstanding principal amount of Reserve Adjusted
Eurodollar Loans under the Loan Facility (or portion thereof) made pursuant to a
single Borrowing to less than the Minimum Borrowing Amount, (c) a Loan may only
be converted into or continued as Reserve Adjusted Eurodollar Loans if no
Default or Event of Default is in existence on the date of the conversion or
continuation, (d) Borrowings resulting from conversions or continuations
pursuant to this Section 1.06 shall be limited in amount and number as provided
in Section 1.02 and (e) all or a portion of the outstanding principal amount of
Base Rate Loans may not be converted into Reserve Adjusted Eurodollar Loans if
such Base Rate Loans or portion thereof will mature within one month of such
proposed conversion.  Each such conversion/continuation shall be effected by the
Borrower by giving the Administrative Agent at the Agent's Office prior to 1:00
P.M. (New York time) at least three Business Days' (or on the same Business Day
in the case of a conversion into Base Rate Loans) prior written notice (or
telephonic notice promptly confirmed in writing) (each a "NOTICE OF
CONVERSION/CONTINUATION"), specifying the Loans to be so converted or continued,
the Type of Loans into which such Loans will be converted or continued, the
proposed conversion/continuation date, and, if to be converted into or continued
as Reserve Adjusted Eurodollar Loans, the Interest Period to be initially
applicable thereto.  The Administrative Agent shall give each Bank notice as
promptly as practicable of any such proposed conversion or continuation
affecting any of its Loans.  Notwithstanding the foregoing or the provisions of
Section 1.09, if a Default or Event of Default is in existence at the time any
Interest Period in respect of any Borrowing of Reserve Adjusted Eurodollar Loans
is to expire, such Loans may not be continued as Reserve Adjusted Eurodollar
Loans but instead shall be automatically converted on the last day of such
Interest Period into Base Rate Loans, unless the Administrative Agent shall
otherwise elect.  If no Notice of Conversion/Continuation has been duly
delivered with respect to a Reserve Adjusted Eurodollar Loan on or before the
third Business Day prior to the last day of the Interest Period applicable
thereto, such Reserve Adjusted Eurodollar Loan shall be automatically converted
into a Base Rate Loan.

     1.07.   PRO RATA BORROWINGS.  All Borrowings under this Agreement shall be
loaned by the Banks pro rata on the basis of their Revolving Loan Commitments,
their Acquisition Term Loan Commitments or their Supplemental Loan Commitments,
as the case may be.  No Bank shall be responsible for any default by any other
Bank in its obligation to make Loans hereunder, and each Bank shall be obligated
to make the Loans provided to be made by it hereunder, regardless of the failure
of any other Bank to fulfill its commitments hereunder.

     1.08.   INTEREST.

             (a)  The unpaid principal amount of each Base Rate Loan shall bear
     interest from the date of the Borrowing thereof until maturity (whether by
     acceleration or otherwise), or unless sooner converted into a Reserve
     Adjusted Eurodollar Loan, at a rate per annum equal to the sum of (i) the
     Base Rate in effect from time to time PLUS (ii) the Base Rate Margin.


                                     -11-

<PAGE>

             (b)  The unpaid principal amount of each Reserve Adjusted
     Eurodollar Loan shall bear interest from the date of the Borrowing thereof
     until maturity (whether by acceleration or otherwise), or unless sooner
     converted into a Base Rate Loan, at a rate per annum equal to the sum of
     (i) the relevant Eurodollar Rate PLUS (ii) the Eurodollar Rate Margin.

             (c)   Overdue principal and, to the extent permitted by law,
     overdue interest in respect of each Loan shall bear interest (A) in the
     case of Base Rate Loans, at a rate per annum equal to the sum of (1) the
     Base Rate in effect from time to time PLUS (2) the Base Rate Margin PLUS
     (3) 2% per annum, and (B) in the case of Reserve Adjusted Eurodollar
     Loans, at a rate per annum equal to the sum of (1) the relevant Eurodollar
     Rate PLUS (2) the Eurodollar Rate Margin PLUS (3) 2% per annum.

             (d)  Interest shall accrue from and including the date of any
     Borrowing to but excluding the date of any repayment thereof and shall be
     payable (i) in respect of each Base Rate Loan, quarterly in arrears on the
     last Business Day of each March, June, September and December commencing
     March 31, 1998; (ii) in respect of each Reserve Adjusted Eurodollar Loan,
     in arrears on the last day of each Interest Period applicable thereto and,
     in the case of an Interest Period in excess of three months, on each date
     occurring at three-month intervals after the first day of such Interest
     Period; and (iii) in respect of each Loan, on any prepayment (on the
     amounts prepaid), at maturity (whether by acceleration or otherwise) and,
     after such maturity, on demand.

             (e)  All computations of interest hereunder shall be made in
     accordance with Section 11.07.

             (f)  The Administrative Agent, upon determining the interest rate
     for any Borrowing of Reserve Adjusted Eurodollar Loans for any Interest
     Period, shall promptly notify the Borrower and the Banks thereof.  Such
     determination shall, absent manifest error, be final, conclusive and
     binding upon all parties hereto.

     1.09.   INTEREST PERIODS.  At the time the Borrower gives a Notice of
Borrowing or Notice of Conversion/Continuation in respect of the making of,
conversion into, or continuation of, a Borrowing of Reserve Adjusted Eurodollar
Loans, it shall have the right to elect, by giving the Administrative Agent
written notice (or telephonic notice promptly confirmed in writing), the
Interest Period applicable to such Borrowing, which Interest Period shall, at
the option of the Borrower, be a period of one, two, three or six months. 
Notwithstanding anything to the contrary contained above:

             (a)  the initial Interest Period for any Borrowing of Reserve
     Adjusted Eurodollar Loans shall commence on the date of such Borrowing
     (including the date of any conversion from a Borrowing of Base Rate Loans)
     and each Interest Period occurring 


                                     -12-

<PAGE>

     thereafter (including continuations thereof) in respect of such Borrowing 
     shall commence on the date on which the next preceding Interest Period 
     expires;

             (b)  if any Interest Period relating to a Borrowing of Reserve
     Adjusted Eurodollar Loans begins on a date for which there is no
     numerically corresponding date in the calendar month in which such Interest
     Period ends, such Interest Period shall end on the last Business Day of
     such calendar month;

             (c)  if any Interest Period would otherwise expire on a day which
     is not a Business Day, such Interest Period shall expire on the next
     succeeding Business Day; PROVIDED, HOWEVER, that if any Interest Period in
     respect of a Reserve Adjusted Eurodollar Loan would otherwise expire on a
     day which is not a Business Day but is a day of the month after which no
     further Business Day occurs in such month, such Interest Period shall
     expire on the next preceding Business Day;

             (d)  no Interest Period shall extend beyond, as applicable, the
     Revolving Loan Maturity Date (in the case of Revolving Loans), the
     Acquisition Term Loan Maturity Date (in the case of Acquisition Term
     Loans), Supplemental Revolving Loan Maturity Date (in the case of
     Supplemental Revolving Loans) or Supplemental Term Loan Maturity Date (in
     the case of Supplemental Term Loans); and

             (e)  no Interest Period with respect to any Borrowing of Reserve
     Adjusted Eurodollar Loans shall extend beyond any date upon which the
     Borrower is required to make a scheduled payment of principal with respect
     to the Acquisition Term Loans or the Supplemental Term Loans, as the case
     may be, if, after giving effect to the selection of such Interest Period,
     the aggregate principal amount of Acquisition Term Loans or Supplemental
     Term Loans, as the case may be, maintained as Reserve Adjusted Eurodollar
     Loans with Interest Periods ending after such date of scheduled payment of
     principal would exceed the amount of Acquisition Term Loans or Supplemental
     Term Loans, as the case may be, permitted to be outstanding after such
     scheduled payment of principal. 

     1.10.   SPECIAL PROVISIONS GOVERNING RESERVE ADJUSTED EURODOLLAR LOANS. 
Notwithstanding other provisions of this Agreement, the following provisions
shall govern with respect to Reserve Adjusted Eurodollar Loans as to the matters
covered:

             (a)  On an Interest Rate Determination Date, the Administrative
     Agent shall determine (which determination shall, absent demonstrable
     error, be final, conclusive and binding upon all parties hereto) the
     interest rate which shall apply to the Reserve Adjusted Eurodollar Loans
     for which an interest rate is then being determined for the applicable
     Interest Period and shall promptly give notice thereof (in writing or by
     telephone promptly confirmed in writing) to the Borrower and to each Bank.


                                     -13-

<PAGE>

             (b)  In the event that (i) in the case of clause (A) below, the
     Administrative Agent or (ii) in the case of clause (B) or (C) below, any
     Bank shall have determined (which determination shall, absent demonstrable
     error, be final, conclusive and binding upon all parties hereto):

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

                  (B)   at any time that such Bank shall incur increased
           costs or reductions in the amounts received or receivable
           hereunder with respect to any Reserve Adjusted Eurodollar
           Loans or its obligation to make Reserve Adjusted Eurodollar
           Loans because of any change since the Closing Date (including
           any changes proposed or published prior to the Closing Date,
           except that any such proposed or published changes as to which
           the Administrative Agent had actual knowledge prior to the
           Closing Date shall only be included if the Administrative
           Agent has notified the Borrower of such proposed or published
           changes in writing on or before the Closing Date) in any
           applicable law, governmental rule, regulation, guideline,
           request or order (or in the interpretation or administration
           thereof and including the introduction of any new law or
           governmental rule, regulation, guideline, request or order)
           (such as, for example, but not limited to a change in official
           reserve requirements, but, in all events, excluding reserves
           required under Regulation D to the extent included in the
           computation of the Eurodollar Rate) and excluding any change
           in the basis of taxation of payments to any Bank of the
           principal or interest on the Notes or any other amounts
           payable hereunder, such changes being provided for exclusively
           by Section 3.07; or 

                  (C)   at any time that the making or continuance of any
           Reserve Adjusted Eurodollar Loan has become unlawful by
           compliance by such Bank in good faith with any applicable law,
           governmental rule, regulation, guideline, request or order (or
           would conflict with any such applicable law, governmental
           rule, regulation, guideline, request or order, whether or not
           having the force of law and even though the failure to comply
           therewith would not be unlawful);

     then, and in any such event, the Administrative Agent in the case of clause
     (A) above or such Bank in the case of clause (B) or (C) above shall on such
     date give notice (by telephone confirmed in writing) in accordance with
     Section 1.10(h) to the Borrower of the Loan affected and, in the case of
     clause (B) or (C) to the Administrative Agent, of such determination (which
     notice the Administrative Agent shall promptly transmit to each of the
     other Banks).  Thereafter (1) in the case of clause (A) above, Reserve
     Adjusted Eurodollar Loans shall no longer be available until such time as
     the Administrative Agent 


                                     -14-

<PAGE>

     notifies the Borrower and the Banks that the circumstances giving rise 
     to such notice by the Administrative Agent no longer exist, and any 
     Notice of Borrowing or Notice of Conversion/Continuation given by the 
     Borrower with respect to the borrowing of or conversion into (including 
     continuance of) Reserve Adjusted Eurodollar Loans which have not yet 
     been incurred shall be deemed rescinded by the Borrower, (2) in the case 
     of clause (B) above, the Borrower shall pay to such Bank, within 10 
     Business Days of written demand therefor, such additional amounts as 
     shall be required to compensate such Bank for such increased costs or 
     reductions in amounts receivable hereunder (a written notice pursuant to 
     Section 1.10(h) as to the additional amounts owed to such Bank, showing 
     the basis for the calculation thereof, submitted to the Borrower by such 
     Bank shall, absent demonstrable error, be final, conclusive and binding 
     upon all parties hereto) and (3) in the case of clause (C) above, the 
     Borrower shall take one of the actions specified in Section 1.10(d) as 
     promptly as possible and, in any event, within the time period required 
     by law.

             (c)  At any time that any Reserve Adjusted Eurodollar Loan is
     affected by the circumstances described in Section 1.10(b)(B), the Borrower
     may either (i) if a Notice of Borrowing or Notice of
     Conversion/Continuation has been given with respect to the affected Reserve
     Adjusted Eurodollar Loan, cancel such Notice of Borrowing or Notice of
     Conversion/Continuation by giving the Administrative Agent telephonic
     notice (promptly confirmed in writing) thereof on the same date (if the
     Borrower has been notified by not later than 3:00 P.M. (New York time) or
     the next Business Day if otherwise) that the Borrower was notified by a
     Bank pursuant to Section 1.10(b)(B) or (C), or (ii) if the affected Reserve
     Adjusted Eurodollar Loan is then outstanding, upon at least one Business
     Day's notice to the Administrative Agent, either require the affected Bank
     to convert each such Reserve Adjusted Eurodollar Loan into a Base Rate
     Loan, or prepay such Reserve Adjusted Eurodollar Loan; PROVIDED, HOWEVER,
     that if more than one Bank is affected at any time, then all affected Banks
     must be treated the same pursuant to this Section 1.10(c); and PROVIDED,
     FURTHER, that the Borrower shall compensate any such affected Banks as set
     forth in Section 1.10(f).

             (d)  At any time that any Reserve Adjusted Eurodollar Loan is
     affected by the circumstances described in Section 1.10(b)(C), the Borrower
     shall either (i) if a Notice of Borrowing or Notice of
     Conversion/Continuation has been given with respect to the affected Reserve
     Adjusted Eurodollar Loan, be deemed to have canceled said Notice of
     Borrowing or Notice of Conversion/Continuation or (ii) if the affected
     Reserve Adjusted Eurodollar Loan is then outstanding, either permit the
     affected Bank to convert each such Reserve Adjusted Eurodollar Loan into a
     Base Rate Loan, or prepay such Reserve Adjusted Eurodollar Loan; PROVIDED,
     HOWEVER, that if more than one Bank is affected at any time, then all
     affected Banks must be treated the same pursuant to this Section 1.10(d);
     and PROVIDED, FURTHER, that the Borrower shall compensate any such affected
     Banks as set forth in Section 1.10(f).


                                     -15-

<PAGE>

             (e)  Each Bank agrees that, as promptly as practicable after it has
     actual knowledge of the occurrence of any event or the existence of a
     condition that would cause it to be an affected Bank under Section
     1.10(b)(B) or (C), it will, to the extent not inconsistent with such Bank's
     internal policies or any legal or regulatory restrictions, use reasonable
     efforts to make, fund or maintain the affected Reserve Adjusted Eurodollar
     Loans of such Bank through another lending office of such Bank if as a
     result thereof the additional moneys which would otherwise be required to
     be paid in respect of such Loans pursuant to Section 1.10(b)(B) would be
     materially reduced or the illegality or other adverse circumstances which
     would otherwise require conversion or prepayment of such Loans pursuant to
     Section 1.10(b)(C) would cease to exist, and if, as determined by such
     Bank, in its reasonable discretion, the making, funding or maintaining of
     such Loans through such other lending office would not otherwise adversely
     affect such Loans or such Bank.  The Borrower hereby agrees to pay all
     reasonable out-of-pocket expenses incurred by any Bank in utilizing another
     lending office of such Bank pursuant to this Section 1.10(e).

             (f)  The Borrower shall compensate each Bank, within 10 Business
     Days after a written request by such Bank (which request shall be
     accompanied by a written notice pursuant to Section 1.10(h) setting forth
     in reasonable detail the calculation of such amounts), for all reasonable
     out-of-pocket losses, expenses and liabilities (including, without
     limitation, such factors as any interest paid by such Bank to lenders of
     funds borrowed by it to make or carry its Reserve Adjusted Eurodollar Loans
     and any loss sustained by such Bank in connection with re-employment of
     such funds (based upon the difference between the amount earned in
     connection with the re-employment of such funds and the amount payable by
     the Borrower if such funds had been borrowed or remained outstanding))
     ("BREAKAGE COSTS") which such Bank may sustain with respect to the
     Borrower's Reserve Adjusted Eurodollar Loans:  (i) if for any reason (other
     than a default or error by such Bank) a Borrowing of any Reserve Adjusted
     Eurodollar Loan does not occur on a date specified therefor in a Notice of
     Borrowing or a Notice of Conversion/Continuation or in a telephonic request
     for borrowing or conversion or continuation, or a successive Interest
     Period in respect of any such Reserve Adjusted Eurodollar Loan does not
     commence after notice therefor is given pursuant to Section 1.06; or (ii)
     subject to Section 3.08, if any payment, prepayment or conversion (as
     required by Section 3.01, 3.02 or 3.03(a) through (e), inclusive, or
     3.03(h) or (i), by acceleration or otherwise) of any of such Bank's Reserve
     Adjusted Eurodollar Loans occurs on a date which is not the last day of the
     Interest Period applicable to that Loan; or (iii) if any prepayment of any
     such Bank's Reserve Adjusted Eurodollar Loans is not made on any date
     specified in a notice of prepayment given by the Borrower; or (iv) as a
     consequence of any other failure by the Borrower to repay such Bank's
     Reserve Adjusted Eurodollar Loans when required by the terms of this
     Agreement.

             (g)  Any Bank claiming any additional amounts payable pursuant to
     this Section 1.10 agrees to use reasonable efforts (consistent with such
     Bank's internal 


                                     -16-

<PAGE>

     policies and with legal and regulatory restrictions) to designate a 
     different lending office if the making of such a designation would avoid 
     the need for, or reduce the amount of, any such additional amounts and 
     would not, in the reasonable judgment of such Bank, be in any way 
     otherwise disadvantageous to such Bank.

             (h)  Each Bank shall notify the Borrower of any event occurring
     after the date hereof entitling such Bank to compensation under this
     Sections 1.10(a) through (g) as promptly as practicable, but in any event
     within 90 days after such Bank obtains actual knowledge thereof; PROVIDED,
     HOWEVER, that if any Bank fails to give such notice within 90 days after it
     obtains actual knowledge of such an event, such Bank shall, with respect to
     compensation payable pursuant to this Section 1.10 in respect of any costs
     or other amounts resulting from or relating to such event, only be entitled
     to payment under this Section 1.10 for such costs or other amounts from and
     after the date 90 days prior to the date that such Bank does give such
     notice.  Each Bank will furnish to the Borrower a certificate setting forth
     in reasonable detail the basis and amount of each request by such Bank for
     compensation under this Section 1.10.  Determinations by any Bank for
     purposes of this Section 1.10, including of the effect of any regulatory
     change pursuant to Section 1.10(b)(B) on its costs of maintaining Loans or
     its obligation to make Loans, or on amounts receivable by it in respect of
     Loans, and of the amounts required to compensate such Bank under this
     Section 1.10, shall be made on a reasonable basis.
  
     1.11.   CAPITAL REQUIREMENTS.

             (a)  If any Bank shall have determined in good faith that the
     adoption or effectiveness after the Closing Date of any applicable law,
     governmental rule, regulation, guideline, request or order regarding
     capital adequacy, or any change therein, or any change in the
     interpretation or administration thereof by any Governmental Authority,
     central bank or comparable agency charged with the interpretation or
     administration thereof, or compliance by such Bank or such Bank's parent
     with any request or directive regarding capital adequacy (whether or not
     having the force of law) of any such authority, central bank or comparable
     agency has or would have the effect of reducing the rate of return on the
     capital or assets of such Bank or such Bank's parent as a consequence of
     such Bank's obligations hereunder to a level below that which such Bank or
     such Bank's parent could have achieved but for such adoption, effectiveness
     or change or as a consequence of an increase in the amount of capital
     required to be maintained by such Bank as a consequence of such Bank's
     obligations hereunder (including in each case, without limitation, with
     respect to any of such Bank's Commitments or any Loan), then from time to
     time, within 15 Business Days after demand by such Bank (with a copy to the
     Administrative Agent), the Borrower shall pay to such Bank such additional
     amount or amounts as will compensate such Bank or such Bank's parent, as
     the case may be, for such reduction.


                                     -17-

<PAGE>

             (b)  Each Bank, upon determining in good faith that any additional
     amounts will be payable pursuant to Section 1.11(a), will give prompt
     written notice thereof to the Borrower, but in any event within 90 days
     after such Bank obtains actual knowledge of an event described in Section
     1.11(a) pursuant to which additional amounts will be payable thereunder;
     PROVIDED, HOWEVER, that if any Bank fails to give such notice within 90
     days after it obtains actual knowledge of such an event, such Bank shall,
     with respect to compensation payable pursuant to this Section 1.11 in
     respect of any costs or other amounts resulting from or relating to such
     event, be entitled to payment under this Section 1.11 only for such costs
     or other amounts from and after the date 90 days prior to the date that
     such Bank does give such notice.  Each Bank will furnish to the Borrower a
     certificate setting forth in reasonable detail the basis and amount of each
     request by such Bank for compensation under this Section 1.11. 
     Determinations by any Bank for purposes of this Section 1.11, including of
     the effect of any regulatory change pursuant to Section 1.11(a) on its rate
     of return or in the amount of capital required to be maintained by it, and
     of the amounts required to compensate such Bank under this Section 1.11,
     shall be made on a reasonable basis.

     1.12.   TOTAL LOAN COMMITMENTS; LIMITATIONS ON OUTSTANDING LOAN AMOUNTS. 
As of the Closing Date, the amount of (a) the Total Commitment is $150,000,000,
(b) the Total Revolving Loan Commitment is $40,000,000, (c) the Total
Acquisition Term Loan Commitment is $75,000,000, and (d) the Total Supplemental
Loan Commitment is $35,000,000.  Anything contained in this Agreement to the
contrary notwithstanding, (i) in no event shall the sum of the aggregate
principal amount of all outstanding Revolving Loans, Acquisition Term Loans,
Supplemental Revolving Loans and Supplemental Term Loans of any Bank at any time
exceed such Bank's portion of the Total Commitment, (ii) in no event shall the
sum of the aggregate principal amount of all Revolving Loans, Acquisition Term
Loans, Supplemental Revolving Loans and Supplemental Term Loans from all Banks
at any time exceed the Total Commitment, (iii) in no event shall the Total
Revolver Utilization exceed the Total Revolving Loan Commitment, (iv) in no
event shall the Total Acquisition Utilization exceed the Total Acquisition Term
Loan Commitment, and (v) in no event shall the Total Supplemental Utilization
exceed the Total Supplemental Loan Commitment.

     1.13.   LETTERS OF CREDIT

             (a)  LETTERS OF CREDIT; PARTICIPATION; ADDITIONAL COLLATERAL UPON
                  DEFAULT.

                    (i)   Subject to the terms and conditions of this Agreement,
             so long as no Default or Event of Default exists hereunder, and in
             reliance upon the representations and warranties of the Borrower
             set forth herein and in the other Credit Documents, in addition to
             requesting that the Banks make Revolving Loans or Supplemental
             Revolving Loans pursuant to Section 1.03, the Borrower may request,
             from time to time, in accordance with the provisions of this
             Section 1.13, that one or more Issuing Banks issue Letters of
             Credit for the account of the Borrower; PROVIDED, THAT: 


                                     -18-

<PAGE>

                    (w)    the Borrower shall specify in such request whether
                           such Letter of Credit is to be issued under the
                           Revolving Portion or the Supplemental Portion of the
                           Loan Facility; and
     
                    (x)    the Borrower shall not request that any Bank issue
                           any Letter of Credit and a Bank shall not be
                           required to issue any Letter of Credit, if after
                           giving effect to such issuance the sum of (a) the
                           Letters of Credit Usage on the date of such
                           issuance, after giving effect to the issuance of all
                           Letters of Credit subject to outstanding requests
                           for issuance of a Letter of Credit, plus (b) the
                           aggregate principal amount of Revolving Loans or
                           Supplemental Revolving Loans, as the case may be,
                           then outstanding, after giving effect to the making
                           of all Revolving Loans or Supplemental Revolving
                           Loans, as the case may be, then requested by all
                           outstanding but unfunded Notices of Borrowing, would
                           exceed the lesser of (x) the Borrowing Base as shown
                           in the Borrowing Base Certificate that was last
                           required to be delivered pursuant to Section 6.01 or
                           (y) the Total Revolving Loan Commitment or the Total
                           Supplemental Revolving Loan Commitment, as the case
                           may be; and 

                    (y)    In no event shall any Issuing Bank issue any Letter
                           of Credit having an expiration date which is (x)
                           later than thirty (30) Business Days prior to the
                           Revolving Loan Maturity Date or Supplemental
                           Revolving Loan Maturity Date, as the case may be,
                           after giving effect to any possible renewal of such
                           Letter of Credit, or (y) more than one year after
                           its date of issuance; PROVIDED that, subject to the
                           foregoing clause (ii)(x), this clause (ii)(y) shall
                           not prevent any Issuing Bank from issuing a Letter
                           of Credit which is subject to renewal for periods
                           not exceeding one year per renewal; and 

                    (z)    In no event shall any Issuing Bank issue any Letter
                           of Credit if, after giving effect to such issuance
                           and the issuance of all other requested Letters of
                           Credit, the then outstanding Letters of Credit Usage
                           in respect of all Letters of Credit would exceed
                           $5,000,000.  

                    (ii)   Upon the issuance of any Letter of Credit, a
             participation therein, in an amount equal to each Bank's PRO RATA
             share (determined on the basis of such Bank's Revolving Loan
             Commitment or Supplemental Revolving Loan Commitment, as the case
             may be) (such participation of each Bank in each Letter of Credit
             being hereinafter referred to as its "Letter of Credit
             Participation"), shall 


                                     -19-

<PAGE>

             automatically be deemed granted by the Issuing Bank to each Bank 
             on the date of such issuance and the Banks shall automatically be 
             obligated, as set forth in Section 1.13(e), to reimburse the 
             Issuing Bank to the extent of such pro rata share for all 
             obligations incurred by the Issuing Bank to third parties in 
             respect of such Letter of Credit not reimbursed by the Borrower.  
             The Issuing Bank will send to each Bank (and the Administrative 
             Agent if the Issuing Bank is not the Administrative Agent) a 
             confirmation regarding the participation in Letters of Credit 
             outstanding during such month. 

                    (iii)   Notwithstanding the foregoing, upon the occurrence
             and during the continuation of any Event of Default hereunder, the
             Administrative Agent or the Required Banks may, by notice to the
             Borrower, require that any outstanding Letters of Credit be cash
             collateralized, and upon receipt of such notice, the Borrower
             shall, within five Business Days of such notice, deliver to the
             Administrative Agent an amount equal to the sum of (x) the maximum
             aggregate amount that is or at any time thereafter may become
             available to be drawn under any such outstanding Letters of Credit
             and (y) the aggregate amount of all drawings under such Letters of
             Credit which have been honored by Issuing Banks with respect
             thereto and not theretofore reimbursed by the Borrower; PROVIDED,
             that any such cash collateralized Letters of Credit shall be
             excluded from the calculation of Letters of Credit Usage for
             purposes of determining the availability of Letters of Credit under
             Section 1.13(a)(x) and for purposes of Section 3.03(a) or (b).

                    (iv)   The Administrative Agent is hereby authorized and
             directed in the event of such Event of Default and requirement of
             cash collateral to create a segregated cash collateral account
             bearing interest payable to the Borrower at a rate per annum equal
             to the Federal Funds Rate (a "LETTER OF CREDIT CASH COLLATERAL
             ACCOUNT"), and to deposit in such account any amounts received from
             the Borrower pursuant to the foregoing.  Funds on deposit from time
             to time in any Letter of Credit Cash Collateral Account (the
             "LETTER OF CREDIT CASH COLLATERAL") shall be held by the
             Administrative Agent for the benefit of the Banks hereunder,
             including Issuing Banks, in respect of their participation in
             Letters of Credit and as Banks hereunder and as security for the
             payment and performance of the Obligations in accordance with the
             Security Documents, including the Borrower's obligations under
             Section 1.13(d), shall be subject to the sole dominion and control
             of the Administrative Agent and the Borrower shall have no right of
             withdrawal from the Letter of Credit Cash Collateral Account. 
             Notwithstanding any provision in this Agreement or in any Security
             Document, after payment of any costs of collection and reasonable
             expenses of the Administrative Agent in connection with the
             establishment of the Letter of Credit Cash Collateral Account,
             Letter of Credit Cash Collateral shall be applied by the
             Administrative Agent as follows: FIRST, to reimburse any Banks
             (including any 


                                     -20-

<PAGE>

             Issuing Banks) for any drawings (or participation in such) on 
             such Letters of Credit which have not been repaid by the 
             Borrower, such reimbursement to be made from time to time until 
             no Letters of Credit are outstanding; SECOND, only after no 
             Letters of Credit remain outstanding and any unreimbursed 
             drawings (or participations in such) of any Bank (including any 
             Issuing Bank) have been fully repaid and all fees payable under 
             this Section 1.13 have been paid, to the payment, in accordance 
             with the Security Documents, of any of the remaining Obligations 
             then due and payable; and FINALLY, after its application in 
             accordance with the foregoing, returned to the Borrower. 

             (b)  REQUEST FOR ISSUANCE  Whenever the Borrower desires the
     issuance of a Letter of Credit it shall deliver to the Administrative
     Agent, at the Agent's Office, an application requesting issuance of a
     Letter of Credit no later than 1:00 P.M. (New York time) at least three
     Business Days, or such shorter period as may be agreed to by any Issuing
     Bank in any particular instance, in advance of the proposed date of
     issuance.  The request for issuance with respect to any Letter of Credit
     shall specify (i) the proposed date of issuance (which shall be a business
     day under the laws of the jurisdiction of the Issuing Bank) of such Letter
     of Credit, (ii) the face amount of such Letter of Credit, (iii) the
     expiration date of such Letter of Credit and (iv) the name and address of
     the beneficiary of such Letter of Credit.  As soon as practicable after
     delivery of such request for issuance of a Letter of Credit, the Issuing
     Bank for such Letter of Credit shall be determined as provided in Section
     1.13(c).  Prior to the date of issuance, the Borrower shall specify a
     precise description of the documents and the verbatim text of any
     certificate to be presented by the beneficiary of such Letter of Credit
     which, if presented by such beneficiary prior to the expiration date of the
     Letter of Credit, would require the Issuing Bank to make payment under the
     Letter of Credit; PROVIDED that the Issuing Bank, in its sole judgment, may
     require such changes in any such documents and certificates as it
     reasonably believes to be necessary to comply with laws, customs or
     practices or to achieve clarity; and PROVIDED, FURTHER, that no Letter of
     Credit shall require payment against a conforming draft to be made
     thereunder earlier than 1:00 P.M. in the time zone of the Issuing Bank on
     the Business Day (which shall be a business day under the laws of the
     jurisdiction of the Issuing Bank) next succeeding the Business Day (which
     shall be a business day under the laws of the jurisdiction of the Issuing
     Bank) that such draft is presented.  In determining whether to pay under
     the Letter of Credit, the Issuing Bank shall be responsible only to
     determine that the documents and certificates required to be delivered
     under the Letter of Credit have been delivered and that they comply on
     their face with the requirements of that Letter of Credit.  Without
     limiting the foregoing, the determination of whether a demand has been made
     prior to the expiration of a Letter of Credit and whether a demand is in
     proper and sufficient form for compliance with the Letter of Credit shall
     be made by the Issuing Bank in accordance with Section 1.13(k).  The
     Issuing Bank is authorized without reference to or approval by the Borrower
     to set forth the terms appearing on the relevant application for the Letter
     of Credit in the Letter of Credit and to modify or alter such terms in such
     language as the Issuing Bank may 


                                     -21-

<PAGE>

     deem appropriate, with such variations from such terms as such Bank may, 
     in accordance with Section 1.13(k), determine are necessary to comply 
     with laws, customs or practices or to achieve clarity and are not 
     materially inconsistent with such terms. Promptly after receipt of a 
     request for issuance of a Letter of Credit and the determination of the 
     Issuing Bank thereof, the Administrative Agent shall notify each Bank of 
     the proposed issuance, the identity of the Issuing Bank and the amount 
     of each other Bank's respective participation therein, determined in 
     accordance with Section 1.13(a)(ii).

             (c)  DETERMINATION OF ISSUING BANK.  Upon receipt by the
     Administrative Agent of a request for issuance pursuant to Section 1.13(b)
     with respect to a Letter of Credit, in the event that Indosuez elects to
     issue such Letter of Credit, the Administrative Agent shall so notify the
     Borrower, and Indosuez shall be the Issuing Bank with respect thereto.  In
     the event that Indosuez, in its sole discretion, elects not to issue such
     Letter of Credit, the Administrative Agent shall promptly so notify the
     Borrower, and the Borrower may request any other Bank to issue such Letter
     of Credit.  Each such Bank so requested to issue such Letter of Credit
     shall promptly notify the Borrower and the Administrative Agent whether or
     not, in its sole discretion, it has elected to issue such Letter of Credit
     and any such Bank that so elects to issue such Letter of Credit shall be
     the Issuing Bank with respect thereto.  In the event that all other Banks
     shall have declined to issue such Letter of Credit, notwithstanding the
     prior election of Indosuez not to issue such Letter of Credit, Indosuez
     shall be obligated to issue the Letter of Credit requested by the Borrower
     and shall be the Issuing Bank with respect to such Letter of Credit;
     PROVIDED that Indosuez shall not be obligated to issue any Letter of Credit
     for which the initial stated amount is less than $5,000.  No Issuing Bank
     shall issue any Letter of Credit denominated in a currency other than
     Dollars.

             (d)  PAYMENT OF AMOUNTS DRAWN UNDER LETTERS OF CREDIT.  In the
     event of any request for drawing under any Letter of Credit by the
     beneficiary thereof, the Issuing Bank shall notify the Borrower and the
     Administrative Agent on or before the date on which such Issuing Bank
     intends to honor such drawing, and the Borrower shall reimburse such
     Issuing Bank on the day on which such drawing is honored in an amount in
     same day funds equal to the amount of such drawing: PROVIDED that,
     anything contained in this Agreement to the contrary notwithstanding, (i)
     unless the Borrower shall have notified the Administrative Agent and such
     Issuing Bank prior to 1:00 p.m. (New York time) on the Business Day of the
     date of such drawing that the Borrower intends to reimburse such Issuing
     Bank for the amount of such drawing with funds other than the proceeds of
     Revolving Loans, the Borrower shall be deemed to have timely given a Notice
     of Borrowing to the Administrative Agent requesting the Banks to make
     Revolving Loans or Supplemental Revolving Loans, as the case may be, that
     are Base Rate Loans on the date on which such drawing is honored in an
     amount equal to the amount of such drawing, and (ii) subject to
     availability under the Borrowing Base, the Banks shall, on the date of such
     drawing, make Revolving Loans or Supplemental Revolving Loans, as the case
     may be, that are Base Rate Loans in the amount of such 


                                     -22-

<PAGE>

     drawing, the proceeds of which shall be applied directly by the 
     Administrative Agent to reimburse such Issuing Bank for the amount of 
     such drawing; and PROVIDED FURTHER that if for any reason, Revolving 
     Loans or Supplemental Revolving Loans, as the case may be, are not made 
     to so reimburse such Issuing Bank in an amount equal to the amount of 
     such drawing, the Borrower shall reimburse such Issuing Bank, within one 
     Business Day (which shall be a business day under the laws of 
     jurisdiction of such Issuing Bank) following the receipt of notice from 
     the Administrative Agent that such Revolving Loans or Supplemental 
     Revolving Loans, as the case may be, have not been made, in an amount in 
     same day funds equal to the excess of the amount of such drawing over 
     the amount of such Revolving Loans or Supplemental Revolving Loans, as 
     the case may be, if any, that are so received, plus accrued interest on 
     such amount at the rate set forth in Section 1.13(f)(i)(A).

             (e)  PAYMENT BY BANKS.  In the event that (i) the Borrower shall
     fail to reimburse an Issuing Bank as provided in Section 1.13(d) in an
     amount equal to the amount of any drawing honored by such Issuing Bank
     under a Letter of Credit issued by it, and (ii) the Revolving Loans are not
     made in payment of such reimbursement obligation as provided in Section
     1.13(d), such Issuing Bank shall promptly notify each Bank of the
     unreimbursed amount of such drawing and of such Bank's respective
     participation therein.  Each Bank shall make available to such Issuing Bank
     an amount equal to its respective participation in same day funds, at the
     office of such Issuing Bank specified in such notice, not later than 1:00
     P.M. (New York time) on the Business Day (which shall be a business day
     under the laws of the jurisdiction of such Issuing Bank) after the date
     notified by such Issuing Bank.  In the event that any Bank fails to make
     available to such Issuing Bank the amount of such Bank's participation in
     such Letter of Credit as provided in this Section 1.13(e), such Issuing
     Bank shall be entitled to recover such amount on demand from such Bank
     together with interest at the customary rate set by the Administrative
     Agent for the correction of errors among banks for three Business Days and
     thereafter at the Base Rate.  Each Issuing Bank shall distribute to each
     other Bank which has paid all amounts payable by it under this Section
     1.13(e) with respect to any Letter of Credit issued by such Issuing Bank
     such other Bank's PRO RATA share of all payments received by such Issuing
     Bank from the Borrower in reimbursement of drawings honored by such Issuing
     Bank under such Letter of Credit when such payments are received.  Nothing
     in this Section 1.13(e) shall be deemed to relieve any Bank of its
     obligation to pay all amounts payable by it under this Section 1.13(e) with
     respect to any Letter of Credit issued by an Issuing Bank or to prejudice
     any rights that the Borrower or any other Bank may have against a Bank as a
     result of any default by such Bank hereunder and no Bank shall be
     responsible for the failure of any other Bank to pay its PRO RATA share
     payable under this Section 1.13(e).

             (f)  COMPENSATION.


                                     -23-

<PAGE>

                    (i)   the Borrower agrees to pay the following amounts with
             respect to all Letters of Credit:

                              (A)   with respect to drawings made under any
                    Letter of Credit, interest, payable on demand, on the amount
                    paid by such Issuing Bank in respect of each such drawing
                    from and including the date of the drawing through the date
                    such amount is reimbursed by the Borrower (including any
                    such reimbursement out of the proceeds of Revolving Loans or
                    Supplemental Revolving Loans, as the case may be, pursuant
                    to Section 1.13(d)) at a rate which is equal to the interest
                    rate then applicable to Revolving Loans or Supplemental
                    Revolving Loans, as the case may be, that are Base Rate
                    Loans for the period from the date of such drawing to and
                    including the first Business Day after the date of such
                    drawing and thereafter at a rate equal to 2% PER ANNUM in
                    excess of the rate of interest otherwise payable under this
                    Agreement for Revolving Loans or Supplemental Revolving
                    Loans, as the case may be, that are Base Rate Loans during
                    such period; and 

                              (B)   with respect to the amendment or transfer of
                    each Letter of Credit and each drawing made thereunder,
                    documentary and processing charges in accordance with such
                    Issuing Bank's standard schedule for such charges in effect
                    at the time of such amendment, transfer or drawing, as the
                    case may be.

                    (ii)   the Borrower agrees to pay to the Administrative
             Agent for distribution to each Bank in respect of all Letters of
             Credit outstanding such Bank's PRO RATA share of a commission equal
             to 2% PER ANNUM of the maximum amount available from time to time
             to be drawn under such outstanding Letters of Credit, payable in
             arrears on and through the last Business Day of each March, June,
             September and December commencing March 31, 1997 and calculated on
             the basis of a 365-day year and the actual number of days elapsed. 
             Upon the happening and during the continuance of an Event of
             Default described in Section 8.01, the commission referred to in
             the preceding sentence shall be 4% PER ANNUM.

                    (iii)   the Borrower agrees to pay to each Issuing Bank in
             respect of each Letter of Credit issued by each such Issuing Bank
             on the date of issuance an amount equal to the greater of (A) 1/2
             of 1% of the maximum amount available at any time to be drawn under
             such Letter of Credit or (B) $1,500.

                  Amounts payable under clauses (i) (A) and (ii) of this Section
          1.13(f) shall be paid to the Administrative Agent for the benefit of
          the Banks.  The Administrative Agent shall promptly distribute to each
          Bank its PRO RATA share of such amount.  Amounts payable under clauses
          (i) (B) and (iii) of this Section 


                                      -24-

<PAGE>

          1.13(f) shall be paid to the Administrative Agent, and thereupon paid 
          over to the Issuing Bank.

             (g)  OBLIGATIONS ABSOLUTE.  The obligation of the Borrower to
     reimburse each Issuing Bank for drawings made under the Letters of Credit
     issued by it and the obligations of the Banks under Section 1.13(e) shall
     be unconditional and irrevocable and shall be paid strictly in accordance
     with the terms of this Agreement under all circumstances including, without
     limitation, the following circumstances:

                    (i)    any lack of validity or enforceability of any Letter
             of Credit;

                    (ii)   the existence of any claim, set off, defense or other
             right that the Borrower or any other Person may have at any time
             against a beneficiary or any transferee of any Letter of Credit (or
             any persons or entities for whom any such beneficiary or transferee
             may be acting), such Issuing Bank, any Bank or any other Person,
             whether in connection with this Agreement, the transactions
             contemplated herein or any unrelated transaction;

                    (iii)   any draft, demand, certificate or any other document
             presented under any Letter of Credit proving to be forged,
             fraudulent, invalid or insufficient in any respect or any statement
             therein being untrue or inaccurate in any respect, if not apparent
             from the documents presented;

                    (iv)    payment by such Issuing Bank under any Letter of
             Credit against presentation of a demand, draft or certificate or
             other document that does not comply with the terms of such Letter
             of Credit unless such Issuing Bank shall have acted in bad faith or
             with willful misconduct or gross negligence in issuing such
             payment;

                    (v)     any other circumstance or happening whatsoever that
             is similar to any of the foregoing; or

                    (vi)    the fact that a Default or Event of Default shall
             have occurred and be continuing.

             (h)  ADDITIONAL PAYMENTS.  If by reason of (a) any change after the
     Effective Date in applicable law, regulation, rule, decree or regulatory
     requirement or any change in the interpretation or application by an
     judicial or regulatory authority of any law, regulation, rule, decree or
     regulatory requirement or (b) compliance by an Issuing Bank or any Bank
     with any direction, request or requirement (whether or not having the force
     of law) of any Governmental Authority or monetary authority including,
     without limitation, Regulation D, any reserve, deposit or similar
     requirement is or shall be applicable, imposed or modified in respect of
     any Letter of Credit issued by such Issuing Bank or participation 


                                      -25-

<PAGE>

     therein purchased by any Bank and the result of the foregoing is to 
     increase the cost to such Issuing Bank or any Bank of issuing, making or 
     maintaining any Letter of Credit or of purchasing or maintaining any 
     participation therein, or to reduce the amount receivable in respect 
     thereof by such Issuing Bank or any Bank, then and in any such case such 
     Issuing Bank or such Bank shall, after the additional cost is incurred 
     or the amount received is reduced, notify the Borrower and the Borrower 
     shall pay within 10 Business Days after demand such amounts as such 
     Issuing Bank or such Bank may specify to be necessary to compensate such 
     Issuing Bank or such Bank for such additional cost or reduced receipt, 
     together with interest on such amount from the date demanded until 
     payment in full thereof at a rate PER ANNUM equal at all times to the 
     rate applicable to Revolving Loans or Supplemental Revolving Loans that 
     are Base Rate Loans then in effect; PROVIDED that if any Bank fails to 
     give such notice within 90 days after it obtains actual knowledge of 
     such an event, such Bank shall, with respect to compensation payable 
     pursuant to this Section 1.13(h) in respect of any costs or other 
     amounts resulting from or relating to such event, only be entitled to 
     payment under this Section 1.13(h) for such costs or other amounts 
     incurred from and after the date 90 days prior to the date that such 
     Bank does give such notice; and PROVIDED, FURTHER, that each Bank agrees 
     that, as promptly as practicable after it becomes aware of the existence 
     of the foregoing conditions, it will, to the extent not inconsistent 
     with such Bank's internal policies or any legal or regulatory 
     restrictions, use reasonable efforts to issue, make or maintain the 
     affected Letter of Credit or purchase or maintain any participation 
     therein through another lending office of such Bank if as a result 
     thereof the additional moneys which would otherwise be required to be 
     paid to compensate for such additional cost or reduced receipt with 
     respect to such Letter of Credit pursuant to this Section 1.13(h) would 
     be reduced and if, as determined by such Bank, in its reasonable 
     discretion, the issuance, making or maintaining of such Letter of Credit 
     or the purchasing or maintaining of any participation therein through 
     such other lending office would not otherwise materially adversely 
     affect such Letter of Credit or such Bank.  Each Bank will furnish to 
     the Borrower a certificate setting forth in reasonable detail the basis 
     and amount of each request by such Bank for compensation under this 
     Section 1.13(h).  Determinations by any Bank for purposes of this 
     Section 1.13(h), including of the effect of any regulatory change 
     pursuant to Section 1.13(h) on its costs of making or maintaining 
     Letters of Credit (or purchasing or maintaining participation therein), 
     or on amounts receivable by it in respect of Letters of Credit, and of 
     the amounts required to compensate such Bank under this Section 1.13(h), 
     shall be made on a reasonable basis.  A certificate in reasonable detail 
     as to the amount of such increased cost or reduced receipt, submitted to 
     the Borrower and the Administrative Agent by the Issuing Bank or any 
     Bank, as the case may be, shall, except for demonstrable error, be 
     final, conclusive and binding for all purposes.

             (i)  INDEMNIFICATION; NATURE OF ISSUING BANK'S DUTIES.  In addition
     to amounts payable as elsewhere provided in this Section 1.13, without
     duplication, the Borrower hereby agrees to protect, indemnify, pay and save
     each Issuing Bank harmless from and against any and all claims, demands,
     liabilities, damages, losses, costs, charges and 


                                      -26-

<PAGE>

     expenses (including reasonable attorneys' fees and allocated costs of 
     internal counsel) which such Issuing Bank may incur or be subject to as 
     a consequence, direct or indirect, of (i) the issuance of the Letters of 
     Credit or (ii) the failure of such Issuing Bank to honor a drawing under 
     any Letter of Credit, in each case as a result of any act or omission, 
     whether rightful or wrongful, of any present or future de jure or de 
     facto Governmental Authority.

          As between the Borrower and each Issuing Bank, the Borrower assumes
     all risks of the acts and omissions of, or misuse of the Letters of Credit
     issued by such Issuing Bank by, the respective beneficiaries of such
     Letters of Credit.  In furtherance and not in limitation of the foregoing,
     such Issuing Bank shall not be responsible:  (i) for the form, validity,
     sufficiency, accuracy, genuineness or legal effects of any document
     submitted by any party in connection with the application for and issuance
     of any such Letter of Credit, even if it should in fact prove to be in any
     or all respects invalid, insufficient, inaccurate, fraudulent or forged;
     (ii) for the validity or sufficiency of any instrument transferring or
     assigning or purporting to transfer or assign any such Letter of Credit or
     the rights or benefits thereunder or proceeds thereof, in whole or in part,
     that may prove to be invalid or ineffective for any reason; (iii) for
     failure of the beneficiary of any such Letter of Credit to comply fully
     with conditions required in order to draw upon such Letter of Credit; (iv)
     for errors, omissions, interruptions or delays in transmission or delivery
     of any messages, by mail, cable, telegraph, telex or otherwise, whether or
     not they are in cipher; (v) for errors in the translation or interpretation
     of technical terms; (vi) for any loss or delay in the transmission or
     otherwise of any document required in order to make a drawing under any
     such Letter of Credit or of the proceeds thereof; (vii) for the
     misapplication by the beneficiary of any such Letter of Credit of the
     proceeds of any drawing under such Letter of Credit;  (viii) for any
     consequences arising from causes beyond the control of such Issuing Bank or
     its correspondents, including, without limitation, any act or omission of
     any Governmental Authority; and (ix) for any error, neglect, default,
     suspension or insolvency of any Issuing Bank's correspondents or any
     consequence thereof, PROVIDED, in each case, that the Issuing Bank acts in
     good faith.  None of the above shall affect, impair, or prevent the vesting
     of any of such Issuing Bank's rights or powers hereunder.  Any Issuing Bank
     shall have the right to transmit the terms of the Letter of Credit without
     translating them.  If the Letter of Credit provides that payment is to be
     made by the Issuing Bank's correspondent, neither the Issuing Bank nor such
     correspondent shall be responsible for the failure of any document
     specified in the Letter of Credit to come into the Issuing Bank's hands or
     for any delay in connection therewith, and the Borrower's obligation to
     reimburse the Issuing Bank for payments made or obligations incurred shall
     not be affected by such failure or delay in the receipt by the Issuing Bank
     of any or all of such documents whether sent to such Bank in one or
     multiple mailings.  No Issuing Bank shall be liable for any failure by such
     Bank or anyone else to pay or accept any draft or other demands for payment
     or acceptance under the Letter of Credit resulting from any censorship,
     law, control or restriction rightfully or wrongfully exercised by any de
     facto or de jure Governmental Authority or from any 


                                      -27-

<PAGE>

     other cause beyond such Bank's control or the control of such Bank's 
     correspondents, agents or sub-agents or for any loss or damage to the 
     Borrower or anyone else resulting from any such failure to pay or 
     accept, all such risks being expressly assumed by the Borrower.

          In furtherance and extension and not in limitation of the specific
     provisions hereinabove set forth, any action taken or omitted by any
     Issuing Bank in connection with the Letters of Credit issued by it or the
     related certificates, if taken or omitted in good faith, shall not result
     in such Issuing Bank incurring any liability to the Borrower.  Without
     limiting the generality of the foregoing, the Issuing Bank and its
     correspondents may, without incurring any responsibility or liability, (i)
     act in reliance upon any oral, telephonic, telegraphic, telex, telecopier,
     electronic or written request, application (including an application for
     issuance of a Letter of Credit) or notice believed in good faith to have
     been authorized by the Borrower, whether or not given or signed by an
     authorized person, and (ii) receive, accept and pay any drafts or other
     documents and instruments (otherwise in order) signed by, or issued to, the
     receiver, executor, administrator, liquidator, guardian or conservator of
     anyone named in the Letter of Credit as the person by whom drafts and other
     documents and instruments are to be made or issued.

          Notwithstanding anything to the contrary contained in this Section
     1.13(i), the Borrower shall have no obligation to indemnify any Issuing
     Bank or any Bank in respect of any liability incurred by such Issuing Bank
     or such Bank arising out of the gross negligence, bad faith or willful
     misconduct of such Issuing Bank or such Bank or out of the wrongful
     dishonor by such Issuing Bank or such Bank of a proper demand for payment
     under the Letters of Credit issued by it.

             (j)  COMPUTATION OF INTEREST.  Interest payable pursuant to this
     Section 1.13 shall be computed on the basis of a 360 day year and the
     actual number of days elapsed.

             (k)  UNIFORM CUSTOMS AND PRACTICE.  This Section 1.13 shall be
     subject to the Uniform Customs and Practice for Documentary Credits of the
     International Chamber of Commerce as in force on the date of issuance of
     each Letter of Credit ("UCP") and the UCP shall in all respects be deemed a
     part hereof as fully as if incorporated herein.  The provisions of this
     Section 1.13 shall, where possible, be construed so as to be consistent
     with the UCP; PROVIDED that to the extent the provisions of the UCP are not
     consistent with the provisions of this Section 1.13 the provisions of the
     UCP shall control.  Notwithstanding the provisions of Section 11.08 hereof,
     in the event of any conflict between the UCP and Article 5 of the UCC, the
     UCP shall govern as to the provisions of this Section 1.13.


                                      -28-

<PAGE>

     SECTION 2.  COMMITMENTS.

     2.01.   VOLUNTARY REDUCTION OF COMMITMENTS.  Upon at least one Business
Day's prior written notice (or telephonic notice promptly confirmed in writing)
to the Administrative Agent at the Agent's Office (which notice the
Administrative Agent shall promptly transmit to each of the Banks), the Borrower
shall have the right, without premium or penalty, to terminate irrevocably the
unutilized portion of any or all of (i) the Total Revolving Loan Commitments,
(ii) the Total Acquisition Term Loan Commitments, and (iii) the Total
Supplemental Loan Commitments, in each case, in part or in whole; PROVIDED,
HOWEVER, that (a) any such termination shall proportionately and permanently
reduce the Revolving Loan Commitment, Acquisition Term Loan Commitment, or
Supplemental Loan Commitment, as applicable, of each of the Banks and (b) any
partial reduction of the Total Revolving Loan Commitments, the Total Acquisition
Term Loan Commitments or the Total Supplemental Loan Commitments pursuant to
this Section 2.01 shall, in each case, be in the amount of at least $500,000 and
integral multiples of $100,000 in excess of that amount; PROVIDED, FURTHER, that
(A) the Total Revolving Loan Commitment shall not be reduced to an amount less
than the sum of (x) the aggregate Revolving Loans then outstanding and (y) the
aggregate Letters of Credit Usage related to the Revolving Portion of the Credit
Facility, (B) the Total Acquisition Term Loan Commitment shall not be reduced to
an amount less than the aggregate Acquisition Term Loans then outstanding, and
(C) the Total Supplemental Loan Commitment shall not be reduced to an amount
less than the sum of (I) the aggregate Supplemental Revolving Loans then
outstanding, (II) the aggregate Letters of Credit Usage related to the
Supplemental Portion of the Credit Facility, and (III) the aggregate
Supplemental Term Loans then outstanding.

     2.02.   ADJUSTMENTS; TERMINATION OF COMMITMENTS, ETC.

             (a)  The Total Revolving Loan Commitment shall terminate on the
     earlier of (i) the Revolving Loan Commitment Termination Date and (ii) the
     voluntary reduction by the Borrower pursuant to Section 2.01 of the
     Revolving Loan Commitment to zero.

             (b)  The Total Acquisition Term Loan Commitment shall terminate on
     the earlier of (i) on the Acquisition Term Loan Commitment Termination Date
     and (ii) the voluntary reduction by the Borrower pursuant to Section 2.01
     of the Acquisition Term Loan Commitment to zero and any amounts not
     borrowed with respect to the Acquisition Term Loan on or before such date
     shall cease to be available.

             (c)  The Total Supplemental Revolving Loan Commitment shall
     terminate on the earlier of (i) the Supplemental Revolving Loan Commitment
     Termination Date, and (ii) the voluntary reduction by the Borrower pursuant
     to Section 2.01 of the Total Supplemental Commitments.

             (d)  The Total Supplemental Term Loan Commitments shall terminate
     on the earlier of (i) the Supplemental Term Loan Commitment Termination
     Date, and (ii) the 


                                      -29-

<PAGE>

     voluntary reduction by the Borrower pursuant to Section 2.01 of the Total 
     Supplemental Term Loan Commitments to zero.

             (e)  Each reduction to or termination of the Total Revolving Loan
     Commitment, the Total Acquisition Term Loan Commitment, the Total
     Supplemental Revolving Loan Commitment or the Total Supplemental Term Loan
     Commitment pursuant to this Section 2.02 shall apply proportionately to the
     Revolving Loan Commitment, the Acquisition Term Loan Commitment, the
     Supplemental Revolving Loan Commitment or the Supplemental Term Loan
     Commitment, as the case may be, of each Bank.

     2.03.   COMMITMENT FEE.  The Borrower agrees to pay the Administrative
Agent a commitment fee (the "COMMITMENT FEE") for the account of each Bank for
the period from and including the Closing Date to but not including the date on
which each of the Total Revolving Loan Commitment, the Total Acquisition Term
Loan Commitment, and the Total Supplemental Loan Commitment have been
terminated, computed at a rate equal to .35% per annum on the daily average
Unutilized Revolver Commitment of such Bank, .35% per annum on the daily average
Unutilized Acquisition Commitment of such Bank, .25% per annum on the daily
average Unutilized Supplemental Commitment of such Bank (for the periods to and
including the last Business Day in December, 1998) and, .50% per annum on the
daily average Unutilized Supplemental Commitment of such Bank (for the periods
from and after January 1, 1999).  The Commitment Fee shall be due and payable in
arrears on the last Business Day of each March, June, September and December
commencing March 31, 1998 (for the period from the Closing Date through March
31, 1998), and on the earlier of (x) the Revolving Loan Commitment Termination
Date or (y) the date on which each of  the Total Revolving Loan Commitment,  the
Total Acquisition Term Loan Commitment and the Total Supplemental Loan
Commitments have been terminated pursuant to the terms of this Agreement (for
the period from the date through which the Commitment Fee has been paid in full
in accordance with this Section 2.03 to and including the Revolving Loan
Commitment Termination Date or the date of such earlier termination, as the case
may be).  The calculation of Commitment Fees shall be based on the actual number
of days elapsed over a year of 360 days.

     SECTION 3.  PAYMENTS.

     3.01.   SCHEDULED PAYMENTS.

             (a)  The Borrower shall cause to be paid Scheduled Supplemental
     Term Loan Principal Payments on the Supplemental Term Loan in the amounts
     and at the times specified in the definition of Scheduled Supplemental Term
     Loan Principal Payments set forth in Section 9 until the Supplemental Term
     Loan is paid in full.  Principal amounts repaid in respect of the
     Supplemental Term Loan shall reduce any outstanding Supplemental Term Loan
     Commitments and shall not be available for reborrowing.


                                      -30-

<PAGE>

             (b)  The Borrower shall cause to be paid Scheduled Acquisition Term
     Loan Principal Payments on the Acquisition Term Loans in the amounts and at
     the times specified in the definition of Scheduled Acquisition Term Loan
     Principal Payments set forth in Section 9 until the Acquisition Term Loan
     are paid in full.  Principal amounts repaid in respect of the Acquisition
     Term Loans shall reduce any outstanding Acquisition Term Loan Commitments
     and shall not be available for reborrowing.

             (c)  Except for earlier maturity of any Loan due to acceleration
     pursuant to the terms of this Agreement, the entire remaining principal
     balance, and accrued interest thereon, together with any other amounts then
     due and payable hereunder, shall be paid in full (i) with respect to the
     Revolving Loans, on the Revolving Loan Maturity Date, (ii) with respect to
     the Acquisition Term Loans, on the Acquisition Term Loan Maturity Date,
     (iii) with respect to the Supplemental Revolving Loans, on the Supplemental
     Revolving Loan Maturity Date and (iv) with respect to Supplemental Term
     Loans, on the Supplemental Term Loan Maturity Date.

             (d)  If, in order to comply with Section 3.01(a), (b) or (c), the
     Borrower is required to repay Reserve Adjusted Eurodollar Loans prior to
     the end of any applicable Interest Period, the Borrower shall compensate
     each Bank for all losses, expenses and liabilities incurred by such Bank in
     connection with each such repayment in accordance with Section 1.10(f).

     3.02.   VOLUNTARY PREPAYMENTS.  The Borrower shall have the right to prepay
the Revolving Loans, the Acquisition Term Loans, the Supplemental Revolving
Loans or the Supplemental Term Loans, in whole or in part from time to time,
without premium or penalty, on the following terms and conditions: (a) the
Borrower shall give the Administrative Agent at the Agent's Office written
notice (or telephonic notice promptly confirmed in writing) of its intent to
prepay the Loans, the amount of such prepayment and whether such prepayment is
in respect of the Revolving Loans or Supplemental Revolving Loans, in the case
of Reserve Adjusted Eurodollar Loans, the specific Borrowing or Borrowings
pursuant to which such Reserve Adjusted Eurodollar Loans were made, which notice
shall be given by the Borrower at least one Business Day prior to the date of
such prepayment and which notice shall promptly be transmitted by the
Administrative Agent to each of the Banks; (b) each partial prepayment of a
Borrowing shall be in an aggregate principal amount of at least $100,000 and in
integral multiples of $100,000 in excess of that amount (or, if less, in an
amount equal to the entire remaining principal balance of the Loan or the
Borrowing so repaid); PROVIDED, HOWEVER, that no partial prepayment of Reserve
Adjusted Eurodollar Loans made pursuant to a single Borrowing under the Loan
Facility (or portion thereof) shall reduce the outstanding Loans made pursuant
to such Borrowing to an amount less than the Minimum Borrowing Amount (other
than $0); and (c) Reserve Adjusted Eurodollar Loans may only be prepaid pursuant
to this Section 3.02 on the last day of an Interest Period applicable thereto. 
Voluntary prepayments of Loans other than prepayments of the Revolving Loans or
Supplemental Revolving Loans shall be applied pro rata (i) first, to the
outstanding principal amount of each of the Acquisition Term Loans to reduce all
remaining 


                                      -31-

<PAGE>

Scheduled Acquisition Term Loan Principal Payments, in each case in order of 
maturity, (ii) second, to the then outstanding principal amount of the 
Supplemental Term Loans if any, in each case in order of maturity; PROVIDED 
that any amount so prepaid pursuant to this subclause (ii) shall permanently 
reduce the Supplemental Loan Commitments and any amounts so prepaid shall not 
be available for reborrowing, (iii) third, to reduce the outstanding 
principal amount of the Revolving Loans, and (iv) fourth, to reduce the 
outstanding principal amount of the Supplemental Revolving Loans.

     3.03.   MANDATORY PREPAYMENTS; REDUCTION OF COMMITMENTS.

             (a)  The Borrower shall prepay the outstanding principal amount of
     (x) the Revolving Loans on any date on which the sum of the aggregate
     outstanding principal amount of such Loans (after giving effect to any
     other repayments or prepayments on such date) and the then outstanding
     Letters of Credit Usage related to the Revolving Portion exceeds the Total
     Revolving Loan Commitment, in an amount equal to the amount of such excess,
     (y) the Acquisition Term Loans on any date on which the aggregate
     outstanding principal amount of such Loans (after giving effect to any
     other repayments or prepayments on such date) exceeds the Total Acquisition
     Term Loan Commitment, in an amount equal to the amount of such excess or
     (z) the Supplemental Term Loans and the Supplemental Revolving Loans, on a
     pro rata basis and in order of maturity, on any date on which the aggregate
     outstanding principal amount of such Loans (after giving effect to any
     other repayments or prepayments on such date), and the then outstanding
     Letters of Credit Usage related to the Revolving Portion exceeds the Total
     Supplemental Commitment.

             (b)  If the sum of (x) the aggregate principal amount of
     outstanding Revolving Loans plus (y) the aggregate principal amount of
     outstanding Supplemental Revolving Loans, plus (z) the then outstanding
     Letters of Credit Usage exceeds the Borrowing Base as set forth in the
     Borrower's most recent Borrowing Base Certificate required to be delivered
     pursuant to Section 6.01(m) (such amount is referred to as the "EXCESS"),
     then the Borrower shall prepay first the Supplemental Revolving Loans on a
     pro rata basis, and second, the Revolving Loans, on a pro rata basis in a
     principal amount equal to the Excess no later than two Business Days after
     the Borrower has delivered, or was required to deliver, such Borrowing Base
     Certificate to the Administrative Agent and the Banks.

             (c)  Subject to the provisions of Section 3.04:  

                    (i)   As promptly as practicable, but in any event within
             five Business Days of the date of receipt by the Borrower and/or
             any of its Subsidiaries, of Net Cash Proceeds (PROVIDED, HOWEVER,
             that with respect to any Net Cash Proceeds of the sale of equity
             securities of Borrower or any of its Subsidiaries, Section 3.03(e)
             will govern and that with respect to any Net Cash Proceeds from any
             damage to, or loss, destruction or condemnation of Assets, Section
             3.03(f) will govern), the 


                                      -32-

<PAGE>

             Borrower shall remit to the Administrative Agent an amount equal 
             to 100% of such Net Cash Proceeds, specifying any portion of 
             such proceeds (such portion, the "REPLACEMENT ASSET AMOUNT") 
             intended by the Borrower to be used within 120 days of receipt 
             (or such longer period as may be consented to by the 
             Administrative Agent) for replacing productive assets of a kind 
             then used or usable in the business of the Borrower and its 
             Subsidiaries (in each case, to the extent permitted by the 
             Security Documents); PROVIDED, HOWEVER, that if the property 
             sold constituted Collateral, any such replacement property shall 
             be made subject to the Lien of the Security Documents.

                  (ii)  The Replacement Asset Amount of such Net Cash Proceeds
             shall be deposited in the Reserve Account and the remaining
             portion, if any, of such Net Cash Proceeds shall be applied by the
             Administrative Agent as provided in Section 3.04(a).  During a
             period of 120 days from the date such Replacement Asset Amount is
             deposited in the Reserve Account, the Administrative Agent shall
             release amounts in such Reserve Account from time to time as the
             Borrower provides evidence to the Administrative Agent of the
             purchase of such replacement assets (whether or not purchased with
             proceeds of Revolving Loans or Supplemental Revolving Loans), and
             after the end of such 120-day period or upon the occurrence of an
             Event of Default of the type specified in Section 8.01 or 8.05 or
             the taking by the Administrative Agent of any of the actions set
             forth in Section 8.10, the Administrative Agent shall apply all
             amounts remaining in such Reserve Account relating to such
             Replacement Asset Amount, to the prepayment of the Loans in the
             manner provided in Section 3.04(a).

             (d)  Subject to the provisions of Section 3.04, as promptly as
     practicable, but in any event within five Business Days of the date of
     receipt by the Borrower and/or any of its Subsidiaries of Net Financing
     Proceeds after the Effective Date (excluding the proceeds of the Initial
     Loans), the Borrower shall prepay the Loans in an amount equal to 100% of
     such Net Financing Proceeds, to be applied as provided in Section 3.04(a).

             (e)  Subject to the provisions of Section 3.04, as promptly as
     practicable, but in any event within five Business Days of the date of
     receipt by The Borrower and/or any of its Subsidiaries of Net Cash Proceeds
     from the sale after the Closing Date of equity securities of the Borrower
     or any of its Subsidiaries (other than proceeds from the issuance of
     capital stock (i) of the Borrower pursuant to any pension, stock option,
     profit sharing or other employee benefit plan or agreement of the Borrower
     and/or any of its Subsidiaries in the ordinary course of business or (ii)
     by a Subsidiary of the Borrower to another Subsidiary of the Borrower or to
     the Borrower), the Borrower shall prepay the Loans in an amount equal to
     100% of such proceeds (net of underwriting discounts and commissions and
     other costs and expenses directly associated therewith), to be applied as
     provided in Section 3.04(a); provided, however, that the Borrower may apply
     up to 75% 


                                      -33-

<PAGE>

     of the proceeds of an initial public offering of the common stock of the 
     Borrower to redeem the Series A Preferred Stock.

             (f)  Subject to the provisions of Section 3.04:

                    (i)   As promptly as practicable, but in any event within
             five Business Days of the date of receipt by the Borrower and/or
             any of its Subsidiaries of any proceeds due to damage to, or loss,
             destruction or condemnation of Assets (collectively, "LOSS
             PROCEEDS"), the Borrower shall remit to the Administrative Agent an
             amount equal to 100% of such Loss Proceeds, specifying any portion
             of such proceeds (such portion, the "ASSET RESTORATION AMOUNT")
             intended by the Borrower to be used within 180 days of receipt of
             such Loss Proceeds (or such longer period as may be consented to by
             the Agent) for rebuilding, repairing or replacing productive assets
             of a kind then used or usable in the business of Holdings and its
             Subsidiaries (in the case of the Borrower, to the extent permitted
             by the Security Documents); PROVIDED, HOWEVER, that if the property
             sold constituted Collateral, any such replacement property shall be
             made subject to the Lien of the Security Documents.

                  (ii) The Asset Restoration Amount of such Loss Proceeds shall
             be deposited in the Reserve Account and the remaining portion, if
             any, of such Loss Proceeds shall be applied by the Administrative
             Agent as provided in Section 3.04(a).  During a period of 180 days
             (or such longer period as has been consented to by the
             Administrative Agent) from the date such Asset Restoration Amount
             is deposited in the Reserve Account, the Administrative Agent shall
             release amounts in such Reserve Account from time to time as the
             Borrower provides evidence to the Administrative Agent of the
             repair, restoration or purchase of such replacement assets, which
             evidence may consist of a purchase order or other irrevocable
             commitment to purchase such  replacement assets, (whether or not
             purchased with proceeds of Revolving Loans), and after the end of
             such 180-day period or upon the occurrence of an Event of Default
             of the type specified in Section 8.01 or 8.05 or the taking by the
             Administrative Agent of any of the actions set forth in Section
             8.10, the Administrative Agent shall apply all amounts remaining in
             the Reserve Account relating to such Asset Restoration Amount, if
             any, in the manner provided in Section 3.04(a).

             (g)  Subject to the provisions of Section 3.04, as promptly as
     practicable, but in any event within five Business Days of the date of
     receipt by the Borrower and/or any of its Subsidiaries of any surplus
     assets of any Pension Plan returned to the Borrower and/or any of its
     Subsidiaries, the Borrower shall prepay the Loans in an amount equal to
     100% of such surplus assets, to be applied as provided in Section 3.04(a).


                                      -34-

<PAGE>

             (h)  Subject to the provisions of Section 3.04, as promptly as
     practicable, but in any event within five Business Days of the date of
     receipt by the Borrower and/or any of its Subsidiaries of any tax refund
     which is not promptly applied by the Borrower and/or any of its
     Subsidiaries to the payment of future tax liabilities, the Borrower shall
     prepay the Loans in an amount equal to 100% of such tax refund, to be
     applied as provided in Section 3.04(a). 

             (i)  Subject to the provisions of Section 3.04, as promptly as
     practicable, but in any event within 100 days after the last day of each
     fiscal year of the Borrower, commencing with the fiscal year ending on or
     about June 30, 1998, the Borrower shall prepay the Loans in an amount equal
     to 50% of Excess Cash Flow for such fiscal year, to be applied as provided
     in Section 3.04(a); PROVIDED, HOWEVER, the Borrower shall prepay the Loans
     in an amount equal to 33% of Excess Cash Flow for such year if the Leverage
     Ratio on the last day of such fiscal year is no greater than 4.5 and no
     less than 4.0; PROVIDED, FURTHER, the Borrower shall have no repayment
     obligation under this Section 3.03(i) for any fiscal year where the
     Leverage Ratio on the last day of such fiscal year is less than 4.0.

             (j)  Subject to the provisions of Section 3.04, simultaneous with
     the effectiveness of any designation of an Unrestricted Subsidiary which
     was previously a Restricted Subsidiary, the Borrower shall prepay the Loans
     in the amount determined in the sole discretion of the Administrative
     Agent, as provided in the definition of "Unrestricted Subsidiary."

             (k)  Notwithstanding anything to the contrary contained in
     paragraphs (c) through (i) above, in the event that any prepayment
     otherwise required under such paragraphs would aggregate less than $100,000
     at any time, such prepayment shall not be required hereunder but shall be
     deferred until a date not later than the fifth Business Day following the
     date when all such prepayments required under such paragraphs aggregate
     $100,000 or more.

             (l)  If, in order to comply with any of Sections 3.03(a) through
     (f), (h) or (i) (including as deferred pursuant to 3.03(j) except where the
     amount which causes all prepayments to aggregate $100,000 or more are not
     prepayments required under any of such Sections 3.03(a) through (e), (h) or
     (i)), the Borrower is required to repay Reserve Adjusted Eurodollar Loans
     prior to the end of any applicable Interest Period, (x) if there is no
     Default or Event of Default then in existence, the Administrative Agent
     shall, immediately upon receipt of funds required to be remitted to the
     Administrative Agent pursuant to any such Sections, deposit such funds into
     the Prepayment Collateral Account (as defined in Section 3.08 hereof), and
     shall immediately notify the Borrower that repayments would be made prior
     to the end of an Interest Period and that Breakage Costs would be payable
     by the Borrower pursuant to this Agreement in connection therewith and the
     Borrower, upon the receipt of any such notice from the Agent, shall
     immediately 


                                     -35-

<PAGE>

     deliver written instructions to the Administrative Agent which shall
     direct the Administrative Agent either (i) to, at the end of the
     earliest to expire Interest Period, apply the entire balance of the
     Prepayment Collateral Account to the repayment of the Loans in accordance
     with Section 3.04(a) or (ii) to proceed with such repayment, in which event
     the Borrower shall compensate each Bank for all Breakage Costs incurred by
     such Bank in connection with each such repayment in accordance with Section
     1.10(f) or (y) if there is then pending a Default or Event of Default, any
     such prepayment shall be immediately applied to the repayment of the Loans
     and the Borrower shall compensate each Bank for all Breakage Costs incurred
     by such Bank in connection with each such repayment in accordance with
     Section 1.10(f).

     3.04.   APPLICATION OF MANDATORY PREPAYMENTS.

             (a)  Prepayments under Section 3.03 (other than Section 3.03(a) or
     (b)) shall be applied without penalty or premium (other than Breakage
     Costs, if any, and if so provided in Section 3.03), in the following
     manner: (i) first, to the outstanding principal amount of each of the
     Acquisition Term Loans to reduce the remaining Scheduled Acquisition Term
     Loan Principal Payments in inverse order of maturity, (ii) second, to the
     outstanding principal amount of the Supplemental Term Loans, in inverse
     order of maturity (provided that any amount so prepaid shall permanently
     reduce the Supplemental Loan Commitments and shall not be available for
     reborrowing) (iii) third, to repay the Revolving Loans, and (iv) fourth, to
     repay the Supplemental Revolving Loans; PROVIDED, HOWEVER, that prepayments
     required by Sections 3.03(a) shall be applied solely to repay Revolving
     Loans, Acquisition Term Loans,  Supplemental Term Loans or Supplemental
     Revolving Loans, as applicable, and prepayments required by Section 3.03(b)
     shall be applied solely to repay Revolving Loans and Supplemental Revolving
     Loans.

             (b)  With respect to each prepayment of Loans required by Section
     3.03 (other than Sections 3.03(a) and (b)), the Borrower shall give the
     Administrative Agent one Business Day's notice and may designate the Types
     of Loans and the specific Borrowing or Borrowings which are to be prepaid;
     PROVIDED, HOWEVER, that (i) if any prepayment of Reserve Adjusted
     Eurodollar Loans made pursuant to a single Borrowing shall reduce the
     outstanding Loans made pursuant to such Borrowing to an amount less than
     the Minimum Borrowing Amount, such Borrowing shall immediately be converted
     into Base Rate Loans; and (ii) each prepayment of any Loans made pursuant
     to a single Borrowing shall be applied to the prepayment of such Loans on a
     pro rata basis.  In the absence of a designation by the Borrower, the
     Administrative Agent shall, subject to the above, make such designation in
     its sole discretion.  All prepayments shall include payment of accrued
     interest on the principal amount so prepaid, shall be applied to the
     payment of interest before application to principal and shall include
     amounts payable, if any, and if provided for in Section 3.03(m), under
     Section 1.10(f).


                                     -36-

<PAGE>

             (c)  Notwithstanding Sections 3.04(a) and (b), (i) in the absence
     of a specific designation from the Borrower, all prepayments to be applied
     pursuant to Section 3.04(a) shall be applied first to the prepayment in
     full of that portion of any Loan constituting Base Rate Loans before
     application of any of such prepayments to the prepayment of Reserve
     Adjusted Eurodollar Loans; (ii) if (A) Breakage Costs would otherwise be
     imposed by applying such prepayments to any portion of the Acquisition Term
     Loan or the Supplemental Term Loan constituting Reserve Adjusted Eurodollar
     Rate Loans, and (B) Revolving Loans or Supplemental Revolving Loans
     constituting Base Rate Loans in an amount not less than the required
     prepayment are then outstanding, such prepayments shall be applied instead
     to the prepayment of Revolving Loans and Supplemental Revolving Loans
     constituting Base Rate Loans, and the prepayment of Reserve Adjusted
     Eurodollar Rate Loans otherwise required under Section 3.04(a) shall be
     deferred until the last day of the applicable Interest Period with respect
     to each of such Reserve Adjusted Eurodollar Loans; and (iii) the
     Administrative Agent may, in its discretion, establish reserves against the
     amount of Revolving Loans or Supplemental Revolving Loans, which the
     Borrower is otherwise entitled to borrow hereunder in an amount equal to
     the amount of any such deferred prepayment and in the event that the
     Borrower does not otherwise make such prepayment on the last day of such
     Interest Period as provided herein, may cause Revolving Loans or
     Supplemental Revolving Loans to be made on the Borrower's behalf and apply
     the proceeds thereof to such prepayment.

     3.05.   REDUCTION OF TOTAL REVOLVING LOAN COMMITMENT, ETC.  Each prepayment
made pursuant to Section 3.03 with respect to (i) the Revolving Loans, (ii) if
prior to the Acquisition Term Loan Commitment Termination Date, the Acquisition
Term Loans (iii) if prior to the Supplemental Term Loan Commitment Termination
Date, the Supplemental Term Loans, or (iv) if prior to the Supplemental
Revolving Loan Commitment Termination Date, the Supplemental Revolving Loan, (in
each case, other than any prepayment made pursuant to Section 3.03(a), (b) or
(i)) shall permanently reduce the Total Revolving Loan Commitment, Total
Acquisition Term Loan Commitment or Total Supplemental Loan Commitment, as
applicable, and shall, on a pro rata basis, reduce the applicable Revolving Loan
Commitment, Acquisition Term Loan Commitment or Supplemental Loan Commitment of
each Bank.  Principal amounts repaid in respect of the Acquisition Term Loans or
the Supplemental Term Loans shall not be available for reborrowing.

     3.06.   METHOD AND PLACE OF PAYMENT.

             (a)  Except as otherwise specifically provided herein, all payments
     under this Agreement shall be made to the Agent, for the ratable account of
     the Banks entitled thereto, not later than 2:00 P.M. (New York time) on the
     date when due and shall be made in immediately available funds in lawful
     money of the United States of America to the account specified therefor by
     the Administrative Agent or if no account has been so specified at the
     Administrative Agent's Office, it being understood that written notice by
     the Borrower to the Administrative Agent to make a payment from the funds
     in the 


                                     -37-

<PAGE>


     Borrower's account at the Administrative Agent's Office shall constitute 
     the making of such payment to the extent of such funds held in such 
     account.  The Administrative Agent will thereafter cause to be distributed
     on the same day (if payment is actually received by the Administrative 
     Agent in New York City prior to 2:00 P.M. (New York time) on such day) 
     funds relating to the payment of principal or interest or fees ratably to
     the Banks entitled to receive any such payment in accordance with the 
     terms of this Agreement.  If and to the extent that any such distribution
     shall not be so made by the Administrative Agent in full on the same day 
     (if payment is actually received by the Administrative Agent prior to 
     2:00 P.M. (New York time) on such day), the Administrative Agent shall pay
     to each Bank its ratable amount thereof and each such Bank shall be 
     entitled to receive from the Agent, upon demand, interest on such amount
     at the Federal Funds Rate for each day from the date such amount is paid to
     the Administrative Agent until the date the Administrative Agent pays such
     amount to such Bank.

             (b)  Any payments under this Agreement which are made by the
     Borrower later than 2:00 P.M. (New York time) shall be deemed to have been
     made on the next succeeding Business Day.  Whenever any payment to be made
     hereunder shall be stated to be due on a day which is not a Business Day,
     the due date thereof shall be extended to the next succeeding Business Day
     and, with respect to payments of principal, interest shall be payable
     during such extension at the applicable rate in effect immediately prior to
     such extension, except that with respect to Reserve Adjusted Eurodollar
     Loans, if such next succeeding applicable Business Day is not in the same
     month as the date on which such payment would otherwise be due hereunder or
     under any Note, the due date with respect thereto shall be the next
     preceding applicable Business Day.

     3.07.   NET PAYMENTS.

             (a)  Except as provided in Section 3.07(d), all payments by the
     Borrower under this Agreement or under any Credit Documents shall be made
     without setoff or counterclaim and in such amounts as may be necessary in
     order that all such payments (after deduction or withholding for or on
     account of any present or future Taxes), shall not be less than the amounts
     otherwise specified to be paid under this Agreement and/or any other Credit
     Documents.  A certificate as to the calculation of any additional amounts
     payable to a Bank under this Section 3.07 submitted to the Borrower by such
     Bank shall, absent demonstrable error, be final, conclusive and binding for
     all purposes upon all parties hereto.  With respect to each deduction or
     withholding for or on account of any Taxes, the Borrower shall, within 30
     days after it is required by law to remit such deduction or withholding to
     any relevant taxing authority, furnish to each Bank such certificates,
     receipts and other documents as may be required (in the reasonable judgment
     of such Bank) to establish any tax credit to which such Bank may be
     entitled.

             (b)  Without prejudice to (but without duplication of the benefits
     of) the provisions of Section 3.07(a), and except as provided in Section
     3.07(d), if any Bank, or 


                                     -38-

<PAGE>

     the Administrative Agent on its behalf, is required by law to make any 
     payment on account of Taxes on or in relation to any sum received or 
     receivable under this Agreement and/or any other Credit Documents by such
     Bank, or the Administrative Agent on its behalf, or any liability for 
     Taxes in respect of any such payment is imposed, levied or assessed 
     against any Bank, or the Administrative Agent on its behalf, the Borrower
     will promptly indemnify such person against such Tax payment or liability,
     together with any interest, penalties and reasonable expenses (including
     counsel fees and expenses) payable or incurred in connection therewith,
     including any Taxes of any Bank arising by virtue of payments under this 
     Section 3.07(b), computed in a manner consistent with Section 3.07(a).
     A certificate by such Bank, or the Administrative Agent on its behalf, as
     to the calculation and amount of such payments shall, absent demonstrable
     error, be final, conclusive and binding upon all parties hereto for all 
     purposes, provided that such certificate is delivered to the Borrower no 
     later than 90 days after the earlier of the date on which such Bank or the
     Administrative Agent makes payment of such Taxes or the date on which the
     applicable Governmental Authority makes written demand for payment of such
     Taxes.

             (c) (i) Each Bank that is organized under the laws of any
     jurisdiction other than the United States or any State thereof (including
     the District of Columbia) (a "FOREIGN BANK") agrees to furnish to the
     Borrower and the Administrative Agent, prior to the date it receives any
     payment under this Agreement or other Credit Documents, two signed copies
     of either U.S. Internal Revenue Service Form 4224 or U.S. Internal Revenue
     Service Form 1001 or any successor form thereto (wherein such Foreign Bank
     validly claims entitlement to a complete exemption from U.S. federal
     withholding tax on interest paid by Borrower hereunder).  Each Foreign Bank
     that is not a bank described in Section 881(c)(3)(A) of the Code and cannot
     deliver U.S. Internal Revenue Service Form 1001 entitling it to a complete
     exemption from withholding tax or U.S. Internal Revenue Service Form 4224
     pursuant to this Section 3.07(c)(i) agrees to furnish to the Borrower and
     the Administrative Agent two copies of U.S. Internal Revenue Service Form
     W-8, or successor form (wherein such Foreign Bank makes the certifications
     necessary to entitle it to a complete exemption from United States
     withholding tax on interest paid by the Borrower hereunder).

             (ii)  In addition, each Foreign Bank that delivers forms pursuant
     to Section 3.07(c) agrees to provide subsequently to the Borrower and the
     Administrative Agent additional signed copies of such forms, or any
     successor forms thereto (wherein such Bank claims entitlement to a complete
     exemption from or reduced rate of U.S. federal withholding tax on interest
     paid by the Borrower hereunder), as may be reasonably requested in writing
     by the Borrower or the Agent.  A Foreign Bank shall be required to furnish
     a form under this Section 3.07(c)(ii) only if it is entitled to claim an
     exemption from or a reduced rate of withholding tax under applicable law. 
     A Bank that is not entitled to claim an exemption from or a reduced rate of
     withholding under applicable law at the time that a request to 


                                     -39-

<PAGE>

     provide forms is received from the Borrower or the Agent, shall so inform 
     the Borrower and the Administrative Agent in writing.

             (d)  The Borrower shall not be required to pay any increased amount
     on account of Taxes pursuant to Section 3.07(a) or (b) to any Bank or
     Administrative Agent (i) to the extent that such Taxes would not have been
     payable if the Bank had furnished a form (properly and accurately completed
     in all material respects) which it was otherwise required to furnish in
     accordance with Section 3.07(c), (ii) if the Bank was not able to furnish a
     form (properly and accurately completed in all material respects) which it
     was required to furnish in accordance with Section 3.07(c)(i), or (iii) if
     the Bank failed to comply with applicable certification, information,
     documentation or other reporting requirements concerning the nationality,
     residence, identity or connections with the United States of such Bank if
     such compliance is required by statute or regulation of the United States
     as a precondition to relief or exemption from such Taxes.

             (e)  With respect to any Taxes imposed on a Bank which are paid or
     reimbursed by Borrower in accordance with the provisions of this Section
     3.07, each Bank receiving the benefit of such payments of Taxes hereby
     agrees to pay to the Borrower any amounts refunded to such Bank (including
     any interest thereon) which such Bank reasonably determines to be a refund
     in respect of such Taxes.

             (f)  If any Bank shall be entitled to payments under this Section
     3.07, such Bank shall, within a reasonable time after becoming entitled to
     such payments, (unless otherwise required by a Governmental Authority or as
     a result of any law, rule, regulation, order or similar directive
     applicable to such Bank), designate a different lending office from that
     initially selected by such Bank to which payments are to be made under this
     Agreement or under any other Credit Document, if such designation would
     avoid the need for (or materially reduce the amount of) such payments and
     would not, in the reasonable opinion of such Bank, be otherwise
     disadvantageous to such Bank.

     3.08.   RESERVE ACCOUNT; PREPAYMENT COLLATERAL ACCOUNT.

             (a)  The Administrative Agent shall establish and maintain a
     special reserve account (the "RESERVE ACCOUNT") for the deposit of amounts
     constituting the Replacement Asset Amount of Net Cash Proceeds pursuant to
     Section 3.03(c)(ii) and the Asset Restoration Amount of Loss Proceeds
     pursuant to Section 3.03(f)(ii), and such Reserve Account shall be subject
     to the sole dominion and control of the Administrative Agent and the
     Borrower shall have no right of withdrawal from the Reserve Account.  Funds
     in the Reserve Account shall be invested in Cash Equivalents and interest
     earned on such investments shall be remitted to the Borrower not less
     frequently than once a month; PROVIDED, HOWEVER, that upon the occurrence
     of an Event of Default and the declaration by the Administrative Agent in
     accordance with Section 8 that the Loans are immediately due and payable,
     the Administrative Agent shall apply all amounts then on deposit in the


                                     -40-

<PAGE>

     Reserve Account towards the payment of the Obligations in such order and in
     such manner as it shall in its discretion determine, and any excess amount
     remaining after such payment shall be remitted to the Borrower.

             (b)  The Administrative Agent shall establish in its own name as
     Administrative Agent and maintain for the benefit of the Banks a special
     purpose collateral account (the "PREPAYMENT COLLATERAL ACCOUNT").  The
     Administrative Agent shall deposit in the Prepayment Collateral Account
     funds which the Borrower shall have requested to be so deposited pursuant
     to Section 3.03(k).  All funds from time to time on deposit in the
     Prepayment Collateral Account shall be under the exclusive control of the
     Administrative Agent and shall be invested in Cash Equivalents, and such
     Prepayment Collateral Account shall be subject to the sole dominion and
     control of the Administrative Agent and the Borrower shall have no right of
     withdrawal from the Prepayment Collateral Account.  The funds (including
     all interest earned from the investment thereof) in the Prepayment
     Collateral Account shall be subject to withdrawal solely by the
     Administrative Agent (i) for the purpose of effecting payments required
     pursuant to Section 3.03 and (ii) upon the occurrence of an Event of
     Default and the declaration by the Administrative Agent in accordance with
     Section 8 that the Loans are immediately due and payable, for application
     to the payment of the Obligations in such order and in such manner as the
     Administrative Agent in its discretion shall determine.  The Borrower shall
     have no legal, equitable or beneficial interest in the Prepayment
     Collateral Account, except for its right to ensure that the funds in such
     account shall be applied to the prepayment of the Loans as required by this
     Agreement.

     SECTION 4.  CONDITIONS PRECEDENT.

     4.01.   CONDITIONS PRECEDENT TO INITIAL LOANS.  The obligations of the
Banks to make the Initial Loans are subject, at the time of the making of such
Loans (except as otherwise hereinafter indicated), to the satisfaction of the
following conditions:

             (a)  CREDIT DOCUMENTS.  

                    (i)   This Agreement and each other Credit Document (to the
             extent not previously executed and delivered) shall (A) have been,
             on or before the Closing Date, duly authorized, executed and
             delivered by each of the parties signatory thereto and (B)
             constitute the legal, valid and binding obligation of each Credit
             Party, enforceable in accordance with its terms (subject to
             bankruptcy and principles of equity).

                    (ii)  There shall have been delivered to the Administrative
             Agent for the account of each of the Banks the Revolving Notes, the
             Acquisition Term Notes the Supplemental Term Notes and the
             Supplemental Revolving Notes, each duly 


                                     -41-

<PAGE>

             executed by the Borrower in the amount and maturity and as 
             otherwise provided herein.

             (b)  OFFICERS' CERTIFICATE.  The Agents shall have received a
     certificate dated the Closing Date signed by the appropriate officer(s) of
     the Borrower on behalf of the Borrower in substantially the form of Exhibit
     4.01(b) stating that (i) all of the applicable conditions set forth in this
     Section 4.01 (in each case disregarding any reference therein that such
     condition be deemed satisfactory by the Agents, the Administrative Agent
     and/or the Required Banks) have been either satisfied or waived in writing
     by the Agents, and the Required Banks as of such date, (ii) immediately
     before and after giving effect to the Initial Loans, all representations
     and warranties contained herein or in any other Credit Document (except as
     expressly amended hereunder or under another Credit Document) shall be true
     and correct in all material respects, (iii) no Default or Event of Default
     has occurred or will have occurred after giving effect to the Initial Loans
     and (iv) since June 30, 1997 no material adverse change in the business,
     assets, prospects, properties or condition (financial or otherwise) of the
     Borrower and its Subsidiaries shall have occurred.

             (c)  OPINIONS OF COUNSEL.  The Administrative Agent shall have
     received an opinion dated the Closing Date addressed to each of the Banks
     from Brownstein Hyatt Farber & Strickland, P.C., counsel to the Credit
     Parties in form and substance reasonably acceptable to the Administrative
     Agent.

             (d)  CORPORATE PROCEEDINGS.  All corporate and legal proceedings
     and all instruments and agreements in connection with the Public Financing,
     the execution of this Agreement and the other Credit Documents and all
     related transactions shall be reasonably satisfactory in form and substance
     to the Agents, and the Administrative Agent shall have received all
     information and copies of all certificates, documents and papers, including
     records of corporate proceedings and governmental approvals, if any, which
     the Agents may have reasonably requested from the Credit Parties or in
     connection therewith, such documents and papers where appropriate to be
     certified by proper corporate or governmental authorities.  Without
     limiting the foregoing, the Administrative Agent shall have received from
     each Credit Party:

                    (i)  resolutions of the board of directors (or of the board
             of directors of the general partner) of each such Person which
             shall include, without limitation, (1) resolutions approving such
             documents and actions as are contemplated by this Agreement, the
             Public Financing and any related transactions to the extent such
             Person is a party thereto and (2) resolutions as to the due
             authorization, execution and delivery of this Agreement, to the
             extent such Person is a party thereto, all such resolutions to be
             in form and substance reasonably satisfactory to the Agents; and


                                     -42-

<PAGE>

                    (ii)  signature and incumbency certificates of each officer
             of each such Credit Party executing instruments, documents or
             agreements required to be executed in connection with the
             transactions contemplated by this Agreement and the Public
             Financing.

             (e)  PUBLIC FINANCING DOCUMENTS.  Full, complete and accurate
     copies of each of the material Public Financing Documents executed or in
     effect as of the Closing Date (including all schedules and exhibits
     thereto) shall have been provided to the Administrative Agent.  The Public
     Financing Documents and any amendments thereto, shall be in form and
     substance satisfactory to the Agents; and on the Closing Date all of the
     conditions to the Public Financing shall have been satisfied in all
     material respects (or waived in writing, such waiver to be reasonably
     satisfactory to the Agents) to the reasonable satisfaction of the Agents.

             (f)  CAPITAL CONTRIBUTION; CAPITALIZATION. As of the Closing Date,
     the Borrower (i) shall have received (in connection with the Public
     Financing) gross cash proceeds in an aggregate amount of at least
     $40,000,000 from the public offering of its Series A Preferred Stock and
     the related warrants to purchase Common Stock of the Borrower and gross
     cash proceeds in an aggregate amount of at least $85,000,000 from the
     issuance of high yield debt, (including capitalized interest), (ii) shall
     have a retained investment in the form of the Heller Subordinated Note in
     the amount of not less than $7,500,000, and (iii) shall use the proceeds of
     the Public Financing to retire the Existing Term A Loans, the Existing Term
     B Loans, the Existing Acquisition Term Loans and the Existing Revolving
     Loans.

             (g)  CAPITAL STRUCTURE.  On the Closing Date, after giving effect
     to the Public Financing, (i) Holdings shall have been merged with and into
     the Borrower and shall have ceased to exist as a separate entity and (ii)
     all of the Capital Stock of each of the Borrower's Restricted Subsidiaries
     shall have been assigned and pledged to the Administrative Agent, for the
     benefit of the Banks and certificates evidencing such Capital Stock shall
     have been delivered to the Administrative Agent, together with executed
     stock powers.  

             (h)  ORGANIZATIONAL DOCUMENTATION, ETC.  On or prior to the Closing
     Date, the Administrative Agent shall have received a true and complete
     certified copy of the following documents of each of the Borrower and each
     of its Restricted Subsidiaries the provisions of which shall be reasonably
     satisfactory to the Agents:

                    (i)  Copies of its certificate of incorporation, or
             certificate of limited partnership, as the case may be, which (A)
             shall be certified by, and accompanied by a good standing
             certificate from, the Secretary of State or similar official of the
             jurisdiction of its organization and (B) shall be accompanied by
             good standing certificates from each jurisdiction in which it is
             required to be qualified to do 


                                     -43-

<PAGE>

             business as a foreign corporation, each to be dated a recent date
             prior to the Closing Date;

                    (ii)  Copies of its by-laws or limited partnership
             agreement as the case may be, certified as of a recent date prior
             to the Closing Date by its corporate secretary or other person
             serving in a similar capacity.

             (i)  CERTAIN FEES; INTEREST ON OUTSTANDING LOANS.  All fees and
     reasonable costs and expenses (including, without limitation, reasonable
     legal fees and expenses) and other compensation payable to the Agents or
     the Banks by the Borrower shall have been paid in full, and there shall
     have been paid in full all accrued interest and all accrued commitment fees
     on the Outstanding Loans and all other fees and expenses (including,
     without limitation, reasonable legal fees and expenses) of the Agents or
     the Banks, in each case to the extent due and payable and, with respect to
     costs and expenses, invoiced or presented on or before the Closing Date.

             (j)  FINANCIAL STATEMENTS, ETC.  On or before the Closing Date, the
     Agents shall have received: (i) audited consolidated financial statements
     of Holdings and its Subsidiaries for Holdings' fiscal years ended on or
     about June 30, 1996 and June 30, 1997; (ii) unaudited income statements,
     cash flows and balance sheets for Holdings and its Subsidiaries for the
     period July 1, 1997 through October 31, 1997; (iii) a pro forma balance
     sheet for the Borrower and its Subsidiaries, as of the Closing Date after
     giving effect to the Public Financing and the Initial Loans; and (iv) a
     revised annual plan, giving effect to the Public Financing, (by month for
     the calendar year commencing on or about June 30, 1997) for each of the
     Borrower's and its Subsidiaries' five calendar years commencing on or about
     June 30, 1997, in each case, accompanied by a statement by the Borrower
     that such projections are based on estimates and assumptions believed by
     the Borrower in good faith to be reasonable in light of the conditions
     which existed at the time of their preparation as to the future financial
     performance of the Borrower, each in form, scope and substance satisfactory
     to the Administrative Agent, prepared in accordance with the Borrower's
     normal accounting procedures applied on a consistent basis, including (A)
     forecasted balance sheets and statements of operations, stockholders'
     equity and cash flows of the Borrower and its Subsidiaries for such
     periods, (B) the amount of forecasted capital expenditures (including the
     amount of such costs to be capitalized, if any) for such periods, and (C)
     the Borrower and its Subsidiaries' forecasted compliance with Sections 7.01
     through 7.05.  Each of the items delivered pursuant to this Section
     4.01(j), which are attached as Schedule 4.01(j), shall be satisfactory to
     the Agents in their reasonable discretion.  Since the time of the
     preparation of such financial projections, no fact or facts have come to
     the attention of any Credit Party to cause such Person to believe that any
     of the estimates and assumptions on which such projections are based are
     not reasonable.


                                     -44-

<PAGE>

             (k)  INSURANCE.  The insurance coverage set forth on Schedule 5.22
     shall be in full force and effect with respect to the Borrower and its
     Restricted Subsidiaries and their respective  properties.

             (l)  LITIGATION.  Except as set forth on Schedule 4.01(l), there
     shall be no litigation pending or threatened by any entity (private or
     governmental) involving any Credit Party or any of the properties or assets
     of any such Person that could reasonably be expected to restrain, enjoin or
     result in the obtaining of a judgment for substantial damages with respect
     to the Public Financing or the consummation of the transactions
     contemplated by the Public Financing, and there shall be no pending or
     threatened litigation involving any Credit Party or any of the properties
     or assets of any such Person that could reasonably be expected to have a
     material adverse effect on the operations or properties of Borrower or any
     of its Subsidiaries or the ability of the Credit Parties to operate the
     same or that could, in the Agents' reasonable judgment, reasonably be
     expected to have a Material Adverse Effect.

             (m)  INDEBTEDNESS, ETC.  (i)  Except as set forth on Schedule
     4.01(m), on or before the Closing Date, each Credit Party shall have
     received all necessary consents or waivers or shall have amended,
     supplemented or otherwise modified, repaid or defeased its outstanding
     Indebtedness in a manner and on terms satisfactory to the Agents such that
     there exists no default or potential default (as a result of the
     consummation of the Public Financing) with respect to such Indebtedness or
     under any note, evidence of indebtedness, capital lease, mortgage, deed of
     trust, security document or other agreement relating to such Indebtedness
     and such indentures, notes, evidences of indebtedness, capital lease
     mortgages, deeds of trust or other agreements relating to such Indebtedness
     shall not contain (i) any restriction on the ability of the Borrower or any
     of its Restricted Subsidiaries to grant any Lien in favor of the Banks
     (other than in the case of Capital Leases, or purchase money debt
     (excluding Real Property leases), a Lien on the property financed thereby)
     or any financial covenants or tests applicable to the Borrower or any of
     its Restricted Subsidiaries.  

                    (ii)  The terms and conditions of any Indebtedness of the
          Borrower and its Restricted Subsidiaries as of the Closing Date
          which remains outstanding after giving effect to the Public
          Financing and the making of the Initial Loans, shall, in each case,
          be reasonably acceptable to the Agents.  The Administrative Agent
          shall have received evidence satisfactory to it that the
          Indebtedness reflected on Schedule 5.19 as being paid as of the
          Closing Date is being paid with the proceeds of the Initial Loans
          or the Public Financing.

          (n)  SECURITY DOCUMENTS.  In each case, to the extent the same
     shall not have been previously delivered to the Administrative Agent, the
     Security Documents shall have been duly executed and delivered by each of
     the Credit Parties party thereto and there shall have been delivered to the
     Administrative Agent: (i) a certificate or certificates 


                                     -45-

<PAGE>

     representing all Capital Stock of each of the Borrower's Restricted 
     Subsidiaries, together with executed and undated stock powers and/or 
     assignments in blank; (ii) certified copies of Requests for Information
     (Form UCC-11 or the equivalent), or equivalent reports or lien search 
     reports listing all effective financing statements which name the 
     Borrower and its Restricted Subsidiaries and which are filed in any 
     jurisdiction in which any of such Collateral is located and the 
     jurisdiction in which such Person's principal place of business is located
     (none of which shall cover the Collateral covered, or purported to be 
     covered, by the Security Documents other than Prior Liens and Permitted 
     Encumbrances); and (iii) evidence of the completion of all recordings and
     filings (or of the making of arrangements to file contemporaneously with 
     the making of the Initial Loans) of each such Security Document and 
     delivery of such other security and other documents as may be necessary 
     or, in the opinion of the Administrative Agent, desirable to perfect the 
     Liens created, or purported or intended to be created, by the Security 
     Documents.

             (o)  LEASES.  All Capital Leases and Operating Leases of the
     Borrower and its Restricted Subsidiaries outstanding immediately prior to
     the Closing Date shall remain outstanding after giving effect to the Public
     Financing and the making of the Initial Loans hereunder.

             (p)  CONSENTS, ETC.  All necessary or required governmental and
     third party approvals and consents (including, without limitation, all
     approvals and consents required in connection with any Environmental Laws),
     in connection with the Public Financing or the transactions contemplated by
     this Agreement and the Public Financing Documents  and otherwise referred
     to herein or therein to be completed on or before the Closing Date are set
     forth on Schedule 4.01(p) and shall have been obtained and remain in
     effect, and all applicable waiting periods shall have expired without any
     action being taken by any competent authority which restrains, prevents or
     imposes, in the reasonable judgment of the Agents, material adverse
     conditions upon the consummation of the Public Financing.  There shall not
     exist any judgment or order enjoining or otherwise restraining the making
     of the Loans hereunder or the consummation of the Public Financing.

             (q)  BORROWING BASE; BORROWING BASE CERTIFICATE.  The
     Administrative Agent and the Banks shall have received and the Required
     Banks shall be satisfied in all reasonable respects with a Borrowing Base
     Certificate which shall be substantially in the form of Exhibit 6.01(m) and
     shall be prepared as of a date prior to the Closing Date that is reasonably
     satisfactory to the Agents.  Such Borrowing Base Certificate shall indicate
     that the Borrowing Base on the Closing Date (before and after giving effect
     to the Public Financing) exceeds the amount of the Revolving Loans to be
     outstanding as of such date by not less than $7,000,000.

             (r)  NO MATERIAL ADVERSE CHANGE.  Since June 30, 1997 nothing shall
     have occurred or become known to any Credit Party which the Agents shall
     have determined has or could reasonably be expected to have a Material
     Adverse Effect or a material 


                                     -46-

<PAGE>

     adverse effect on the business or operations of the Borrower and its 
     Subsidiaries or has resulted or could result in a material adverse 
     change in the business, assets, prospects, properties or condition 
     (financial or otherwise) of any Credit Party, in the industry in which 
     the Borrower competes or in the ability of the Borrower or any of its
     Subsidiaries (after giving effect to the Public Financing) as of the
     Closing Date to conduct its operations in accordance with the revised
     projections furnished to the Agents pursuant to Section 4.01(j).  As of the
     Closing Date, there shall not have occurred and be continuing a material
     disruption of, or material adverse change in, United States financial,
     banking or capital markets, as reasonably determined by the Agents in their
     sole discretion.

             (s)  The Administrative Agent shall have received the Final
     Prospectuses for the Public Financing accompanied by a certificate dated
     the Closing Date signed by the President, Chief Financial Officer or
     Secretary of the Borrower stating that the Registration Statements and the
     Prospectuses related to the Public Financing, as amended and in the form in
     which they became effective (including all of the financial statements and
     schedules included therein), contain all information which is required to
     be stated therein in accordance with the Securities Act of 1933, as
     amended, and the instructions, rules and regulations thereunder and conform
     in all material respects to the requirements thereof; said financial
     statements and schedules were prepared in accordance with generally
     accepted accounting principles, consistently applied as to the corporations
     covered thereby throughout the periods involved, are correct and complete
     and present fairly the financial condition of the corporations stated to be
     covered thereby at the dates thereof and the results of their operations
     for the stated periods covered thereby; and the Registration Statements and
     Prospectuses do not include any untrue statement of a material fact or omit
     to state a material fact which (in the case of the Registration Statements)
     is required to be stated therein or is necessary to make the statements
     therein not misleading or which (in the case of the Prospectuses) is
     necessary to make the statements therein in the light of the circumstances
     under which they are made not misleading.

     The acceptance of the proceeds of each Borrowing of Initial Loans shall
constitute a representation and warranty by the Borrower to each of the Banks
that all of the applicable conditions specified above have been satisfied or
waived as of that time.  All of the certificates, legal opinions and other
documents and papers referred to in this Section 4.01, unless otherwise
specified, shall be delivered to the Administrative Agent at the Agent's Office
(or such other location as may be specified by the Agents) for the account of
each of the Banks and in sufficient counterparts for each of the Banks and shall
be reasonably satisfactory in form and substance to the Agents.

     4.02.   CONDITIONS PRECEDENT TO ALL LOANS.  The obligations of the Banks to
make all Loans (which term shall not include a conversion or continuation of a
Loan), including the Initial Loans, are subject, at the time of the making of
each such Loan, to the satisfaction of the following conditions:


                                     -47-

<PAGE>

             (a)  NO DEFAULT; REPRESENTATIONS AND WARRANTIES.  At the time of
     the making of each Loan and also after giving effect thereto (and in the
     case of the Initial Loans, after giving effect to the Public Financing; and
     in the case of any Acquisition Term Loans, after giving effect to the
     transactions contemplated to be effected with the proceeds of such Loan)
     (i) there shall exist no Default or Event of Default and (ii) all
     representations and warranties contained herein and in each of the other
     Credit Documents in effect at such time shall be true and correct with the
     same effect as though such representations and warranties had been made on
     and as of the date of the making of such Loan, unless such representation
     and warranty expressly indicates that it is being made as of any other
     specific date in which case it shall be true and correct on and as of such
     other date.

             (b)  NO MATERIAL ADVERSE CHANGE, ETC.  

                    (i)   Since June 30, 1997, nothing shall have occurred or
             become known to any Credit Party which the Required Banks or the
             Administrative Agent shall have determined has or could reasonably
             be expected to have a Material Adverse Effect.

                    (ii)   There shall not have been issued or filed any
             judgment or order which remains outstanding enjoining or otherwise
             restraining the making of any Loans hereunder.

             (c)  MARGIN RULES.  On the date of each Borrowing of Loans, neither
     the making of any Loan nor the use of the proceeds thereof will violate the
     provisions of Regulation G, U or X of the Board of Governors of the Federal
     Reserve System.

             (d)  BORROWING BASE CERTIFICATE.  The Administrative Agent and the
     Required Banks shall have received, and the Required Banks shall be
     reasonably satisfied (both as to form and substance) with, the Borrowing
     Base Certificate last delivered to the Banks.

     The acceptance of the proceeds of each Borrowing of Loans, including the
Initial Loans, shall constitute a representation and warranty by each Credit
Party to each of the Banks that all of the applicable conditions specified in
this Section 4.02 have been satisfied or waived (in each case disregarding any
reference therein that such condition be deemed satisfactory by the
Administrative Agent and/or the Required Banks).  All of the certificates,
documents and papers referred to in this Section 4.02, unless otherwise
specified, shall be delivered to the Administrative Agent at the Agent's Office
(or such other location as may be specified by the Administrative Agent) for the
account of each of the Banks and in sufficient counterparts for each of the
Banks and shall be reasonably satisfactory in form and substance to the
Administrative Agent.


                                     -48-

<PAGE>

     4.03.   ADDITIONAL CONDITIONS PRECEDENT TO ACQUISITION TERM LOANS AND
SUPPLEMENTAL TERM LOANS.  The obligations of the Banks to make Acquisition Term
Loans and Supplemental Term Loans (which shall not include a conversion or
continuation of any such Loan) are subject to the satisfaction of the following
additional conditions:

             (a)  Any such Acquisition Term Loan or Supplemental Term Loan shall
     be made solely to effect one or more Permitted Business Acquisitions;

             (b)  No later than ten Business Days prior to the applicable
     Acquisition Term Loan Closing Date or Supplemental Term Loan Closing Date
     (except to the extent the Administrative Agent agrees to a shorter period),
     the Administrative Agent shall have received (with sufficient copies for
     each Bank) each of the following with respect to the consummation of the
     Permitted Business Acquisition to be financed with the proceeds of any such
     Acquisition Term Loan or Supplemental Term Loan:

                    (i)   audited financial statements of the acquired company
             for such company's two most recently completed fiscal years (or if
             audited financial statements are unavailable for any such period,
             unaudited financial statements for such period not so available
             which are accompanied by a report on such financial statements by 
             Arthur Anderson or another "Big Six" accounting firm acceptable to
             the Administrative Agent); 

                    (ii)  a pro forma balance sheet and pro forma consolidated
             statements of income and cash flows of  the Borrower and its
             Restricted Subsidiaries, after giving effect to the consummation of
             the proposed Permitted Business Acquisition, as at the end of the
             calendar quarter in which such Permitted Business Acquisition is to
             be consummated;

                    (iii) a revised consolidated plan, substantially in the
             form of the consolidated plan provided pursuant to Section
             4.01(j)(iv) or otherwise in a form acceptable to the Administrative
             Agent, for the then current calendar year and the next four
             succeeding calendar years, in each case, giving effect to such
             Permitted Business Acquisition, prepared in accordance with the
             Borrower's normal accounting procedures (and which will represent
             management's reasonable estimate of the projected performance of
             the Borrower and its Restricted Subsidiaries during such periods)
             applied on a consistent basis, including, without limitation
             (i) forecasted consolidated balance sheets, consolidated statements
             of operations, of stockholders' equity and of cash flows of the
             Borrower and its Restricted Subsidiaries on a consolidated basis
             for such periods, (ii) the amount of forecasted capital
             expenditures for such periods, and (iii) forecasted compliance with
             Sections 7.01 through 7.05; PROVIDED, HOWEVER, that if any such
             forecast projects a potential failure to comply with any provision
             of this Agreement at some future date, such forecast shall not
             constitute a Default or Event of Default 


                                     -49-

<PAGE>

             or anticipatory or other breach hereof.

                    (iv)  a certificate of the president or chief financial
             officer of the Borrower which is substantially in the form of
             Exhibit 4.03(b)(iv), 

                    (x)   certifying to the preparation of the pro forma
                          financial statements and budgets referenced in
                          subclauses (i) and (ii) and certifying that, after
                          giving effect to such Permitted Business
                          Acquisition, no Default or Event of Default shall
                          exist, and that, on a pro forma basis, the Borrower
                          and its Restricted Subsidiaries (including any
                          Subsidiary of the Borrower to be acquired in the
                          contemplated Permitted Business Acquisition), will
                          be in compliance with the covenants set forth in
                          Sections 7.01 through 7.05, inclusive, as of the
                          end of the calendar quarter in which such
                          Acquisition is to be consummated and setting forth
                          the calculations required to establish such pro
                          forma compliance and appending a spreadsheet
                          showing any adjustments to the actual EBITDA of the
                          Permitted Business Acquisition made in the
                          preparation of such pro forma financial statements
                          and calculations;

                    (y)   setting forth, to the reasonable satisfaction of the
                          Administrative Agent, the material terms and 
                          conditions of such Acquisition; and

                    (z)   certifying that the conditions set forth in each of 
                          Sections 4.02 and 4.03 (other than the completion of
                          filings and recordings to be performed upon the 
                          applicable Acquisition Term Loan Closing Date or 
                          Supplemental Term Loan Closing Date, as the case may 
                          be) have been satisfied with respect to such proposed
                          Acquisition Term Loan Borrowing or Supplemental Term
                          Loan Borrower, as the case may be.

             (c)  Since June 30, 1997, nothing shall have occurred or become
     known to any Credit Party which the Required Banks or the Administrative
     Agent shall have determined has or could reasonably be expected to have a
     Material Adverse Effect or has or could reasonably be expected to result in
     a material adverse change in the industry in which the Borrower competes.

             (d)  The terms and conditions of such Acquisition and the related
     documents shall be reasonably acceptable to the Administrative Agent;

             (e)  On or before the applicable Acquisition Term Loan Closing Date
     or Supplemental Term Loan Closing Date, as the case may be, the Borrower
     shall have complied, in all material respects, with the provisions of
     Section 6.14 as to any property 


                                     -50-

<PAGE>

     acquired or to be acquired in connection with any such Permitted Business
     Acquisition, except for any such provisions with which compliance is 
     waived by the Administrative Agent, including, without limitation, that 
     the Borrower and its Restricted Subsidiaries (including any Subsidiary so
     acquired) shall execute and deliver to the Administrative Agent any 
     Additional Security Documents (or Subsidiary Guarantees) required to 
     provide the Administrative Agent for the benefit of the Banks with a 
     valid, perfected security interest in any Collateral to be acquired in 
     such Permitted Business Acquisition; and

             (f)  Without limiting the foregoing clause (d), with respect to any
     Real Property (whether fee title or leasehold) in which an interest is
     acquired in connection with any such Permitted Business Acquisition
     (including any such interest held by any Subsidiary of the Borrower
     acquired in such acquisition), the applicable conditions described below
     shall be satisfied on or before the Acquisition Term Loan Closing Date or
     Supplemental Term Loan Closing Date, as the case may be, provided, however,
     that the following requirements shall not apply to (i) any Permitted
     Business acquisition which includes Real Property in which the Borrower's
     or any Restricted Subsidiary's interest individually is, in the
     Administrative Agent's reasonable opinion, worth less than $300,000 and in
     the aggregate worth less than $1,000,000 or (ii) to any acquisition of a
     company involved solely in the business of growing, harvesting and selling
     Christmas trees, so long as the amount of Borrowings related to such
     acquisitions of Christmas tree companies consummated after the Closing Date
     do not exceed $5,000,000 in the aggregate:  

                    (x) with respect to Permitted Business Acquisitions which
          include Real Property which, in the Administrative Agent's reasonable
          opinion, individually is worth less than $300,000 but in the aggregate
          is worth $1,000,000 or more (but less than $3,000,000), the 
          Administrative Agent may require that Real Property interests be 
          subject to the requirements of subclauses (i), (ii) and (iv) of 
          clause (z) below;  

                    (y) with respect to Permitted Business Acquisitions which
          include Real Property which individually is worth $300,000 or more,
          for each such parcel the Borrower's or any Restricted Subsidiary's
          interest is worth less than $600,000, the requirements set forth in
          subclauses (i)-(iv) of clause (z) below must be fulfilled (provided
          that no as-built survey or related title insurance policy endorsements
          dependent thereon will be required) and, for each parcel of Real 
          Property the Borrower's or any Restricted Subsidiary's interest is 
          worth $600,000 or more, all the requirements set forth in clause (z)
          below must be fulfilled; and 


                                     -51-

<PAGE>



                    (z) with respect to acquisitions which include Real Property
          which individually the Borrower's or any Restricted Subsidiary's
          interest is worth less than $300,000 but in the aggregate the 
          Borrower's or any Restricted Subsidiary's interest is worth
          $3,000,000 or more, the Administrative Agent may require that  Real
          Property interests be subject to some or all of the requirements
          described below:

                    (i)    The Administrative Agent, for the benefit of the
                           Banks, shall be granted a first mortgage or deed of
                           trust (or leasehold mortgage or deed of trust) on
                           all of the interests in such Real Property by the
                           Person holding such acquired interest, subject to no
                           prior Liens except for Permitted Encumbrances.

                  (ii)     Any leasehold mortgages or deeds of trust granted
                           pursuant to the foregoing subclause (i) must be
                           consented to by any owners of such Real Property
                           pursuant to an estoppel and consent agreement in
                           form and substance satisfactory to the
                           Administrative Agent.

                  (iii)    There shall be issued a lender's title insurance
                           policy as to each mortgage or deed of trust granted
                           pursuant to the foregoing subclause (i), with no
                           exceptions (including fee mortgages encumbering
                           leasehold interests in Real Property) which are not
                           reasonably acceptable to the Administrative Agent,
                           and, unless the Administrative Agent shall otherwise
                           elect, as-built surveys sufficient to remove the
                           survey exception from all title insurance policies
                           shall be delivered to the Administrative Agent. 

                  (iv)     A Phase I environmental report with respect to each
                           parcel of such Real Property satisfactory to the
                           Administrative Agent (and upon which the Banks shall
                           be entitled to rely) shall be delivered to the
                           Administrative Agent.

                  (v)      Evidence reasonably acceptable to the Administrative
                           Agent shall be presented that the intended use by
                           the Borrower and its Subsidiaries of each of such
                           Real Properties complies with all zoning and land
                           use laws, and that all necessary permits and
                           approvals for the operation of such properties in
                           such manner have been obtained and are in full force
                           and effect.

             (g)  There shall be delivered to the Administrative Agent (in each
     case, with sufficient copies for each Bank) copies of the following
     documents related to any Permitted Business Acquisition to be consummated
     with the proceeds of an Acquisition 


                                     -52-

<PAGE>

     Term Loan, (i) the term sheet for such Acquisition, upon execution thereof
     by the parties thereto, and (ii) upon consummation of such Acquisition, a
     complete set of the documents effecting such Acquisition, together with 
     all schedules and exhibits (including, without limitation the acquisition
     agreement and any Seller Notes issued in connection therewith).

             (h)  The Administrative Agent shall have received, if so requested
     by the Administrative Agent,  an opinion dated the applicable Acquisition
     Term Loan Closing Date or Supplemental Term Loan Closing Date, as the case
     may be, addressed to each of the Banks from Brownstein Hyatt Farber &
     Strickland, P.C., in form and substance reasonably acceptable to the
     Administrative Agent.
             
             (i)  Any fees or expenses of the Agents or the Banks which are then
     due and payable, whether due in connection with such Acquisition Term Loan
     Borrowing or otherwise, shall have been paid in full prior to, or
     simultaneously with, the applicable Acquisition Term Loan Closing.

     SECTION 5.  REPRESENTATIONS, WARRANTIES AND AGREEMENTS.  In order to induce
the Agents and the Banks to enter into this Agreement and to make the Loans
provided for herein,  the Borrower makes the following representations and
warranties to, and agreements with, the Agents and the Banks, all of which shall
survive the execution and delivery of this Agreement and the making of the Loans
(with the execution and delivery of this Agreement and the making of each Loan
thereafter being deemed to constitute a representation and warranty that the
matters specified in this Section 5 are true and correct in all material
respects both before and after giving effect to the Public Financing and the
related transactions and as of the date of each such Loan unless such
representation and warranty expressly indicates that it is being made as of any
specific date). 

     5.01.   STATUS.  Each Credit Party is a duly organized and validly existing
corporation or limited partnership, as the case may be, in good standing under
the laws of the jurisdiction of its organization.  After giving effect to the
Public Financing, Holdings shall have merged with and into the Borrower, and all
of its right, title and interest in any assets as of such date shall thereupon
be held directly by the Borrower.  Each Credit Party has all corporate power and
authority, and has obtained all requisite governmental licenses, authorizations,
consents and approvals (including, without limitation, those required by
Environmental Laws), to own and operate its property and assets and to transact
the business in which it is engaged and presently proposes to engage, except for
those governmental licenses, authorizations, consents or approvals the failure
of which to be so obtained would not have a Material Adverse Effect; and is duly
qualified and authorized to do business and is in good standing in all
jurisdictions where it is required to be so qualified, except where the failure
to be so qualified could not reasonably be expected to have a Material Adverse
Effect.

     5.02.   POWER AND AUTHORITY; BUSINESS. Each Credit Party had or has, as
applicable, the requisite corporate power and authority to execute, deliver and
carry out the terms and provisions 


                                     -53-

<PAGE>

of the Transaction Documents and Public Financing Documents to which it is a 
party and has taken all necessary corporate action to authorize the 
execution, delivery and performance of the Transaction Documents and Public 
Financing Documents to which it is a party.  Each Credit Party has duly 
executed and delivered each Transaction Document and each Public Financing 
Documents to which it is a party and each such Document constitutes the 
legal, valid and binding obligation of such Credit Party and is enforceable 
against such Credit Party in accordance with its terms, except as such 
enforceability may be limited by bankruptcy, insolvency, reorganization, 
fraudulent conveyance, moratorium or other similar laws now or hereafter in 
effect relating to the rights of creditors generally or by general principles 
of equity or the discretion of the court before which any proceeding therefor 
may be brought.

     5.03.   NO VIOLATION.  Neither the execution, delivery or performance by
any Credit Party of the Credit Documents to which it is a party nor compliance
with the terms and provisions thereof nor the consummation of the transactions
contemplated therein (a) will contravene any applicable provision (or any
provision to be applicable following the Public Financing) of any law, statute,
rule, regulation, order, writ, injunction or decree of any court or Governmental
Authority; (b) conflicts or will conflict or be inconsistent with, or results or
will result in any breach or violation of any of the terms, covenants,
conditions or provisions of, or constitutes or will constitute a default under,
or (other than pursuant to the Security Documents) results or will result in the
creation or imposition of (or the obligation to create or impose) any Lien upon
any of the property or assets of any Credit Party pursuant to the terms of, any
indenture, mortgage, deed of trust or other material instrument or agreement to
which any Credit Party is a party or by which it or any of its property or
assets is bound (or will be bound after giving effect to the Public Financing)
or to which it may be subject or any law, statute, rule, regulation, order,
writ, injunction or decree of any court or Governmental Authority referred to in
clause (a) above; or (c) will violate any provision of the certificate of
incorporation, certificate of formation, certificate of limited partnership, 
by-laws, limited liability company agreement of any Credit Party, except in 
the case of any of the foregoing clauses (a) through (c) where such 
contravention, conflict, inconsistency, breach, default, creation, 
imposition, obligation or violation does not have a Material Adverse Effect.  
Neither the execution, delivery or performance of any Document, nor the 
consummation of the Public Financing nor the terms of the financing in 
connection therewith conflicted, conflicts or will conflict or be 
inconsistent with, or results or will result in any breach or violation of 
any of the terms, covenants, conditions or provisions of, or constitutes or 
will constitute a default under, or results or will result in the creation or 
imposition of (or the obligation to create or impose) any Lien (except 
pursuant to the Security Documents) upon any of the property or assets of any 
Credit Party pursuant to the terms of, any indenture, mortgage, deed of 
trust, instrument or agreement relating to Indebtedness for borrowed money or 
the equivalent thereof or other material agreement to which any Credit Party 
is a party or by which it or any of its property or assets is bound or to 
which it may be subject or any law, statute, rule, regulation, order, writ, 
injunction or decree of any court or Governmental Authority referred to in 
clause (a) above, except, in each case, where such conflict, inconsistency, 
breach, default, creation, imposition or obligation could not reasonably be 
expected to have a Material Adverse Effect.


                                     -54-

<PAGE>

     5.04.   LITIGATION.  There are no actions, judgments, suits, investigations
or proceedings by any administrative or other public authority or Governmental
Authority or other Person pending or, to the best knowledge of the Borrower,
threatened with respect to any Credit Party or any of its assets (both before
and after giving effect to the Public Financing) that (a) challenges the
consummation of the Public Financing or the validity of any of the Public
Financing Documents or the transactions contemplated thereby, including the
making of any Loans, or (b) taken individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect.

     5.05.   USE OF PROCEEDS. 

             (a)  Not more than $7,000,000 of the proceeds of the Revolving
     Loans shall be used by the Borrower on the Closing Date to pay fees and
     expenses related to the Public Financing and the remaining proceeds of the
     Revolving Loans and the Supplemental Revolving Loans shall be used to
     finance the ongoing capital requirements of the Borrower and its
     Subsidiaries and for general corporate purposes. 

             (b)  All of the proceeds of the Acquisition Term Loans and the
     Supplemental Term Loans shall be used by the Borrower to provide all or a
     portion of the consideration for Permitted Business Acquisitions, to pay
     existing Indebtedness encumbering property acquired in such transactions
     (including existing Indebtedness of any Restricted Subsidiary of the
     Borrower so acquired), and to pay related fees and expenses.

             (c)  Neither the making of any Loan hereunder nor the use of the
     proceeds thereof shall violate or be inconsistent with the provisions of
     Regulation G, U or X of the Board of Governors of the Federal Reserve
     System.

     5.06.   GOVERNMENTAL APPROVALS, ETC.  No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption or other action by or notice to, any third party or any foreign or
domestic, administrative or public body or Governmental Authority, or by any
subdivision thereof (except for (a) such orders, consents, approvals, licenses,
authorizations or validations which, if not obtained or made, would not have a
Material Adverse Effect or which have previously been obtained or made and (b)
filings to perfect security interests granted pursuant to the Security
Documents) is necessary or required to authorize or is required in connection
with (i) the execution, delivery and performance of any Credit Document or the
transactions contemplated thereby or (ii) the legality, validity, binding effect
or enforceability of any Credit Document.  As of the Closing Date, there shall
not exist any judgment, order, injunction or other restraint issued or filed
with respect to the transactions contemplated by the Credit Documents or the
Public Financing Documents or Credit Documents, including the making of Loans or
the performance by any Credit Party of its obligations under any Public
Financing Documents or Credit Documents.  At the time of the making of the
Initial Loans, there does not exist any judgment, order, injunction or other
restraint issued or filed with respect to the transactions contemplated by the
Public Financing Documents, including the 


                                     -55-

<PAGE>

consummation of the Public Financing, the making of Loans or the performance 
by any Credit Party of its obligations in connection with the Public 
Financing.

     5.07.   INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT. 
Neither the Borrower nor any of its Restricted Subsidiaries was, prior to the
Closing Date, is, or will be after giving effect to the transactions
contemplated by the Public Financing, (a) an "investment company" or a company
"controlled" by an "investment company," in each case within the meaning of the
Investment Company Act of 1940, as amended; or (b) a "holding company," a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," in each case
within the meaning of the Public Utility Holding Company Act of 1935, as
amended.

     5.08.   TRUE AND COMPLETE DISCLOSURE. All factual information (taken as a
whole) heretofore or contemporaneously furnished in writing by or on behalf of
any Credit Party to any Bank and either (a) contained in any Credit Document or
(b) required to be furnished pursuant to Section 4.01, is, and as of the Closing
Date will be, and all other such factual information (taken as a whole) which
has been or hereafter will be furnished in writing by or on behalf of any Credit
Party to the Administrative Agent or any Bank pursuant to Section 6.01 or 4.03
is or will be, true and accurate in all material respects on the date as of
which such information is dated or certified and is not and will not be
incomplete by omitting to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; PROVIDED, HOWEVER, that it is understood that the
projections and pro forma financial information contained in such materials are
based on good faith estimates and assumptions believed by such Credit Party to
be reasonable at the time made, but that actual results may vary from the
projections.

     5.09.   FINANCIAL CONDITION; FINANCIAL STATEMENTS; PROJECTIONS. 

             (a)  No Credit Party entered into the arrangements contemplated by
     the Original Credit Agreement, the Existing Credit Agreement, the other
     Transaction Documents this Agreement or by the Public Financing Documents,
     or did intend or intends to make any transfer or incur any obligations
     hereunder or thereunder, with actual intent to hinder, delay or defraud
     either then existing, present or future creditors.  On and as of the
     Effective Date, the Closing Date (and as of each Acquisition Term Loan
     Closing Date and each Supplemental Term Loan Closing Date), on a pro forma
     basis after giving effect to (i) as applicable, the Public Financing (and
     the transactions to be consummated with the proceeds of any such
     Acquisition Term Loan or Supplemental Term Loan), (ii) the incurrence of 
     all Indebtedness in connection therewith, (iii) the creation of all Liens
     created or to be created in connection therewith and (iv) the granting of
     all guarantees granted by any Credit Party in connection therewith, (A) no
     Credit Party expected or expects that final judgments against it in actions
     for money damages with respect to pending or threatened litigation will be
     rendered at a time when, or in an amount such that, it will be unable to
     satisfy any such judgments promptly in accordance with their 


                                     -56-

<PAGE>

     terms (taking into account the maximum reasonable amount of such 
     judgments in any such actions, the earliest reasonable time at which 
     such judgments might be rendered and the cash available to such Credit 
     Party, after taking into account all other anticipated uses of the cash 
     of such Credit Party (including the payments on or in respect of debts 
     (including its Contingent Obligations)); (B) no Credit Party incurred, 
     will have incurred or intends to, or believes that it will, incur debts 
     beyond its ability to pay such debts as such debts mature (taking into 
     account the timing and amounts of cash to be received by such Credit 
     Party from any source, and of amounts to be payable on or in respect of 
     debts of such Credit Party and the amounts referred to in the preceding 
     clause (A)); (C) each Credit Party, after taking into account all other 
     anticipated uses of the cash of such Person, anticipates being able to 
     pay all amounts on or in respect of debts of such Person when such 
     amounts are required to be paid; and (D) each Credit Party will have 
     sufficient capital with which to conduct its present and proposed 
     business and the property of such Credit Party will not constitute 
     unreasonably small capital with which to conduct its present or proposed 
     business.  For purposes of this Section 5.09, "debt" means any liability 
     on a claim, and "claim" means a (1) right to payment whether or not such 
     a right is reduced to judgment, liquidated, unliquidated, fixed, 
     contingent, matured, unmatured, disputed, undisputed, legal, equitable, 
     secured or unsecured; or (2) right to an equitable remedy for breach of 
     performance if such breach gives rise to a payment, whether or not such 
     right to an equitable remedy is reduced to judgment, fixed, contingent, 
     matured, unmatured, disputed, undisputed, secured or unsecured.

             (b)   The Borrower has heretofore delivered to the Banks the
     financial statements attached hereto as Schedule 4.01(j).  All such
     financial statements were prepared in accordance with GAAP consistently
     applied.  Such financial statements (other than the pro forma balance
     sheets) present fairly, in all material respects, the financial position of
     the Borrower and its Subsidiaries (or where applicable, Holdings and its
     Subsidiaries) on a consolidated basis as of the date and for the periods
     covered thereby, and such pro forma balance sheet presents fairly, in all
     material respects, the pro forma financial position of the Borrower and its
     Subsidiaries as of the Closing Date, based on the assumptions stated
     therein, and before and after giving effect to the transactions described
     therein.

             (c)  There have heretofore been delivered to the Banks the pro
     forma income projections for the Borrower and its Subsidiaries, pro forma
     balance sheet projections for the Borrower and its Subsidiaries and pro
     forma cash flow projections for the Borrower and its Subsidiaries for the
     five calendar years commencing June 30, 1997, inclusive, referred to in
     Section 4.01(j) including the financial statements delivered as of the
     Closing Date, and, in connection with any Acquisition Term Loan, the
     proforma financial statements referred to in Section 4.03 (the "PROJECTED
     FINANCIAL STATEMENTS"), which give effect to the applicable Permitted
     Business Acquisitions and all Indebtedness and Liens incurred or created in
     connection therewith.  The Projected Financial Statements are based on
     estimates and projections which are believed by the Borrower and its
     Restricted 


                                      -57-

<PAGE>

     Subsidiaries to be reasonable in light of the conditions which existed 
     at the time of their preparation as to the future financial performance 
     of the Borrower and its Subsidiaries.

             (d)  As of the Closing Date, except as fully reflected or reserved
     against in the financial statements (including the pro forma balance sheet
     as of the Closing Date) described in Section 5.09(b), there were not and
     will not be any liabilities or obligations with respect to the Borrower and
     its Subsidiaries of any nature whatsoever, other than deferred purchase
     price payments to be made pursuant to the Asset Purchase Agreement dated as
     of July 31, 1997 among Holdings, Color Spot Christmas Trees, Inc. and
     Cracon Inc. (whether absolute, accrued, contingent or otherwise and whether
     or not due, other than for such as have been incurred by the Borrower and
     its Subsidiaries in connection with the Public Financing and other than
     trade payables incurred in the ordinary course of business since the
     respective dates of such financial statements) which, either individually
     or in aggregate, were or will be material to such Persons.  No Credit Party
     knows of any basis for the assertion against the Borrower or any of its
     Subsidiaries of any liability or obligation of any nature whatsoever that
     is not fully reflected in the financial statements described in
     Section 5.09(b) or the Public Financing Documents or the schedules or
     exhibits thereto (other than trade payables incurred in the ordinary course
     of business) since the respective dates of such financial statements which,
     either individually or in the aggregate, could reasonably be expected to
     have a Material Adverse Effect.

     5.10.   SECURITY INTERESTS.  With the exception of the parcels of Real
Property at the locations set forth on Schedule 5.10A, upon the execution,
delivery and filing or recording in all appropriate registries or offices of the
Security Documents, the Security Documents create or will create, in favor of
the Administrative Agent for the benefit of the Banks, as security for the
obligations purported to be secured thereby, a valid and enforceable perfected
security interest in and Lien upon all of the Collateral, which security
interest and Lien upon the Collateral shall be superior to and prior to the
rights of all third persons and subject to no Liens except the Prior Liens and
Permitted Encumbrances applicable to such Collateral.  Set forth on Schedule
5.10B is a true list of all Liens (other than Liens in favor of the Agent and
Liens included in clause (a), (e) and (f) of the definitions of Permitted
Encumbrances) (i) on the property of the Borrower and its Restricted
Subsidiaries after giving effect to the Public Financing (collectively, the
"PRIOR LIENS").  The respective pledgor or assignor, as the case may be, has
(or, on and after the time it executes the respective Security Document, will
have) good and marketable title to the Collateral covered by such Security
Document, free and clear of all Liens other than Liens permitted under the
applicable Security Document.  No filings or recordings are required in order to
perfect the security interests created under any Security Document except for
filings or recordings in the registries and offices set forth in Schedule 5.10C
(including as supplemented from time to time pursuant to Section 6.01(n)).

     5.11.   TAX RETURNS AND PAYMENTS.  Except for the extension, to March 31,
1997, of the filing deadline for the tax returns due September 15, 1996 for the
Borrower's fiscal year ended June 30, 1996, each of the Borrower and its
Subsidiaries has filed all tax returns required to be 


                                      -58-

<PAGE>

filed by it (which are true and correct in all material respects) and has 
paid all taxes and assessments due and payable, other than (a) those not yet 
delinquent and (b) those contested in good faith and for which adequate 
reserves have been established, except, solely with respect to tax returns 
and taxes and assessments required to be filed or paid by or on behalf of any 
such Person relating to periods prior to the Closing Date, for any failure 
which, individually or in the aggregate, would not have a Material Adverse 
Effect. Each of the Borrower and its Subsidiaries has paid, or has provided 
adequate reserves (in accordance with GAAP) for the payment of, all federal, 
state, local and foreign income taxes (including, without limitation, 
franchise taxes based upon income) applicable for all prior fiscal years and 
for the current fiscal year to the date hereof except, solely with respect to 
tax returns and taxes and assessments required to be filed or paid by or on 
behalf of any such Person relating to the period prior to the Closing Date, 
for any failures which, individually or in the aggregate, would not have a 
Material Adverse Effect. Neither the Borrower nor any of its Subsidiaries 
know of any proposed tax assessment against any such Person that could 
reasonably be expected to have a Material Adverse Effect which is not being 
actively contested in good faith by such Person to the extent affected 
thereby in good faith and by appropriate proceedings; PROVIDED, HOWEVER,  
that such reserves or other appropriate provisions, if any, as shall be 
required in conformity with GAAP shall have been made or provided therefor.

     5.12.   ERISA.  Neither the Borrower nor its Restricted Subsidiaries nor
any ERISA Affiliate of any such Person has, for a period commencing six years
prior to the Closing Date, established, maintained, participated in or been
obligated to contribute to any Plan.

     5.13.   CAPITAL STOCK; SUBSIDIARIES, ETC. 

             (a)  From and after the consummation of the Public Financing, all
     of the outstanding Capital Stock of the Borrower and its Restricted
     Subsidiaries shall be validly issued, fully paid and nonassessable.  Except
     as set forth in the Stockholders Agreement, there are no preemptive rights
     on the part of any holder of any class of securities or equity interests of
     the Borrower and its Restricted Subsidiaries.

             (b)   LSGR Holdings, Inc., a direct, Wholly-Owned Subsidiary of 
     the Borrower, holds 99% of the partnership interests in  Lone Star 
     Growers, L.P., as the sole limited partner, and Lone Star, Inc., a 
     direct, Wholly-Owned Subsidiary of the Borrower, holds the remaining 1% 
     of the partnership interests in Lone Star Growers, L.P., as the sole 
     general partner.  

             (c)  Schedule 5.13 (including as supplemented from time to time
     pursuant to Section 6.01(n)) lists each Subsidiary of the Borrower and sets
     forth the jurisdiction of incorporation (or of formation) of each such
     Subsidiary.  There are no Restricted Subsidiaries of the Borrower which are
     not directly or indirectly Wholly Owned Subsidiaries.  Each Restricted
     Subsidiary of the Borrower has guaranteed the Borrower's obligations
     hereunder and the Borrower and each such Restricted Subsidiary has pledged


                                      -59-

<PAGE>

     all of its property to secure the same, pursuant to a Subsidiary Guarantee
     and related Security Documents.

     5.14.   PROPRIETARY RIGHTS.  The Borrower and each of its Restricted
Subsidiaries owns or possesses adequate patents, patent applications,
copyrights, licenses, permits, trademarks, trademark applications, service
marks, service mark applications, trade names, trade secrets and know how or
rights thereto (collectively, "INTELLECTUAL PROPERTY"), necessary to conduct its
business as presently conducted and as proposed to be conducted.  No claim is
pending or, to the best knowledge of the Borrower and each such Restricted
Subsidiary, threatened to the effect that the Borrower or any of its Restricted
Subsidiaries infringes upon the asserted rights of any other Person under any
Intellectual Property, and to the best knowledge of the Borrower or any of its
Restricted Subsidiaries, there is no basis for any such claim (whether or not
pending or threatened), in each case where such claim could reasonably be
expected to have a Material Adverse Effect.  No claim is pending or, to the best
knowledge of the Borrower or any of its Restricted Subsidiaries threatened to
the effect that the rights of the Borrower or any of its Restricted Subsidiaries
with respect to any such Intellectual Property owned by the Borrower or any of
its Restricted Subsidiaries are invalid or unenforceable by such Person, and, to
the best knowledge of the Borrower or any of its Restricted Subsidiaries, there
is no basis for any such claim (whether or not pending or threatened), in each
case where such claim could reasonably be expected to have a Material Adverse
Effect.  

     5.15.   COMPLIANCE WITH LAWS, ETC.  The Borrower and its Restricted
Subsidiaries are each in compliance in all material respects with all applicable
laws and regulations, including, without limitation, all laws relating to equal
employment opportunity and employee safety (but excluding, for purposes of this
Section 5.15, Environmental Laws), in all jurisdictions in which it is presently
doing business, and the Borrower will, and will cause its Subsidiaries to,
comply in all material respects with all such laws and regulations which may be
imposed in the future in jurisdictions in which it or any of its Restricted
Subsidiaries may then be doing business, other than such laws and regulations
the noncompliance with which could not reasonably be expected to have a Material
Adverse Effect.

     5.16.   PROPERTIES.  The Borrower and its Restricted Subsidiaries each has
good and marketable title to, and beneficial ownership of, all the properties
owned by it, including, after the Closing Date, all property reflected in the
most recent balance sheet referred to in Section 5.09(b), free and clear of all
Liens, other than Prior Liens and Permitted Encumbrances.  Schedule 5.16 lists
the addresses and locations of all Real Property owned and leased by the
Borrower and each such Restricted Subsidiary as of the Closing Date.  Except as
set forth on Schedule 5.16 (including as supplemented from time to time pursuant
to Section 6.01(n)) the Borrower and its Restricted Subsidiaries own or lease no
other Real Property.  Each of the Borrower and its Restricted Subsidiaries holds
all material licenses, certificates of occupancy or operation, water rights and
similar certificates and clearances of municipal and other authorities necessary
to own and operate its Real Property in the manner and for the purposes
currently operated by such party which if not obtained or maintained would have
a material adverse effect 


                                      -60-

<PAGE>

upon the value of such Real Property.  With respect to the leases of Real 
Property reflected on Schedule 5.16, the Borrower or the applicable 
Restricted Subsidiary of the Borrower is in compliance with all material 
provisions of each such lease.  With respect to all leases of Real Property 
by each of the Borrower and its Restricted Subsidiaries, no event has 
occurred which (with the giving of notice or the passage of time or both), 
would impair any right of such Person to exercise and obtain the benefit of 
any options contained in any material lease; there is no material default or 
basis for acceleration, repossession or termination by the landlord under any 
lease, nor has any event occurred which (with the giving of notice or the 
passage of time or both) would constitute a default or result in or permit 
the repossession, acceleration of any obligation under, or termination of, 
any material lease by the landlord.
  
     5.17.   SECURITIES.  

             (a)  Except as set forth in Schedule 5.17 (including as
     supplemented from time to time pursuant to Section 6.01(n)), there is not
     any existing Capital Stock of any Subsidiary of the Borrower.

             (b)  All Capital Stock of the Borrower's Restricted Subsidiaries is
     pledged to the Administrative Agent for the benefit of the Banks, and all
     certificates evidencing such Capital Stock has been delivered to the
     Administrative Agent.  All such Capital Stock is and shall be at all times
     duly authorized, validly issued, fully paid and nonassessable.

     5.18.   COLLECTIVE BARGAINING AGREEMENTS; LABOR MATTERS.  None of the
Borrower nor any of its Restricted Subsidiaries is a party to any collective
bargaining or similar agreement.  No such Person has experienced any strike,
labor dispute, slowdown or work stoppage due to labor disagreements which could
reasonably be expected to have a Material Adverse Effect, and to the best
knowledge of each such Person, there is no such strike, dispute, slowdown or
work stoppage threatened against any such Person.

     5.19.   INDEBTEDNESS OUTSTANDING.  Schedule 5.19 lists and describes all
Indebtedness of the Borrower and its Restricted Subsidiaries that will be
outstanding immediately after the Closing Date, and all Indebtedness of each
such Person that will be repaid, defeased, transferred or otherwise terminated
on the Closing Date.

     5.20.   ENVIRONMENTAL PROTECTION.  Except as set forth on Schedule 5.20
(including in any of the environmental reports listed on said Schedule), except
to the extent that any items set forth (or in said reports) individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect:

             (a)  Each of the Borrower and its Restricted Subsidiaries has
     obtained all material permits, licenses and other authorizations which are
     required with respect to the operation of its business, and the use,
     operation and ownership of its properties (including the Real 


                                      -61-

<PAGE>

     Property) and assets under any Environmental Law (collectively, the 
     "ENVIRONMENTAL AUTHORIZATIONS") and each such Environmental 
     Authorization is in full force and effect.

             (b)  Each of the Borrower and its Restricted Subsidiaries, and each
     of the properties (including the Real Property) and assets used in its
     business, is in compliance in all material respects with all terms and
     conditions of the Environmental Authorizations and is also in compliance in
     all respects (including, without limitation, compliance in all respects
     with standards, schedules and timetables therein) with, and not subject to
     liability under, any Environmental Law applicable to it or its business,
     assets, operations and Real Property, if any, including without limitation
     those arising under the Resource Conservation and Recovery Act of 1976, as
     amended, the Comprehensive Environmental Response, Compensation and
     Liability Act of 1980, as amended by the Superfund Amendments and
     Reauthorization Act of 1986 ("CERCLA"), the Federal Water Pollution Control
     Act, as amended, the Federal Clean Air Act, as amended, and the Toxic
     Substances Control Act, as amended, and all corresponding equivalent state
     laws, and there are no circumstances of a nature which may prevent or
     interfere with such material compliance in the future.  None of the
     Borrower nor its Restricted Subsidiaries has been notified by any
     Governmental Authority or has any basis to believe that any such
     Environmental Authorizations will be modified, suspended or revoked or
     cannot be renewed or otherwise maintained in the ordinary course of
     business.  In the last five years, to the best knowledge of each such
     Person, none of the Borrower nor any of its Restricted Subsidiaries has
     received any communication, whether from a Governmental Authority, citizen
     group, employee or otherwise, that alleges that the Borrower or any of its
     Restricted Subsidiaries or any of the properties or assets used in their
     respective businesses (including the Real Properties) is not in compliance
     in all material respects with Environmental Laws.

             (c)  There is no Environmental Notice that (i) is pending or, to
     the best knowledge of the Borrower and its Restricted Subsidiaries,
     threatened against any such Person or (ii) is pending or, to the best
     knowledge of each such Person, threatened against any Person whose
     liability for such Environmental Notice may have been retained or assumed
     by, or could reasonably be imputed or attributed by law or contract to, any
     such Person.

             (d)  To the best knowledge of each of the Borrower and its
     Restricted Subsidiaries, there are no past or present actions, activities,
     circumstances, conditions, events or incidents arising out of, based upon,
     resulting from or relating to the operation, ownership or use of any
     properties or assets (including the Real Properties) currently or formerly
     owned, operated, leased or used by any of the Borrower and its Restricted
     Subsidiaries (or any predecessor in interest of any of them), including,
     without limitation, the emission, discharge, disposal or other release of
     any Hazardous Materials in or into the Environment that could reasonably be
     expected to form the basis of any Environmental Notice against or with
     respect to any such Person, or against any person or 


                                      -62-

<PAGE>

     entity whose liability for any Environmental Notice may have been retained 
     or assumed by, or could be imputed by law or contract to, any such Person.

             (e)  None of the Borrower nor any of its Restricted Subsidiaries
     (i) has received written notice that it has been identified as a
     potentially responsible party under CERCLA or any comparable state, local
     or foreign law or (ii) has received any notification that any Hazardous
     Materials that it or any of its predecessors in interest has used,
     generated, stored, treated, handled, transported or disposed of, or
     arranged for transport for disposal or treatment of, or arranged for
     disposal or treatment of, has been found at any site at which any
     governmental agency or private party is conducting or plans to conduct a
     remedial investigation or other action pursuant to any Environmental Law.

             (f)  Without in any way limiting the generality of the foregoing,
     to the best knowledge of each of the Borrower and its Restricted
     Subsidiaries, (i) there are, and have been, no underground storage tanks or
     related piping located on, at or under property (including the Real
     Properties) owned, operated, leased or used by any such Person (or any
     predecessor in interest of any of them), (ii) there are, and have been, no
     polychlorinated biphenyls used or stored by any such Person located on, at
     or under property (including the Real Properties) owned, operated, leased
     or used by any such Person (iii) there are, and have been, no properties
     (including the Real Properties) owned, operated, managed, leased or used by
     any such Person (or any predecessor in interest of any of them) at which
     Hazardous Materials generated, used, owned, managed, stored or controlled
     by any such Person (or any predecessor in interest of any of them) may have
     been disposed or otherwise released into the Environment except such
     disposals or other releases which were in compliance with Environmental
     Laws and Environmental Authorizations and (iv) there is no friable asbestos
     contained in or forming part of any building, building component, structure
     or office space owned, operated, leased or used by any such Person.

             (g)  To the best knowledge of each of the Borrower and its
     Restricted Subsidiaries, no Lien has been recorded under any Environmental
     Law with respect to any properties, assets or facilities (including the
     Real Property) owned, operated, managed, leased, used or controlled by any
     such Person.

             (h)  Each of the Borrower and its Restricted Subsidiaries shall
     have made all notifications, registrations and filings in all material
     respects in accordance with all applicable State and Local Real Property
     Disclosure Requirements, including, without limitation, the use of forms
     provided by state or local agencies, where such forms exist, whether to the
     Administrative Agent or to, or with, the state or local agency, provided
     that where such notification, registration or filing was made to, or with a
     state or local agency, a copy of such notification, registration or filing
     shall be provided to the Administrative Agent prior to the Closing Date.


                                      -63-

<PAGE>

     5.21.   ENVIRONMENTAL INVESTIGATIONS.  All material environmental
investigations, assessments, studies, audits or reviews conducted of which any
of the Borrower and its Restricted Subsidiaries has knowledge in relation to the
current or prior business of any such Person or any Real Property or facility
now or previously owned, operated, used, controlled or leased by any such
Person, including, without limitation, those relating to compliance with or
liability under any Environmental Law, have been delivered to the Administrative
Agent.

     5.22.   INSURANCE. Schedule 5.22 lists all insurance policies maintained by
each of the Borrower and its Restricted Subsidiaries.  All of such insurance is
in full force and effect as of the Closing Date and, at all times after the
Closing Date, such insurance, or renewal or replacement policies substantially
equivalent in coverage and amount, shall be in full force and effect.

     5.23.   GOVERNMENTAL REGULATION.  None of the Borrower nor any of its
Restricted Subsidiaries is subject to any federal or state statute or regulation
limiting its ability to incur indebtedness for money borrowed or guarantee such
indebtedness as contemplated by the Transaction Documents, other than Regulation
X.

     5.24.   ABSENCE OF EVENTS OF DEFAULT.  No Default or Event of Default has
occurred and is continuing.

     5.25.   PERFORMANCE OF AGREEMENTS.  None of the Borrower nor any of its
Restricted Subsidiaries is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
contractual obligation of such Person which, singly or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, and no condition
exists which, with the giving of notice or the lapse of time or both, would
constitute such a default.

     5.26.   SECURITIES ACTIVITIES.  Neither the Borrower nor any of its
Restricted Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying any margin stock.

     SECTION 6.  AFFIRMATIVE COVENANTS.  The Borrower covenants and agrees that
on the Closing Date and thereafter until (a) this Agreement has ceased to be in
effect, (b) the Commitments have terminated and (c) the Loans, together with
interest, fees and all other Obligations incurred hereunder then due and
payable, have been paid in full (except as otherwise agreed or consented to, or
waived, in writing by the Required Banks):

     6.01.   INFORMATION COVENANTS.  The Borrower will furnish or cause to be
furnished to each Bank:

             (a)  As soon as available, and in any event within 90 days after
     the close of each fiscal year of the Borrower the audited consolidated
     balance sheet of the Borrower and its Subsidiaries as at the end of such
     fiscal year and the related audited consolidated 


                                      -64-

<PAGE>

     statements of income, of cash flows and of stockholders' equity for such 
     fiscal year, setting forth comparative consolidated figures for the 
     preceding fiscal year and a report on such consolidated balance sheets 
     and financial statements by Arthur Andersen or another "Big Six" 
     accounting firm that is reasonably satisfactory to the Administrative 
     Agent, which report shall not be qualified as to the scope of audit or 
     as to the status of the Borrower and its Subsidiaries as a going concern 
     and shall state that such consolidated financial statements present 
     fairly, in all material respects, the consolidated financial position of 
     the Borrower and its Subsidiaries as at the dates indicated and the 
     results of their operations and their cash flows for the periods 
     indicated in conformity with GAAP, and that the examination by such 
     accountants was conducted in accordance with generally accepted auditing 
     standards. 

             (b)  As soon as practicable, and in any event within 30 days after
     the end of each month, commencing with January 1998, (i) the unaudited
     consolidated balance sheet of the Borrower and its Subsidiaries as at the
     end of such month and (ii) the related unaudited consolidated statements of
     income and cash flows of the Borrower and its Subsidiaries, each in the
     form customarily prepared by management for such month and for the period
     from the beginning of the then current fiscal year to the end of such
     month, setting forth in comparative form the corresponding periods of the
     prior fiscal year (including a comparison of such monthly financial results
     against the budgets required to be submitted pursuant to Section 6.01(f)
     (such comparisons of actual results to budget to commence with the
     financial results of the month of January 1997), together with a brief
     narrative discussion and analysis prepared by management describing the
     results of operations of the Borrower and its Subsidiaries for such month.

             (c)  As soon as available, and in any event within 90 days after
     the close of each fiscal year of the any Unrestricted Subsidiary the
     audited consolidated and consolidating balance sheets of such Unrestricted
     Subsidiary and its Subsidiaries as at the end of such fiscal year and the
     related audited consolidated and consolidating statements of income, of
     cash flows and of stockholders' equity for such fiscal year, setting forth
     comparative consolidated figures for the preceding fiscal year and a report
     on such consolidated and consolidating balance sheets and financial
     statements by Arthur Andersen or another "Big Six" accounting firm that is
     reasonably satisfactory to the Administrative Agent, which report shall not
     be qualified as to the scope of audit or as to the status of such
     Unrestricted Subsidiary and its Subsidiaries as a going concern and shall
     state that such consolidated and consolidating financial statements present
     fairly, in all material respects, the consolidated and consolidating
     financial position of such Unrestricted Subsidiary and its Subsidiaries as
     at the dates indicated and the results of their operations and their cash
     flows for the periods indicated in conformity with GAAP, and that the
     examination by such accountants was conducted in accordance with generally
     accepted auditing standards. 


                                      -65-

<PAGE>

             (d)  As soon as practicable, and in any event within 30 days after
     the end of each month, commencing with November 1997, (i) unaudited
     consolidated balance sheets of any Unrestricted Subsidiaries and its
     Subsidiaries as at the end of such month and (ii) the related unaudited
     consolidated statements of income and cash flows of such Unrestricted
     Subsidiary and its Subsidiaries, each in the form customarily prepared by
     management for such month and for the period from the beginning of the then
     current fiscal year.

             (e)  Together with each delivery of consolidated financial
     statements of the Borrower and its Subsidiaries pursuant to Section
     6.01(a), a written statement by the independent public accountants giving
     the report thereon (i) stating that their audit examination has included a
     review of the terms of Sections 7.01 through 7.05, inclusive, and the
     definitions related thereto as they relate to accounting matters but
     without having conducted any special auditing procedures in connection
     therewith; (ii) stating whether, in connection with their audit
     examination, any condition or event which constitutes a Default or Event of
     Default has come to their attention, and if such a condition or event has
     come to their attention, specifying the nature and period of existence
     thereof; PROVIDED, HOWEVER, that such accountants shall not be liable by
     reason of any failure to obtain knowledge of any such Default or Event of
     Default that would not be disclosed in the course of their audit
     examination; and (iii) stating that based on their audit examination
     nothing has come to their attention which causes them to believe that as of
     the end of such fiscal year of the Borrower there existed a Default or an
     Event of Default related to the breach of any covenant set forth in
     Sections 7.01 through 7.05, inclusive, as they relate to accounting matters
     and if such a condition or event has come to their attention, specifying
     the nature and period of existence thereof and what action the applicable
     Credit Party has taken, is taking and proposes to take with respect
     thereto.

             (f)  Prior to the commencement of each fiscal year, annual budgets
     of the Borrower and its Subsidiaries in reasonable detail for each month of
     such fiscal year, as customarily prepared by management for its internal
     use, setting forth, with appropriate discussion, the principal assumptions
     upon which such budgets are based.

             (g)  At the time of the delivery of the financial statements
     provided for in Sections 6.01(a) and (b), a certificate of the chief
     financial officer, controller, chief accounting officer or other Authorized
     Officer of the Borrower to the effect that no Default or Event of Default
     exists, or, if any Default or Event of Default does exist, specifying the
     nature and extent thereof, which certificate shall, with respect to the
     financial statements provided for in Section 6.01(b), at the time of
     delivery of such statements for the fiscal months ended nearest to March
     31, June 30, September 30 and December 31, beginning with the fiscal month
     ended nearest to December 31, 1997, be accompanied by a Compliance
     Certificate, in a form reasonably acceptable to the Agent, setting forth
     the calculations required to establish whether the Borrower and its
     Subsidiaries were in compliance with the covenants in this Agreement
     (including without limitation the 


                                      -66-

<PAGE>

     covenants set forth in Sections 7.01 through 7.05, inclusive) as at the 
     end of such fiscal period.

             (h)  At the time of the delivery of the financial statements
     provided for in Sections 6.01(a), (b), (c) and (d), unaudited consolidated
     financial statements of the Borrower and its Restricted Subsidiaries
     certified by the chief financial officer, controller, chief accounting
     officer or other Authorized Officer of the Borrower to the effect that such
     financial statements were prepared in accordance with GAAP and fairly
     reflect the financial condition of the Borrower and the Restricted
     Subsidiaries at the dates thereof and the results of operations for the
     periods covered thereby (subject only to normal year-end audit
     adjustments).

             (i)  Promptly upon receipt thereof, a copy of each annual
     "management letter" submitted to the Borrower the Borrower by its
     independent accountants in connection with any annual audit made by them of
     the books of the Borrower or any of its Subsidiaries.

             (j)  Promptly upon becoming available, copies of all consolidated
     financial statements, reports, notices and proxy statements sent or made
     available generally by the Borrower or any of its Subsidiaries to the
     security holders (other than to the Borrower or another of its
     Subsidiaries) of such Person, of all regular and periodic reports and all
     registration statements and prospectuses, if any, filed by the Borrower or
     any of its Subsidiaries with any securities exchange or with the SEC and of
     all press releases and other statements made available generally by the
     Borrower or any of its Subsidiaries to the public concerning material
     developments in the business of the Borrower and its Subsidiaries.

             (k)  Promptly upon any Senior Officer obtaining actual knowledge
     (i) of any condition or event which constitutes a Default or Event of
     Default, or that any Bank has given any written notice or taken any other
     action with respect to a claimed Default or Event of Default under this
     Agreement, (ii) that any Person has given any written notice to the
     Borrower or any of its Subsidiaries or taken any other action with respect
     to a claimed default or event or condition of the type referred to in
     Section 8.04, or (iii) of a material adverse change in the business,
     operations, properties, assets, nature of assets, condition (financial or
     otherwise) or prospects of the Borrower and its Subsidiaries taken as a
     whole, an Officers' Certificate specifying the nature and period of
     existence of any such condition or event, or specifying the notice given or
     action taken by such holder or Person and the nature of such claimed
     Default, Event of Default, event or condition, or material adverse change,
     and what action the applicable Credit Party has taken, is taking and
     proposes to take with respect thereto.

             (l)  (i) Promptly upon any Senior Officer obtaining actual
     knowledge of the institution of, or written threat of, any action, suit,
     proceeding, governmental 


                                      -67-

<PAGE>

     investigation or arbitration against or affecting the Borrower or any of 
     its Subsidiaries or any property of the Borrower or any of its 
     Subsidiaries not previously disclosed to the Banks, which action, suit, 
     proceeding, governmental investigation or arbitration seeks (or in the 
     case of multiple actions, suits, proceedings, governmental 
     investigations or arbitrations arising out of the same general 
     allegations or circumstances which seek) recovery from the Borrower or 
     any of its Subsidiaries aggregating $1,000,000 or more (exclusive of 
     claims covered by insurance policies of the Borrower or any of its 
     Subsidiaries unless the insurers of such claims have disclaimed coverage 
     or reserved the right to disclaim coverage on such claims), the Borrower 
     shall give notice thereof to the Banks and provide such other 
     information as may be reasonably available to enable the Banks and their 
     counsel to evaluate such matters; (ii) as soon as practicable and in any 
     event within 45 days after the end of each fiscal quarter, the Borrower 
     shall provide a report to the Banks covering the institution of, or 
     written threat of, any action, suit, proceeding, governmental 
     investigation or arbitration (not previously reported) against or 
     affecting the Borrower or any of its Subsidiaries or any property of the 
     Borrower or any of its Subsidiaries not previously disclosed to the 
     Banks, which action, suit, proceedings, governmental investigation or 
     arbitration seeks (or in the case of multiple actions, suits, 
     proceedings, governmental investigations or arbitrations arising out of 
     the same general allegations or circumstances which seek) recovery from 
     the Borrower or any of its Subsidiaries aggregating $1,000,000 or more 
     (exclusive of claims covered by insurance policies of the Borrower or 
     any of its Subsidiaries unless the insurers of such claims have 
     disclaimed coverage or reserved the right to disclaim coverage on such 
     claims), and shall provide such other information at such time as may be 
     reasonably available to enable the Banks and their counsel to evaluate 
     such matters; (iii) in addition to the requirements set forth in clauses 
     (i) and (ii) of this Section 6.01(i), the Borrower upon request shall 
     promptly give notice of the status of any action, suit, proceeding, 
     governmental investigation or arbitration covered by a report delivered 
     to the Banks pursuant to clause (i) or (ii) above to the Banks and 
     provide such other information as may be reasonably available to it to 
     enable the Banks and their counsel to evaluate such matters; (iv) 
     promptly upon any officer of the Borrower or any Subsidiary obtaining 
     actual knowledge of any dispute in respect of or the institution of, or 
     written threat of, any action, suit, proceeding, governmental 
     investigation or arbitration in respect of any lease of Real Property or 
     other material contract of the Borrower or any of its Subsidiaries (in 
     the case of such other material contract, to the extent that the 
     dispute, action, suit, proceeding, investigation or arbitration could, 
     if resolved in a manner unfavorable to the Credit Party thereto, 
     reasonably be anticipated to have a Material Adverse Effect), such 
     Person shall give notice thereof to the Banks and shall provide to the 
     Banks such other information as may be reasonably available to enable 
     the Banks and their counsel to evaluate such matters; and (v) promptly 
     upon any Senior Officer obtaining knowledge of, or written threat of, 
     any action, suit, proceeding, governmental investigation or arbitration 
     in respect of any lease of Real Property or other material contract of 
     the Borrower or any of its Subsidiaries (in the case of such other 
     material contract, to the extent that the action, suit, proceeding, 
     investigation or arbitration could, if resolved in a manner unfavorable 
     to the 


                                      -68-

<PAGE>

     Credit Party thereto, reasonably be anticipated to have a Material 
     Adverse Effect), the Borrower shall give notice thereof to the Banks and 
     shall provide such other information as may be reasonably available to 
     enable the Banks and their counsel to evaluate such matters.

             (m)  Within 90 days of the last day of each calendar year of the
     Borrower, a summary report outlining all changes to the material insurance
     coverage maintained from the date of the previous such report by the
     Borrower or any of its Subsidiaries.

             (n)  To the extent reasonably requested by the Administrative
     Agent, as soon as practicable and in any event within ten Business Days of
     the later of such request and the making of any such amendment or waiver,
     copies of amendments or waivers with respect to Indebtedness of the
     Borrower or any of its Restricted Subsidiaries.

             (o)  On or prior to the Closing Date and within 90 days after the
     commencement of each fiscal year (to the extent there has been a change
     since the list provided the prior fiscal year), a complete and accurate
     list of the Senior Officers and directors of each Credit Party, which list
     shall include any officers authorized to execute any certificates, notices,
     reports or other documents provided to the Administrative Agent or the
     Banks hereunder or under any other Credit Document, and within 30 days of
     any change in personnel affecting the accuracy of such list, a notice
     specifying such change in personnel.
     
             (p)  Within twenty days after the last Business Day of each fiscal
     month, a borrowing base certificate in the form of Exhibit 6.01(p) (each, a
     "BORROWING BASE CERTIFICATE") detailing the Borrower's Eligible Accounts
     Receivable and Eligible Inventory as of the last day of such fiscal month,
     certified as complete and correct on behalf of the Borrower by a Senior
     Officer or other Authorized Officer.  In addition, each Borrowing Base
     Certificate shall have attached to it such additional schedules and/or
     other information as the Administrative Agent may reasonably request.  If
     the Borrower fails to deliver any such Borrowing Base Certificate within
     thirty days after the end of any such fiscal month, then the Borrower's
     Borrowing Base shall be deemed to be $0 until such time as the Borrower
     shall deliver such required Borrowing Base Certificate.

             (q)  Within 25 days after the last Business Day of each month, or
     upon the consummation of any Permitted Business Acquisition, a supplement
     to each of Schedules 5.10B, 5.13, 5.16 and 5.17 showing any changes in the
     information set forth in such Schedule not previously furnished to the
     Banks in writing, and within 25 days after the last Business Day of each
     calendar year, an amendment to each such Schedule; PROVIDED that the
     Borrower shall only be required to provide a supplement (or amendment) with
     respect to any such Schedule where there has been a change in the
     information set forth in such Schedule not previously furnished to the
     Banks in writing.


                                      -69-

<PAGE>

             (r)  With reasonable promptness, such other information and data
     with respect to the Borrower or any of its Subsidiaries or any other
     similar entity in which the Borrower or any of its Subsidiaries has an
     investment, as from time to time may be reasonably requested by any Bank
     and may be reasonably available to the Borrower.

     6.02.   BOOKS, RECORDS AND INSPECTIONS.  The Borrower will, and will cause
each of its Restricted Subsidiaries to, keep true books of records and accounts
in which full and correct entries will be made of all its business transactions,
and will reflect in its financial statements adequate accruals and
appropriations to reserves, all in accordance with GAAP.  The Borrower will, and
will cause each of its Restricted Subsidiaries to, permit, upon reasonable prior
notice to the chief executive officer or chief financial officer of the
Borrower, officers and designated representatives of the Administrative Agent or
any Bank to visit and inspect any of the properties or assets (including the
conduct, at the Borrower's cost, of an annual field audit of the Borrowing Base)
of the Borrower or any of its Restricted Subsidiaries in whosesoever possession,
and to examine the books of account of the Borrower or any of its Restricted
Subsidiaries and discuss the affairs, finances and accounts of the Borrower or
any of its Restricted Subsidiaries with, and be advised as to the same by, its
and their chief executive officer, chief financial officer and independent
accountants (in the presence of such officers), all at such reasonable times
during normal business hours and intervals and to such reasonable extent as the
Administrative Agent or any Bank may reasonably request.  Notwithstanding
anything to the contrary contained in this Section 6.02, any field audit
conducted pursuant to this Section 6.02 may be conducted by a third party
auditor commissioned by the Administrative Agent or the Banks.

     6.03.   MAINTENANCE OF PROPERTY; INSURANCE.

             (a)   The Borrower will, and will cause each of its Restricted
     Subsidiaries to, maintain or cause to be maintained in good repair, working
     order and condition (subject to normal wear and tear) all properties used
     in its businesses (including, without limitation, any Real Property,
     whether owned or leased) and from time to time will make or cause to be
     made all appropriate repairs, renewals and replacements thereof and will
     maintain and renew as necessary all licenses, permits and other clearances
     necessary to use and occupy such properties of the Borrower and its
     Restricted Subsidiaries. The Borrower will, and will cause each of its
     Restricted Subsidiaries to, comply with all material provisions of each
     lease of Real Property in which any such Person is the lessee.

             (b)  Subject to the provisions of Section 6.03(c), Borrower and its
     Restricted Subsidiaries will maintain or cause to be maintained, with
     financially sound and reputable insurers, insurance with respect to its
     properties and business against loss or damage of the kinds customarily
     insured against by corporations of established reputation engaged in the
     same or similar businesses and similarly situated, of such types and in
     such amounts as are customarily carried under similar circumstances by such
     other corporations to the extent that such types and such amounts of
     insurance are available at commercially reasonable rates.  The Borrower or
     its Restricted Subsidiaries, as applicable, will furnish 


                                      -70-

<PAGE>

     to each Bank, upon reasonable request, information as to the insurance 
     carried, and will not cancel any such insurance without the consent of 
     the Required Banks, which consent shall not be unreasonably withheld.

             (c)  Without limiting Section 6.03(b), the Borrower and its
     Restricted Subsidiaries, as applicable, shall maintain, or cause to be
     maintained, in full force the insurance coverages specified in the Security
     Documents.

     6.04.   PAYMENT OF TAXES. The Borrower will pay and discharge, and will
cause each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which penalties attach
thereto, and all lawful claims which, if unpaid, might become a Lien or charge
upon any properties of the Borrower or any of its Subsidiaries or cause a
failure or forfeiture of title thereto; PROVIDED, HOWEVER, that neither the
Borrower nor any of its Subsidiaries shall be required to pay any such tax,
assessment, charge, levy or claim that is being contested in good faith and by
proper proceedings promptly instituted and diligently conducted if it has
maintained adequate reserves with respect thereto in accordance with GAAP or if
the same shall have been bonded.

     6.05.   CORPORATE FRANCHISES.  The Borrower will do or cause to be done,
and will cause each of its Subsidiaries to do or cause to be done, all things
necessary to preserve and keep in full force and effect its corporate existence,
rights and authority, EXCEPT that any Wholly Owned Subsidiary of the Borrower
that is a Restricted Subsidiary may merge with and into the Borrower or into
another Wholly Owned Subsidiary of the Borrower that is a Restricted Subsidiary.

     6.06.   COMPLIANCE WITH STATUTES, ETC.  The Borrower will, and will cause
each of its Restricted Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
Governmental Authorities, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including all applicable laws),
except where such noncompliance would not have a Material Adverse Effect.

     6.07.   ERISA.  The Borrower will furnish to the Administrative Agent, who
will distribute to each of the Banks:

             (a)  promptly upon any Credit Party's knowing or having reason to
     know of the occurrence of any (i) Termination Event, or (ii) "prohibited
     transaction," within the meaning of Section 406 of ERISA or Section 4975 of
     the Code, in connection with any Pension Plan or any trust created
     thereunder, which in the case of all such events described in clause (i) or
     (ii) results or could reasonably be expected to result in a liability of
     any Credit Party or its ERISA Affiliates in the aggregate in excess of
     $250,000, a written notice specifying the nature thereof, what action such
     Credit Party or its ERISA Affiliates have taken, are taking or propose to
     take with respect thereto, and, when 


                                      -71-

<PAGE>

     known, any action taken or threatened by the Internal Revenue Service, 
     Department of Labor, PBGC or Multiemployer Plan with respect thereto.

             (b)  with reasonable promptness, copies of (i) all notices received
     by any Credit Party or any of its ERISA Affiliates of PBGC's intent to
     terminate any Title IV Plan or to have a trustee appointed to administer
     any Title IV Plan, the notice of which event is required pursuant to
     Section 6.07(a); (ii) upon the request of the Administrative Agent, each
     Schedule B (Actuarial Information) to the annual report (Form 5500 Series)
     filed by any Credit Party or any of its ERISA Affiliates with the Internal
     Revenue Service with respect to each Pension Plan for which Schedule B is
     required; (iii) upon the request of the Administrative Agent, the most
     recent actuarial valuation report for each Title IV Plan; and (iv) all
     notices received by any Credit Party or any of its ERISA Affiliates from a
     Multiemployer Plan concerning the imposition or amount of withdrawal
     liability pursuant to Section 4202 of ERISA, the notice of which event is
     required pursuant to Section 6.07(a).

     6.08.   PERFORMANCE OF OBLIGATIONS.  The Borrower will, and will cause each
of its Restricted Subsidiaries to, perform in all material respects all of its
obligations under the terms of each mortgage, indenture, security agreement,
other debt instrument and material contract by which it is bound or to which it
is a party, except where such nonperformance could not reasonably be expected to
have a Material Adverse Effect.

     6.09.    FISCAL YEAR; FISCAL QUARTERS.  Each of The Borrower and its
Subsidiaries as of the Closing Date will, for financial reporting purposes have
(a) its fiscal year end on or about June 30, and (b) its fiscal quarters end on
or about September 30, December 31, March 31 and June 30.  Neither the Borrower
nor any of its Subsidiaries shall change their respective fiscal years from that
set forth above, with respect to the Borrower and such Subsidiaries, and from
that currently maintained by any Subsidiary subsequently acquired by the
Borrower without the prior written consent of the Required Banks, except that
any such subsequently acquired Subsidiary may change its fiscal year to end on
or about June 30, with fiscal quarters to end on or about September 30, December
31, March 31 and June 30, without such prior written consent.

     6.10.   USE OF PROCEEDS.  All proceeds of the Loans shall be used as
provided in Section 5.05.

     6.11.   INTEREST RATE PROTECTION.  

             (a)  The Borrower shall, commencing no later than 30 days after the
     first to occur of (x) the date on which the outstanding principal balance
     of the Acquisition Term Loans equals $25 million or (y) the Acquisition
     Term Loan Commitment Termination Date, enter into Interest Rate Agreements
     reasonably acceptable to the Administrative Agent for a term ending no
     earlier than three years after the Acquisition Term Loan Commitment


                                      -72-

<PAGE>

     Termination Date, in respect of no less than 50% of the Acquisition Term
     Loans outstanding from time to time.

             (b)   The Borrower shall, commencing no later than 30 days after
     the first to occur of (x) the date on which the outstanding principal
     balance of the Supplemental Term Loans equals $15 million or (y) the
     Supplemental Term Loan Commitment Termination Date, enter into Interest
     Rate Agreements reasonably acceptable to the Administrative Agent for a
     term ending no earlier than three years after the Supplemental Term Loan
     Termination Date, in respect of no less than 50% of the Supplemental Term
     Loans outstanding from time to time. 

     6.12.   NO FURTHER NEGATIVE PLEDGES, ETC.  Except with respect to
prohibitions against other encumbrances on specific property encumbered to
secure payment of particular Indebtedness permitted hereunder (which
Indebtedness relates solely to the acquisition or improvement of such specific
property), neither the Borrower nor any of its Restricted Subsidiaries shall
enter into any agreement prohibiting or restricting, in any manner (directly or
indirectly and including by way of covenant, representation or warranty or event
of default), the creation or assumption of any Lien upon its properties or
assets, whether now owned or hereafter acquired (other than in connection with
the Security Documents).  Neither the Borrower nor any of its Restricted
Subsidiaries shall create, or permit to be created, any restriction in the
charter or bylaws of any Restricted Subsidiary of the Borrower restricting the
payment of dividends to the Borrower or any Wholly Owned Subsidiary of the
Borrower.  

     6.13.   BANK MEETING.  The Borrower will participate in a meeting of the
Banks once during each calendar year (the first such meeting to take place prior
to June 30, 1998) to be held at a location and a time selected by the
Administrative Agent and reasonably acceptable to the Borrower, unless the
Required Banks determine in their sole discretion that such meeting is
unnecessary and so inform the Administrative Agent and the Borrower.

     6.14.   ADDITIONAL COLLATERAL; FURTHER ASSURANCES.  

             (a)  Promptly, and in any event within 30 days after the Borrower
     or any of its Restricted Subsidiaries acquires any asset or property,
     including any Real Property, which is not covered by the existing Security
     Documents, including, without limitation, any Capital Stock of any
     Restricted Subsidiary (the "ADDITIONAL COLLATERAL"), the Borrower will
     cause any newly acquired Restricted Subsidiary to execute a Subsidiary
     Guaranty, and the Borrower will, and will cause each of its Restricted
     Subsidiaries to, grant to the Administrative Agent, for the benefit of the
     Banks, security interests and mortgages in such asset or property, EXCEPT
     that, with respect to any asset or property acquired in a Permitted
     Business Acquisition, including any Restricted Subsidiary so acquired, such
     actions shall be required to be performed on or before the applicable
     Permitted Business Acquisition Closing Date (except as otherwise assented
     to by the Administrative Agent).  Such security interests and mortgages
     shall be granted pursuant to documentation 


                                      -73-

<PAGE>

     substantially the same as the Security Documents (the "ADDITIONAL 
     SECURITY DOCUMENTS") reasonably satisfactory in form and substance to 
     the Administrative Agent, including, without limitation, and if deemed 
     desirable by the Administrative Agent, opinions of local counsel in any 
     jurisdictions in which such asset or property is located, and shall 
     constitute valid and enforceable perfected security interests superior 
     to and prior to the rights of all third Persons and subject to no other 
     Liens except Permitted Encumbrances at the time of perfection thereof.  
     The Additional Security Documents or other instruments related thereto 
     shall be duly recorded or filed in such manner and in such places as are 
     required by law to establish, perfect, preserve and protect the Liens in 
     favor of the Administrative Agent for the benefit of the Banks required 
     to be granted pursuant to the Additional Security Documents and all 
     taxes, fees and other charges payable in connection therewith shall have 
     been paid in full.  

             (b)   The Borrower will, and will cause each of its Restricted
     Subsidiaries to, at its own expense, make, execute, endorse, acknowledge,
     file and/or deliver to the Administrative Agent from time to time such
     vouchers, invoices, schedules, confirmatory assignments, conveyances,
     financing statements, transfer endorsements, powers of attorney,
     certificates, real property surveys, reports and other assurances or
     instruments and take such further steps relating to the Collateral covered
     by any of the Security Documents or the Additional Security Documents as
     the Administrative Agent may reasonably require.  Furthermore, the Borrower
     shall cause to be delivered to the Administrative Agent such opinions of
     counsel, title insurance and other related documents as may be requested by
     the Administrative Agent to assure themselves that this Section 6.14 has
     been compiled with. 

             (c)  At the request of the Administrative Agent or the Required
     Banks, the Borrower shall provide to the Administrative Agent appraisals
     satisfying applicable requirements of FIRREA in respect of the Real
     Property of the Borrower and its Restricted Subsidiaries, if any,
     constituting Collateral, from time to time, in form and substance
     reasonably satisfactory to the Administrative Agent.

             (d)   The Borrower agrees that each action required by this Section
     6.14 shall be completed as soon as possible, but if such Collateral has
     been newly acquired by the Borrower or its Restricted Subsidiaries or is
     Collateral held by any newly acquired Restricted Subsidiary of the
     Borrower, in no event later than 30 days after the date of the acquisition
     of such Collateral; PROVIDED that with respect to any Collateral acquired
     in a Permitted Business Acquisition, each action required by this Section
     6.14 with respect to such Collateral (including property of, or Capital
     Stock of, any newly acquired Restricted Subsidiary) shall be taken no later
     than the closing of such Permitted Business Acquisition, unless otherwise
     consented to by the Administrative Agent.

             (e)  Following the Closing Date, the Borrower will, and will cause
     each of its Restricted Subsidiaries to, perform any and all acts and
     execute any and all documents 


                                      -74-

<PAGE>

     (including, without limitation, the execution, amendment or modification 
     of any financing statement and continuation statement) for filing in any 
     appropriate jurisdiction under the provisions of the UCC, local law or 
     any statute, rule or regulation of any applicable jurisdiction which are 
     necessary in order to maintain or confirm in favor of the Administrative 
     Agent for the ratable benefit of the Banks a valid and perfected Lien on 
     the Collateral and any Additional Collateral, subject to no Liens except 
     for Prior Liens and Permitted Encumbrances.  The Borrower shall, as 
     promptly as practicable after the filing of any such financing 
     statements, deliver to the Administrative Agent acknowledgment copies 
     of, or copies of lien search reports confirming the filing of, financing 
     statements duly filed under the UCC of all jurisdictions as may be 
     necessary or, in the reasonable opinion of the Administrative Agent, 
     desirable to perfect the Lien created, or purported or intended to be 
     created, by each Security Document.

             (f)  The Borrower shall use its best efforts and shall cause each
     of its Restricted Subsidiaries to use their best efforts, to obtain an
     executed Landlord Certification and Waiver with respect to each lease of
     Real Property entered into by Credit Party after the Closing Date; PROVIDED
     that, the Borrower shall not be required to take actions or incur costs
     which are commercially unreasonable with respect to such leases of Real
     Property which, in the reasonable judgement of the Administrative Agent,
     are not material to the business of the Borrower and its Restricted
     Subsidiaries taken as a whole, in order to obtain such Landlord
     Certification and Waivers.

     6.15.   ENVIRONMENTAL EVENTS.

             (a)  The Borrower will, and will cause each of its Restricted
     Subsidiaries to, comply with any and all Environmental Laws, other than
     noncompliance which could not reasonably be expected to result in liability
     under Environmental Laws which would have a Material Adverse Effect;
     PROVIDED that the Borrower will, and will cause each of its Restricted
     Subsidiaries to, comply with any and all Environmental Laws, to the extent
     any noncompliance would (x) constitute or create a default under any lease
     of Real Property as to which a Credit Party is a tenant which would entitle
     the lessor of such Real Property to terminate said lease or (y) materially
     diminish the value of any Real Property owned by any Credit Party.

             (b)   The Borrower will, and will cause each of its Restricted
     Subsidiaries to, promptly give notice to the Administrative Agent upon
     becoming aware thereof (i) of any violation of any Environmental Law, (ii)
     any Environmental Notice or (iii) any release or threatened release of any
     Hazardous Material at, on, into, under or from any Real Property or any
     facility or equipment thereat in excess of reportable or allowable
     standards or levels under any Environmental Law, or in a manner and/or
     amount which could reasonably be expected to either (x) result in liability
     under any Environmental Law, in each case, in excess of $500,000
     individually or in the aggregate with any other liability under any
     Environmental Laws (other than any such events disclosed in Schedule 5.21
     or 


                                      -75-

<PAGE>

     referred to in the reports listed on said Schedule) or (y) materially
     interfere with the continued operation of the Real Property which is the
     site or subject of the violation, notice or release.

             (c)   The Borrower will, and will cause each of its Restricted
     Subsidiaries to, promptly provide the Administrative Agent with copies of
     any notice, submittal or documentation provided by the Borrower or any of
     its Restricted Subsidiaries to any Governmental Authority or third party
     under any Environmental Law if the matter which is the subject of the
     notice, submittal or other documentation could reasonably be expected to
     have a Material Adverse Effect.  Such notice, submittal or documentation
     shall be provided to the Administrative Agent promptly and, in any event,
     within ten Business Days after such material is provided to the
     Governmental Authority or third party.

             (d)  In the event of the presence of Hazardous Materials on any
     Real Property which is in violation of, or which could reasonably be
     expected to result in liability under, any Environmental Laws, in each
     case, to the extent such violation, or liability, could reasonably be
     expected to (x) have a Material Adverse Effect, or (y) entitle the lessor
     of any Real Property with respect to which a Credit Party is the tenant to
     terminate the subject lease, or (z) materially diminish the value of any
     Real Property owned by any Credit Party, then, in each case, the Borrower
     or any of its Restricted Subsidiaries, upon discovery thereof, shall take
     appropriate steps to initiate and expeditiously complete all response,
     corrective and other action required under any Environmental Laws to
     mitigate and eliminate any such liability.

     6.16.   The Borrower shall and shall cause each of the Unrestricted
Subsidiaries to maintain compliance with each of the Unrestricted Subsidiary
Conditions.

     SECTION 7.  NEGATIVE COVENANTS.  The Borrower hereby covenants and agrees
that as of the Closing Date and thereafter until (a) this Agreement has ceased
to be in effect, (b) the Commitments have terminated and (c) the Loans (together
with interest, fees and all other Obligations incurred hereunder) then due and
payable have been paid in full (except as otherwise agreed or consented to, or
waived, in writing by the Required Banks):


                                      -76-


<PAGE>

     7.01.   CAPITAL EXPENDITURES.  The Borrower will not, and will not permit
any of its Restricted Subsidiaries to, make Consolidated Capital Expenditures
for any purpose, in excess of the amount specified in the table below for each
of the calendar years specified in such table:

              YEAR ENDING                  AMOUNT
              -----------                  ------

          December 31, 1997            $10.4 million
          December 31, 1998            $13.5 million
          December 31, 1999            $11.5 million
          December 31, 2000            $11.5 million
          December 31, 2001            $11.5 million
          December 31, 2002            $11.5 million
          December 31, 2003            $11.5 million
          December 31, 2004            $11.5 million

; PROVIDED, HOWEVER, that for purposes of this Section 7.01, the aggregate
amount of Capitalized Lease Obligations incurred by the Borrower and its
Restricted Subsidiaries, on a consolidated basis, shall be included in the
calculation of Consolidated Capital Expenditures in the year in which such
Capitalized Lease Obligations were incurred; PROVIDED, FURTHER, that if the
Borrower and its Restricted Subsidiaries make Consolidated Capital Expenditures
in any calendar year in an amount less than the amount set forth above for such
period (such unused portion the "CARRYOVER AMOUNT"), the Borrower and its
Restricted Subsidiaries may make Consolidated Capital Expenditures in the
immediately succeeding calendar year in an amount not to exceed the sum of (i)
the amount set forth above for such calendar year and (ii) the Carryover Amount;
PROVIDED, FURTHER, that (i) the Carryover Amount calculated for any calendar
year may only be used during the immediately succeeding calendar year and will
not be added to the amount of Consolidated Capital Expenditure availability for
such succeeding calendar year for purposes of calculating the Carryover Amount
for such calendar year, and (ii) the Capital Expenditures for a given calendar
year shall be counted, first, against the amount set forth above for such
calendar year and, second, against the Carryover Amount and PROVIDED, FURTHER,
that after the consummation of any Permitted Business Acquisition, the amounts
set forth in the table above for any periods ending after such Permitted
Business Acquisition shall be increased by an amount equal to 30% of the
projected EBITDA of the acquired company included in the pro forma consolidated
plan for the then current calendar year delivered to the Administrative Agent
pursuant to Section 4.03(b)(iii).

     7.02.   TOTAL INTEREST COVERAGE RATIO. The Borrower will not permit the
ratio of (a) Consolidated EBITDA of the Borrower for any Test Period ended on or
about a date specified in the table below to (b) Consolidated Interest Expense
of the Borrower for any Test Period ended on or about a date specified in the
table below (provided, however in the case of periods ending on March 31, June
30, or September 30 of 1998, the Consolidated Interest Expense of the Borrower
shall be calculated for the relevant Test Period net of any interest paid with
respect to 


                                    -77-

<PAGE>

any Existing Revolving Loans which were repaid (and not reborrowed under the 
Revolving Loans) on the Closing Date), to be less than the ratio set forth 
opposite such date in such table:

           TEST PERIOD ENDING                                 RATIO
           ------------------                                 ----- 

          March 31, 1998 . . . . . . . . . . . . . . . .    2.00 to 1.00
                         . . . . . . . . . . . . . . . .    2.00 to 1.00
          June 30, 1998. . . . . . . . . . . . . . . . .    2.00 to 1.00
          September 30, 1998 . . . . . . . . . . . . . .    2.00 to 1.00
          December 31, 1998. . . . . . . . . . . . . . .    2.00 to 1.00

          March 31, 1999 . . . . . . . . . . . . . . . .    2.15 to 1.00
          June 30, 1999. . . . . . . . . . . . . . . . .    2.15 to 1.00
          September 30, 1999 . . . . . . . . . . . . . .    2.25 to 1.00
          December 31, 1999. . . . . . . . . . . . . . .    2.25 to 1.00

          March 31, 2000 . . . . . . . . . . . . . . . .    2.25 to 1.00
          June 30, 2000. . . . . . . . . . . . . . . . .    2.25 to 1.00
          September 30, 2000 . . . . . . . . . . . . . .    2.50 to 1.00
          December 31, 2000. . . . . . . . . . . . . . .    2.50 to 1.00

          March 31, 2001 . . . . . . . . . . . . . . . .    2.50 to 1.00
          June 30, 2001. . . . . . . . . . . . . . . . .    2.50 to 1.00
          September 30, 2001 . . . . . . . . . . . . . .    2.75 to 1.00
          December 31, 2001. . . . . . . . . . . . . . .    2.75 to 1.00

          March 31, 2002 . . . . . . . . . . . . . . . .    2.75 to 1.00
          June 30, 2002. . . . . . . . . . . . . . . . .    2.75 to 1.00
          September 30, 2002 . . . . . . . . . . . . . .    3.00 to 1.00
          December 31, 2002. . . . . . . . . . . . . . .    3.00 to 1.00

          March 31, 2003 . . . . . . . . . . . . . . . .    3.00 to 1.00
          June 30, 2003. . . . . . . . . . . . . . . . .    3.00 to 1.00
          September 30, 2003 . . . . . . . . . . . . . .    3.25 to 1.00
          December 31, 2003. . . . . . . . . . . . . . .    3.25 to 1.00

          March 31, 2004 . . . . . . . . . . . . . . . .    3.25 to 1.00
          June 30, 2004. . . . . . . . . . . . . . . . .    3.25 to 1.00
          September 30, 2004 . . . . . . . . . . . . . .    3.50 to 1.00
          December 31, 2004. . . . . . . . . . . . . . .    3.50 to 1.00


                                    -78-

<PAGE>

; PROVIDED that, for purposes of this Section 7.02, Consolidated EBITDA for a
given Test Period (x) shall mean Consolidated EBITDA for the twelve month period
ended on the last day of such Test Period and (y) shall also include the EBITDA
(with appropriate adjustments) derived from any business which was acquired by
the Borrower and its Restricted Subsidiaries during such twelve-month period and
which is consolidated with the Borrower and its Restricted Subsidiaries as of
the last day of such Test Period, for the portion of such twelve month period
before the business was so acquired; and PROVIDED further that, for purposes of
clause (b) of this Section 7.02,  Consolidated Interest Expense shall include
only cash interest expense paid during the applicable period.

     7.03.   FIXED CHARGE COVERAGE RATIO.  The Borrower will not permit the
ratio of (a) Consolidated EBITDAC for any Test Period ending on or about the
date specified in the table below MINUS taxes paid in cash during such Test
Period to (b) the sum of (i) Consolidated Interest Expense (which for purposes
of this clause (b) shall mean only cash interest expense paid during such
period) of the Borrower for such period (provided, however, in the case of
periods ending on March 31, June 30, or September 30 of 1998, the Consolidated
Interest Expense of the Borrower shall be calculated for the relevant Test
Period net of any interest paid with respect to any Existing Revolving Loans
which were repaid (and not reborrowed under the Revolving Loan) on the Closing
Date), PLUS (ii) the amount of cash payments on account of principal of
Indebtedness PLUS (iii) payments on account of noncompetition or consulting
arrangements made by the Borrower and its Restricted Subsidiaries, on a
consolidated basis, during such period to be less than the ratio specified
opposite such date; PROVIDED that, for purposes of this Section 7.03,
Consolidated EBITDAC for a given Test Period (x) shall mean Consolidated EBITDAC
for the twelve month period ended on the last day of such Test Period and (y)
shall also include the EBITDAC (with appropriate adjustments) derived from any
business which was acquired by the Borrower and its Restricted Subsidiaries
during such twelve-month period and which is consolidated with the Borrower and
its Restricted Subsidiaries as of the last day of such Test Period, for the
portion of such twelve month period before the business was so acquired:

          TEST PERIOD ENDING                                   RATIO
          ------------------                                   ----- 

          March 31, 1998 . . . . . . . . . . . . . . . .    1.10 to 1.00   
          June 30, 1998. . . . . . . . . . . . . . . . .    1.10 to 1.00
          September 30, 1998 . . . . . . . . . . . . . .    1.10 to 1.00   
          December 31, 1998. . . . . . . . . . . . . . .    1.10 to 1.00
          
          March 31, 1999 . . . . . . . . . . . . . . . .    1.10 to 1.00   
          June 30, 1999. . . . . . . . . . . . . . . . .    1.10 to 1.00   
          September 30, 1999 . . . . . . . . . . . . . .    1.10 to 1.00   
          December 31, 1999. . . . . . . . . . . . . . .    1.10 to 1.00   



                                    -79-

<PAGE>

          March 31, 2000 . . . . . . . . . . . . . . . .    1.10 to 1.00   
          June 30, 2000. . . . . . . . . . . . . . . . .    1.10 to 1.00   
          September 30, 2000 . . . . . . . . . . . . . .    1.10 to 1.00   
          December 31, 2000. . . . . . . . . . . . . . .    1.10 to 1.00   

          March 31, 2001 . . . . . . . . . . . . . . . .    1.10 to 1.00   
          June 30, 2001. . . . . . . . . . . . . . . . .    1.10 to 1.00   
          September 30, 2001 . . . . . . . . . . . . . .    1.10 to 1.00
          December 31, 2001. . . . . . . . . . . . . . .    1.10 to 1.00

          March 31, 2002 . . . . . . . . . . . . . . . .    1.10 to 1.00
          June 30, 2002. . . . . . . . . . . . . . . . .    1.10 to 1.00
          September 30, 2002 . . . . . . . . . . . . . .    1.10 to 1.00
          December 31, 2002. . . . . . . . . . . . . . .    1.10 to 1.00

          March 31, 2003 . . . . . . . . . . . . . . . .    1.10 to 1.00
          June 30, 2003. . . . . . . . . . . . . . . . .    1.10 to 1.00
          September 30, 2003 . . . . . . . . . . . . . .    1.10 to 1.00
          December 31, 2003. . . . . . . . . . . . . . .    1.10 to 1.00

          March 31, 2004 . . . . . . . . . . . . . . . .    1.10 to 1.00
          June 30, 2004. . . . . . . . . . . . . . . . .    1.10 to 1.00
          September 30, 2004 . . . . . . . . . . . . . .    1.10 to 1.00
          December 31, 2004. . . . . . . . . . . . . . .    1.10 to 1.00

          7.04.   LEVERAGE RATIO.  The Borrower will not permit the Leverage
Ratio on or about the date specified in the table below to be greater than the
ratio specified opposite such date in such table:

          TEST PERIOD ENDING                                  RATIO
          ------------------                                  ----- 

          March 31, 1998 . . . . . . . . . . . . . . . .    5.50 to 1.00   
          June 30, 1998. . . . . . . . . . . . . . . . .    5.50 to 1.00   
          September 30, 1998 . . . . . . . . . . . . . .    5.50 to 1.00   
          December 31, 1998. . . . . . . . . . . . . . .    5.50 to 1.00   

          March 31, 1999 . . . . . . . . . . . . . . . .    5.50 to 1.00   
          June 30, 1999. . . . . . . . . . . . . . . . .    5.50 to 1.00   
          September 30, 1999 . . . . . . . . . . . . . .    5.25 to 1.00   
          December 31, 1999. . . . . . . . . . . . . . .    5.25 to 1.00   

          March 31, 2000 . . . . . . . . . . . . . . . .    5.00 to 1.00   
          June 30, 2000. . . . . . . . . . . . . . . . .    5.00 to 1.00   


                                    -80-

<PAGE>

          September 30, 2000 . . . . . . . . . . . . . .    4.75 to 1.00   
          December 31, 2000. . . . . . . . . . . . . . .    4.75 to 1.00   

          March 31, 2001 . . . . . . . . . . . . . . . .    4.50 to 1.00   
          June 30, 2001. . . . . . . . . . . . . . . . .    4.50 to 1.00   
          September 30, 2001 . . . . . . . . . . . . . .    4.25 to 1.00   
          December 31, 2001. . . . . . . . . . . . . . .    4.25 to 1.00   

          March 31, 2002 . . . . . . . . . . . . . . . .    4.00 to 1.00   
          June 30, 2002. . . . . . . . . . . . . . . . .    4.00 to 1.00   
          September 30, 2002 . . . . . . . . . . . . . .    3.75 to 1.00   
          December 31, 2002. . . . . . . . . . . . . . .    3.75 to 1.00   

          March 31, 2003 . . . . . . . . . . . . . . . .    3.50 to 1.00   
          June 30, 2003. . . . . . . . . . . . . . . . .    3.50 to 1.00   
          September 30, 2003 . . . . . . . . . . . . . .    3.25 to 1.00   
          December 31, 2003. . . . . . . . . . . . . . .    3.25 to 1.00   

          March 31, 2004 . . . . . . . . . . . . . . . .    3.00 to 1.00
          June 30, 2004. . . . . . . . . . . . . . . . .    3.00 to 1.00
          September 30, 2004 . . . . . . . . . . . . . .    2.75 to 1.00
          December 31, 2004. . . . . . . . . . . . . . .    2.75 to 1.00

; PROVIDED that, for purposes of this Section 7.04, for a given date set forth
above, (x) Consolidated Indebtedness shall not include any such Indebtedness as
to which the interest on such Indebtedness is not cash-pay (but is, rather, 
pay-in-kind or capitalized), EXCEPT that, if cash interest is paid on any 
such non cash-pay Indebtedness during the fiscal quarter ended on such date, 
Consolidated Indebtedness shall include the non cash-pay Indebtedness on 
which such cash interest was paid, and (y) the component of Consolidated 
Indebtedness consisting of Revolving Loans shall equal (i) the sum of the 
balance of the Revolving Loans as of the last day of each fiscal month during 
the twelve fiscal month period ending on such date DIVIDED by (ii) twelve; 
and PROVIDED further that, for purposes of this Section 7.04, Consolidated 
EBITDA for a given Test Period (x) shall mean Consolidated EBITDA for the 
twelve month period ended on the last day of such Test Period and (y) shall 
also include the EBITDA (with appropriate adjustments set forth in financials 
delivered pursuant to Section 4.03(b)(x)) derived from any business which was 
acquired by the Borrower and its Restricted Subsidiaries during such 
twelve-month period and which is consolidated with the Borrower and its 
Restricted Subsidiaries as of the last day of such Test Period, for the 
portion of such twelve month period before the business was so acquired.

     7.05.   CONSOLIDATED NET WORTH.  Consolidated Net Worth determined as of
the dates specified in the table below shall equal or exceed the amount
specified in such table opposite such dates:


                                    -81-

<PAGE>

             DETERMINATION DATE             AMOUNT 
             ------------------             ------ 

             December 31, 1998           $ 45,000,000
             December 31, 1999           $ 50,000,000
             December 31, 2000           $ 55,000,000
             December 31, 2001           $ 70,000,000
             December 31, 2002           $ 85,000,000
             December 31, 2003           $105,000,000
             December 31, 2004           $130,000,000

     7.06.   LIENS.  The Borrower will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
permit or suffer to exist any Lien upon or with respect to any item constituting
Collateral, whether now owned or hereafter acquired, except for the Lien of the
Security Document relating thereto, Prior Liens applicable thereto and Permitted
Encumbrances.  The Borrower will not, and will not permit any of its Restricted
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets of the Borrower or any of its Restricted
Subsidiaries, whether now owned or hereafter acquired, or sell any such property
or assets subject to an understanding or agreement, contingent or otherwise, to
repurchase such property or assets or assign any right to receive income, or
file or permit the filing of any financing statement under the UCC or any other
similar notice of Lien under any similar recording or notice statute, except the
following, which are herein collectively referred to as "PERMITTED
ENCUMBRANCES":

             (a)  Liens for taxes, assessments or governmental charges or claims
     not yet delinquent or Liens for taxes, assessments or governmental charges
     or claims being contested in good faith and by appropriate proceedings for
     which adequate reserves, as may be required by GAAP, have been established
     or as to which bonds have been posted with the applicable authority in the
     amounts required by applicable law;

             (b)  Liens in respect of property or assets of the Borrower or any
     of its Restricted Subsidiaries imposed by law (i) which were incurred in
     the ordinary course of business, such as carriers', warehousemen's and
     mechanics' Liens and other similar Liens arising in the ordinary course of
     business, and (A) which do not in the aggregate materially detract from the
     value of the property or assets of the Borrower and its Restricted
     Subsidiaries, taken as a whole, or materially impair the use thereof in the
     operation of the business of the Borrower or any of its Restricted
     Subsidiaries or (B) which are being contested in good faith by appropriate
     proceedings promptly instituted, which proceedings have the effect of
     preventing the forfeiture or sale of the property or asset subject to such
     Lien or (ii) which do not relate to material liabilities of the Borrower
     and its Restricted Subsidiaries and do not in the aggregate materially
     detract from the value of the property and assets of the Borrower and its
     Restricted Subsidiaries taken as a whole and do not create a default under
     any lease of Real Property;


                                    -82-

<PAGE>

             (c)  Liens in connection with any attachment or judgment (including
     judgment or appeal bonds) not in excess of $1,000,000 in the aggregate
     (exclusive of any amount adequately covered by insurance as to which the
     insurance company has acknowledged coverage) unless the attachment or
     judgment it secures shall, within 60 days after the entry thereof, not have
     been discharged or execution thereof not stayed pending appeal, or shall
     not have been discharged within 30 days after the expiration of any such
     stay;

             (d)  Liens (other than any Lien imposed by ERISA) incurred or
     deposits made in the ordinary course of business in connection with
     workers' compensation, unemployment insurance and other types of social
     security, or to secure the performance of tenders, statutory obligations,
     surety and appeal bonds, bids, leases, government contracts, performance
     and return-of-money bonds and other similar obligations incurred in the
     ordinary course of business (exclusive of obligations in respect of the
     payment for borrowed money or the equivalent);

             (e)  Easements, rights of way, restrictions, minor defects or
     irregularities in title not interfering in any material respect with the
     business of the Borrower or any of its Restricted Subsidiaries, in each
     case incurred in the ordinary course of business and which do not
     materially impair for its intended purposes the Real Property to which it
     relates;

             (f)  Zoning and building bylaws and ordinances, municipal bylaws
     and regulations, and restrictive covenants, which do not materially
     interfere with the use of the subject property by the Borrower or any of
     its Restricted Subsidiaries as such property is used as of the Closing Date
     (or, with respect to property acquired after the Closing Date, as such
     property is used as of the acquisition date of such property);

             (g)  Liens securing Indebtedness of any Restricted Subsidiary of
     the Borrower owing to the Borrower or any Wholly Owned Subsidiary of the
     Borrower that is a Restricted Subsidiary;

             (h)  Liens upon real or tangible personal property acquired or
     constructed by the Borrower or its Restricted Subsidiaries after the date
     hereof or on such property or equity securities of a Person at the time
     such Person becomes a Restricted Subsidiary of the Borrower or any of its
     Restricted Subsidiaries; PROVIDED, HOWEVER, that (A) any such Lien is
     created solely for the purpose of securing Indebtedness representing, or
     incurred to finance, the cost of the item of property subject thereto or
     such Liens existed on the date such property or securities were acquired
     and were not incurred as a result of or in anticipation of such
     acquisition, (B) the principal amount of the Indebtedness secured by such
     Lien does not exceed when incurred 100% of the fair value (as determined in
     good faith by the board of directors of the Borrower or the Borrower) of
     the property at the time it was so acquired or constructed, (C) the
     Indebtedness secured by the Lien is not created more than 180 days after
     the later of the acquisition, completion of construction, 


                                    -83-

<PAGE>

     repair, improvement, addition or commencement of full operation of the 
     property subject to the Lien, (D) such Lien does not extend to or cover 
     any other property other than such item of property, (E) the incurrence 
     of such Indebtedness secured by such Lien is permitted by Section 7.07 and
     (F) such Lien is not in violation of any lease of any Real Property of any
     Credit Party; and

             (i)  Liens on any property existing as of the date hereof securing
     Existing Debt and any refinancing, extension, renewal or rearrangement
     thereof provided that such Lien does not extend to or cover any other
     property other than items of property encumbered as of the date hereof.

     7.07.   INDEBTEDNESS.  The Borrower will not, and will not permit any of
its Restricted Subsidiaries to, contract, create, incur, assume, guarantee,
acquire or become liable for (contingently or otherwise) or suffer to exist any
Indebtedness, except:

             (a)  Indebtedness incurred pursuant to the Credit Documents;

             (b)  Indebtedness incurred pursuant to the Heller Subordinated
     Note;

             (c)  Indebtedness incurred pursuant to the Seller Note issued
     pursuant to the Stock Purchase Agreement dated as of September 3, 1997
     among the Borrower, Oda Nursery, Inc. and the former shareholders of Oda
     Nursery, Inc.

             (d)  Indebtedness incurred pursuant to the Senior Subordinated
     Notes.

             (e)  Indebtedness not in excess of $6,000,000 in aggregate
     principal amount at any one time outstanding, incurred pursuant to any note
     issued to sellers as part of the consideration for a Permitted Business
     Acquisition (any such note, a "SELLER NOTE"), provided that any such Seller
     Note shall satisfy the following conditions: (i) it shall be unsecured,
     (ii) it shall not pay interest prior to maturity, other than interest which
     is paid-in-kind (except that up to $600,000 of cash interest may be paid on
     Seller Notes annually, subject to there being, at the time of any such
     payment of cash interest, no payment Default hereunder, and subject to
     restrictions imposed on such payment pursuant to clause (iii) hereof), and
     (iii) it shall contain subordination and related provisions which are
     acceptable in form and substance to the Administrative Agent, including,
     without limitation, that there shall be no payments made with respect to
     such Seller Notes (other than the payment of interest, in-kind) while there
     is any payment Default or, subject to such conditions as are acceptable to
     the Administrative Agent, upon such other Defaults as are acceptable to the
     Administrative Agent, and there shall be no right of acceleration on such
     Seller Notes on account of such nonpayment.


                                    -84-

<PAGE>

             (f)  Indebtedness arising under noncompetition or consulting
     arrangements entered into in connection with Permitted Business
     Acquisitions, not to exceed $6,000,000 in the aggregate at any one time
     outstanding.  

             (g)  Existing Debt and any refinancing, extension, rearrangement,
     renewal or replacement thereof; PROVIDED, HOWEVER, that any such
     refinancing, extension, renewal, rearrangement or replacement of Existing
     Debt shall be on terms which, both taken as a whole and specifically as
     such terms relate to the identity of the obligors, repayments of principal,
     covenants, events of default and security in property of the debtor, are in
     each event no less favorable to the Borrower than the correlative terms of
     the Existing Debt;

             (h)  Interest Rate Agreements entered into pursuant to Section 6.11
     or for other bona fide hedging purposes;

             (i)  Indebtedness (other than Indebtedness permitted by Section
     7.07(l)) not exceeding $4,000,000 in aggregate principal amount outstanding
     at any time to finance the cost of the acquisition of personal tangible
     property (including Capital Leases, but excluding Indebtedness incurred to
     finance Permitted Business Acquisitions), and any refinancing, extension,
     renewal, rearrangement or replacement; PROVIDED, HOWEVER, that such
     Indebtedness (or the refinancing thereof) shall not exceed when incurred
     100% of the fair value of such property when so acquired; and PROVIDED,
     FURTHER, that such Indebtedness (or the refinancing thereof) is not secured
     by any Lien other than a Lien referred to in Section 7.06(h);

             (j)  other unsecured Indebtedness not exceeding $2,500,000 in the
     aggregate at any time outstanding;

             (k)  Indebtedness of the Borrower to any of its Wholly Owned
     Subsidiaries (which is a Restricted Subsidiary) or of any Restricted
     Subsidiary of the Borrower to the Borrower or another Wholly Owned
     Restricted Subsidiary of the Borrower (but only so long as such
     Indebtedness is held by the Borrower or a Wholly Owned Subsidiary (which is
     a Restricted Subsidiary) of the Borrower) to the extent such Indebtedness
     is permitted as an Investment by the Person owed such Indebtedness by the
     provisions of Section 7.08; and

             (l)  Indebtedness of any entity, or secured by any personal
     tangible property, acquired in a Permitted Business Acquisition, so long as
     such Indebtedness is (i) not incurred in contemplation of such Permitted
     Business Acquisition, (ii) not in excess of  $1,000,000 in the aggregate at
     any one time outstanding and (iii) not secured by any Lien other than a
     Lien referred to in Section 7.06(h).

     7.08.   INVESTMENTS.  The Borrower will not, and will not permit any of its
Restricted Subsidiaries to, have outstanding or make any Investments except:


                                    -85-

<PAGE>

             (a)  Investments consisting of Cash and Cash Equivalents;

             (b)  Investments consisting of receivables owing to them and
     advances to customers and suppliers, in each case if created, acquired or
     made in the ordinary course of business and payable or dischargeable in
     accordance with customary trade terms;

             (c)  Investments received in connection with the bankruptcy or
     reorganization of suppliers and customers or in settlement of delinquent
     obligations of, and other disputes with, customers and suppliers arising in
     the ordinary course of business; 

             (d)  Investments made in Wholly Owned Subsidiaries (that are
     Restricted Subsidiaries) of the Borrower or any Person which, as a result
     of such Investment, becomes a Wholly Owned Subsidiary (and a Restricted
     Subsidiary) of the Borrower (including any such Investment which
     constitutes a Permitted Business Acquisition); PROVIDED, HOWEVER, that such
     Wholly Owned Subsidiary is engaged in a business related to that of the
     Borrower and its Restricted Subsidiaries in compliance with Section 7.17;

             (e)  Investments consisting of loans or advances made by the
     Borrower to its officers, directors and employees in the ordinary course of
     business not to exceed $100,000 in the aggregate outstanding at any time
     (excluding any such loans or advances made as of the closing date of the
     Existing Credit Agreement pursuant to the Put/Call Option Agreement);

             (f)  Investments made as a result of the receipt of non-cash
     proceeds from any Asset Sale made pursuant to and in compliance with
     Section 7.11;

             (g)  Investments in Interest Rate Agreements permitted under
     Section 7.07(h);  

             (h)  Investments in addition to those permitted above not exceeding
     $1,000,000 in the aggregate at any time outstanding; and

             (i)  An Investment made with the consent of the Administrative
     Agent in an Unrestricted Subsidiary at the time that such Subsidiary is 
     determined to be an Unrestricted Subsidiary; provided that any such 
     Investment shall not exceed the greater of (x) $200,000 and (y) 110% of 
     the Borrower's Investment in such Subsidiary existing immediately prior 
     to the time that such Subsidiary is determined to be an Unrestricted 
     Subsidiary.

     7.09.   PREPAYMENTS OF INDEBTEDNESS.  The Borrower will not, and will not
permit any of its Restricted Subsidiaries to, make (or give any notice in
respect of) any voluntary or optional payment or prepayment or redemption or
acquisition for value of Indebtedness (including, without limitation, by way of
depositing with any trustee with respect thereto money or securities 


                                    -86-

<PAGE>

before such Indebtedness is due for the purpose of paying such Indebtedness
when due) or exchange of any such Indebtedness, other than the Loans.

     7.10.   DIVIDENDS, ETC. The Borrower will not, and will not permit any of
its Restricted Subsidiaries to, declare or pay any dividends or return any
capital to its stockholders (in their capacity as such) or authorize or make any
other distribution, payment or delivery of property or cash to its stockholders
(in their capacity as such), or redeem, retire, purchase or otherwise acquire,
directly or indirectly, for any consideration, any shares of any class of its
capital stock now or hereafter outstanding (or any warrants for or options or
stock appreciation rights in respect of any of such shares), or make any loans
or advances to Affiliates, or set aside any funds for any of the foregoing
purposes, or permit any of its Restricted Subsidiaries to purchase or otherwise
acquire for consideration any shares of any class of the capital stock of the
Borrower or any of its Restricted Subsidiaries, as the case may be, now or
hereafter outstanding (or any options or warrants or stock appreciation rights
issued by such Person with respect to its capital stock) (all of the foregoing,
"DIVIDENDS"), PROVIDED, HOWEVER, that (a) any direct or indirect Wholly Owned
Subsidiary of the Borrower may pay cash Dividends to its parent corporation if
such parent corporation is the Borrower or is both a Wholly Owned Subsidiary and
a Restricted Subsidiary of the Borrower; (b) the Borrower or any of its
Restricted Subsidiaries may make payments to Affiliates pursuant to and in
compliance with Section 7.19; (c) after December 15, 2002, the Borrower may pay
Dividends to holders of its Series A Preferred Stock required by the Certificate
of Designation of such Series A Preferred Stock as in effect on the Closing Date
and the Borrower may pay non-cash dividends in the form of payment-in-kind
preferred stock to holders of its Series A Preferred Stock at any time; (d) the
Borrower may make payments from the Put/Call Funds to Management Stockholders to
redeem their "Option Shares" (as defined in the Put/Call Option Agreement), in
accordance with the Put/Call Option Agreement, provided that any such redemption
is effected prior to January 31, 1998; and (e) upon the death, disability or
termination of employment of Management Stockholders, the Borrower may
repurchase from such Management Stockholders their Capital Stock of the
Borrower in an amount not exceeding $250,000 per year or $1,500,000 in the
aggregate; provided in each case that no Default or Event of Default which has
not been cured or waived is in existence, or would result from such payment.

     7.11.   DISPOSITION OF ASSETS.  The Borrower will not, and will not permit
any of its Restricted Subsidiaries to, dispose of all or any part of its
interest in any asset except that the Borrower and its Restricted Subsidiaries
may sell or otherwise dispose of assets to any Person other than an Affiliate so
long as such sales or other dispositions are (a) approved by the Required Banks;
(b) for at least the fair market value of such assets and the aggregate amount
of such asset sales is less than $2,500,000 in any 12-month period and, in any
such case, the Borrower or such Restricted Subsidiary complies with the
mandatory prepayment provisions and Commitment reduction provisions herein and,
in the case of Collateral, so long as the conditions to the release of
Collateral described herein and in the applicable Security Documents are met;
(c) of inventory in the ordinary course of business; (d) (i) of equipment that
has become worn out, obsolete or damaged or otherwise unsuitable or no longer
needed for use in connection with

                                     -87-
<PAGE>

the business of the Borrower or any of its Restricted Subsidiaries or should
be replaced, as the case may be, in each case as determined in good faith by
the board of directors of the Borrower or its Restricted Subsidiary, as the
case may be; (ii) for at least the fair value of such equipment, as determined
in good faith by the board of directors of the Borrower or its Restricted
Subsidiaries; and (iii) the proceeds of the sales of such equipment are used
within 120 days of such sales (or such longer period as may be consented to by
the Administrative Agent) to (A) purchase equipment used in substantially
similar lines of business or (B) repay Loans pursuant to Section 3.03 and
until so applied are held in the Reserve Account; or (e) of assets as to which
the likely amount of net sales proceeds that would be realized upon a sale of
such assets is such that a sale of such assets is not, in the reasonable
judgment of the Borrower, economically practicable but such other disposition
is otherwise of commercial value to the Borrower; PROVIDED, HOWEVER, that in
no case shall sales or other dispositions pursuant to this clause (e) be of
assets of a fair market value at the time of such sale which is in excess of
an aggregate of $750,000 in any calendar year, and in the case of Collateral,
so long as the conditions to the release of Collateral described herein and in
the applicable Security Documents are met; PROVIDED, HOWEVER, that
notwithstanding the foregoing, the Borrower will not, and will not permit any
of its Restricted Subsidiaries to, sell, with or without recourse, or discount
(other than in connection with trade discounts in the ordinary course of
business consistent with past practice) or otherwise sell for less than the
face value thereof, notes or accounts receivable owed to it by its third-party
customers or suppliers.

     The consideration received by the Borrower and its Restricted Subsidiaries
from each sale of assets permitted by this Section 7.11, other than with respect
to such sales involving consideration of not more than $500,000 in the aggregate
in any calendar year, shall be received in whole within 15 days of such sale and
at least 70% of the consideration from each sale shall consist of Cash or Cash
Equivalents.  Any non-Cash proceeds received from the sale of assets
constituting Collateral shall be pledged pursuant to and in accordance with the
applicable Security Documents and shall constitute Collateral.

     7.12.   CONTINGENT OBLIGATIONS.  The Borrower will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly, create or become
or be liable with respect to any Contingent Obligation except:

             (a)  guarantees resulting from endorsement of instruments for
     deposit or collection in the ordinary course of business;

             (b)  Interest Rate Agreements permitted under Section 7.07(h);

             (c)  obligations arising as a direct consequence of the
     Recapitalization;

             (d)  obligations with respect to the Indebtedness permitted to be
     incurred under Section 7.07;

                                     -88-
<PAGE>

             (e)  other Contingent Obligations not to exceed $750,000
     outstanding at any one time; and

             (f)  Contingent Obligations in respect of the repurchase or
     redemption of Capital Stock of the Borrower held by Management
     Stockholders, upon the termination of such shareholders' employment, which
     meet the specifications of Section 7.10.

     7.13.   MERGER AND CONSOLIDATIONS. The Borrower will not, and will not
permit any of its Restricted Subsidiaries to, merge or consolidate with or into
any other entity; PROVIDED, HOWEVER, that Holdings may merge with and into the
Borrower on the Closing Date and any Restricted Subsidiary of the Borrower or
any Person acquired in a Permitted Business Acquisition may be merged or
consolidated with or into (a) the Borrower, if the Borrower is the continuing or
surviving corporation or (b) any Restricted Subsidiary of the Borrower, if (i)
the continuing or surviving corporation is both a Wholly Owned Subsidiary and a
Restricted Subsidiary of the Borrower and (ii) the continuing or surviving
corporation is, or immediately thereafter becomes, party to a Subsidiary
Guarantee and a Security Agreement and all related documentation necessary for
the perfection of the liens and security interests created thereunder.

     7.14.   AMENDMENTS TO ORGANIZATIONAL DOCUMENTS.  Without the prior written
consent of the Administrative Agent, the Borrower will not, and will not permit
any of its Restricted Subsidiaries to, amend, modify or change any of the terms
or provisions of its certificate of incorporation (including, without
limitation, by the filing of any certificate of designation), by-laws or
agreement of limited partnership, in each case to the extent such amendment,
modification or change is adverse to the Banks as Banks hereunder, provided,
however, the Borrower may amend and restate its certificate of incorporation on
the Closing Date in the form attached hereto as Exhibit 7.14.

     7.15.   ERISA.  At no time shall the actuarial present value of unfunded
liabilities for post-employment health care benefits of the Borrower, any of its
Restricted Subsidiaries or any ERISA Affiliate of any of them, whether or not
provided under a Plan, calculated in a manner consistent with Statement No. 106
of the Financial Accounting Standards Board, exceed $750,000 in aggregate.

     7.16.   NO NON-WHOLLY OWNED SUBSIDIARIES.  Neither the Borrower nor any of
its Restricted Subsidiaries shall have, create or suffer to exist any Subsidiary
of any of them which is not a Wholly Owned Subsidiary, including, without
limitation, any such Restricted Subsidiary acquired in a Permitted Business
Acquisition.

     7.17.    CHANGES IN BUSINESS.  Other than asset dispositions permitted
under Section 7.11, the Borrower will not, and will not permit any of its
Restricted Subsidiaries to, materially alter its business from that conducted by
it at the Closing Date.

                                     -89-
<PAGE>

     7.18.   AMENDMENTS OR WAIVERS OF CERTAIN DOCUMENTS.  After the Closing
Date, the Borrower will not, and will not permit any of its Restricted
Subsidiaries to, amend, terminate or otherwise change any Public Financing
Documents or the terms of any of the leases of Real Property referred to on
Schedule 5.16 without, with respect to any amendment, termination or change
which is adverse to the Banks as Banks hereunder, the prior written consent of
the Administrative Agent.  The Borrower will not, and will not permit any of its
Restricted Subsidiaries to, amend or otherwise change the terms of any Existing
Debt (excluding such Indebtedness arising under Capital Leases), except as
otherwise permitted under this Section 7.

     7.19.   TRANSACTIONS WITH AFFILIATES.  The Borrower will not, and will 
not permit any of its Restricted Subsidiaries to, enter into any transaction 
or series of transactions, whether or not in the ordinary course of business, 
with any holder of 5% or more of any class of equity interests of the Borrower 
or with any Affiliate of the Borrower other than on terms and conditions 
substantially as favorable to the Borrower or such Restricted Subsidiary as 
would be obtainable by the Borrower or such Subsidiary at the time in a 
comparable arm's-length transaction with a Person other than a holder of 5% or 
more of any class of equity interests of the Borrower or an Affiliate of the 
Borrower; PROVIDED, HOWEVER, that the foregoing restrictions shall not apply 
to (a) transactions between the Borrower and any of its Wholly Owned 
Subsidiaries (that are Restricted Subsidiaries) and between Wholly Owned 
Subsidiaries of the Borrower (that are Restricted Subsidiaries) permitted by 
the other provisions of this Agreement, (b) loans or advances made by the 
Borrower to its officers, directors and employees permitted under Section 
7.08(e), (c) the payment of fees to Indosuez and its respective Affiliates for 
financial services, such fees not to exceed the usual and customary fees for 
similar services, (d) the issuance of Capital Stock of the Borrower pursuant 
to any pension, stock option, profit sharing or other employee benefit plan or 
agreement of the Borrower or its Restricted Subsidiaries in the ordinary 
course of business, (e) a payment to KCSN or its Affiliates on or about the 
Closing Date for management services pursuant to the termination of the 
Management Agreement, not to exceed $2,000,000, (f) the continuation and 
renewal of the leases referred to on Schedule 5.16, (g) distributions with 
respect to the Heller Subordinated Note permitted under Section 7.23 and the 
Heller Subordination Agreement, (h) the redemption of Capital Stock of the 
Borrower held by Management Stockholders or the Senior Managers subject to the 
conditions described in Section 7.10 and (i) transactions between the Borrower 
and holders of the Borrower's Series A Preferred Stock permitted by the other 
provisions of this Agreement.

     7.20.   CAPITAL STRUCTURE.  The Borrower shall not permit any of its
Restricted Subsidiaries to issue, sell, assign, pledge or otherwise encumber or
dispose of any of its Capital Stock (including partnership interests or other
securities or warrants, rights or options to acquire capital stock, partnership
interests or other securities), without first providing prior written notice
thereof to the Administrative Agent and making arrangements satisfactory to the
Administrative Agent to ensure that any such Capital Stock will be deposited
with the Administrative Agent, and that the Administrative Agent will have a
valid first priority perfected security interest in such Capital Stock.

                                     -90-
<PAGE>

     7.21.   SALE AND LEASE-BACKS.  The Borrower will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly, become or
thereafter remain liable as lessee or as guarantor or other surety with respect
to the lessee's obligations under any lease, whether an Operating Lease or a
Capital Lease, of any property (whether real or personal or mixed) whether now
owned or hereafter acquired, (a) which the Borrower or any of its Restricted
Subsidiaries has sold or transferred or is to sell or transfer to any other
Person or (b) which the Borrower or any such Restricted Subsidiary intends to
use for substantially the same purpose as any other property which has been or
is to be sold or transferred by the Borrower or any such Restricted Subsidiary
to any Person in connection with such lease, if in the case of clause (a) or (b)
above, such sale and such lease are part of the same transaction or a series of
related transactions or such sale and such lease occur within one year of each
other or are with the same other Person.

     7.22.   CLEAN-DOWN PERIOD.  During the Clean-down Period for each fiscal
year of the Borrower, the aggregate unpaid principal amount of outstanding
Revolving Loans and Supplemental Revolving Loans, plus outstanding Letters of
Credit Usage (which are not cash collateralized in a manner satisfactory to the
Administrative Agent) shall not exceed the Clean-down Amount.

     7.23.   CERTAIN PAYMENTS.  The Borrower and its Restricted Subsidiaries
shall make no payments or distributions with respect to (i) the Heller
Subordinated Notes, except as permitted under the Heller Subordination Agreement
or (ii) the Senior Subordinated Notes, except as permitted under the
subordination provisions of such Senior Subordinated Notes.  Without limiting
the foregoing, on or after December 31, 1998, the Borrower shall be permitted to
pay interest in cash on the Heller Subordinated Notes to the holders thereof
(the "HELLER SUBORDINATED LENDERS") in an amount equal to any scheduled semi-
annual interest payment on the Subordinated Notes if (A) at the time of making
such payment there is not in existence, nor will there occur after giving effect
to such payment, a Default or Event of Default; (B) after giving pro forma
effect to such cash payment as if such payment was made during the relevant Test
Period (i) the ratio of (w) total Consolidated Indebtedness of the Borrower and
its Restricted Subsidiaries (including the outstanding balance under any
noncompete or consulting arrangements) immediately prior to such payment to (x)
Consolidated EBITDA of the Borrower and its Restricted Subsidiaries is not more
than 3.25:1.0 (PROVIDED, that, for purpose of the foregoing clause (i), the
calculations shall be performed in accordance with the provisos to Section 7.04)
and Consolidated Indebtedness shall include the outstanding balance (including
capitalized interest) of the Heller Subordinated Notes; and (ii) the ratio of
(y) Consolidated EBITDA of the Borrower and its Restricted Subsidiaries to (z)
Consolidated Interest Expense (which, for the purposes of this Section 7.23,
shall include only cash interest expense) of the Borrower and its Restricted
Subsidiaries is not less than 3.0:1.0; (C) during the period two weeks before
the scheduled interest payment date on the Heller Subordinated Notes for which
the Borrower has proposed a cash interest payment there shall be $2.5 million of
availability for additional Borrowings of a Revolving Loan or Supplemental
Revolving Loan pursuant to Section 1.01; and (D) the Borrower shall have
delivered to the Administrative Agent an Officers' Certificate (i) setting forth
the calculation of the financial ratios required by clause (B) above and

                                     -91-
<PAGE>

(ii) stating that, based on the annual budgets or forecasts currently in
effect and provided pursuant to Section 4.01(j) or 4.03 hereof and after
giving effect to the amount of any interest payment permitted by this Section
7.23, such persons do not expect that a Default or an Event of Default shall
occur in the then current fiscal quarter or the next succeeding fiscal
quarter, in each case, of the Borrower and its Subsidiaries.

     SECTION 8.  EVENTS OF DEFAULT.  Each of the events specified in Sections
8.01 through 8.09, inclusive, is referred to as an "EVENT OF DEFAULT":

     8.01.   PAYMENTS.  The Borrower shall (a) default in the payment when due
of any principal of the Loans, (b) default in the payment when due of any
interest on the Loans, and such default shall continue for two or more Business
Days or (c) fail to pay any other amounts owing hereunder or under any other
Credit Document, and such failure shall continue for five Business Days after
the Borrower's receipt of written notice thereof.

     8.02.   REPRESENTATIONS, ETC.  Any representation, warranty or statement
made or deemed made by operation of Sections 4.01, 4.02, 4.03 or 5 by any Credit
Party herein or in any other Credit Document or in any written statement or
certificate delivered or required to be delivered pursuant hereto or thereto
shall prove to be untrue in any material respect on the date as of which made or
deemed made by operation of Sections 4.01, 4.02, 4.03 or 5.

     8.03.   COVENANTS.

             (a)  Any Credit Party shall default in the due performance or
     observance by it of any term, covenant or agreement contained in Sections
     6.11, 6.12 or Section 7; or

             (b)  any Credit Party shall default in the due performance or
     observance by it of any other term, covenant or agreement contained in this
     Agreement, any other Credit Document or any Security Document (except as
     otherwise provided in this Section 8) and such default shall continue
     unremedied after (i) the expiry of any specified grace period relative to
     such default or, (ii) where no grace period is specified, 30 days (or, in
     the case of Section 6.16(d), ten Business Days) after the date of such
     default.

     8.04.   DEFAULT UNDER OTHER AGREEMENTS.

             (a)   Any Credit Party shall (i) default in any payment with
     respect to any Indebtedness (other than Obligations) having a principal
     amount of $750,000 or more individually or $1,500,000 or more in the
     aggregate, for all such Persons, beyond the period of grace, if any,
     provided in the instrument or agreement under which such Indebtedness was
     created, or (ii) default in the observance or performance of any agreement
     or condition relating to any such Indebtedness or contained in any
     instrument or agreement evidencing, securing or relating thereto, or any
     other event shall occur or condition exist, the effect of which default or
     other event or condition is to cause, or,

                                     -92-
<PAGE>

     except for any such default or other event or condition as to such
     Indebtedness arising under Capital Leases, to permit (with or without
     notice, lapse of time or both) the holder or holders of such Indebtedness
     (or a trustee or agent on behalf of such holder or holders) to cause any
     such Indebtedness to become due (whether by acceleration, redemption,
     etc.) prior to its stated maturity;

             (b)  any such Indebtedness of any Credit Party shall be declared to
     be due and payable, or required to be prepaid or redeemed other than by a
     regularly scheduled or required prepayment, prior to the stated maturity
     thereof; or

             (c)  Any Credit Party shall default in the performance or
     observance of any obligation under any lease reflected on Schedule 5.16
     (excluding those leases which the Borrower has designated on Schedule 5.16
     as not material, and the Administrative Agent has agreed with such
     designation), and such default results in the termination of such lease.

     8.05.   BANKRUPTCY, ETC.  Any Credit Party shall commence a voluntary case
concerning itself under Title 11 of the United States Code entitled
"Bankruptcy," as now or hereafter in effect, or any successor thereto (the
"BANKRUPTCY CODE"); or an involuntary case is commenced against any Credit Party
and the petition is not controverted within 20 days, or is not dismissed within
60 days, after commencement of the case; or a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or substantially all
of the property of any Credit Party; or any Credit Party commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to any Credit Party; or
there is commenced against any Credit Party any such proceeding which remains
undismissed for a period of 60 consecutive days; or any Credit Party is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or any Credit Party suffers
any appointment of any custodian or the like for it or any substantial part of
its property to continue undischarged or unstayed for a period of 60 days; or
any Credit Party makes a general assignment for the benefit of creditors; or any
corporate action is taken by any Credit Party for the purpose of effecting any
of the foregoing.

     8.06.   SECURITY DOCUMENTS; GUARANTEES.

             (a)  Any Security Document shall cease to be in full force and
     effect, or shall cease to give the Administrative Agent the Liens, rights,
     powers, and privileges purported to be created thereby, in favor of the
     Administrative Agent, superior to and prior to the rights of all third
     Persons and subject, in each case, to no Liens other than Permitted
     Encumbrances, Prior Liens and Liens expressly permitted by the applicable
     Security Document, or any judgment creditor having a Lien against any
     material item of Collateral shall commence legal action to foreclose such
     Lien or otherwise exercise its remedies against any material item of
     Collateral, or the Administrative Agent shall cease to hold,

                                     -93-
<PAGE>

     for the benefit of the Banks, 100% of the Borrower's Restricted
     Subsidiaries Capital Stock.

             (b)  Any Subsidiary Guarantee, or any provisions thereof shall
     cease to be in full force and effect in all material respects, or any
     guarantor thereunder or any Person acting by or on behalf of such guarantor
     shall deny or disaffirm such guarantor's obligations under such guarantee
     or shall default in the due performance or observance of any term, covenant
     or agreement on its part to be performed or observed pursuant to such
     guarantee.

     8.07.   SUBORDINATION.

     (a)  The terms of the Heller Subordination Agreement, the subordination 
          provisions of the Senior Subordinated Notes, or of the subordination 
          as to any Seller Note shall cease, for any reason, to be in full 
          force and effect for the benefit of the Banks, or any Credit Party 
          or the holder of the Heller Subordinated Notes or any Seller Note or 
          the trustee or holders of the Senior Subordinated Notes shall so 
          assert or shall otherwise assert that the Obligations are not senior 
          to the Heller Subordinated Notes, the Senior Subordinated Notes or 
          any Seller Note, as the case may be.

     (b)  An event described in Section 2.2(a) of the Heller Subordinated Notes,
          as requiring mandatory redemption of the Heller Subordinated Notes,
          shall occur.

     (c)  An event described in the indenture governing the Senior Subordinated
          Notes which requires redemption of any position of the Senior
          Subordinated Notes, shall occur.

     8.08.   JUDGMENTS. One or more judgments or decrees shall be entered
against any Credit Party involving a liability of $750,000 or more in the case
of any one such judgment or decree and $1,500,000 in the aggregate for all such
judgments or decrees for the Borrower and its Restricted Subsidiaries (in either
case in excess of the amount covered by insurance as to which the insurance
company has acknowledged coverage) and any such judgments or decrees shall not
have been vacated, discharged, stayed or bonded pending appeal for a period of
60 consecutive days from the entry thereof.

     8.09.   OWNERSHIP.

             (a)    KCSN, together with any other Person controlled by or under
                    common control with Kohlberg & Company, LLC, shall,
                    collectively, cease to have and to exercise the right to
                    elect or designate directors entitled to cast a majority of
                    the votes of the Borrower's board of directors; or

             (b)    Any Person or group of related Persons for purposes of
                    Section 13(d) of the Securities Exchange Act of 1933 (other
                    than KCSN, taken together with any other Person controlled
                    by or under common control with

                                     -94-
<PAGE>

                    Kohlberg & Company, LLC) shall own and/or control (x) a
                    percentage of the issued and outstanding capital stock of
                    the Borrower entitled (without regard to the occurrence of
                    any contingency) to vote for the election of directors
                    which is equal to or greater than the amount of such
                    securities held by KCSN, taken together with any other
                    Person controlled by or under common control with Kohlberg
                    & Company, LLC, or (y) more of the issued and outstanding
                    capital stock of the Borrower (taking into consideration
                    both voting and nonvoting capital stock) than KCSN, taken
                    together with any other Person controlled by or under
                    common control with Kohlberg & Company, LLC; or

             (c)    KCSN shall cease to be controlled by Kohlberg & Company,
                    LLC.

     8.10.   CERTAIN ACTIONS FOLLOWING AN EVENT OF DEFAULT.  Upon the occurrence
and during the continuance of any Event of Default, the Administrative Agent
may, and, upon the written request of the Required Banks shall, by written
notice to the Borrower (which shall be deemed notice to each other Credit
Party), take any or all of the following actions, without prejudice to the
rights of the Administrative Agent or any Bank to enforce its claims against the
Borrower or any other Credit Party, except as otherwise specifically provided
for in this Agreement (PROVIDED, HOWEVER, that upon an Event of Default
specified in Section 8.05 the actions provided for in clauses (a) and (b) below
shall occur automatically without the giving of any notice):

             (a)  declare the Total Revolving Loan Commitments and the
     Supplemental Revolving Loan Commitments terminated (and, if prior to the
     Acquisition Term Loan Commitment Termination Date and for the Supplemental
     Term Loan Commitment Termination Date, declare the Acquisition Term Loan
     Commitments and/or the Supplemental Term Loan Commitments, as applicable,
     terminated), whereupon the Revolving Loan Commitment the Supplemental Loan
     Commitment (and, if applicable, the Acquisition Term Loan Commitment) of
     each Bank shall forthwith terminate immediately and any accrued and unpaid
     Commitment Fee shall forthwith become due and payable without any other
     notice of any kind;

             (b)  declare the principal of and accrued interest in respect of
     all Loans and all Obligations owing hereunder and thereunder to be,
     whereupon the same shall become, forthwith due and payable without
     presentment, demand, protest or other notice of any kind, all of which are
     hereby waived by each Credit Party; and/or

             (c)  enforce, as Administrative Agent (or direct the Administrative
     Agent to enforce), any or all of the remedies created pursuant to the
     Security Documents.  If an Event of Default is cured or waived in
     accordance with the terms of this Agreement, it ceases (and, if waived,
     pursuant to the terms, and to the extent, of such waiver).

                                     -95-
<PAGE>

     SECTION 9.  DEFINITIONS.  Certain capitalized terms are used in this
Agreement with the specific meanings set forth or referred to below in this
Section 9.  Capitalized terms defined in this Agreement in the singular or
plural form include the plural and singular form, respectively.

     "ACCOUNT" means all of the "accounts" of the Borrower and its Restricted
Subsidiaries (as that term is defined in Section 9-106 of the Uniform Commercial
Code as in effect in the State of New York) whether or not such Account has been
earned by performance, whether now existing or existing in the future,
including, without limitation, all (a) accounts receivable, including, without
limitation, all accounts created by or arising from the sale of goods or
rendition of services by the Borrower and its Restricted Subsidiaries; (b)
unpaid seller's rights (including rescission, replevin, reclamation and stopping
in transit) relating to the foregoing or arising therefrom; (c) rights to any
goods represented by any of the foregoing, including returned or repossessed
goods; (d) reserves and credit balances held by the Borrower and its Restricted
Subsidiaries with respect to any such accounts receivable or any account debtor;
(e) guarantees or collateral for any of the foregoing; and (f) insurance
policies or rights relating to any of the foregoing.

     "ACQUISITION PORTION" means, at any time, the portion of the Loan Facility
evidenced by the Total Acquisition Term Loan Commitment.

     "ACQUISITION TERM LOAN" is defined in Section 1.01(b).

     "ACQUISITION TERM LOAN CLOSING DATE" is defined in Section 1.01(b).

     "ACQUISITION TERM LOAN COMMITMENT" means, with respect to each Bank, the
amount set forth below such Bank's name on Exhibit A hereto directly below the
column entitled "Acquisition Term Loan", as same may be reduced from time to
time pursuant to Sections 2.01, 3.03 and/or 8.

     "ACQUISITION TERM LOAN COMMITMENT TERMINATION DATE" means the last Business
Day of December, 1999.

     "ACQUISITION TERM LOAN MATURITY DATE" means the last Business Day of
December, 2004.

     "ACQUISITION TERM NOTE" is defined in Section 1.05(a)(ii).

     "ADDITIONAL SECURITY DOCUMENTS" is defined in Section 6.14(a).

     "AFFILIATE" means, with respect to any Person, any other Person directly or
indirectly controlling (including but not limited to all directors and executive
officers of such Person), controlled by, or under direct or indirect common
control with such Person; PROVIDED, HOWEVER, that none of Indosuez, IBJS, BKOB,
nor any Affiliate of Indosuez, or BKOB shall be deemed to be an Affiliate of any
Credit Party.  A Person shall be deemed to control a corporation for the

                                     -96-
<PAGE>

purposes of this definition if such Person possesses, directly or indirectly,
the power (a) to vote 10% or more of the securities having ordinary voting power
for the election of directors of such corporation or (b) to direct or cause the
direction of the management and policies of such corporation, whether through
the ownership of voting securities, by contract or otherwise.

     "ADMINISTRATIVE AGENT" is defined in the preamble to this Agreement and
shall include any successor Administrative Agent appointed in accordance
herewith in its capacity as Administrative Agent for the Banks.

     "AGENTS" is defined in the preamble to this Agreement.

     "AGENT'S OFFICE" shall mean the office of the Administrative Agent located
at 1211 Avenue of the Americas, 7th Floor, New York, New York 10036, or such
other office as the Administrative Agent may hereafter designate in writing as
such to the other parties hereto.

     "AGREEMENT" shall mean the Original Credit Agreement, as amended and
restated by the Existing Credit Agreement and hereby, including as the same may
after its execution be amended, supplemented or otherwise modified from time to
time in accordance with the terms hereof.

     "ASSET RESTORATION AMOUNT" is defined in Section 3.03(f)(i).

     "ASSET SALE" means the sale, transfer or other disposition, to the extent
consummated after the Closing Date, by the Borrower or any of its Restricted
Subsidiaries to any Person other than the Borrower or any of its Wholly Owned
Subsidiaries (which are Restricted Subsidiaries) of any asset of the Borrower or
such Subsidiary, except for (a) transactions included in the definition of the
Public Financing or (b) the issuance of equity securities under any stock option
or other benefit plan available to the employees or directors of the Borrower or
any of its Subsidiaries.

     "ASSETS" means all of the assets of the Borrower and its Restricted
Subsidiaries from time to time.

     "ASSIGNMENT AGREEMENT" is defined in Section 11.04(c).

     "AUTHORIZED OFFICER" shall mean any senior officer of the Borrower or the
Borrower, as applicable, designated as such in writing to the Administrative
Agent by the Borrower.

     "BANK" is defined in the preamble to this Agreement and in Section 11.04.

     "BANKRUPTCY CODE" is defined in Section 8.05.

     "BASE RATE" means the higher of (a) 1/2% per annum in excess of the Federal
Funds Rate and (b) the rate which the Administrative Agent announces from time
to time as its prime

                                     -97-

<PAGE>


commercial lending rate, as in effect from time to time; PROVIDED, 
HOWEVER, that (i) the rate the Administrative Agent announces as its 
prime commercial lending rate is a reference rate and does not 
necessarily represent the lowest or best rate actually charged to any 
customer and (ii) the Administrative Agent may make commercial loans or 
other loans at rates of interest at, above or below the rate it 
announces as its prime lending rate.

     "BASE RATE LOAN" means each Loan bearing interest at the rate provided in
Section 1.08(a).

     "BASE RATE MARGIN" means, with respect to any Revolving Loan, any
Acquisition Term Loan, any Supplemental Term Loan or and Supplemental Revolving
Loan, with respect to interest payable in any quarter, the rate set forth in the
table below opposite the Leverage Ratio of the Borrower as determined on the
last day of such quarter; provided, however the Base Rate Margin applicable in
any quarter shall equal 1.25% unless the Borrower has delivered at least 10
Business Days prior to the end of such quarter a certificate of the Borrower's
president or chief financial officer to the Administrative Agent irrevocably
certifying the Leverage Ratio for such quarter:

     LEVERAGE RATIO   BASE RATE MARGIN
     --------------   ----------------
       > 5.00x             1.25%
     4.51x - 5.00x         1.00%
     4.01x - 4.50x         0.75%
     3.51x - 4.00x         0.50%
     3.01x - 3.50x         0.25%
     2.51x - 3.00x         0.00%
     2.01x - 2.50x         0.00%
       < 2.01x             0.00%

     "BKOB" is defined in the preamble to this Agreement.

     "BORROWER" is defined in the preamble to this Agreement.

     "BORROWING" means the incurrence pursuant to a Notice of Borrowing and
under the Loan Facility of one Type of Loan by the Borrower from all of the
Banks on a pro rata basis on a given date (or resulting from conversions on a
given date), having, in the case of Reserve Adjusted Eurodollar Loans, the same
Interest Period.

     "BORROWING BASE" means, at any date of determination, an amount equal to 
the sum of (x) 85% of Eligible Accounts Receivable PLUS (y) 55% of Eligible 
Inventory, in each case as shown on the most recent Borrowing Base 
Certificate delivered prior to such date of determination; PROVIDED that 
during any Clean-down Period, the Borrowing Base shall be the lesser of (x) 
the amount derived from the foregoing calculation and (y) the Clean-down 
Amount.


                                      -98-

<PAGE>

     "BORROWING BASE CERTIFICATE" is defined in Section 6.01(m).

     "BREAKAGE COSTS" is defined in Section 1.10(f).

     "BUSINESS DAY" means (a) for all purposes other than as covered by clause
(b) below, any day excluding Saturday, Sunday and any day which shall be in the
City of New York or the State of California a legal holiday or a day on which
banking institutions are authorized by law or other governmental actions to
close and (b) with respect to all notices and determinations in connection with,
and payments of principal and interest on, Reserve Adjusted Eurodollar Loans,
any day which is a Business Day described in clause (a) and which is also a day
for trading by and between banks in U.S. dollar deposits in the interbank
Eurodollar market.

     "CAPITAL LEASE" of any Person means any lease of any property (whether
real, personal or mixed) by that Person as lessee which, in conformity with
GAAP, is, or is required to be, accounted for as a capital lease on the balance
sheet of that Person, together with any renewals of such leases (or entry into
new leases) on substantially similar terms.

     "CAPITAL STOCK" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants or options to purchase, or securities convertible into,
any of the foregoing.

     "CAPITALIZED LEASE OBLIGATIONS" of any Person means all obligations under
Capital Leases of such Person or any of its Subsidiaries in each case taken at
the amount thereof accounted for as liabilities in accordance with GAAP.

     "CARRYOVER AMOUNT" is defined in Section 7.01.

     "CASH" means Dollars in money, currency or a credit balance in a Deposit
Account.

     "CASH EQUIVALENTS" means (a) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (PROVIDED that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than three years from the date of acquisition; (b) marketable direct obligations
issued by any State of the United States of America or any local government or
other political subdivision thereof rated (at the time of acquisition of such
security) at least AA by S&P or the equivalent thereof by Moody's having
maturities of not more than one year from the date of acquisition; (c) U.S.
dollar denominated time deposits, certificates of deposit and bankers'
acceptances of (i) any Bank, (ii) any domestic commercial bank of recognized
standing having capital and surplus in excess of $10,000,000,000 or (iii) any
bank whose short-term commercial paper rating (at the time of acquisition of
such security) by S&P is at least A-1 or the equivalent thereof or by Moody's
is at least P-1 or the equivalent thereof (any such bank, an "APPROVED 


                                      -99-

<PAGE>

BANK"), in each case with maturities of not more than six months from the 
date of acquisition; (d) commercial paper and variable or fixed rate notes 
issued by any Bank or Approved Bank or by the parent company of any Bank or 
Approved Bank and commercial paper and variable rate notes issued by, or 
guaranteed by, any industrial or financial company with a short-term 
commercial paper rating (at the time of acquisition of such security) of at 
least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent 
thereof by Moody's, or guaranteed by any industrial company with a long-term 
unsecured debt rating (at the time of acquisition of such security) of at 
least AA or the equivalent thereof by S&P or the equivalent thereof by 
Moody's and in each case maturing within one year after the date of 
acquisition; (e) repurchase agreements with any Bank or any primary dealer 
maturing within one year from the date of acquisition that are fully 
collateralized by investment instruments that would otherwise be Cash 
Equivalents; PROVIDED that the terms of such repurchase agreements comply 
with the guidelines set forth in the Federal Financial Institutions 
Examination Council Supervisory Policy -- Repurchase Agreements of Depository 
Institutions With Securities Dealers and Others, as adopted by the 
Comptroller of the Currency on October 31, 1985; and (f) investments in money 
market mutual funds, all of the assets of which are invested in securities 
and instruments of the types set forth in clauses (a) through (d) above.

     "CERCLA" is defined in Section 5.21(b).

     "CLEAN-DOWN AMOUNT" means $15,000,000.

     "CLEAN-DOWN PERIOD" means, for each fiscal year of the Borrower, the 30
consecutive calendar day period designated by the Borrower for such fiscal year,
falling within the 90 day period commencing on July 1 of that year and ending on
September 30 of that year. 

     "CLOSING DATE" means the date on which the Initial Loans are made and the
Public Financing is consummated.

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

     "COLLATERAL" means all assets of the Borrower and/or its Restricted
Subsidiaries from time to time (excluding the Put/Call Funds) and any other
assets which are required to be subjected to Liens and security interests in
favor of the Administrative Agent, for the benefit of the Banks, as collateral
security for the payment or performance of any of the Obligations, including the
assets described as collateral security in the Security Documents and any
Subsidiary Guarantee.

     "COMMERCIAL LETTER OF CREDIT" means any letter of credit or similar
instrument issued for the account of the Borrower for the benefit of the
Borrower or any of its Restricted Subsidiaries, for the purpose of providing the
primary payment mechanism in connection with the purchase of any materials,
goods or services by the Borrower or any of its Restricted Subsidiaries in the
ordinary course of business of the Borrower or such Restricted Subsidiaries.


                                      -100-

<PAGE>

     "COMMITMENTS" means, with respect to each Bank, the Revolving Loan
Commitment, the Acquisition Term Loan Commitment and the Supplemental Loan
Commitment of such Bank.

     "COMMITMENT FEE" is defined in Section 2.03.

     "COMPLIANCE CERTIFICATE" means a certificate issued pursuant to Section
6.01(e) signed by a chief financial officer, controller, chief accounting
officer or other Authorized Officer of the Borrower.

     "CONSOLIDATED AMORTIZATION EXPENSE" for any Person means, for any period,
the consolidated amortization expense of such Person for such period (including
amortization of any step-up in value of inventory or other assets as may be
required by purchase accounting), determined on a consolidated basis for such
Person and its Restricted Subsidiaries in conformity with GAAP.

     "CONSOLIDATED CAPITAL EXPENDITURES" of any Person means, for any period,
the aggregate gross increase during that period, in the property, plant or
equipment reflected in the consolidated balance sheet of such Person and its
consolidated Restricted Subsidiaries, in conformity with GAAP, but excluding
expenditures made in connection with the replacement, substitution or
restoration of assets (a) to the extent financed from insurance proceeds paid on
account of the loss of or damage to the assets being replaced or restored or
from indemnity payments, received under the Recapitalization Documents or from
any Replacement Asset Amount or Asset Restoration Amount, (b) with awards of
compensation arising from the taking by eminent domain or condemnation of the
assets being replaced or (c) with regard to equipment that is purchased
substantially simultaneously with the trade-in of existing equipment, fixed
assets or improvements, the credit granted by the seller of such equipment for
the trade-in of such equipment, fixed assets or improvements; PROVIDED, HOWEVER,
that Consolidated Capital Expenditures shall exclude the purchase price paid in
connection with the acquisition of any other Person in a Permitted Business
Acquisition financed, in whole or in part, with the proceeds of an Acquisition
Term Loan (including through the purchase of all of the capital stock or other
ownership interests of such Person or through merger or consolidation) to the
extent allocable to property, plant and equipment.

     "CONSOLIDATED CURRENT ASSETS" means, with respect to any Person as at any
date of determination, the total assets of such Person and its consolidated
Restricted Subsidiaries which may properly be classified as current assets on a
consolidated balance sheet of such Person and its Restricted Subsidiaries in
accordance with GAAP.

     "CONSOLIDATED CURRENT LIABILITIES" means, with respect to any Person as at
any date of determination, the total liabilities of such Person and its
consolidated Restricted Subsidiaries which may properly be classified as current
liabilities (other than the current portion of any 


                                      -101-

<PAGE>

Loans or any Existing Debt) on a consolidated balance sheet of such Person 
and its consolidated Restricted Subsidiaries in accordance with GAAP.

     "CONSOLIDATED DEPRECIATION EXPENSE" for any Person means, for any period,
the consolidated depreciation expense of such Person for such period, determined
on a consolidated basis for such Person and its consolidated Restricted
Subsidiaries in conformity with GAAP.
     
     "CONSOLIDATED EBITDA" for any Person means, without duplication, for any
period, the sum of the amounts for such period of

          (i)  Consolidated Net Income,

          (ii)  Consolidated Tax Expense,

          (iii)  Consolidated Interest Expense,

          (iv)  Consolidated Depreciation Expense,

          (v)  Consolidated Amortization Expense, 

          (vi)  other non-cash expenses incurred during such period, 

          (vii)  any expenses or charges related to the termination of the
     Management Agreement, and

          (viii)  any write-off of deferred financing costs in connection with
     this Second Amended and Restated Credit Agreement.


     "CONSOLIDATED EBITDAC" for any Person means, for any period, Consolidated
EBITDA minus Consolidated Capital Expenditures (other than Expansion Capital
Expenditures).

     "CONSOLIDATED INDEBTEDNESS" for any Person means, at any time for the
determination thereof, the principal amount of all Indebtedness of such Person
and its consolidated Restricted Subsidiaries, determined on a consolidated basis
in accordance with GAAP.

     "CONSOLIDATED INTEREST EXPENSE" for any Person means, for any period, the
sum of (a) total interest expense (including that attributable to Capital Leases
in accordance with GAAP) and (b) total dividends paid on any preferred stock, in
each case of such Person and its Restricted Subsidiaries on a consolidated basis
with respect to all outstanding Indebtedness and preferred stock of such Person
and its Restricted Subsidiaries, including, without limitation, all commissions,
discounts and other fees and charges of a similar nature owed with respect to
letters of credit and bankers' acceptance financing, but excluding, however, any
amortization of 


                                      -102-

<PAGE>

deferred financing costs, all as determined on a consolidated basis for such 
Person and its consolidated Restricted Subsidiaries in accordance with GAAP.  
For purposes of clause (b) above, dividend requirements shall be increased to 
an amount representing the pretax earnings that would be required to cover 
such dividend requirements; accordingly, the increased amount shall be equal 
to such dividend requirements multiplied by a fraction, the numerator of 
which is such dividend requirement and the denominator of which is one MINUS 
the applicable actual combined federal, state, local and foreign income tax 
rate of such Person and its subsidiaries (expressed as a decimal), on a 
consolidated basis, for the calendar year immediately preceding the date of 
the transaction giving rise to the need to calculate Consolidated Interest 
Expense.

     "CONSOLIDATED NET INCOME" for any Person means, for any period, the net
income (or loss) of such Person and its Restricted Subsidiaries on a
consolidated basis for such period taken as a single accounting period
determined on a consolidated basis for such Person and its consolidated
Restricted Subsidiaries in conformity with GAAP; PROVIDED, HOWEVER, that there
shall be excluded (a) the income (or loss) of any other Person (other than
consolidated Restricted Subsidiaries of such Person) in which any third Person
(other than such Person or any of its consolidated Restricted Subsidiaries) has
a joint interest, except to the extent of the amount of dividends or other
distributions actually received by such Person or any of its consolidated
Restricted Subsidiaries from such other Person during such period, and (b) the
income of any consolidated Restricted Subsidiary of such Person to the extent
that the declaration or payment of dividends or similar distributions by that
consolidated Restricted Subsidiary of that income is not at the time permitted
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
consolidated Restricted Subsidiary.

     "CONSOLIDATED NET WORTH" means, at any date of determination, the total of
stockholders' equity of the Borrower and its Restricted Subsidiaries determined
in accordance with GAAP on a consolidated basis. 

     "CONSOLIDATED TAX EXPENSE" for any Person means, for any period, the
consolidated tax expense of such Person for such period, determined on a
consolidated basis for such Person and its consolidated Restricted Subsidiaries
in conformity with GAAP.

     "CONTINGENT OBLIGATIONS" means, as to any Person, without duplication, any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("PRIMARY OBLIGATIONS") of
any other Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary obligation or
(ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (c) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary 


                                      -103-

<PAGE>

obligation or (d) otherwise to assure or hold harmless the owner of such 
primary obligation against loss in respect thereof; PROVIDED, HOWEVER, that 
the term Contingent Obligation shall not include endorsements of instruments 
for deposit or collection in the ordinary course of business.  The amount of 
any Contingent Obligation shall be deemed to be an amount equal to the 
maximum amount that such Person may be obligated to expend pursuant to the 
terms of such Contingent Obligation or, if such Contingent Obligation is not 
so limited, the stated or determinable amount of the primary obligation in 
respect of which such Contingent Obligation is made or, if not stated or 
determinable, the maximum reasonably anticipated liability in respect thereof 
(assuming such Person is required to perform thereunder) as determined by 
such Person in good faith.

     "CREDIT DOCUMENTS" means (a) the Original Credit Agreement, as amended and
restated by the Existing Credit Agreement and by this Agreement, (b) each Note,
(c) each Security Document, (d) any Subsidiary Guarantee and (e) any other
agreement, document or instrument between the Administrative Agent and the
Borrower or any other Credit Party or between or among the Agent, the Banks and
the Borrower or any other Credit Party, which amends, supplements or modifies
this Agreement, the Notes, any Security Document or any Subsidiary Guarantee or
which is stated to be a Credit Document.

     "CREDIT PARTY" means each of the Borrower and each Restricted Subsidiary of
the Borrower.
     
     "DEFAULT" means any event, act or condition which with notice or lapse of
time, or both, would constitute an Event of Default.

     "DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like account
with a bank, savings and loan association, credit union or like organization,
other than an account evidenced by a negotiable certificate of deposit.

     "DIVIDENDS" is defined in Section 7.10.

     "DOLLARS" means United States dollars.

     "EFFECTIVE DATE" means December 31, 1996, such being the date of the
Original Credit Agreement and the making of the initial Loans thereunder.

     "ELIGIBLE ACCOUNTS RECEIVABLE" means, as at any applicable date of
determination, the aggregate face amount of Borrower's and its Restricted
Subsidiaries' Accounts included in clause (a) of the definition of Account
hereunder, without duplication, MINUS (i) (without duplication) the aggregate
amount of all reserves, limits and deductions with respect to such Accounts
required by paragraphs (a) through (q) below and (ii) the aggregate amount of
all returns, discounts, claims, credits, charges (including warehouseman's
charges) and allowances of any nature with respect to such Accounts (whether
issued, owing, granted or outstanding).  Unless 


                                      -104-

<PAGE>

otherwise approved in writing by the Administrative Agent in its sole 
discretion, no individual Account shall be deemed to be an Eligible Account 
Receivable if:

             (a)   the Borrower or its Restricted Subsidiary does not have legal
     and valid title to the Account or the account has been written off as
     uncollectible; or

             (b)  the Account is not the valid, binding and legally enforceable
     obligation of the account debtor subject, as to enforceability, only to
     (i) applicable bankruptcy, insolvency, reorganization, moratorium or
     similar laws at the time in effect affecting the enforceability of
     creditors' rights generally and (ii) judicial discretion in connection with
     the remedy of specific performance and other equitable remedies; or

             (c)  the Account arises out of a sale made by the Borrower or a
     Restricted Subsidiary to an Affiliate of the Borrower (other than a Person
     that is an Affiliate solely by virtue of being under common control with
     the Borrower); or

             (d)  the Account or any portion thereof is unpaid more than 90 days
     after the original invoice date; or

             (e)  other than Accounts of Home Depot, the Account, when
     aggregated with all other Accounts of the same account debtor (or any
     Affiliate thereof), exceeds 30% in face value of all Accounts of the
     Borrower then outstanding, to the extent of such excess; or

             (f)  (i) the Account is subject to any claim on the part of the
     account debtor disputing liability under such Account in whole or in part,
     to the extent of the amount of such dispute or (ii) the Account otherwise
     is or is reasonably likely to become subject to any right of setoff or any
     counterclaim, claim or defense by the account debtor, to the extent of the
     amount of such setoff or counterclaim, claim or defense or (iii) the
     account debtor for such Account is also a creditor of the Borrower, to the
     extent of the amount owed by the Borrower to the account debtor; or 

             (g)  the account debtor has commenced a voluntary case under the
     federal bankruptcy laws, as now constituted or hereafter amended, or made
     an assignment for the benefit of creditors or if a decree or order for
     relief has been entered by a court having jurisdiction in the premises in
     respect of the account debtor in an involuntary case under the federal
     bankruptcy laws, as now constituted or hereafter amended, or if any other
     petition or other application for relief under the federal bankruptcy laws
     has been filed by or against the account debtor, or if the account debtor
     has failed, suspended business, ceased to be solvent, or consented 


                                      -105-

<PAGE>

     to or suffered a receiver, trustee, liquidator or custodian to be appointed
     for it or for all or a significant portion of its assets or affairs; or

             (h)  the Administrative Agent does not have a valid and perfected
     first priority security interest in such Account; or

             (i)  the sale to the account debtor for such Account is on a
     consignment, bill-and-hold, sale on approval, guaranteed sale or sale-and-
     return basis or pursuant to any written agreement providing for repurchase
     or return other than return arrangements in the ordinary course of business
     consistent with the past business practices of Borrower; or

             (j)  it is from an account debtor (or any Affiliate thereof) and
     25% or more, in face amount, of other Accounts from either such account
     debtor or any Affiliate thereof are due or unpaid for more than 90 days
     after the original invoice date; or

             (k)  25% or more, in face amount, of other Accounts from the same
     account debtor are not deemed Eligible Accounts Receivable hereunder; or

             (l)  the amount debtor is a foreign Governmental Authority;

             (m)  the Account is an Account a security interest in which would
     be subject to the Federal Assignment of Claims Act of 1940, as amended (31
     U.S.C. Section 3727 et seq.), unless (i) such Account, together with all
     other Eligible Accounts a security interest in which would be subject to
     such Act, does not exceed 2% in face value of all Eligible Accounts of the
     Borrower and its Restricted Subsidiaries then outstanding, or (ii) Borrower
     has assigned the Account to the Administrative Agent in compliance with the
     provisions of such Act; or

             (n)  the sale is to an account debtor outside the United States or
     Canada or incorporated in or primarily doing business in any jurisdiction
     located outside the United States or Canada, unless (i) the obligations
     with respect to such Account are secured by the issuance of a letter of
     credit by a bank reasonably acceptable to the Administrative Agent,
     guarantee or acceptance terms, (PROVIDED, HOWEVER, that obligations so
     secured shall not exceed 5% in face value of all Eligible Accounts of
     Borrower and its Restricted Subsidiaries then outstanding) or (ii) such
     Account is otherwise approved by and acceptable to the Administrative
     Agent; or

             (o)  the Administrative Agent determines in good faith, and in
     accordance with its internal credit policies and reasonable commercial
     banking practices that (i) collection of the Account is insecure or (ii)
     the Account may not be paid by reason of the account debtor's financial
     inability to pay; PROVIDED, HOWEVER, that any Account referred to in this
     clause (o) shall not become ineligible until the 


                                      -106-

<PAGE>

     Administrative Agent shall have given the Borrower five Business Days' 
     advance notice of such determination; or

             (p)  the goods giving rise to such Account have not been shipped
     and delivered to and accepted by the account debtor or the services giving
     rise to such Account have not been performed by the Borrower and accepted
     by the account debtor or the Account otherwise does not represent a final
     sale; or

             (q)  the Account does not comply in all material respects with all
     applicable legal requirements, including, where applicable, the Federal
     Consumer Credit Protection Act, the Federal Truth in Lending Act and
     Regulation Z of the Board of Governors of the Federal Reserve System, in
     each case as amended.

     In addition to the foregoing, Eligible Accounts Receivable shall include
such Accounts as the Borrower shall request and that the Administrative Agent
approves in advance, in writing and in its sole discretion (or if the aggregate
face amount to be approved exceeds $1,300,000 at any one time, the approval of
the Required Banks has been obtained in writing).

     "ELIGIBLE ASSIGNEE" means (a) a commercial bank organized under the laws of
the United States, or any State thereof, and having total assets in excess of
$1,000,000,000; (b) a savings and loan association or savings bank organized
under the laws of the United States, or any State thereof, and having total
assets in excess of $1,000,000,000; (c) a finance company, insurance company,
investment company or other financial institution organized under the laws of
the United States, or any State thereof, that is engaged in purchasing or
otherwise investing in commercial loans in the ordinary course of business,
having total assets in excess of $100,000,000; or (d) an entity managed by a
Bank or Affiliate of a Bank; PROVIDED, HOWEVER, that the original Commitment
held by such entity is at least $5,000,000.

     "ELIGIBLE INVENTORY" means the total of:

          (a)  the gross amount of Inventory of the Borrower and its Restricted
     Subsidiaries, valued at the lower of cost (on a FIFO basis) or market,
     which (i) is owned solely by the Borrower or any of its Restricted
     Subsidiaries and with respect to which the Borrower or such Restricted
     Subsidiary has good, valid and marketable title; (ii) is stored on property
     that is owned or leased by (A) the Borrower or any of its Restricted
     Subsidiaries or (B) a warehouseman that has contracted with the Borrower or
     any of its Restricted Subsidiaries to store Inventory on such
     warehouseman's property (PROVIDED, HOWEVER, that, with respect to Inventory
     stored on property owned or leased by a warehouseman, the Borrower or such
     Restricted Subsidiary shall have delivered to the Administrative Agent
     acknowledgment agreements executed by such warehouseman); (iii) is subject
     to a valid, enforceable and first priority Lien in favor of the
     Administrative Agent (subject, with respect to Eligible Inventory stored at
     sites described in clause 


                                      -107-

<PAGE>

     (ii)(B) above, to Liens for normal and customary warehouseman charges); 
     (iv) is located in the United States; and (v) is not, in the reasonable 
     judgment of the Administrative Agent, obsolete or slow moving in relation 
     to customary industry practice, and which otherwise conforms to the 
     requirements for eligibility contained in clauses (i) through (iv) above; 
     MINUS (without duplication); 

          (b)  the amount of any goods returned or rejected by the customers of
     the Borrower or any of its Restricted Subsidiaries and goods in transit to
     third parties (other than to agents or warehousemen of the Borrower or any
     of its Restricted Subsidiaries that comply with clause (a)(ii)(B) above);
     MINUS (without duplication); and

          (c)  the amount of any reserves for spoilage, special order goods and
     market value declines in accordance with GAAP.

In addition to the foregoing, Eligible Inventory shall include such items of the
Inventory of the Borrower and its Restricted Subsidiaries as the Borrower shall
request and the Administrative Agent (or if the aggregate amount to be approved
exceeds $1,300,000 at any one time, the Required Banks) shall approve in
advance, in writing and in its (their) sole discretion.

     "ENVIRONMENT" means any surface water, ground water, drinking water supply,
land surface or subsurface strata or ambient air and includes, without
limitation, any indoor location.

     "ENVIRONMENTAL AUTHORIZATIONS" is defined in Section 5.21.

     "ENVIRONMENTAL LAWS" means the common law and all federal, state, local and
foreign laws or regulations, codes, orders, decrees, judgments or injunctions
issued, promulgated, approved or entered thereunder, now or hereafter in effect,
relating to pollution or protection of public or employee health or safety or
the Environment, including, without limitation, laws relating to (a) emissions,
discharges, releases or threatened releases of Hazardous Materials into the
Environment (including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata), (b) the manufacture, processing,
distribution, use, generation, treatment, storage, disposal, transport or
handling of Hazardous Materials, and (c) underground and aboveground storage
tanks, and related piping, and emissions, discharges, releases or threatened
releases therefrom.

     "ENVIRONMENTAL NOTICE" means any written notice or claim by any
Governmental Authority or other third party alleging liability (including,
without limitation, potential liability for investigatory costs, cleanup costs,
governmental costs, compliance costs or harm, injuries or damages to any person,
property or natural resources, or any fines or penalties) arising out of, based
upon, resulting from or relating to any Environmental Law.

     "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.  Section references to ERISA are to ERISA as in
effect at the date of this 


                                      -108-


<PAGE>

Agreement and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.

     "ERISA AFFILIATE" of a Person means any entity, whether or not
incorporated, which is under common control or would be considered a single
employer with such Person within the meaning of Section 414(b) or (c) of the
Code and regulations promulgated under those Sections or within the meaning of
Section 4001(b) of ERISA and regulations promulgated under that Section.

     "EURODOLLAR RATE" means with respect to each Interest Period for a Reserve
Adjusted Eurodollar Loan, (a) the arithmetic average (rounded to the nearest
1/100 of 1%) of the offered quotation to first-class banks in the interbank
Eurodollar market by each of the Reference Banks for dollar deposits of amounts
in same day funds comparable to the outstanding principal amount of the Reserve
Adjusted Eurodollar Loan for which an interest rate is then being determined
with maturities comparable to the Interest Period to be applicable to such
Eurodollar Loan, determined as of 10:00 A.M. (New York time) on the date which
is two Business Days prior to the commencement of such Interest Period divided
(and rounded upward to the next whole multiple of 1/16 of 1%) DIVIDED BY (b) a
percentage equal to 100% minus the then stated maximum rate of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) applicable to any member bank of the
Federal Reserve System in respect of Eurocurrency liabilities as defined in
Regulation D (or any successor category of liabilities under Regulation D);
PROVIDED, HOWEVER, that if any Reference Bank fails to provide the
Administrative Agent with its aforesaid rate, then the Eurodollar Rate shall be
determined based on the rate or rates provided to the Administrative Agent by
the remaining Reference Banks.

     "EURODOLLAR RATE MARGIN" means, with respect to any Revolving Loan,
Acquisition Loan, Supplemental Term Loan or any Supplemental Revolving Loan,
with respect to any Interest Period, the rate set forth in the table below
opposite the Leverage Ratio of the Borrower as determined on the last day of
such Interest Period:

     LEVERAGE RATIO       EURODOLLAR RATE MARGIN
     --------------       ----------------------
   GREATER THAN 5.00x            2.75%
     4.51x - 5.00x               2.50%
     4.01x - 4.50x               2.25%
     3.51x - 4.00x               2.00%
     3.01x - 3.50x               1.75%
     2.51x - 3.00x               1.50%
     2.01x - 2.50x               1.25%
    LESS THAN 2.01x              1.00%

     "EVENT OF DEFAULT" is defined in Section 8.

                                     -109-
<PAGE>

     "EXCESS" is defined in Section 3.03(b).

     "EXCESS CASH FLOW" means, without duplication, for any Person for any
period for which such amount is being determined, (a) Consolidated Net Income,
MINUS (b) any amount which is both (i) included in Consolidated Net Income and
(ii) required to be applied to the prepayment of the Loans pursuant to Section
3.03, PLUS (minus) (c) the amount of depreciation, depletion, amortization of
intangibles, deferred taxes and other non-cash expenses (revenues) which,
pursuant to GAAP, were deducted (added) in determining such Consolidated Net
Income of such Person, MINUS (d) additions to working capital for such period
(I.E., the increase or decrease in Consolidated Current Assets of such Person
from the beginning to the end of such period (excluding Cash or Cash Equivalents
which are either Net Cash Proceeds or Net Financing Proceeds required to be
applied to the prepayment of the Loans pursuant to Section 3.03(d) during such
period) of such Person minus the increase or plus the decrease in Consolidated
Current Liabilities), MINUS (e) cash expenditures in respect of Consolidated
Capital Expenditures that are made during such period, MINUS (f) Scheduled
Acquisition Term Loan Principal Payments, Scheduled Supplemental Term Loan
Principal Payments, and voluntary prepayments of Loans not subject to
reborrowing made during such period, MINUS (g) cash payments to Management
Stockholders to repurchase capital stock pursuant to Section 7.10, MINUS (h)
principal payments on Indebtedness permitted under Section 7.07.  For purposes
of the foregoing and without duplication, Consolidated Net Income will exclude
(A) all net losses on the sale of capital assets or out of the ordinary course
of business and (B) all write-downs of capital assets.

     "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

     "EXISTING ACQUISITION TERM LOANS" is defined in the recitals to this
Agreement.

     "EXISTING ACQUISITION TERM NOTES" means the Acquisition Term Notes issued
pursuant to the Existing Credit Agreement and dated the Effective Date, to be
canceled upon issuance of the Acquisition Term Notes to be issued hereunder as
of the Closing Date.

     "EXISTING CREDIT AGREEMENT" is defined in the preamble of this Agreement.

     "EXISTING DEBT" means Indebtedness of Borrower and its Subsidiaries set
forth on Schedule 5.19.

     "EXISTING LEASES" means the Leases of the Borrower and its Subsidiaries set
forth on Schedule 5.16.

     "EXISTING LOANS" means the Existing Term A Loans, the Existing Term B
Loans, the  Existing Acquisition Term Loans and the Existing Revolving Loans,
all of which are to be refinanced and replaced with the proceeds of the Initial
Loans hereunder.

                                     -110-
<PAGE>

     "EXISTING NOTE" means each Existing Term A Note, Existing Term B Note,
Existing Revolving Note and Existing Acquisition Term Note.

     "EXISTING REVOLVING LOANS" is defined in the recitals to this Agreement.

     "EXISTING REVOLVING NOTES" means the Revolving Notes issued pursuant to the
Existing Credit Agreement and dated the Effective Date, to be canceled upon
issuance of the Revolving Notes to be issued hereunder as of the Closing Date.

     "EXISTING TERM A LOANS" is defined in the recitals to this Agreement.

     "EXISTING TERM B LOANS" is defined in the recitals to this Agreement.

     "EXISTING TERM A NOTES" means the Term A Notes issued pursuant to the
Existing Credit Agreement and dated the Effective Date, to be canceled upon
payment therefor on the Closing Date.

     "EXISTING TERM B NOTES" means the Term B Notes issued pursuant to the
Existing Credit Agreement and dated the Effective Date, to be canceled upon
payment therefor on the Closing Date.

     "EXPANSION CAPITAL EXPENDITURES" means up to $7.5 million of Consolidated
Capital Expenditures incurred during the period from July 31, 1997 to and
including January 31, 1998 in connection with the existing properties and
buildings located in the Texas cities of Huntsville, Houston, Waco, Waller and
Walnut Springs.

     "FEDERAL FUNDS RATE" means on any one day the weighted average of the 
rate on overnight Federal funds transactions with members of the Federal 
Reserve System only arranged by Federal funds brokers as published as of such 
day by the Federal Reserve Bank of New York, or if not so published, the rate 
then used by first-class banks in extending overnight loans to other 
first-class banks.

     "FINANCING PROCEEDS" means the Cash or Cash Equivalents (other than Net
Cash Proceeds or proceeds of any sale, transfer or other disposition of assets
specifically excluded from the definition of "Asset Sale" by the exceptions
contained therein) received by the Borrower or any of its Restricted
Subsidiaries, directly or indirectly, from any financing transaction of whatever
kind or nature, including without limitation from any incurrence of Indebtedness
from any mortgage or pledge of an asset or interest therein (including any
transaction which is the substantial equivalent of a mortgage or pledge), from
any lease to a third party and a pledge of the lease payments due thereunder to
secure Indebtedness, from any joint venture arrangement, from any exchange of
assets and a sale of the assets received in such exchange, or any other similar
arrangement or technique whereby a Credit Party obtains Cash in respect of an
asset, net of direct costs associated therewith.  Financing Proceeds shall not

                                     -111-
<PAGE>

include any amounts with respect to (a) any Borrowings of Revolving Loans,
Acquisition Term Loans, Supplemental Revolving Loans or Supplemental Term Loans,
(b) the incurrence or refinancing of Indebtedness permitted by Sections 7.07(g)
and (h) effected in accordance with the applicable provisions of such Sections
and (c) transactions between any of the Borrower and its Wholly Owned
Subsidiaries that are Restricted Subsidiaries.

     "FIRREA" means the Financial Institutions Reform, Recovery & Enforcement
Act of 1989, as amended from time to time, and any successor statute.

     "FOREIGN BANK" is defined in Section 3.07(c).

     "GAAP" means generally accepted accounting principles in the United States
of America observed in the preparation of the audited financial statements of
the Borrower for its fiscal year ended June 30, 1997 and delivered pursuant to
Section 4.01(j), consistently applied.

     "GOVERNMENTAL AUTHORITY" means any federal, state, local, foreign or other
governmental or administrative (including self-regulatory) body,
instrumentality, department or agency or any court, tribunal, administrative
hearing body, arbitration panel, commission, or other similar dispute-resolving
panel or body including, without limitation, those governing the regulation and
protection of the Environment, whether now or hereafter in existence, or any
officer or official thereof.

     "HAZARDOUS MATERIALS" means all pollutants, contaminants or chemical,
industrial, hazardous or toxic materials, substances, constituents or wastes,
including, without limitation, asbestos, or asbestos-containing materials,
polychlorinated biphenyls and petroleum, oil, or petroleum or oil products,
derivatives or constituents, including, without limitation, crude oil or any
fraction thereof, or any other material, waste, chemical, substance or
constituent subject to regulation under any Environmental Law.

     "HELLER SUBORDINATED LENDERS" is defined in Section 7.23.

     "HOLDINGS" is defined in the preamble to this Agreement.

     "IBJS" is defined in the preamble to this Agreement.

     "INDEBTEDNESS" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) the deferred purchase price
of assets or services which in accordance with GAAP would be shown on the
liability side of the balance sheet of such Person, (c) the undrawn amount of
all letters of credit issued for the account of such Person and, without
duplication, all unreimbursed drafts drawn thereunder, (d) all Indebtedness of a
second Person secured by any Lien on any property owned by such first Person,
whether or not such Indebtedness has been assumed by such first Person, (e) all
Capitalized Lease Obligations of such Person, (f) all obligations of such Person
to pay a specified purchase price for goods or

                                     -112-
<PAGE>

services whether or not delivered or accepted, i.e., take-or-pay and similar
obligations, (g) the total risk amount (as determined by the Administrative
Agent) of such Person under Interest Rate Agreements and (h) all Contingent
Obligations of such Person; PROVIDED, HOWEVER, that Indebtedness shall not
include trade payables, accrued expenses, accrued dividends and accrued income
taxes, in each case arising in the ordinary course of business.

     "INDOSUEZ" is defined in the preamble to this Agreement.

     "INFORMATION" is defined in Section 11.04(e).

     "INITIAL BANK" means a Bank that is an original signatory to this
Agreement.

     "INITIAL BORROWERS" is defined in the preamble to this Agreement.

     "INITIAL DATE" means, in the case of each Bank party hereto on the Closing
Date, the Closing Date, and in the case of each other Bank, the effective date
of the Assignment Agreement pursuant to which it became a Bank hereunder.

     "INITIAL LOANS" means the Loans made on the Closing Date.

     "INITIAL REVOLVING LOANS" means the initial Revolving Loans made on the
Closing Date in an aggregate amount not to exceed $[           ] used to make
payments as set forth in Section 1.01(a).

     "INTELLECTUAL PROPERTY" is defined in Section 5.14.

     "INTEREST PERIOD" means, with respect to any Reserve Adjusted Eurodollar
Loan, the interest period applicable thereto, as determined pursuant to Section
1.09.

     "INTEREST RATE AGREEMENT" means any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement, interest rate futures
contract, interest rate option contract or other similar agreement or
arrangement to which any Credit Party is a party, designed to protect the
Borrower or any of its Restricted Subsidiaries against fluctuations in interest
rates.

     "INTEREST RATE DETERMINATION DATE" means, with respect to a Reserve
Adjusted Eurodollar Loan, the date for calculating the Eurodollar Rate for
purposes of determining the interest rate in respect of an Interest Period, and
for each such Borrowing the date which is two Business Days prior to the
commencement of the Interest Period for such Borrowing.

     "INVENTORY" means all of the inventory of the Borrower and its Restricted
Subsidiaries (on a consolidated basis), including, without limitation, (a) all
finished goods, raw materials, work in process and packaging materials produced,
used or consumed in the business

                                     -113-
<PAGE>

of the Borrower and its Restricted Subsidiaries, whether finished or
unfinished, held for sale or furnished or to be furnished under contracts of
service, and (b) all finished goods returned or repossessed by the Borrower or
any of its Restricted Subsidiaries.

     "INVESTMENT" means with respect to any Person (a) any share of Capital
Stock, partnership interest, evidence of Indebtedness or other security issued
by any other Person, (b) any loan, advance, extension of credit to, or
contribution to the capital of, any other Person, (c) the acquisition of the
stock or assets of a business or (d) any other investment; PROVIDED, HOWEVER,
that the term "Investment" shall not include (i) fixed assets or inventory
acquired in the ordinary course of business and payable in accordance with
customary trade terms, (ii) advances to employees for travel expenses, drawing
accounts and similar expenditures, (iii) stock or other securities acquired in
connection with the satisfaction or enforcement of Indebtedness or claims due or
owing to any Person or as security for any such Indebtedness or claim, or (iv)
demand deposits in banks or trust companies.  The amount of an Investment
outstanding at any time shall be determined in accordance with GAAP; PROVIDED,
HOWEVER, that no Investment shall be increased as a result of an increase in the
undistributed retained earnings of the Person in whom an Investment was made or
decreased as a result of equity in the losses of any such Person.

     "KCSN" is defined in the preamble to this Agreement.

     "LANDLORD CERTIFICATION AND WAIVER" means, with respect to any Real
Property leased by the Borrower or any of its Restricted Subsidiaries, a
statement executed by the landlord of such Real Property, in form and substance
satisfactory to the Administrative Agent, providing the Administrative Agent
with, among other things, (i) the right to take and perfect a mortgage or other
assignment of the applicable Credit Party's interest in the lease as collateral
security for the Obligations, (ii) the right to cure defaults and perform under
the lease in the event of a failure to perform by such Credit Party, (iii) the
right to foreclose or otherwise realize upon said security interest in the lease
and to assign the Credit Party's rights in the lease to a third party in
connection with such foreclosure or other realization and (iv) the right to take
upon such foreclosure or other realization any property of the Credit Party
located on the leased Real Property (which right shall be superior to that of
the lessor).

     "LEASE" means any lease, sublease, franchise agreement, license, occupancy
or concession agreement.

     "LETTER OF CREDIT" or "LETTERS OF CREDIT" means, (i) Standby Letter or
Letters of Credit and (ii) Commercial Letter or Letters of Credit, in each case,
issued or to be issued by Issuing Banks for the account of Borrower pursuant to
Section 1.13.

     "LETTER OF CREDIT CASH COLLATERAL" shall have the meaning provided in
Section 1.13(a)(iv).

                                     -114-
<PAGE>

     "LETTER OF CREDIT CASH COLLATERAL ACCOUNT" shall have the meaning provided
in Section 1.13(a)(iv).

     "LETTER OF CREDIT PARTICIPATION" shall have the meaning provided in Section
1.13(a)(ii).

     "LETTERS OF CREDIT USAGE" means, as at any date of determination, the sum
of (i) the maximum aggregate amount that is or at any time thereafter may become
available to be drawn under all Letters of Credit then outstanding plus (ii) the
aggregate amount of all drawings under Letters of Credit honored by all Issuing
Banks and not theretofore reimbursed by Borrower.

     "LEVERAGE RATIO" means, as of any date of determination, the ratio of (a)
the Consolidated Indebtedness (including the outstanding balance under any
noncompete or consulting arrangements) of the Borrower and its Restricted
Subsidiaries as of the last day of each calendar quarter ending on or about any
date of determination to (b) the Consolidated EBITDA of the Borrower and its
Restricted Subsidiaries for the Test Period ending on or about such date;
PROVIDED that, for purposes of this definition, Consolidated Indebtedness shall
not include indebtedness under the Existing Revolving Loans which is repaid (and
not reborrowed under the Revolving Loan) on the Closing Date; and PROVIDED,
FURTHER, that, for purposes of this definition, Consolidated EBITDA for a given
Test Period (x) shall mean Consolidated EBITDA for the twelve month period ended
on the last day of such Test Period and (y) shall also include the EBITDA (with
appropriate adjustments) derived from any business which was acquired by the
Borrower and its Restricted Subsidiaries during such twelve-month period and
which is consolidated with the Borrower and its Restricted Subsidiaries as of
the last day of such Test Period, for the portion of such twelve month period
before the business was so acquired.

     "LIEN" means any mortgage, pledge, security interest, encumbrance, lien,
claim, hypothecation, assignment for security or charge of any kind (including
any agreement to give any of the foregoing, any conditional sale or other title
retention agreement or any lease in the nature thereof).

     "LOAN" means each Revolving Loan, Acquisition Term Loan, Supplemental
Revolving Loan and Supplemental Term Loan.

     "LOAN FACILITY" means the credit facility evidenced by the Total Revolving
Loan Commitment, the Total Acquisition Term Loan Commitment and the Total
Supplemental Loan Commitment..

     "LOSS PROCEEDS" is defined in Section 3.03(f).

     "MANAGEMENT AGREEMENT" means the Fee Agreement dated as of December 31,
1996 between the Borrower and Kohlberg & Company, LLC., as amended.

                                     -115-
<PAGE>

     "MANAGEMENT STOCKHOLDERS" means, collectively, Michael F. Vukelich, Jerry
L. Halamuda, Gary E. Mariani, Gene Malcolm, Steven J. Bookspan, Michael T.
Neenan, Robert F. Strange, Jim Tsurudome, Richard George, Gary Crook, Dave
Grimshaw, John Negrete, Dennis Bahen, and other individuals from time to time
party to the Stockholders Agreement.

     "MATERIAL ADVERSE EFFECT" means, (a) with respect to the Borrower and its
Restricted Subsidiaries, any material adverse effect (whether occurring before
or after giving effect to the Public Financing and the financing thereof and the
other transactions contemplated hereby and by the other Transaction Documents)
with respect to the operations, business, properties, assets, liabilities
(contingent or otherwise), financial condition or prospects of the Borrower and
its Restricted Subsidiaries, taken as a whole, or (b) any fact or circumstance
(whether or not the result thereof would be covered by insurance) as to which
singly or in the aggregate there is a reasonable likelihood of (i) a material
adverse change described in clause (a) with respect to the Borrower and its
Restricted Subsidiaries, taken as a whole, or (ii) the inability of any Credit
Party to perform in any material respect its Obligations hereunder or under any
of the other Transaction Documents or the inability of the Banks to enforce in
any material respect their rights purported to be granted hereunder or under any
of the other Transaction Documents or the Obligations (including realizing on
the Collateral).

     "MINIMUM BORROWING AMOUNT" means $100,000.

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

     "MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA with respect to which the Borrower or any of its
ERISA Affiliates is or has been required to contribute.

     "NET CASH PROCEEDS" means with respect to any Asset Sale, the aggregate
payments of Cash or Cash Equivalents received by the Borrower and/or any of its
Restricted Subsidiaries, as the case may be, from such Asset Sale, net of direct
expenses of sale, net of taxes (including income taxes and transfer taxes) and
net of repayment of Indebtedness or Capitalized Leases in each case secured by a
Lien on the asset subject to such Asset Sale; PROVIDED, HOWEVER, that with
respect to taxes, expenses shall only include taxes to the extent that taxes are
payable in cash with respect to the current year after taking into account any
reduction in consolidated tax liability due to available tax credits or
deductions and any tax sharing arrangements; and PROVIDED, FURTHER, that Net
Cash Proceeds shall not include any amounts or items included in the definition
of Financing Proceeds or Net Financing Proceeds.

     "NET FINANCING PROCEEDS" means Financing Proceeds, net of direct expenses
of the transaction and net of taxes (including income taxes) currently paid or
payable in cash with respect to the current year after taking into account any
reduction in consolidated tax liability due to available tax credits or
deductions and any tax sharing arrangements as a result of the transaction
generating such Financing Proceeds.

                                     -116-
<PAGE>

     "NOTE" means each Revolving Note, Acquisition Term Note, Supplemental
Revolving Note and Supplemental Term Note.

     "NOTICE OF ACQUISITION LOAN BORROWING" is defined in Section 1.03.

     "NOTICE OF BORROWING" is defined in Section 1.03.

     "NOTICE OF REVOLVING LOAN BORROWING" is defined in Section 1.03.

     "NOTICE OF CONVERSION/CONTINUATION" is defined in Section 1.06.

     "OBLIGATIONS" means all amounts, direct or indirect, contingent or
absolute, of every type or description, and at any time existing, owing to the
Administrative Agent or any Bank pursuant to the terms of this Agreement or any
other Credit Document or secured by any of the Security Documents, including,
without limitation, interest accruing subsequent to the filing of a petition
initiating any proceeding in bankruptcy, insolvency or like proceeding of any
Credit Party, whether or not such interest is an allowed claim enforceable
against the debtor in a bankruptcy case under the Bankruptcy Code.

     "OFFICERS' CERTIFICATE" means, as applied to any corporation, a certificate
executed on behalf of such corporation by its Chairman of the Board (if an
officer), Chief Executive Officer, its President or one of its Vice Presidents,
its Chief Financial Officer or its Treasurer (in such Person's capacity as an
officer and not individually); PROVIDED, HOWEVER, that every Officers'
Certificate with respect to compliance with a condition precedent to the making
of any Loan hereunder shall include (a) a statement that the officers making or
giving such Officers' Certificate have read such condition and any definitions
or other provisions contained in this Agreement relating thereto, (b) a
statement that, in the opinion of the signers, they have made or have caused to
be made such examination or investigation as is necessary to enable them to
express an informed opinion as to whether or not such condition has been
complied with, and (c) a statement as to whether, in the opinion of the signers,
such condition has been complied with.

     "OPERATING LEASE" of any Person shall mean any lease (including, without
limitation, leases which may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) by such Person as lessee which is not
a Capital Lease.

     "ORIGINAL CREDIT AGREEMENT" is defined in the preamble to this Agreement.

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

                                     -117-
<PAGE>

     "PENSION PLAN" means any pension plan as defined in Section 3(2) of ERISA
(other than a Multiemployer Plan) which is or has been maintained by or to which
contributions are or have been made by the Borrower or any of its ERISA
Affiliates.

     "PERMITTED BUSINESS ACQUISITION" means an acquisition by the Borrower or
its Restricted Subsidiaries of assets or property used or useful in the
Borrower's business which is proposed to be financed with the proceeds of an
Acquisition Term Loan Borrowing or a Supplemental Term Loan Borrowing.

     "PERMITTED ENCUMBRANCES" is defined in Section 7.06.

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

     "PLAN" means, at any time, any pension benefit plan subject to Title IV of
ERISA.

     "PORTION" means the Revolving Portion, the Acquisition Term Portion or the
Supplemental Portion.

     "PREPAYMENT COLLATERAL ACCOUNT" is defined in Section 3.08(b).

     "PRIOR LIENS" is defined in Section 5.10.

     "PROJECTED FINANCIAL STATEMENTS" is defined in Section 5.09(c).

     "PUBLIC FINANCING" means the proposed offering of up to $40 million of PIK
preferred stock of the Borrower and the public offering of up to $85 million of
Senior Subordinated Notes.

     "PUBLIC FINANCING DOCUMENTS" means the registration statements,
prospectuses, underwriting agreements, certificates, notes, agreements and
documents prepared or entered into by the Company with respect to the Public
Financing.

     "PUT/CALL FUNDS" means the aggregate $100,051 set aside by the Borrower to
redeem "Option Shares" (as defined in the Put/Call Option Agreement) pursuant to
the Put/Call Option Agreement.

     "PUT/CALL OPTION AGREEMENT" means the Put/Call Option Agreement dated as of
December 31, 1996 among Holdings, KCSN and the Management Stockholders.

     "REAL PROPERTY" means all right, title and interest of the Borrower or any
of its Restricted Subsidiaries (including, without limitation, any leasehold
estate) in and to a parcel of

                                     -118-
<PAGE>

real property owned or leased (or, with respect to representations, warranties
and covenants relating to compliance with Environmental Laws, operated) by the
Borrower or any of its Restricted Subsidiaries together with, in each case,
all improvements and appurtenant fixtures, equipment, personal property,
easements and other property and rights incidental to the ownership or lease
(or operation, as applicable) thereof, in each case, from time to time after
the Closing Date.

     "RECAPITALIZATION" means the recapitalization of Holdings whereby a
controlling interest in Holdings was acquired by KCSN pursuant to the
Recapitalization Agreement.

     "RECAPITALIZATION AGREEMENT" is defined in the recitals to this Agreement.

     "REFERENCE BANKS" means Indosuez, Citibank, N.A. and The Chase Manhattan
Bank, N.A.

     "REGISTER" is defined in Section 11.04(c).

     "REGULATIONS D, G, T, U AND X" means Regulations D, G, T, U and X (or
any one or more of them specified) of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor to all or a
portion thereof establishing margin requirements.

     "REPLACEMENT ASSET AMOUNT" is defined in Section 3.03(c)(i).

     "REQUIRED BANKS" means at any time Banks holding at least 51% of the
sum of the (x) Total Commitments and (y) outstanding Loans; PROVIDED, HOWEVER
that in the event there is only one Bank, "Required Banks" shall mean such Bank;
and PROVIDED, FURTHER that for the purposes of Section 4, the requirement that
any document, agreement, certificate or other writing is to be satisfactory to
the Required Banks shall be satisfied if (a) such document, agreement,
certificate or other writing was delivered in its final form to the Banks prior
to the Closing Date (or if amended or modified thereafter, the Administrative
Agent shall have reasonably determined such amendment or modification not to be
material), (b) such document, agreement, certificate or other writing is
satisfactory to the Administrative Agent and (c) Banks holding more than 51% of
the Total Commitments held by Banks have not objected in writing to such
document, agreement, certificate or other writing to the Administrative Agent
prior to the Closing Date.

     "RESERVE ACCOUNT" is defined in Section 3.08(a).

     "RESERVE ADJUSTED EURODOLLAR LOAN" means any Loan bearing interest at
a rate determined by reference to the Eurodollar Rate in accordance with the
provisions of Section 1.08(b).

                                     -119-

<PAGE>

          "RESTRICTED SUBSIDIARY" means any Subsidiary of the Borrower or of the
Borrower's Subsidiaries which is not an Unrestricted Subsidiary.

          "REVOLVING LOAN" is defined in Section 1.01(a).

          "REVOLVING LOAN COMMITMENT" means, with respect to each Bank, the
amount set forth below such Bank's name on Schedule A hereto directly below the
column entitled "Revolving Loan", as same may be reduced from time to time
pursuant to Sections 2.01, 3.03 and/or 8.

          "REVOLVING LOAN COMMITMENT TERMINATION DATE" means the Business Day
immediately preceding the Revolving Loan Maturity Date.

          "REVOLVING LOAN MATURITY DATE" means the last Business Day of
December, 2002.

          "REVOLVING NOTE" is defined in Section 1.05(a)(i).

          "REVOLVING PORTION" means, at any time, the portion of the Loan
Facility evidenced by the Total Revolving Loan Commitment.

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

     "SCHEDULED ACQUISITION TERM LOAN PRINCIPAL PAYMENTS" means, with respect to
the principal payments on the Acquisition Term Loan to be made on the last
Business Day of each calendar quarter specified in the table below, in each
case, for each such date, in the Dollar amount which is the product of (x) the
percentage specified opposite such date in such table, and (y) the greater of
(a) the total outstanding principal amount of all of the Acquisition Term Loans
as of the close of business on the Acquisition Term Loan Commitment Termination
Date (after giving effect to any Borrowings under the Acquisition Term Loans on
such date) and (b) the Total Acquisition Loan Commitment on the date, if any,
that aggregate Unutilized Acquisition Commitments equals zero:

                                                     Percentage to Obtain
                                                     Acquisition Term Loan
               Period                                  Principal Payment
               ------                                ---------------------

The earlier of the date the aggregate 
Unutilized Acquisition Commitments equals
zero and the Acquisition Term Loan Commitment
Termination Date, through December 31, 2002                  0.250%


                                      -120-

<PAGE>

and, with respect to the principal payments on the Acquisition Term Loan to be
made on the last Business Day of each calendar quarter specified in the table
below, in each case, for each such date, in the Dollar amount which is the
product of (x) the ratio specified opposite such date in such table, and (y) the
total outstanding principal amount of all of the Acquisition Term Loans as of
such date:

                Period                                      Ratio
                ------                                      -----

January 1, 2003 through the last Business
day of December, 2004                                        1/8

     "SCHEDULED SUPPLEMENTAL TERM LOAN PRINCIPAL PAYMENTS" means, with respect
to the principal payments on the Supplemental Term Loan to be made on the last
Business Day of each calendar quarter specified in the table below, in each
case, for each such date, in the Dollar amount which is the product of (x) the
percentage specified opposite such date in such table, and (y) the greater of
(a) the total outstanding principal amount of all of the Supplemental Term Loans
as of the close of business on the Supplemental Term Loan Commitment Termination
Date (after giving effect to any Borrowings under the Supplemental Term Loans on
such date) and (b) the Total Supplemental Loan Commitment on the date, if any,
that aggregate Unutilized Supplemental Commitments equals zero:

                                                     Percentage to Obtain
                                                     Acquisition Term Loan
               Period                                  Principal Payment
               ------                                ---------------------

The earlier of the date the aggregate 
Unutilized Supplemental Commitments equals
zero and the Supplemental Term Loan Commitment
Termination Date, through December 31, 2002                 0.250%
     

and, with respect to the principal payments on the Supplemental Term Loan to be
made on the last Business Day of each calendar quarter specified in the table
below, in each case, for each such date, in the Dollar amount which is the
product of (x) the ratio specified opposite such date in such table, and (y)
the total outstanding principal amount of all of the Supplemental Term Loans as
of such date:


                Period                                      Ratio
                ------                                      -----

January 1, 2003 through the last Business
Day of December, 2004                                        1/8


                                      -121-

<PAGE>

          "SEC" means the Securities and Exchange Commission or any successor
thereto.

          "SECURITIES" means any stock, shares, partnership interests,
membership interests, voting trust certificates, bonds, debentures, options,
warrants, notes, or other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or in general any instruments commonly
known as "securities" or any certificates of interest, shares or participation
in temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.

          "SECURITIES ACT" means the Securities Act of 1933, as amended. 

          "SECURITY AGREEMENTS" means, collectively, the Security Agreements
executed by the Borrower and any Subsidiary of the Borrower pursuant to Section
6.14, each substantially in the form of Exhibit 9A, except for such changes
therein as shall have been approved by the Administrative Agent as the same may
after its execution be amended, supplemented or otherwise modified from time to
time in accordance with the terms thereof and hereof.

          "SECURITY DOCUMENTS" means each of the Security Agreements, the
Landlord Certification and Waivers, any mortgages, deeds of trust or leasehold
mortgages granting a security interest in favor of the Administrative Agent (or
other agent for the Banks) in any Real Property of any Credit Party, the
Trademark Security Agreement and any other documents (including UCC financing
statements) utilized to pledge or perfect a security interest in any other
property or assets of whatever kind or nature as Collateral for the Obligations.

          "SELLER NOTE" is defined in Section 7.07(e).

          "SELLERS" is defined in the preamble to this Agreement.

          "SENIOR MANAGERS" means, collectively, Michael F. Vukelich and Jerry
L. Halamuda.

          "SENIOR OFFICER" means any of the chief executive officer, president,
chief financial officer, controller, chief accounting officer, chief operating
officer, treasurer or any vice president of the Borrower.

          "SENIOR SUBORDINATED LENDERS" means the holders of the Senior
Subordinated Notes.

          "SENIOR SUBORDINATED NOTES" means, up to $85 million in aggregate
principal amount of Senior Subordinated Notes due 2007 of the Borrower issued in
the Public Financing.


                                      -122-

<PAGE>

          "SPECIFIED COLLATERAL PERFECTION ACTIONS" is defined in Section 6.18
of the Original Credit Agreement.

          "STANDBY LETTER OF CREDIT" means any standby letter of credit or
similar instrument issued for the purpose of supporting (i) workers'
compensation liabilities of the Borrower or any of its Subsidiaries, (ii) the
obligations of third-party insurers of the Borrower or any of its Subsidiaries
arising by virtue of the laws of any jurisdiction requiring third-party insurers
to obtain such letters of credit, or (iii) performance, payment, deposit or
surety obligations of the Borrower or any of its Subsidiaries, including with
respect to the obligations of Borrower to third party vendors, if required by
law or governmental rule or regulation or in accordance with custom and practice
in the industry.

          "STATE AND LOCAL REAL PROPERTY DISCLOSURE REQUIREMENTS" means any
state or local laws requiring notification of the buyer of real property, or
notification, registration, or filing to or with any state or local agency,
prior to the sale of any real property or transfer of control of an
establishment, of the actual or threatened presence or release into the
environment, or the use, disposal, or handling of Hazardous Materials on, at,
under, or near the real property to be sold or the establishment for which
control is to be transferred.

          "STOCKHOLDERS AGREEMENT" means the Stockholders Agreement dated as of
December 31, 1996 among Holdings, KCSN, Heller and the Management Stockholders,
as amended as of the Effective Date.

          "SUBJECT SECURITIES" has the meaning provided in the Stock Repurchase
Agreement.

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

          "SUBSIDIARY GUARANTEE" means the guarantee of the Borrower's
Obligations hereunder to be executed by each Restricted Subsidiary of the
Borrower, in the form attached hereto as Exhibit 9B.

          "SUPPLEMENTAL LOAN COMMITMENT" means, with respect to each Bank, the
amount set forth below such Bank's name on Schedule A hereto directly below the
column entitled "Supplemental Loan", as same may be reduced from time to time
pursuant to Sections 2.01, 3.03 and/or 8.


                                      -123-

<PAGE>

          "SUPPLEMENTAL PORTION" means, at any time, the portion of the Loan
Facility evidenced by the Total Supplemental Loan Commitment.

          "SUPPLEMENTAL REVOLVING LOAN" is defined in Section 1.01(c).

          "SUPPLEMENTAL REVOLVING LOAN COMMITMENT" means, as of any date, with
respect to each Bank, such Bank's Supplemental Loan Commitment, less (i) the
aggregate principal amount of Supplemental Term Loans then outstanding.

          "SUPPLEMENTAL REVOLVING LOAN COMMITMENT TERMINATION DATE" means the
Business Day immediately preceding the Supplemental Revolving Loan Maturity
Date.

          "SUPPLEMENTAL REVOLVING LOAN MATURITY DATE" means the last Business
Day of December, 2002

          "SUPPLEMENTAL REVOLVING NOTE" is defined in Section 1.05(a)(iii).

          "SUPPLEMENTAL TERM LOAN" is defined in Section 1.01(c).

          "SUPPLEMENTAL TERM LOAN CLOSING DATE" is defined in Section 1.01(d).

          "SUPPLEMENTAL TERM LOAN COMMITMENT" means, as of any date, with
respect to each Bank, such Bank's Supplemental Loan Commitment, less (i) the
aggregate principal amount of Supplemental Revolving Loans then outstanding and
(ii) the then outstanding Letters of Credit Usage related to the Supplemental
Portion of the Credit Facility.

          "SUPPLEMENTAL TERM LOAN COMMITMENT TERMINATION DATE" means the last
Business Day of December, 2001.

          "SUPPLEMENTAL TERM LOAN MATURITY DATE" means the last Business Day of
December, 2004.

          "SUPPLEMENTAL TERM NOTE" is defined in Section 1.05(a)(iv).

          "TARGET" is defined in the preamble to this Agreement.

          "TAXES" means all taxes, levies, imposts, duties or other charges of
whatsoever nature imposed by any Governmental Authority, together with interest,
penalties and expenses payable or incurred in connection therewith, except that
such term shall not refer to any of the following:  

          (a)  any taxes imposed by the United States or any political
     subdivision thereof on the effectively connected net income of any Bank or
     any franchise taxes imposed by any such jurisdiction;


                                      -124-

<PAGE>

          (b)  taxes imposed on the net income of, or franchise taxes imposed
     upon, any Bank by the jurisdiction under the laws of which such Bank is
     organized or by any political subdivision thereof;

          (c)  taxes imposed on the net income of such Bank's lending office,
     and franchise taxes imposed on it, by the jurisdiction of such Bank's
     lending office, or any political subdivision thereof;

          (d)  any taxes imposed on any Bank by Section 884(a) of the Code (and
     any successor statute to Section 884(a)); and 

          (e)  any United States withholding tax payable with respect to any
     payments to such Bank under the laws (including, without limitation, any
     treaty, ruling, judicial or administrative determination or regulation) in
     effect on the Initial Date or as a result of the Bank's having voluntarily
     changed the jurisdiction of its lending office from a jurisdiction in which
     payments made to such Bank are exempt from United States withholding tax to
     a jurisdiction in which such payments are not so exempt; PROVIDED, HOWEVER,
     that the term "Taxes" shall include any United States withholding tax
     payable or increased as a result of any change in any law, treaty, ruling,
     judicial or administrative determination or regulation occurring after the
     Initial Date. 

          "TERMINATION EVENT" means (a) a "reportable event" described in
Section 4043 of ERISA or in the regulations thereunder (excluding events for
which the requirement for notice of such reportable event has been waived by the
PBGC) with respect to a Title IV Plan, or (b) the withdrawal of the Borrower or
any of its ERISA Affiliates from a Title IV Plan during a plan year in which it
was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, or (c)
the filing of a notice of intent to terminate a Title IV Plan or the treatment
of a Title IV Plan amendment as a termination under Section 4041 of ERISA, or
(d) the institution of proceedings by the PBGC to terminate a Title IV Plan or
to appoint a trustee to administer a Title IV Plan, or (e) any other event or
condition which might constitute reasonable and probable grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Title IV Plan, or (f) the complete or partial withdrawal (within
the meaning of Sections 4203 and 4205, respectively, of ERISA) of the Borrower
or any of its ERISA Affiliates from a Multiemployer Plan, or (g) the insolvency
or reorganization (within the meaning of Sections 4245 and 4241, respectively,
of ERISA) or termination of any Multiemployer Plan. 

          "TEST PERIOD" means, for any specified date, the shorter of (x) the
four consecutive complete calendar quarters last ended or (y) the period of all
complete calendar quarters since the Effective Date.

          "TITLE IV PLAN" means any plan (other than a Multiemployer Plan)
described in Section 4021(a) of ERISA, and not excluded under Section 4021(b) of
ERISA, which is or has 


                                      -125-

<PAGE>

been maintained by, or to which contributions are or have been made by, 
Borrower or any of its ERISA Affiliates.

          "TOTAL ACQUISITION TERM LOAN COMMITMENT" means the sum of the
Acquisition Term Loan Commitments of each of the Banks.

          "TOTAL ACQUISITION UTILIZATION" means, at any date of determination,
the sum of the aggregate principal amount of all Acquisition Term Loans then
outstanding. 

          "TOTAL COMMITMENTS" means the sum of (a) the Total Revolving Loan
Commitments, (b) Total Acquisition Term Loan Commitments and (c) the Total
Supplemental Loan Commitment.

          "TOTAL REVOLVER UTILIZATION" means, at any date of determination, the
sum of the aggregate principal amount of all Revolving Loans then outstanding
and all outstanding Letters of Credit issued under the Revolving Portion.

          "TOTAL REVOLVING LOAN COMMITMENT" means the sum of the Revolving Loan
Commitments of each of the Banks.

          "TOTAL SUPPLEMENTAL LOAN COMMITMENT" means the sum of the Supplemental
Loan Commitments of each of the Banks.

          "TOTAL SUPPLEMENTAL REVOLVING LOAN COMMITMENT" means the sum of the
Supplemental Revolving Loan Commitments of each by the Banks.

          "TOTAL SUPPLEMENTAL TERM LOAN COMMITMENT" means the sum of the
Supplemental Revolving Loan Commitments of each of the Banks.

          "TOTAL SUPPLEMENTAL UTILIZATION" means, at any date of determination,
the sum of the aggregate principal amount of all Supplemental Revolving Loans,
all Supplemental Term Loans then outstanding and all outstanding Letters of
Credit issued under the Supplemental Portion. 

          "TRADEMARK SECURITY AGREEMENT" means the trademark security agreement
substantially in the form of Exhibit 10C.  

          "TYPE" of Loan means a Base Rate Loan or Reserve Adjusted Eurodollar
Loan.

          "UCC" means the Uniform Commercial Code as in effect in the State of
New York.

          "UCP" is defined in Section 1.13(k).


                                      -126-

<PAGE>

     "UNRESTRICTED SUBSIDIARY" of any Person means any Subsidiary of such Person
that at the time of determination shall have been and shall continue to be
designated an Unrestricted Subsidiary.  The Board of Directors of the Borrower
may, with the consent of the Administrative Agent, designate any Subsidiary
(including any newly acquired or newly formed Subsidiary) which meets the
Unrestricted Subsidiary Conditions to be an Unrestricted Subsidiary; provided,
however, (x) the Administrative Agent may require that all or any portion of the
outstanding Revolving Loans, Acquisition Term Loans, Supplemental Revolving
Loans or Supplemental Term Loans be repaid in accordance with Section 3.03(j)
and/or that any or all of the Total Revolving Loan Commitment, Total Acquisition
Term Loan Commitment or Total Supplemental Loan Commitment be reduced by an
amount determined in the sole discretion of the Administrative Agent in view of
the reduction in revenue producing assets held by the Borrower and its
Restricted Subsidiaries and the corresponding reduction in Collateral caused by
the designation of such Unrestricted Subsidiary. 


     "UNRESTRICTED SUBSIDIARY CONDITIONS"  means the following:

     1.   the relevant Unrestricted Subsidiary holds regular meetings of its
          shareholder(s) and directors, keeps minutes of those meetings, elects
          officers and observes all the formalities necessary to reflect its
          status as a separate independent corporation;

     2.   the day to day affairs of the relevant Unrestricted Subsidiary are
          administered by its officers, subject to the direction of its
          directors;

     3.   the directors, management group and employees of the relevant
          Unrestricted Subsidiary are different from the directors and
          management group of the Borrower and its Restricted Subsidiaries;

     4.   the relevant Unrestricted Subsidiary maintains a separate bank account
          and separate books from the Borrower and its Restricted Subsidiaries;

     5.   the relevant Unrestricted Subsidiary maintains its own billing and
          receivables processes separate from those of the Borrower and its
          Restricted Subsidiaries;

     6.   the relevant Unrestricted Subsidiary has its own financial reporting
          system separate from the Borrower and its Restricted Subsidiaries and
          its financial statements do not include the assets or liabilities of
          the Borrower or its Restricted Subsidiaries;

     7.   the creditors of the relevant Unrestricted Subsidiary do not extend
          credit to the Unrestricted Subsidiary on the basis of the financial
          condition of the Borrower and/or its Restricted Subsidiaries and any
          credit extended to such Unrestricted 


                                      -127-

<PAGE>

          Subsidiary is based solely on the assets and liabilities of the 
          Unrestricted Subsidiary;

     8.   none of the Borrower or any of its Restricted Subsidiaries guarantee
          or provide collateral for any obligation of the Unrestricted
          Subsidiary and the Unrestricted Subsidiary does not guarantee or
          provide collateral for any obligation of the Borrower or any of its
          Restricted Subsidiaries;

     9.   the relevant Unrestricted Subsidiary has its own headquarters separate
          from that of the Borrower and its Restricted Subsidiaries;

     10.  there are no loans, advances or other indebtedness between the
          Unrestricted Subsidiary and any of the Borrower or its Restricted
          Subsidiaries;

     11.  the Unrestricted Subsidiary maintains a separate business from the
          Borrower and its Restricted Subsidiaries and its assets and
          liabilities are segregated from those of the Borrower and its
          Restricted Subsidiaries; and

     12.  the Unrestricted Subsidiary is either a separate taxable entity from
          the Borrower and its Restricted Subsidiaries (for local, state,
          federal and all other purposes) or shall have entered into a tax
          sharing agreement with the Borrower and its Restricted Subsidiaries in
          a form satisfactory to the Administrative Agent.

          "UNUTILIZED ACQUISITION COMMITMENT" for any Bank at any time, means on
and after the Closing Date, the amount by which the sum of Acquisition Term Loan
Commitment of such Bank exceeds its portion of the Total Acquisition
Utilization. 

          "UNUTILIZED REVOLVER COMMITMENT" for any Bank at any time means, on
and after the Closing Date, the amount by which the sum of the Revolving Loan
Commitment of such Bank exceeds its portion of the Total Revolver Utilization.

          "UNUTILIZED SUPPLEMENTAL COMMITMENT" for any Bank at any time means,
on and after the Closing Date, the amount by which the Supplemental Loan
Commitment of such Bank exceeds the portion of the Total Supplemental
Utilization.

          "WHOLLY OWNED SUBSIDIARY" of any Person shall mean any Subsidiary of
such Person to the extent all of the capital stock or other ownership interests
in such Subsidiary, other than directors' or nominees' qualifying shares, is
owned directly or indirectly by such Person.

          "WRITTEN" or "IN WRITING" means any form of written communication or a
communication by means of telex, telecopier device, telegraph or cable.

     SECTION 10.  THE AGENT.


                                      -128-

<PAGE>

     10.01.  APPOINTMENT.  Each Bank hereby irrevocably designates and appoints
Indosuez as Administrative Agent, IBJS as Syndication Agent, and BKOB as
Documentation Agent of such Bank to act as specified herein and in the other
Credit Documents and each such Bank hereby irrevocably authorizes the Agents to
take such action on its behalf under the provisions of this Agreement and the
other Credit Documents and to exercise such powers and perform such duties as
are expressly delegated to the Agents by the terms of this Agreement and the
other Credit Documents, together with such other powers as are reasonably
incidental thereto.  The Agents agrees to act as such upon the express
conditions contained in this Section 10.  Notwithstanding any provision to the
contrary elsewhere in this Agreement, the Agents shall not have any duties or
responsibilities, except those expressly set forth herein or in the other Credit
Documents, or any fiduciary relationship with any Bank, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against either Agent.  The
provisions of this Section 10 are solely for the benefit of the Agents and the
Banks, and no Credit Party shall have any rights as a third party beneficiary of
any of the provisions hereof.  In performing its functions and duties under this
Agreement, each Agent shall act solely as an Agent of the Banks and does not
assume and shall not be deemed to have assumed any obligation or relationship of
agency or trust with or for any Credit Party.

     10.02.  DELEGATION OF DUTIES.  The Agents may each execute any of its
duties under this Agreement or any other Credit Document by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties.  Neither Agent shall not be responsible for
the negligence or misconduct of any agents or attorneys-in-fact selected by it
with reasonable care except to the extent otherwise required by Section 10.03.

     10.03.  EXCULPATORY PROVISIONS.  Neither Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates shall be (a)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement (except for its or such Person's own
gross negligence or willful misconduct) or (b) responsible in any manner to any
of the Banks for any recitals, statements, representations or warranties by any
of the Credit Parties or their respective officers contained in this Agreement,
any other Transaction Document or any Public Financing Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by each Agent under or in connection with, this Agreement or any
other Transaction Document or any Public Financing Document or for any failure
of any of the Credit Parties or their respective officers to perform its
obligations hereunder or thereunder.  The Administrative Agent shall not be
under any obligation to any Bank to ascertain or to inquire as to the observance
or performance of any of the agreements contained in, or conditions of, this
Agreement, or to inspect the properties, books or records of any Credit Party. 
Neither Agent shall be responsible to any Bank for the effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of this
Agreement or any Credit Document or for any representations, warranties,
recitals or statements made herein or therein or made in any written or oral
statement or in any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith or therewith
furnished or 


                                      -129-
<PAGE>

made by such Agent to the Banks or by or on behalf of any Credit Party to 
such Agent or any Bank or be required to ascertain or inquire as to the 
performance or observance of any of the terms, conditions, provisions, 
covenants or agreements contained herein or therein or as to the use of the 
proceeds of the Loans or of the existence or possible existence of any 
Default or Event of Default.

     10.04.  RELIANCE BY THE AGENT.  Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Credit Parties), independent accountants and other
experts selected by the Administrative Agent.  Each Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Credit Document unless it shall first receive such advice or concurrence
of the Required Banks as it deems appropriate or it shall first be indemnified
to its satisfaction by the Banks against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
Each Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement and the other Credit Documents in accordance
with a request of the Required Banks (or to the extent specifically provided in
Section 11.11, all the Banks), and such request and any action taken or failure
to act pursuant thereto shall be binding upon all the Banks.

     10.05.  NOTICE OF DEFAULT.  Neither Agent shall be deemed to have knowledge
of the occurrence of any Default or Event of Default, other than a default in
the payment of principal or interest on the Loans hereunder unless it has
received notice from a Bank or any Credit Party referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default".  In the event that the Administrative Agent receives such a
notice, the Agent shall give prompt notice thereof to the Banks.  The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Banks;
PROVIDED, HOWEVER, that, unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Banks.

     10.06.  NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER BANKS.  Each Bank
expressly acknowledges that neither Agent nor any officers, directors,
employees, agents, attorneys-in-fact or affiliates of such Agent have made any
representations or warranties to it and that no act by such Agent hereinafter
taken, including any review of the affairs of any Credit Party, shall be deemed
to constitute any representation or warranty by such Agent to any Bank.  Each
Bank represents to each Agent that it has, independently and without reliance
upon such Agent or any other Bank, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, assets, operations, property, financial and other conditions,
prospects and creditworthiness of the Credit Parties and made its own 


                                   -130-

<PAGE>

decision to make its Loans hereunder and enter into this Agreement and the 
other agreements contemplated hereby.  Each Bank also represents that it 
will, independently and without reliance upon either Agent or any other Bank, 
and based on such documents and information as it shall deem appropriate at 
the time, continue to make its own credit analysis, appraisals and decisions 
in taking or not taking action under this Agreement, and to make such 
investigation as it deems necessary to inform itself as to the business, 
assets, operations, property, financial and other conditions, prospects and 
creditworthiness of the Credit Parties. Except for notices, reports and other 
documents expressly required to be furnished to the Banks by the 
Administrative Agent hereunder, neither Agent shall have any duty or 
responsibility to provide any Bank with any credit or other information 
concerning the business, operations, assets, property, financial and other 
conditions, prospects or creditworthiness of any Credit Party which may come 
into the possession of either such Agent or any of its officers, directors, 
employees, agents, attorneys-in-fact or affiliates.

     10.07.  INDEMNIFICATION.  The Banks agree to indemnify each Agent in its
capacity as such or in any other representative capacity under any other Credit
Document ratably according to the sum of their aggregate Commitments and Loans,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, reasonable expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Obligations) be imposed on,
incurred by or asserted against either Agent in its capacity as such, in any way
relating to or arising out of this Agreement or any other Credit Document, or
any documents contemplated by or referred to herein or the transactions
contemplated hereby or any action taken or omitted to be taken by either or both
of the Agents under or in connection with any of the foregoing, but only to the
extent that any of the foregoing is not paid by any Credit Party; PROVIDED,
HOWEVER, that no Bank shall be liable to either Agent for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from any
such Agent's gross negligence or willful misconduct.  If any indemnity furnished
to either Agent for any purpose shall, in the opinion of such Agent, be
insufficient or become impaired, either Agent may call for additional indemnity
and cease, or not commence, to do the acts indemnified against until such
additional indemnity is furnished.  The agreements in this Section 10.07 shall
survive the payment of all Obligations.

     10.08.  THE AGENTS IN THEIR INDIVIDUAL CAPACITIES.  The Agents and their
respective Affiliates may make loans to, accept deposits from and generally
engage in any kind of business with any Credit Party and any Affiliate of any
Credit Party as though such Agent were not an Agent hereunder.  With respect to
the Loans made by it and all Obligations owing to it, such Agent shall have the
same rights and powers under this Agreement as any Bank and may exercise the
same as though it were not an Agent, and the terms "Bank" and "Banks" shall
include each Agent in its individual capacity.

     10.09.  SUCCESSOR AGENT.  Upon the acceptance of any appointment as an
Administrative Agent hereunder by a successor Administrative Agent, the term
"Administrative Agent" shall 


                                   -131-

<PAGE>

include such successor Administrative Agent effective upon its appointment, 
and the resigning Administrative Agent's rights, powers and duties as 
Administrative Agent shall be terminated, without any other or further act or 
deed on the part of such former Administrative Agent or any of the parties to 
this Agreement.  After the retiring Administrative Agent's resignation 
hereunder as Administrative Agent, the provisions of this Section 10 shall 
inure to its benefit as to any actions taken or omitted to be taken by it 
while it was Administrative Agent under this Agreement.

     10.10.  RESIGNATION, TRANSFER BY AGENT.

             (a)  The Administrative Agent may resign from the performance of
     all its functions and duties hereunder at any time by giving 30 Business
     Days' prior written notice to the Borrower and the Banks.  Such resignation
     shall take effect upon the acceptance by a successor Administrative Agent
     of appointment pursuant to Sections 10.10(b) and (c) or as otherwise
     provided below.

             (b)  Upon any such notice of resignation of the Administrative
     Agent, the Required Banks shall appoint a successor Administrative Agent
     acceptable to the Borrower and which shall be an incorporated bank or trust
     company or other qualified financial institution with operations in the
     United States and total assets of at least $5 billion.

             (c)  If a successor Administrative Agent shall not have been so
     appointed within said 30 Business Day period, the resigning Administrative
     Agent with the consent of the Borrower shall then appoint a successor
     Administrative Agent (which shall be an incorporated bank or trust company
     or other qualified financial institution with operations in the United
     States and total assets of at least $5 billion) who shall serve as a
     successor Administrative Agent until such time, if any, as the Required
     Banks appoint a successor Administrative Agent as provided above.

             (d)  If no successor Administrative Agent has been appointed
     pursuant to Section 10.10(b) or (c) by the 30th Business Day after the date
     such notice of resignation was given by the resigning Administrative Agent,
     such Administrative Agent's resignation shall become effective and the
     Required Banks shall thereafter perform all the duties of Administrative
     Agent hereunder until such time, if any, as the Required Banks appoint a
     successor Administrative Agent as provided above.

             (e)  Notwithstanding anything to the contrary contained in this
     Section 10, Indosuez, as Administrative Agent, may transfer its rights and
     obligations to perform all of its functions and duties hereunder to its
     parent company or to any Affiliate of it or its parent company.


                                   -132-

<PAGE>

     10.11.  SYNDICATION AGENT AND DOCUMENTATION AGENT.  The Syndication Agent
and Documentation Agent, in such capacity, shall have no obligations, duties or
responsibilities, and shall incur no liabilities, under this Agreement or any
other Credit Document.

     SECTION 11.  MISCELLANEOUS.

     11.01.  PAYMENT OF EXPENSES, ETC.  The Borrower agrees to: (a) whether or
not the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Agents in connection with the
negotiation, preparation, execution, syndication and delivery of the Credit
Documents and the documents and instruments referred to therein (in accordance
with the terms of the letter agreement between the Borrower and Indosuez dated
September 29, 1997), other than any expenses of Indosuez incurred after the
Closing Date solely in its capacity as one of the Banks hereunder, and any
amendment, waiver or consent relating thereto (including, without limitation,
the reasonable fees and disbursements of Ropes & Gray and local counsel to
Indosuez) and of each of the Banks after the occurrence and during the
continuation of an Event of Default in connection with the enforcement of the
Credit Documents and the documents and instruments referred to therein
(including, without limitation, the reasonable fees and disbursements of counsel
for each of the Banks) with prior notice to the Borrower of the engagement of
any counsel, and hold each of the Banks harmless from and against any and all
reasonable fees and expenses of any appraisers or any consultants or other
advisors reasonably engaged by the Administrative Agent; (b) pay and hold each
of the Banks harmless from and against any and all present and future stamp and
other similar taxes with respect to the foregoing matters and save each of the
Banks harmless from and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the extent attributable to
such Bank) to pay such taxes; and (c) indemnify each Agent and each Bank, its
officers, directors, employees, representatives and agents from and hold each of
them harmless against any and all losses, liabilities, claims, damages or
expenses (including, without limitation, any and all losses, liabilities,
claims, damages or expenses arising under Environmental Laws except with regard
to any losses, costs, damages or expenses under Environmental Laws, excluding
such losses, costs, damages or expenses arising from or relating to acts or
omissions occurring after the Administrative Agent or any Bank takes possession
of, uses, operates, manages, controls or sells any Real Property provided,
however, that such exception shall apply only to the extent such losses, costs,
damages or expenses arise solely from the gross negligence, bad faith or willful
misconduct of the applicable Administrative Agent or any Bank or of the agents
of such Administrative Agent or any Bank) incurred by any of them as a result
of, or arising out of, or in any way related to, or by reason of, any
investigation, litigation or other proceeding (whether or not any Bank is a
party thereto) related to the entering into and/or performance of any Credit
Document or the use of the proceeds of any Loans hereunder or the consummation
of any other transactions contemplated in any Credit Document, including,
without limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation, litigation or other proceeding (but
excluding any such losses, liabilities, claims, damages or expenses to the
extent incurred by reason of the gross negligence or willful misconduct of the
Person to be indemnified).


                                   -133-

<PAGE>

     11.02.  RIGHT OF SETOFF.  In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, each Bank is hereby authorized at any time or from time to time,
without presentment, demand, protest or other notice of any kind to any Credit
Party or to any other Person, any such notice being hereby expressly waived, to
set off and to appropriate and apply any and all deposits (general or special)
and any other Indebtedness at any time held or owing by such Bank (including,
without limitation, by branches and agencies of such Bank wherever located) to
or for the credit or the account of any Credit Party against and on account of
the Obligations and liabilities of such Credit Party to such Bank under this
Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations of such Credit Party purchased by such
Bank pursuant to Section 11.06(b), and all other claims of any nature or
description arising out of or connected with this Agreement or any other Credit
Document, irrespective of whether or not such Bank shall have made any demand
hereunder and although said Obligations, liabilities or claims, or any of them,
shall be contingent or unmatured.  Notwithstanding the foregoing, the Banks
shall have no right of setoff as to the Put/Call Funds and shall not seek to
enjoin payments from the Put/Call Funds made pursuant to the Put/Call Option
Agreement or otherwise prevent the Borrower from honoring its obligations
thereunder; PROVIDED that nothing in the foregoing shall be construed to prevent
the Administrative Agent from exercising remedies against the Borrower and the
Borrower generally available under this Agreement or applicable law, including,
without limitation the commencement of a case under the Bankruptcy Code relative
to any Credit Party.

     11.03.  NOTICES.  Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and hand
delivered, telegraphed, telexed, telecopied, cabled or delivered:


                                   -134-

<PAGE>

             (a)  If to the Borrower, to it at: 

                  3478 Buskirk Avenue, Suite 260 
                  Pleasant Hill, CA 94523
                  Attention: President

                  with a copy to each of the following: 

                  Brownstein Hyatt Farber & Strickland, PC
                  410 Seventeenth Street
                  22nd Floor
                  Denver, CO 80202-4437
                  Attention: Steven Siegel, Esq.
                  Fax: (303) 623-1956

                  and

                  Kohlberg & Company, LLC
                  111 Radio Circle
                  Mt. Kisco, NY  10549
                  Attention: Samuel Frieder
                  Fax: (914) 241-7476
             
             (b)  if to any Bank, to it at its address specified on Schedule
     11.03;

             (c)  or, at such other address as shall be designated by any party
     in a written notice to the other parties hereto.

     All such notices and communications shall, when hand delivered,
telegraphed, telexed, telecopied, or cabled or sent by overnight courier, be
effective the following Business Day when delivered to the telegraph company,
cable company or overnight courier, as the case may be, or when transmission is
confirmed, if by telex or telecopier, except that notices and communications to
the Administrative Agent shall not be effective until received by the
Administrative Agent.

     11.04.  BENEFIT OF AGREEMENT.

             (a)  This Agreement shall be binding upon and inure to the benefit
     of and be enforceable by the parties hereto, all future holders of the
     Notes, and their respective successors and assigns; PROVIDED, HOWEVER, that
     the Borrower shall not assign or transfer any of its interests hereunder
     without the prior written consent of the Banks; and PROVIDED, FURTHER, that
     the rights of each Bank to transfer, assign or grant participation in 


                                   -135-

<PAGE>

     its rights and/or obligations hereunder shall be limited as set forth below
     in this Section 11.04; and PROVIDED, FURTHER, that nothing in this Section
     11.04 shall prevent or prohibit any Bank from (i) pledging its Loans
     hereunder to a Federal Reserve Bank in support of borrowings made by such
     Bank from such Federal Reserve Bank and (ii) granting participation in or
     assignments of such Bank's Loans, Notes and/or Commitments hereunder to its
     parent company and/or to any Affiliate of such Bank that is at least 50%
     owned by such Bank or its parent company.

             (b)  Each Bank shall have the right to transfer, assign or grant
     participation in all or any part of its remaining Loans, Notes and/or
     Revolving Loan Commitments hereunder on the basis set forth below in this
     Section 11.04.  Subject to Section 11.04(e), each Bank may furnish any
     information concerning the Borrower or any Subsidiary in the possession of
     such Bank from time to time to assignees and participants (including
     prospective assignees and participants).

             (c)  Each Bank, with the written consent of the Administrative
     Agent, which consent shall not be unreasonably withheld may assign pursuant
     to an Assignment Agreement substantially in the form of Exhibit 11.04(c)
     hereto (the "ASSIGNMENT AGREEMENT") all or a portion of its Loans, Notes,
     Revolving Loan Commitments, Acquisition Term Loan Commitments and/or
     Supplemental Loan Commitments hereunder pursuant to this Section 11.04(c)
     to one or more Eligible Assignees; PROVIDED, HOWEVER, that any assignment
     pursuant to this Section 11.04(c)(i) shall be in a minimum aggregate
     amount, for all Loans and Commitments assigned, of $10,000,000, and (ii)
     shall not result in the Borrower incurring any obligation to pay additional
     amounts as of the time of such assignment pursuant to Section 1.10(e), 1.11
     or 3.05.  Any assignment pursuant to this Section 11.04(c) will become
     effective five Business Days after the Administrative Agent's receipt of
     (i) a written notice in the form of Exhibit 11.04(c) executed by the
     assigning Bank and the Eligible Assignee, and (ii) a processing and
     recordation fee of $2,500 from the assigning Bank in connection with the
     Administrative Agent's recording of such sale, assignment, transfer or
     negotiation; PROVIDED, HOWEVER, that such fee shall only be payable if the
     assignment is between a Bank and an Eligible Assignee that is not a Bank
     prior to the assignment.  Such assignment shall be recorded by the
     Administrative Agent in the Register.  The Borrower shall issue new Notes
     to the assignee Bank or Eligible Assignee, as the case may be, in
     conformity with Section 1.05 and the assignor shall return the old Notes to
     the Borrower.  Upon the effectiveness of any assignment in accordance with
     this Section 11.04(c), the assignee, if not a Bank, will become a "Bank"
     for all purposes of this Agreement and the other Credit Documents and, to
     the extent of such assignment, the assigning Bank shall be relieved of its
     obligations hereunder with respect to the Commitments being assigned.  The
     Administrative Agent shall maintain at its address specified in Exhibit
     11.03 a copy of each Assignment Agreement delivered to and accepted by it
     and a register in which it shall record the names and addresses of the
     Banks and the Commitments of, and principal amount of the Loans owing to,
     each Bank from time to time (the "REGISTER").


                                   -136-
<PAGE>

     The entries in the Register shall be conclusive and binding for all 
     purposes, absent demonstrable error, and the Borrower, the Administrative
     Agent and the Banks may treat each Person whose name is recorded in the 
     Register as a Bank hereunder for all purposes of this Agreement.  The 
     Register shall be available for inspection by the Borrower, the 
     Administrative Agent or any Bank at any reasonable time and from time to
     time upon reasonable prior notice.

             (d)  Each Bank may transfer, grant or assign participation in all
     or any part of such Bank's Loans, Notes and/or Commitments hereunder
     pursuant to this Section 11.04(d) to any Person; PROVIDED, HOWEVER, that
     (i) such Bank shall remain a "Bank" for all purposes of this Agreement and
     the transferee of such participation shall not constitute a Bank hereunder
     and (ii) no participant under any such participation shall have rights to
     approve any amendment to or waiver of this Agreement or any other Credit
     Document except to the extent such amendment or waiver would (A) change the
     scheduled final maturity date of any of the Loans, Notes, Revolving Loan
     Commitments, Acquisition Term Loan Commitments or Supplemental Loan
     Commitments in which such participant is participating or (B) reduce the
     principal amount, interest rate or fees applicable to any of the Loans,
     Notes or Revolving Loan Commitments in which such participant is
     participating or postpone the payment of any interest or fees or (C)
     release all or substantially all of the Collateral and PROVIDED, FURTHER,
     that any participation pursuant to this Section 11.04(d) shall not result
     in the Borrower paying additional amounts as of the time of such
     participation pursuant to Section 1.10(e), 1.11 or 3.05.  In the case of
     any such participation, the participant shall not have any rights under
     this Agreement or any of the other Credit Documents (the participant's
     rights against the granting Bank in respect of such participation to be
     those set forth in the agreement with such Bank creating such
     participation) and all amounts payable by the Borrower hereunder shall be
     determined as if such Bank had not sold such participation; PROVIDED,
     HOWEVER, that such participant shall be considered to be a "Bank" for
     purposes of Sections 11.02 and 11.06(b).

             (e)  The Agents and the Banks agree to keep confidential (and to
     cause their respective officers, directors, employees, agents,
     representatives and counsel to keep confidential) all information,
     materials and documents furnished by any Credit Party to the Agents or any
     Bank (the "INFORMATION").  Notwithstanding the foregoing the Agents and
     each Bank shall be permitted to disclose Information (i) to such of its
     officers, directors, employees, agents, representatives and counsel as need
     to know such Information in connection with its participation in any of the
     transactions contemplated hereby or the administration of this Agreement;
     (ii) to the extent required by applicable laws and regulations or by any
     subpoena or similar legal process, or requested by any governmental agency
     or authority; (iii) to the extent such Information (A) becomes publicly
     available other than as a result of a breach of this Agreement or any other
     confidentiality agreement with respect thereto, (B) becomes available to
     such Agent or such Bank on a non-confidential basis from a source other
     than the Borrower or its 


                                   -137-

<PAGE>

     Subsidiaries, officers, directors, employees, agents or representatives 
     or (C) was available to such Agent or such Bank on a non-confidential 
     basis prior to its disclosure to the Agent or such Bank by the Borrower or
     any of its Subsidiaries; (iv) to the extent the Borrower or any of its 
     Subsidiaries shall have consented to such disclosure in writing; (v) in 
     connection with the sale of any Collateral pursuant to the provisions of 
     any of the Security Documents; (vi) in connection with any litigation or 
     claim concerning enforcement of the Obligations or arising under this 
     Agreement or any Credit Document or any related agreement; or (vii) 
     pursuant to Section 11.04(b); PROVIDED, HOWEVER, that prior to any such 
     disclosure under Section 11.04(b), each prospective Eligible Assignee or 
     participant shall enter into a written agreement with the assigning or 
     selling Bank to preserve the confidentiality of any Information to the 
     extent set forth in this Section 11.04(e).

             (f)  If the Borrower shall: (i) as a result of the requirements of
     Section 1.01(b) or 1.11 of this Agreement, be required to pay to any Bank
     the additional amounts referred to in such Sections at any time when all of
     the Banks have not requested payment of such amounts; (ii) as a result of
     the requirements of Section 3.07, be required to pay any Bank the Taxes
     referred to in Section 3.07, or (iii) as a result of the failure of any
     Bank to make available to the Administrative Agent such Bank's ratable
     portion of any Borrowing, be required to repay to the Administrative Agent
     such corresponding amount pursuant to Section 1.04(b), then, in each such
     case, (A) the Borrower shall be entitled to designate an Eligible Assignee
     to replace such Bank, (B) such Bank shall execute and deliver to such
     Eligible Assignee an Assignment Agreement with respect to such Bank's
     entire interest under this Agreement and the Notes, and (C) upon the
     execution by such Eligible Assignee of such Assignment Agreement and
     compliance with the requirements of Section 11.04(c), such Eligible
     Assignee shall succeed to all of such Bank's rights and duties under this
     Agreement; PROVIDED, HOWEVER, that notwithstanding anything to the contrary
     in this Agreement, the Borrower shall be responsible to pay any and all
     out-of-pocket expenses of any Bank replaced by the Borrower pursuant to
     this Section 11.04(f) or of the Administrative Agent incurred by such Bank
     or by the Administrative Agent, in either case incurred in connection with
     the Borrower's replacement of any Bank pursuant to this Section 11.04(f). 

     11.05.  NO WAIVER; REMEDIES CUMULATIVE.  No failure or delay on the part of
the Administrative Agent or any Bank in exercising any right, power or privilege
hereunder or under any other Credit Document and no course of dealing between
any Credit Party and any Administrative Agent or any Bank shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power, or
privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder.  The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which any Administrative
Agent or any Bank would otherwise have.  No notice to or demand on any Credit
Party in any case shall entitle any Credit Party to any other or further notice
or demand in similar or other circum-


                                   -138-

<PAGE>

stances or constitute a waiver of the rights of any Administrative Agent or 
the Banks to any other or further action in any circumstances without notice 
or demand.

     11.06.  PAYMENTS PRO RATA.

             (a)  The Administrative Agent agrees that promptly after its
     receipt of each payment from or on behalf of any Credit Party in respect of
     any Obligations of such Credit Party, it shall distribute such payment to
     the Banks pro rata based upon their respective shares, if any, of the
     Obligations with respect to which such payment was received and in
     accordance with the provisions hereof as to the application of prepayments.

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

     11.07.  CALCULATIONS; COMPUTATIONS.  Unless otherwise indicated, all
computations of interest and fees hereunder shall be made on the actual number
of days elapsed over a year of 365 days; PROVIDED, HOWEVER, that all
computations of Reserve Adjusted Eurodollar Loans and Commitment Fees shall be
made on the actual number of days elapsed over a year of 360 days.

     11.08.  GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; SERVICE OF
PROCESS.

             (a)  This Agreement and the rights and obligations of the parties
     hereunder shall be construed and enforced in accordance with and be
     governed by the laws of the State of New York applicable to contracts made
     and to be performed wholly therein, without giving effect to principles of
     conflicts of law.  Any legal action or proceeding with respect to this
     Agreement or any other Credit Document may be brought in the courts of the
     State of New York or the United States for the Southern District of New
     York, and, by execution and delivery of this Agreement, each Credit Party
     hereby irrevocably accepts for itself and in respect of its property,
     generally and unconditionally, the non-exclusive jurisdiction of the
     aforesaid courts.  Each Credit Party designates and appoints 


                                   -139-

<PAGE>

     CT Corporation System, with an address at 1633 Broadway, New York, New York
     10019 and such other persons as may hereafter be selected by the Credit 
     Parties and shall irrevocably agree in writing to so serve, as their 
     administrative agent to receive on their behalf, service of all process 
     in any such proceedings in any such court, such service being hereby 
     acknowledged by each Credit Party to be effective and binding service in 
     every respect.  A copy of such process so served shall be mailed by 
     registered mail to any Credit Parties at the address provided for the 
     Borrower in Section 11.03 of this Agreement except that unless otherwise
     provided by applicable law, any failure to mail such copy shall not affect
     the validity of service of process.  If any agent appointed by the Credit
     Parties refuses to accept service, the Credit Parties hereby agree that 
     service upon them by mail shall constitute sufficient notice.  Nothing 
     herein shall affect the right to serve process in any other manner 
     permitted by law or shall limit the right of the Administrative Agent to 
     bring proceedings against any Credit Party in the courts of any other 
     jurisdiction.

             (b)  Each party hereto hereby irrevocably waives any objection
     which it may now or hereafter have to the laying of venue of any of the
     aforesaid actions or proceedings arising out of or in connection with this
     Agreement or any other Credit Document brought in the courts referred to in
     Section 11.08(a) and hereby further irrevocably waives and agrees not to
     plead or claim in any such court that any such action or proceeding brought
     in any such court has been brought in an inconvenient forum.

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

     11.10.  HEADINGS DESCRIPTIVE.  The headings of the several Sections and
Subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.

     11.11.  AMENDMENT OR WAIVER.  Neither this Agreement nor any other Credit
Document nor any terms hereof or thereof may be changed, waived, discharged or
terminated unless such change, waiver, discharge or termination is in writing
signed by the Required Banks; PROVIDED, HOWEVER, that no such change, waiver,
discharge or termination shall, without the consent of each affected Bank and
the Administrative Agent, (a) extend the scheduled final maturity date of any
Loan, or any portion thereof, or reduce the rate or extend the time of payment
of interest thereon or fees or reduce the principal amount thereof, or increase
the Commitments of any Bank over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default or of a mandatory
reduction in the Total Commitment shall not constitute a change in the terms of
any Commitment of any Bank), (b) release all or substantially all of the
Collateral (except as expressly permitted by the Credit Documents), (c) amend,
modify or waive 


                                   -140-

<PAGE>

any provision of this Section, or Section 1.10, 1.11, 3.05, 8, 10.07, 11.01, 
11.02, 11.04, 11.06, 11.07 or 11.12, (d) reduce any percentage specified in, 
or otherwise modify, the definition of Required Banks or (e) consent to the 
assignment or transfer by any Credit Party of any of its rights and 
obligations under this Agreement.  No provision of Section 11 may be amended 
without the consent of the Administrative Agent.

     11.12.  SURVIVAL.  All indemnities set forth herein including, without
limitation, in Section 1.11, 3.05, 9.07 or 11.01 shall survive the execution and
delivery of this Agreement and the making of the Loans, the repayment of the
Obligations and the termination of the Total Commitments.

     11.13.  DOMICILE OF LOANS.  Each Bank may transfer and carry its Loans at,
to or for the account of any branch office, subsidiary or Affiliate of such
Bank; PROVIDED, HOWEVER, that any such transfer shall not result in the Borrower
paying additional amounts as of the time of such transfer pursuant to any
provision of any Credit Document.

     11.14.  WAIVER OF JURY TRIAL.  Each of the parties to this Agreement hereby
irrevocably waives all rights to a trial by jury in any action, proceeding or
counterclaim arising out of or relating to this Agreement or the other Credit
Documents or the transactions contemplated hereby or thereby.

     11.15.  INDEPENDENCE OF COVENANTS.  All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or be otherwise within the limitation of, another covenant shall not avoid
the occurrence of a Default or an Event of Default if such action is taken or
condition exists.

     11.16.  REINSTATEMENT.  If, at any time, all or part of any payment of the
Obligations made by the Borrower is rescinded or otherwise must be returned by
any Bank or the Administrative Agent for any reason whatsoever (including the
insolvency, bankruptcy or reorganization of the Borrower), this Agreement shall
be reinstated as to the Obligations which were satisfied by the payment to be
rescinded or returned, all as though such payment had not been made.


                                   -141-

<PAGE>

                                       [Amended and Restated Credit Agreement]


     IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Agreement to be duly executed and delivered as of the date first above
written.

                         COLOR SPOT NURSERIES, INC.


                         By: /s/ Karla D. Vukelich
                            -------------------------------
                              Name:
                              Title:

                         CREDIT AGRICOLE INDOSUEZ
                         (formerly Banque Indosuez,
                         New York Branch)
                         as a Bank and as Administrative Agent


                         By: /s/ Kenneth Kencel
                            -------------------------------
                              Name:  Kenneth J. Kencel
                              Title: First Vice President

                         By: /s/ Patricia Fizanel
                            -------------------------------
                              Name:  Patricia Fizanel
                              Title: First Vice President

                         IBJ SCHRODER BANK & TRUST COMPANY,
                           as a Bank and as Syndication Agent

                         By: /s/ Mary McLaughlin
                            -------------------------------
                              Name:  Mary McLaughlin
                              Title: Vice President

                         BANKBOSTON, N.A.
                           as a Bank and as Documentation Agent


                         By: /s/ Timothy M. Barns
                            -------------------------------
                              Name:  Timothy M. Barns
                              Title: Division Executive

                         FIRST SOURCE FINANCIAL LLP,
                         an Illinois registered limited liability partnership
                         By:  First Source Financial, Inc., its manager


                         By: /s/ Gary L. Francis
                            -------------------------------
                             Name:  Gary L. Francis
                             Title: Senior Vice President

<PAGE>

                         CREDITANSTALT-BANKVEREIN


                         By /s/ Patrick J. Rounds
                           ----------------------------
                             Name:  Patrick J. Rounds
                             Title: Vice President


                         By /s/ Dennis O'Dowd
                           -----------------------------
                             Name:  Dennis O'Dowd
                             Title: Chief Executive Officer

                              THE ING CAPITAL SENIOR SECURED
                              HIGH INCOME FUND, L.P.

                              By ING Capital Advisors, Inc.
                               as Investment Advisor


                              By: /s/ [ILLEGIBLE]
                                 ---------------------------
                                 Name:
                                 Title:

                              COMMERCIAL LOAN FUNDING
                                     TRUST I

                              By:  Lehman Commercial Paper, Inc.,
                                        not in its individual capacity but as
                                        Administrative Agent


                              By: /s/ Michele Swenson
                                 -------------------------------
                               Name:  Michele Swenson
                               Title: Authorized Signatory

                                     -143-
<PAGE>

                              ING HIGH INCOME PRINCIPAL
                              PRESERVATION OFFERING, L.P.

                              By: ING Capital Advisers, Inc.,
                                    its Investment Advisor


                              By: /s/ [ILLEGIBLE]
                                 ---------------------------
                                 Name:
                                 Title:




                    Total Revolving Loan Commitment:        $40,000,000
                    Total Acquisition Term Loan Commitment: $75,000,000
                    Total Supplemental Loan Commitment:     $35,000,000

                                     -144-
<PAGE>

                                                                  SCHEDULE A

                                    LIST OF BANKS

Credit Agricole Indosuez
IBJ Schroder Bank & Trust Co.
BankBoston, N.A.


                                    ASSIGNEE BANKS

First Source Financial, LLP
Creditanstalt-Bankverein
The ING Capital Senior Secured High Income Fund, L.P.
Indosuez Capital Funding II, Limited
Indosuez Capital Funding III, Limited
Commercial Loan Funding Trust I
ING High Income Principal Preservation Offering, L.P.


<PAGE>

                                                               SCHEDULE 11.03


                                    BANK ADDRESSES

Mat Linett                   Merily McLaughlin              Cherryl Carangelo
Credit Agricole Indosuez     IBJ Schroder Bank & Trust Co.  BankBoston, N.A.
1211 Avenue of the Americas  One State Street               100 Federal Street
7th Floor                    New York, New York 10004       Boston, MA  02110
New York, New York 10036



                                   *  *  *  *  *  *



Michelle Swanson                             Patrick Rounds
Commercial Loan Funding Trust I              Creditanstalt-Bankverein
Lehman Brothers                              4 Embarcadero Center
Three World Financial Center, 10th Floor     Suite 630
New York, New York  10285                    San Francisco, CA  94111

Kathleen A. Lenarcic                         Janice Rackow
The ING Capital Senior Secured               First Source Financial, Inc.
  High Income Fund, L.P.                     2850 West Golf Road, 5th Floor
ING High Income Principal                    Rolling Meadow, IL  60008
  Preservation Offering, L.P.
ING Capital Advisors, Inc.
333 South Grand Avenue
Los Angeles, CA  90071