EXECUTION COPY


                                   $38,000,000


                                CREDIT AGREEMENT

                          Dated as of December 23, 1996

                                      Among

                      CENTRAL TRACTOR FARM & COUNTRY, INC.,

                                  as Borrower,

                                CT HOLDING, INC.,

                                   as Holding,

                            JWC ACQUISITION I, INC.,

                                as the Purchaser,

                                       and

                  THE INITIAL LENDERS, INITIAL ISSUING BANK AND
                          SWING LINE BANK NAMED HEREIN

          as Initial Lenders, Initial Issuing Bank and Swing Line Bank

                                       and

                               FLEET NATIONAL BANK

                             as Administrative Agent

                                       and

                                NATIONSBANK, N.A.

                                   as Co-Agent



<PAGE>


                                                         


                          T A B L E O F C O N T E N T S

Section                                                                    Page

                                    ARTICLE I

                        DEFINITIONS AND ACCOUNTING TERMS

1.01.  Certain Defined Terms................................................  2
1.02.  Computation of Time Periods.......................................... 27
1.03.  Accounting Terms..................................................... 28

                                   ARTICLE II

                        AMOUNTS AND TERMS OF THE ADVANCES
                            AND THE LETTERS OF CREDIT

2.01.  The Advances......................................................... 28
2.02.  Making the Advances.................................................. 30
2.03.  Issuance of and Drawings and Reimbursement Under Letters of
         Credit............................................................. 32
2.04.  Repayment of Advances................................................ 34
2.05.  Termination or Reduction of the Commitments.......................... 36
2.06.  Prepayments.......................................................... 36
2.07.  Interest............................................................. 38
2.08.  Fees................................................................. 39
2.09.  Conversion of Advances............................................... 40
2.10.  Increased Costs, Etc................................................. 41
2.11.  Payments and Computations............................................ 43
2.12.  Taxes................................................................ 44
2.13.  Sharing of Payments, Etc............................................. 47
2.14.  Use of Proceeds...................................................... 47
2.15.  Defaulting Lenders................................................... 48
2.16.  Removal of Lender.................................................... 50

                                   ARTICLE III

                              CONDITIONS OF LENDING

3.01.  Conditions Precedent to Initial Extension of Credit.................. 51
3.02.  Conditions Precedent to the First Extension of Credit on or After
         the Date of the Consummation of the Merger......................... 56
3.03.  Conditions Precedent to Each Borrowing and Issuance.................. 59


<PAGE>


                                       ii

3.04.  Determinations Under Sections 3.01 and 3.02.......................... 60

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

4.01.  Representations and Warranties....................................... 60

                                    ARTICLE V

                            COVENANTS OF THE BORROWER

5.01.  Affirmative Covenants................................................ 68
5.02.  Negative Covenants................................................... 74
5.03.  Reporting Requirements............................................... 80
5.04.  Financial Covenants.................................................. 85

                                   ARTICLE VI

                                EVENTS OF DEFAULT

6.01.  Events of Default.................................................... 86
6.02.  Actions in Respect of the Letters of Credit upon Default............. 90

                                   ARTICLE VII

                            THE ADMINISTRATIVE AGENT

7.01.  Authorization and Action............................................. 90
7.02.  Administrative Agent's Reliance, Etc................................. 91
7.03.  Fleet and Affiliates................................................. 91
7.04.  Lender Party Credit Decision......................................... 92
7.05.  Indemnification...................................................... 92
7.06.  Successor Administrative Agents...................................... 94

                                  ARTICLE VIII

                                  MISCELLANEOUS

8.01.  Amendments, Etc...................................................... 95
8.02.  Notices, Etc......................................................... 96
8.03.  No Waiver; Remedies.................................................. 96


<PAGE>


                                       iii

8.04.  Costs and Expenses................................................... 96
8.05.  Right of Set-off..................................................... 98
8.06.  Binding Effect....................................................... 99
8.07.  Assignments and Participations....................................... 99
8.08.  Execution in Counterparts............................................102
8.09.  No Liability of the Issuing Bank.....................................102
8.10.  Confidentiality......................................................102
8.11.  Jurisdiction, Etc....................................................103
8.12.  Governing Law........................................................103
8.13.  Waiver of Jury Trial.................................................103

                                   ARTICLE IX

                                    GUARANTY

9.01.  Guaranty.............................................................104
9.02.  Guaranty Absolute....................................................104
9.03.  Waivers and Acknowledgments..........................................105
9.04.  Subrogation..........................................................106
9.05.  Continuing Guarantee; Assignments....................................107





<PAGE>


                                       iv

SCHEDULES

Schedule I          -      Commitments and Applicable Lending Offices

Schedule II         -      Disclosed Litigation

Schedule III        -      Subsidiaries

Schedule IV         -      Authorizations, Etc.

Schedule V          -      Plans

Schedule VI         -      Existing Debt

Schedule VII        -      Owned Real Property

Schedule VIII       -      Leased Real Property

Schedule IX         -      Material Contracts

Schedule X          -      Investments

Schedule XI         -      Intellectual Property

Schedule XII        -      Mortgaged Property

Schedule XIII       -      Liens

Schedule XIV        -      Surviving Debt

Schedule XV         -      Environmental Disclosure


EXHIBITS

Exhibit A-1   -      Form of Term Note

Exhibit A-2   -      Form of Revolving Credit Note

Exhibit B     -      Form of Notice of Borrowing

Exhibit C     -      Form of Assignment and Acceptance


<PAGE>


                                  v

Exhibit D     -      Form of Security Agreement

Exhibit E     -      Form of Opinion of Holdings' and the Purchaser's Counsel

Exhibit F     -      Form of Opinion of Borrower's Counsel

Exhibit G     -      Form of Solvency Certificate

Exhibit H     -      Form of Borrowing Base Certificate

Exhibit I     -      Form of Management Agreement



<PAGE>
                                                        

                                CREDIT AGREEMENT


         CREDIT  AGREEMENT  dated as of December 23, 1996 among Central  Tractor
Farm & Country, Inc., a Delaware corporation (the "Borrower"),  CT Holding Inc.,
a  Delaware  corporation  ("Holding"),  JWC  Acquisition  I,  Inc.,  a  Delaware
corporation  (the  "Purchaser"),  the banks,  financial  institutions  and other
institutional  lenders  listed on the  signature  pages  hereof  as the  Initial
Lenders  (the  "Initial  Lenders"),  the Initial  Issuing  Bank (as  hereinafter
defined),  the Swing Line Bank (as  hereinafter  defined),  Fleet  National Bank
("Fleet"),  as  administrative  agent  (together  with any  successor  appointed
pursuant to Article VII, the "Administrative  Agent") for the Lender Parties (as
hereinafter  defined) and  NationsBank,  N.A.  ("NationsBank)  as co-agent  (the
"Co-Agent") for the Lender Parties.


PRELIMINARY STATEMENTS:

         (1) J.W.  Childs Equity  Partners,  L.P.  ("J.W.  Childs")  organized a
Subsidiary  (as  hereinafter  defined),  JWC Equity  Funding,  Inc.,  a Delaware
corporation  ("Funding"),  which in turn organized a single-purpose  subsidiary,
Holding.  Holding, in turn, organized the Purchaser as a single-purpose,  wholly
owned Subsidiary.

         (2) The Purchaser,  pursuant to the Securities Purchase Agreement dated
as of  November  27, 1996 (as the same may be  amended,  modified  or  otherwise
supplemented  from  time to time  in  accordance  with  the  provisions  of this
Agreement,  the "Purchase  Agreement")  with the  "Securityholders"  referred to
therein,  purchased (the "Initial Purchase")  1,048,214 shares of the Borrower's
outstanding  common  stock,  $0.01 par value  (all of such  common  stock  being
referred to herein as the "Borrower Stock"), owned by Butler Capital Corporation
and its Affiliates (as hereinafter defined) (collectively,  "Butler") for $14 in
cash per share.

         (3) The  Purchaser,  pursuant to the terms of the  Purchase  Agreement,
intends to  purchase  (the  "Additional  Purchase";  together  with the  Initial
Purchase,  the "Stock  Purchase")  5,783,515  shares of the Borrower Stock and a
warrant (the "Borrower Warrant")  representing  230,523 shares of Borrower Stock
from Butler for $14 in cash per share. Subsequently,  the Purchaser, pursuant to
the terms of letter  agreements with James McKitrick and Dean  Longnecker,  each
dated  November 27, 1996 (the  "Letter  Agreements"),  intends to purchase  (the
"Subsequent  Purchase";  together with the Initial  Purchase and the  Additional
Purchase,  the "Stock  Purchase")  146,299 shares of Borrower Stock from certain
members of senior management of the Borrower for $14 in cash per share.

         (4) As promptly  as  practicable  after the  closing of the  Additional
Purchase,  the  Purchaser  will  consummate  a merger  (the  "Merger")  with the
Borrower in which the Borrower will be the surviving corporation.

 

<PAGE>


                                        2

         (5) The Borrower has requested that,  immediately upon the consummation
of the  Additional  Purchase,  the Lender  Parties  lend to the  Borrower  up to
$38,000,000 to pay transaction  fees and expenses,  refinance  certain  Existing
Debt (as  hereinafter  defined) of the Borrower and that, from time to time, the
Lender  Parties lend to the Borrower and issue Letters of Credit for the benefit
of  the  Borrower  to  provide   working   capital  for  the  Borrower  and  its
Subsidiaries.  The Lender Parties have indicated  their  willingness to agree to
lend such amounts on the terms and conditions of this Agreement.

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


                                    ARTICLE I

                        DEFINITIONS AND ACCOUNTING TERMS

         SECTION 1.01.  Certain Defined Terms.  As used in this  Agreement,  the
following  terms shall have the following  meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

         "Additional Purchase" has the meaning specified in the Preliminary
     Statements.

          "Administrative  Agent" has the  meaning  specified  in the recital of
     parties to this Agreement.

          "Administrative   Agent's   Account"   means   the   account   of  the
     Administrative  Agent maintained by the Administrative  Agent with Fleet at
     its office at One Federal Street, Boston,  Massachusetts 02211, ABA No. 011
     000 138, Account No. 151035- 03-156, Attention: Terry DeMarco.

         "Advance" means a Term Advance, a Revolving Credit Advance, a Swing
     Line Advance or a Letter of Credit Advance.

         "Affiliate" means, as to any Person, any other Person that, directly or
     indirectly, controls, is controlled by or is under common control with such
     Person or is a director  or officer of such  Person.  For  purposes of this
     definition,   the  term  "control"   (including  the  terms  "controlling,"
     "controlled  by" and "under  common  control  with") of a Person  means the
     possession,  direct  or  indirect,  of the power to vote 10% or more of the
     Voting  Stock of such  Person or to direct  or cause the  direction  of the
     management  and policies of such Person,  whether  through the ownership of
     Voting Stock, by contract or otherwise.


<PAGE>


                                        3


         "Applicable  Lending Office" means,  with respect to each Lender Party,
     such Lender  Party's  Domestic  Lending  Office in the case of a Prime Rate
     Advance and such Lender Party's  Eurodollar Lending Office in the case of a
     Eurodollar Rate Advance.

         "Applicable  Margin"  means (x) during the period  from the date hereof
     through  the  first day of  Fiscal  Year  1998 1% per annum for Prime  Rate
     Advances  and  2-1/4%  per  annum  for  Eurodollar  Rate  Advances  and (y)
     thereafter,  a percentage per annum  determined by reference to the Debt to
     EBITDA Ratio as set forth below:


<TABLE>
<CAPTION>


                                               Prime Rate Advances           Eurodollar Rate Advances
                                               -------------------           ------------------------
          <S>                                       <C>                               <C>

           Level I                                    0.25%                            1.50%
           -------

           less than 3.0: 1

           Level II                                   0.50%                            1.75%
           --------

           3.0: 1 or greater,

           but less than 3.5: 1                       0.75%                            2.00%

           Level III
           ---------

           3.5: 1 or greater,

           but less than 4.0: 1

           Level IV                                   1.00%                            2.25%
           --------

           4.0: 1 or greater
</TABLE>

     The  Applicable  Margin for each Prime Rate Advance  shall be determined by
     reference  to the  ratio in  effect  from  time to time and the  Applicable
     Margin for each Eurodollar Rate Advance shall be determined by reference to
     the  ratio in effect on the  first  day of each  Interest  Period  for such
     Advance;  provided,  however, that no change in the Applicable Margin shall
     be  effective  until  three  Business  Days  after  the date on  which  the
     Administrative Agent receives financial statements pursuant to


<PAGE>


                                        4

     Section  5.03(b),  (c) or (d)  and a  certificate  of the  chief  financial
     officer of the Borrower demonstrating such ratio.

         "Appropriate Lender" means, at any time, with respect to (a) any of the
     Term or Revolving  Credit  Facilities,  a Lender that has a Commitment with
     respect to such Facility at such time,  (b) the Letter of Credit  Facility,
     (i) the Issuing Bank and (ii) if the other  Revolving  Credit  Lenders have
     made  Letter  of Credit  Advances  pursuant  to  Section  2.03(c)  that are
     outstanding at such time, each such other  Revolving  Credit Lender and (c)
     the Swing  Line  Facility,  (i) the  Swing  Line Bank and (ii) if the other
     Revolving Credit Lenders have made Swing Line Advances  pursuant to Section
     2.02(b) that are outstanding at such time, each such other Revolving Credit
     Lender.

         "Assignment and Acceptance" means an assignment and acceptance  entered
     into by a Lender  Party  and an  Eligible  Assignee,  and  accepted  by the
     Administrative  Agent, in accordance with Section 8.07 and in substantially
     the form of Exhibit C hereto.

         "Available  Amount" of any  Letter of Credit  means,  at any time,  the
     maximum  amount  available  to be drawn under such Letter of Credit at such
     time (assuming compliance at such time with all conditions to drawing).

         "Borrower" has the meaning specified in the recital of parties to this
     Agreement.

          "Borrower  Stock"  has  the  meaning   specified  in  the  Preliminary
     Statements.

          "Borrower  Warrant"  has  the  meaning  specified  in the  Preliminary
     Statements.

          "Borrower's  Account" means the account of the Borrower  maintained by
     the  Borrower  with  Fleet at its  office at One  Federal  Street,  Boston,
     Massachusetts  02110,  ABA No.  011  000  138,  Account  No.  937  3835380,
     Attention: Terry DeMarco.

         "Borrowing" means a Term Borrowing, a Revolving Credit Borrowing or a
     Swing Line Borrowing.

         "Borrowing Base Deficiency"  means, at any time, the failure of (a) the
     Loan Value of the Eligible  Collateral  at such time to equal or exceed (b)
     the sum of (i) the  aggregate  principal  amount  of the  Revolving  Credit
     Advances,  the  Letter  of Credit  Advances  and the  Swing  Line  Advances
     outstanding at such time plus (ii) the aggregate Available Amount under all
     Letters of Credit outstanding at such time.



<PAGE>


                                        5

         "Borrowing Rate  Certificate"  means a certificate in substantially the
     form of Exhibit H hereto,  duly certified by the chief financial officer of
     the Borrower.

         "Bridge Note  Documents"  means the  agreements and  instruments  which
     govern the terms of the Bridge Notes, as the same may be amended,  modified
     or  otherwise  supplemented  from  time  to  time in  accordance  with  the
     provisions of this Agreement.

         "Bridge Notes" means the securities,  if any, issued by the Borrower as
     contemplated  by the terms of the Bridge  Commitment  Letter dated November
     26, 1996 from NationsBridge  L.L.C. to J.W. Childs and any other securities
     for which such securities are exchanged  pursuant to such Bridge Commitment
     Letter.

         "Business  Day" means a day of the year on which banks are not required
     or  authorized  by  law to  close  in  Boston,  Massachusetts  and,  if the
     applicable  Business Day relates to any Eurodollar Rate Advances,  on which
     dealings are carried on in the London interbank market.

         "Butler" has the meaning specified in the Preliminary Statements.

         "Capital Expenditures" means, for any Person for any period, the sum of
     (a) all expenditures made, directly or indirectly, by such Person or any of
     its  Subsidiaries  during such period for  equipment,  fixed  assets,  real
     property or improvements,  or for replacements or substitutions therefor or
     additions  thereto,  that have been or should be, in accordance  with GAAP,
     reflected as additions  to property,  plant or equipment on a  Consolidated
     balance  sheet of such  Person or have a useful  life of more than one year
     plus (b) (without  duplication) the aggregate  principal amount of all Debt
     (including  Obligations  under  Capitalized  Leases) assumed or incurred in
     connection with any such expenditures.

         "Capitalized  Leases"  means all leases that have been or should be, in
     accordance with GAAP, recorded as capitalized leases.

         "Cash Collateral Account" has the meaning specified in the Security
     Agreement.

         "Cash Equivalents"  means any of the following,  to the extent owned by
     the Borrower or any of its  Subsidiaries  free and clear of all Liens other
     than Liens created under the Collateral  Documents and having a maturity of
     not greater than 360 days from the date of acquisition thereof: (a) readily
     marketable direct obligations of the Government of the United States or any
     agency or instrumentality thereof or obligations unconditionally guaranteed
     by the full faith and credit of the Government


<PAGE>


                                        6

     of the  United  States,  (b)  insured  certificates  of  deposit of or time
     deposits with any commercial bank that is a Lender Party or a member of the
     Federal Reserve System,  issues (or the parent of which issues)  commercial
     paper rated as described in clause (c), is organized  under the laws of the
     United States or any State thereof and has combined  capital and surplus of
     at least $1 billion or (c)  commercial  paper in an aggregate  amount of no
     more than $2.5 million per issuer  outstanding  at any time,  issued by any
     corporation  organized under the laws of any State of the United States and
     rated  at  least  "Prime-1"  (or the  then  equivalent  grade)  by  Moody's
     Investors Service, Inc. or "A-1" (or the then equivalent grade) by Standard
     & Poor's Ratings Group.

         "CERCLA" means the Comprehensive  Environmental Response,  Compensation
     and Liability Act of 1980, as amended from time to time.

         "CERCLIS" means the Comprehensive Environmental Response,  Compensation
     and Liability Information System maintained by the U.S.
     Environmental Protection Agency.

         "Co-Agent" has the meaning specified in the recital of parties to this
     Agreement.

         "Collateral"  means  all  "Collateral"  referred  to in the  Collateral
     Documents  and all other  property  that is or is intended to be subject to
     any  Lien in favor  of the  Administrative  Agent  for the  benefit  of the
     Secured Parties.

         "Collateral  Documents"  means  the  Security  Agreement,   the  Pledge
     Agreement and any other agreement that creates or purports to create a Lien
     in favor of the Administrative Agent for the benefit of the Lender Parties.

         "Commitment" means a Term Commitment, a Revolving Credit Commitment
     or a Letter of Credit Commitment.

         "Confidential   Information"   means   information  that  the  Borrower
     furnishes  to  the  Administrative  Agent  or  any  Lender  Party  that  is
     proprietary  in  nature,  including  financial  information,   projections,
     business  plans  and other  information  in a writing  marked,  labeled  or
     otherwise  identified  as  confidential,  but  does  not  include  any such
     information that is or becomes generally available to the public other than
     as a result of a breach by the Administrative  Agent or any Lender Party of
     its  obligations   hereunder  or  that  is  or  becomes  available  to  the
     Administrative  Agent or such  Lender  Party  from a source  other than the
     Borrower.



<PAGE>


                                        7

          "Consolidated"  refers to the  consolidation of accounts in accordance
     with GAAP.

         "Conversion",  "Convert" and "Converted"  each refer to a conversion of
     Advances of one Type into  Advances  of the other Type  pursuant to Section
     2.09 or 2.10.

         "Current  Assets" of any Person  means all assets of such  Person  that
     would,  in  accordance  with GAAP,  be  classified  as current  assets of a
     company  conducting  a  business  the  same as or  similar  to that of such
     Person,  after deducting  adequate reserves in each case in which a reserve
     is proper in accordance with GAAP.

         "Current  Liabilities"  of any Person means (a) all Debt of such Person
     that by its terms is payable on demand or matures within one year after the
     date of determination  (excluding any Debt renewable or extendible,  at the
     option  of such  Person,  to a date  more  than one year  from such date or
     arising under a revolving  credit or similar  agreement  that obligates the
     lender or  lenders to extend  credit  during a period of more than one year
     from such  date),  (b) without  duplication,  all amounts of Funded Debt of
     such Person  required to be paid or prepaid within one year after such date
     and (c) all other items  (including  taxes  accrued as  estimated)  that in
     accordance  with GAAP would be  classified as current  liabilities  of such
     Person.

         "Debt" of any Person means, without  duplication,  (a) all indebtedness
     of such Person for borrowed  money,  (b) all Obligations of such Person for
     the  deferred  purchase  price of property  or  services  (other than trade
     payables not overdue by more than 90 days  incurred in the ordinary  course
     of such Person's business), (c) all Obligations of such Person evidenced by
     notes, bonds, debentures or other similar instruments,  (d) all Obligations
     of such Person created or arising under any conditional sale or other title
     retention  agreement with respect to property acquired by such Person (even
     though the rights and remedies of the seller or lender under such agreement
     in the  event  of  default  are  limited  to  repossession  or sale of such
     property),  (e) all Obligations of such Person as lessee under  Capitalized
     Leases, (f) all Obligations,  contingent or otherwise, of such Person under
     acceptance,  letter of credit or similar facilities, (g) all Obligations of
     such Person to purchase,  redeem,  retire,  defease or  otherwise  make any
     payment in respect of any  capital  stock of or other  ownership  or profit
     interest  in such  Person or any other  Person or any  warrants,  rights or
     options to acquire such capital  stock,  valued,  in the case of Redeemable
     Preferred Stock, at the greater of its voluntary or involuntary liquidation
     preference plus accrued and unpaid  dividends,  (h) all Obligations of such
     Person in respect of Hedge  Agreements,  (i) all Debt of others referred to
     in clauses (a) through (h) above or clause (j) below guaranteed directly or
     indirectly in any manner by such Person, or in effect  guaranteed  directly
     or indirectly by such Person through an agreement (i) to


<PAGE>


                                        8

     pay or purchase  such Debt or to advance or supply funds for the payment or
     purchase  of such  Debt,  (ii) to  purchase,  sell or lease  (as  lessee or
     lessor)  property,  or to  purchase  or sell  services,  primarily  for the
     purpose of  enabling  the debtor to make  payment of such Debt or to assure
     the holder of such Debt  against  loss,  (iii) to supply funds to or in any
     other  manner  invest in the debtor  (including  any  agreement  to pay for
     property or services  irrespective  of whether such property is received or
     such services are rendered) or (iv) otherwise to assure a creditor  against
     loss,  and (j) all Debt  referred  to in clauses  (a)  through (j) above of
     another  Person  secured  by (or for which  the  holder of such Debt has an
     existing  right,  contingent  or  otherwise,  to be secured by) any Lien on
     property  (including,  without  limitation,  accounts and contract  rights)
     owned by such  Person,  even  though  such Person has not assumed or become
     liable for the payment of such Debt.

         "Debt to EBITDA  Ratio"  means,  for any fiscal  quarter of Holding,  a
     ratio  of Debt of  Holding  and its  Subsidiaries  (other  than any Debt of
     Holding that bears  interest on a  payment-in-kind  basis) as at the end of
     such  fiscal  quarter  less the sum of cash and  Cash  Equivalents  held by
     Holding  and its  Subsidiaries  as at the end of such  fiscal  quarter,  to
     Consolidated EBITDA for the most recently completed four fiscal quarters of
     Holding and its Subsidiaries.

         "Default" means any Event of Default or any event that would constitute
     an Event of Default  but for the  requirement  that notice be given or time
     elapse or both.

         "Defaulted  Advance"  means,  with  respect to any Lender  Party at any
     time,  the portion of any Advance  required to be made by such Lender Party
     to the  Borrower  pursuant to Section 2.01 or 2.02 at or prior to such time
     which has not been made by such Lender Party or by the Administrative Agent
     for the account of such Lender Party pursuant to Section 2.02(e) as of such
     time.  In the event that a portion of a Defaulted  Advance  shall be deemed
     made pursuant to Section 2.15(a),  the remaining  portion of such Defaulted
     Advance shall be considered a Defaulted Advance  originally  required to be
     made pursuant to Section 2.01 on the same date as the Defaulted  Advance so
     deemed made in part.

         "Defaulted Amount" means, with respect to any Lender Party at any time,
     any amount  required to be paid by such Lender Party to the  Administrative
     Agent or any other Lender Party  hereunder or under any other Loan Document
     at or  prior  to such  time  which  has not  been so paid as of such  time,
     including,  without  limitation,  any  amount  required  to be paid by such
     Lender  Party to (a) the Swing Line Bank  pursuant  to  Section  2.02(b) to
     purchase a portion of a Swing Line Advance made by the Swing Line Bank, (b)
     the Issuing  Bank  pursuant  to Section  2.03(c) to purchase a portion of a
     Letter of Credit Advance made by the Issuing Bank,  (c) the  Administrative
     Agent pursuant to Section 2.02(e) to reimburse the Administrative Agent for
     the amount of


<PAGE>


                                        9

     any Advance made by the Administrative Agent for the account of such Lender
     Party,  (d) any other Lender Party pursuant to Section 2.13 to purchase any
     participation  in  Advances  owing to such other  Lender  Party and (e) the
     Administrative  Agent or the  Issuing  Bank  pursuant  to  Section  7.05 to
     reimburse  the  Administrative  Agent or the  Issuing  Bank for such Lender
     Party's  ratable  share of any  amount  required  to be paid by the  Lender
     Parties  to the  Administrative  Agent  or the  Issuing  Bank  as  provided
     therein.  In the event that a portion of a Defaulted Amount shall be deemed
     paid pursuant to Section 2.15(b),  the remaining  portion of such Defaulted
     Amount shall be  considered a Defaulted  Amount  originally  required to be
     paid  hereunder  or under any other Loan  Document  on the same date as the
     Defaulted Amount so deemed paid in part.

         "Defaulting  Lender" means, at any time, any Lender Party that, at such
     time, (a) owes a Defaulted  Advance or a Defaulted Amount or (b) shall take
     any  action  or be  the  subject  of any  action  or  proceeding  of a type
     described in Section 6.01(f).

         "Disclosed Litigation" has the meaning specified in Section 3.01(j).

         "Domestic  Lending Office" means, with respect to any Lender Party, the
     office of such Lender Party  specified  as its  "Domestic  Lending  Office"
     opposite its name on Schedule I hereto or in the  Assignment and Acceptance
     pursuant  to which it  became a Lender  Party,  as the case may be, or such
     other  office of such Lender  Party as such  Lender  Party may from time to
     time specify to the Borrower and the Administrative Agent.

         "EBITDA" means, for any period,  the sum,  determined on a Consolidated
     basis, of (a) net income (or net loss),  (b) interest  expense,  (c) income
     tax expense, (d) depreciation expense and (e) amortization expense, in each
     case of the Borrower and its  Subsidiaries,  determined in accordance  with
     GAAP for such period.

         "Eligible  Assignee" means (a) with respect to any Facility (other than
     the  Letter  of Credit  Facility),  (i) a Lender;  (ii) an  Affiliate  of a
     Lender;  (iii) a  commercial  bank  organized  under the laws of the United
     States,  or any  State  thereof,  and  having  total  assets  in  excess of
     $500,000,000; (iv) 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 $500,000,000; (v) a commercial bank organized under the
     laws of any other  country  that is a member  of the OECD or has  concluded
     special  lending   arrangements  with  the   International   Monetary  Fund
     associated  with  its  General  Arrangements  to  Borrow  or of the  Cayman
     Islands, or a political  subdivision of any such country,  and having total
     assets in excess of $500,000,000,  so long as such bank is acting through a
     branch or agency located in the United States; (vi) the central bank of any
     country that is a member of the OECD; (vii) a finance company,


<PAGE>


                                       10

     insurance  company  or  other  financial  institution  or fund  (whether  a
     corporation, partnership, trust or other entity) that is engaged in making,
     purchasing  or  otherwise  investing  in  commercial  loans in the ordinary
     course of its business  and having total assets in excess of  $500,000,000;
     and (viii) any other Person  approved by the  Administrative  Agent and the
     Borrower, such approval not to be unreasonably withheld or delayed, and (b)
     with respect to the Letter of Credit Facility, a Person that is an Eligible
     Assignee under  subclause (iii) or (v) of clause (a) of this definition and
     is approved by the Administrative Agent and the Borrower, such approval not
     to be unreasonably withheld or delayed; provided, however, that neither any
     Loan Party nor any  Affiliate of a Loan Party shall  qualify as an Eligible
     Assignee under this definition.

          "Eligible  Collateral"  means,  collectively,  Eligible  Inventory and
     Eligible Receivables.

         "Eligible Inventory" means all Inventory of the Borrower other than the
     following classes of Inventory:

               (a) Inventory consisting of "perishable agricultural commodities"
          within the meaning of the Perishable  Agricultural  Commodities Act of
          1930, as amended, and the regulations  thereunder,  or on which a Lien
          has  arisen  or may  arise in favor of  agricultural  producers  under
          comparable state or local laws;

               (b) Inventory that is obsolete, unusable or otherwise unavailable
          for sale;

               (c)  Inventory  with  respect  to which the  representations  and
          warranties set forth in Section 8 of the Security Agreement applicable
          to Inventory are not true and correct;

               (d) Inventory consisting of promotional,  marketing, packaging or
          shipping materials and supplies;

               (e)  Inventory  that fails to meet all  standards  imposed by any
          governmental  agency,  or  department  or  division  thereof,   having
          regulatory authority over such Inventory or its use or sale;

               (f) Inventory that is subject to any licensing,  patent, royalty,
          trademark, trade name or copyright agreement with any third party from
          whom the Borrower  has received  notice of a dispute in respect of any
          such agreement;


<PAGE>


                                       11

               (g) Inventory located outside the United States;

               (h) Inventory  that is not in the possession of or under the sole
          control of the Borrower;

               (i) Inventory consisting of work in progress; and

               (j) Inventory in respect of which the Security  Agreement,  after
          giving effect to the related filings of financing statements that have
          then been made,  if any,  does not or has ceased to create a valid and
          perfected  first  priority  lien or security  interest in favor of the
          Lender Parties securing the Secured Obligations.

         "Eligible Receivables" means all Receivables of the Borrower other than
     the following classes of Receivables:

               (a)  Receivables  that do not  arise  out of  sales  of  goods or
          rendering  of  services  in the  ordinary  course  of  the  Borrower's
          business;

               (b)  Receivables on terms other than those normal or customary in
          the Borrower's business;

               (c) Receivables owing from any Person that is an Affiliate of the
          Borrower;

               (d) Receivables  more than 90 days past original  invoice date or
          more than 60 days past the date due;

               (e)  Receivables  owing  from any  Person  that (i) has  disputed
          liability  for any  Receivable  owing  from  such  Person  or (ii) has
          otherwise asserted any claim, demand or liability,  whether by action,
          suit, counterclaim or otherwise;

               (f)  Receivables  owing from any Person that shall take or be the
          subject of any action or  proceeding  of a type  described  in Section
          6.01(f);

               (g) Receivables (i) owing from any Person that is also a supplier
          to or creditor of the Borrower or (ii) representing any manufacturer's
          or  supplier's   credits,   discounts,   incentive  plans  or  similar
          arrangements  entitling  the Borrower to discounts on future  purchase
          therefrom;

               (h)  Receivables  arising out of sales to account debtors outside
          the United States;


<PAGE>


                                       12


               (i)  Receivables   arising  out  of  sales  on  a  bill-and-hold,
          guaranteed sale, sale-or-return, sale on approval or consignment basis
          or subject to any right of return, set-off or charge-back;

               (j)  Receivables  owing from an account debtor that is an agency,
          department  or  instrumentality  of the  United  States  or any  State
          thereof;

               (k)  Receivables  the  full  and  timely  payment  of  which  the
          Administrative  Agent  in  its  reasonable  judgment  believes  to  be
          doubtful; and

               (l) Receivables in respect of which the Security Agreement, after
          giving effect to the related filings of financing statements that have
          then been made,  if any,  does not or has ceased to create a valid and
          perfected  first  priority  lien or security  interest in favor of the
          Lender Parties securing the Secured Obligations.

         "Environmental  Action" means any action, suit, demand,  demand letter,
     claim,  notice of  non-compliance  or  violation,  notice of  liability  or
     potential liability,  investigation,  proceeding,  consent order or consent
     agreement  relating in any way to any Environmental  Law, any Environmental
     Permit or Hazardous Material,  including,  without  limitation,  (a) by any
     governmental or regulatory  authority for  enforcement,  cleanup,  removal,
     response,  remedial or other actions or damages and (b) by any governmental
     or  regulatory   authority  or  third  party  for  damages,   contribution,
     indemnification, cost recovery, compensation or injunctive relief.

         "Environmental Law" means any federal, state, local or foreign statute,
     law, ordinance, rule, regulation, code, order, writ, judgment,  injunction,
     decree or judicial or agency  interpretation,  policy or guidance  that has
     the force and effect of law  relating to  pollution  or  protection  of the
     environment,  public or  employee  health and safety or natural  resources,
     including,  without  limitation,  those  relating  to  the  use,  handling,
     transportation,  treatment,  storage,  disposal,  release or  discharge  of
     Hazardous Materials.

         "Environmental  Permit"  means  any  permit,  approval,  identification
     number,  license or other  authorization  required under any  Environmental
     Law.

         "Equity" has the meaning specified in Section 3.01(f).

         "Equity   Investors"   means  J.W.   Childs  and  its   Affiliates  and
     co-investors,  Fleet Equity Partners and its Affiliates, certain members of
     management of the Borrower and certain members of the Board of Directors of
     Holding.


<PAGE>


                                       13

         "ERISA" means the Employee  Retirement  Income Security Act of 1974, as
     amended  from time to time,  and the  regulations  promulgated  and rulings
     issued thereunder.

         "ERISA  Affiliate"  means any Person  that for  purposes of Title IV of
     ERISA is a member  of the  controlled  group  of any Loan  Party,  or under
     common  control  with any Loan Party,  within the meaning of Section 414 of
     the Internal Revenue Code.

         "ERISA  Event"  means (a) (i) the  occurrence  of a  reportable  event,
     within  the  meaning  of Section  4043 of ERISA,  with  respect to any Plan
     unless the 30-day  notice  requirement  with respect to such event has been
     waived by the PBGC, or (ii) the  requirements  of subsection (1) of Section
     4043(b) of ERISA (without regard to subsection (2) of such Section) are met
     with respect to a contributing  sponsor,  as defined in Section 4001(a)(13)
     of ERISA, of a Plan, and an event  described in paragraph (9), (10),  (11),
     (12) or (13) of Section  4043(c) of ERISA is  reasonably  expected to occur
     with respect to such Plan within the following 30 days; (b) the application
     for a minimum  funding  waiver with respect to a Plan; (c) the provision by
     the administrator of any Plan of a notice of intent to terminate such Plan,
     pursuant to Section  4041(a)(2)  of ERISA  (including  any such notice with
     respect to a plan amendment  referred to in Section 4041(e) of ERISA);  (d)
     the  cessation of  operations  at a facility of any Loan Party or any ERISA
     Affiliate in the  circumstances  described in Section 4062(e) of ERISA; (e)
     the  withdrawal  by any Loan Party or any ERISA  Affiliate  from a Multiple
     Employer Plan during a plan year for which it was a  substantial  employer,
     as  defined  in  Section  4001(a)(2)  of  ERISA;  (f)  the  conditions  for
     imposition of a lien under Section 302(f) of ERISA shall have been met with
     respect to any Plan;  (g) the adoption of an amendment to a Plan  requiring
     the provision of security to such Plan pursuant to Section 307 of ERISA; or
     (h) the institution by the PBGC of proceedings to terminate a Plan pursuant
     to  Section  4042 of ERISA,  or the  occurrence  of any event or  condition
     described  in  Section  4042 of  ERISA  that  constitutes  grounds  for the
     termination of, or the appointment of a trustee to administer, such Plan.

         "Eurocurrency Liabilities" has the meaning specified in Regulation D of
     the Board of Governors  of the Federal  Reserve  System,  as in effect from
     time to time.

         "Eurodollar  Lending  Office" means,  with respect to any Lender Party,
     the  office of such  Lender  Party  specified  as its  "Eurodollar  Lending
     Office"  opposite  its name on Schedule I hereto or in the  Assignment  and
     Acceptance  pursuant  to which it  became a Lender  Party  (or,  if no such
     office is specified,  its Domestic Lending Office), or such other office of
     such Lender Party as such Lender Party may from time to time specify to the
     Borrower and the Administrative Agent.



<PAGE>


                                       14

         "Eurodollar  Rate" means,  for any Interest  Period for all  Eurodollar
     Rate Advances  comprising part of the same Borrowing,  an interest rate per
     annum equal to the rate per annum  obtained  by  dividing  (a) the rate per
     annum at which deposits in U.S. dollars are offered by the principal office
     of Fleet in London,  England to prime banks in the London  interbank market
     at 11:00 A.M.  (London time) two Business Days before the first day of such
     Interest Period in an amount substantially equal to Fleet's Eurodollar Rate
     Advance  comprising  part of such Borrowing to be  outstanding  during such
     Interest  Period  (or,  if Fleet  shall  not have  such a  Eurodollar  Rate
     Advance,  $1,000,000) and for a period equal to such Interest Period by (b)
     a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage for
     such Interest Period.

         "Eurodollar  Rate  Advance"  means an Advance  that bears  interest  as
     provided in Section 2.07(a)(ii).

         "Eurodollar  Rate Reserve  Percentage"  for any Interest Period for all
     Eurodollar  Rate Advances  comprising  part of the same Borrowing means the
     reserve  percentage  applicable  two Business  Days before the first day of
     such  Interest  Period  under  regulations  issued from time to time by the
     Board of Governors of the Federal  Reserve  System (or any  successor)  for
     determining the maximum reserve requirement (including, without limitation,
     any emergency,  supplemental or other marginal  reserve  requirement) for a
     member bank of the Federal  Reserve System in New York City with respect to
     liabilities or assets consisting of or including  Eurocurrency  Liabilities
     (or with  respect  to any  other  category  of  liabilities  that  includes
     deposits  by  reference  to which  the  interest  rate on  Eurodollar  Rate
     Advances is determined) having a term equal to such Interest Period.

         "Events of Default" has the meaning specified in Section 6.01.

         "Excess Cash Flow" means,  for any period,  the amount by which (a) the
     sum of (i)  Consolidated  net  income  (or  loss) of the  Borrower  and its
     Subsidiaries for such period the initial  Borrowing plus (ii) the aggregate
     amount of all non-cash  charges  deducted in arriving at such  Consolidated
     net income (or loss) plus (iii) if there was a net increase in Consolidated
     Current  Liabilities  of the  Borrower  and its  Subsidiaries  during  such
     period,  the  amount  of such net  increase  plus  (iv) if there  was a net
     decrease  in   Consolidated   Current  Assets   (excluding  cash  and  Cash
     Equivalents) of the Borrower and its Subsidiaries  during such period,  the
     amount of such net decrease less (v) the  aggregate  amount of all non-cash
     credits included in arriving at such Consolidated net income (or loss) less
     (vi) if there was a net decrease in Consolidated Current Liabilities of the
     Borrower and its  Subsidiaries  during such period,  the amount of such net
     decrease  less (vii) if there was a net  increase in  Consolidated  Current
     Assets  (excluding  cash  and Cash  Equivalents)  of the  Borrower  and its
     Subsidiaries  during  such  period,  the amount of such net  increase  less
     (viii)  the  aggregate  amount  of  cash  paid  by  the  Borrower  and  its
     Subsidiaries  in respect of Capital  Expenditures  during  such period less
     (ix) without duplication, the aggregate


<PAGE>


                                       15

     amount of all cash  payments made by the Borrower and its  Subsidiaries  in
     respect of the  permanent  reduction  of Debt (of the type  referred  to in
     clauses (a), (c), (d), (e) and (f) of the definition  thereof)  during such
     period exceeds (b) $2,000,000.

         "Existing  Debt"  means  Debt  of the  Borrower  and  its  Subsidiaries
     outstanding immediately before the date hereof.

          "Extension  of Credit" means a Borrowing or an issuance of a Letter of
     Credit hereunder.

         "Extraordinary  Receipt"  means any cash  received by or paid to or for
     the  account  of any  Person  not  in  the  ordinary  course  of  business,
     including,  without  limitation,  tax  refunds,  pension  plan  reversions,
     proceeds  of  insurance  (other  than  proceeds  of  business  interruption
     insurance  to the extent such  proceeds  constitute  compensation  for lost
     earnings), condemnation awards (and payments in lieu thereof) and indemnity
     payments in respect of loss or damage to  equipment,  fixed  assets or real
     property;  provided,  however,  that an  Extraordinary  Receipt  shall  not
     include cash receipts  received  from  proceeds of insurance,  condemnation
     awards (or payments in lieu  thereof) or  indemnity  payments to the extent
     that such  proceeds,  awards or  payments  in  respect of loss or damage to
     equipment,  fixed  assets or real  property  are  applied (or in respect of
     which  expenditures  were  previously  incurred)  to  replace or repair the
     equipment,  fixed assets or real property in respect of which such proceeds
     were received in accordance with the terms of the Loan  Documents,  so long
     as such  application  is made within 12 months after the occurrence of such
     damage or loss.

          "Facility" means the Term Facility, the Revolving Credit Facility, the
     Swing Line Facility or the Letter of Credit Facility.

         "Federal Funds Rate" means, for any period, a fluctuating interest rate
     per annum equal for each day during such period to the weighted  average of
     the rates on  overnight  Federal  funds  transactions  with  members of the
     Federal Reserve System arranged by Federal funds brokers,  as published for
     such day (or,  if such day is not a Business  Day,  for the next  preceding
     Business Day) by the Federal  Reserve Bank of New York, or, if such rate is
     not so  published  for any day that is a Business  Day,  the average of the
     quotations   for   such  day  for  such   transactions   received   by  the
     Administrative  Agent  from  three  Federal  funds  brokers  of  recognized
     standing selected by it.

         "Financing Documents" means the Stock Purchase Facility Documents, the
     Bridge Note Documents and the Permanent Debt Documents.



<PAGE>


                                       16

         "Fiscal Year" means a fiscal year of the Borrower and its  Consolidated
     Subsidiaries ending in October or November of any calendar year.

         "Funded Debt" of any Person means Debt in respect of the  Advances,  in
     the case of the  Borrower,  and all other Debt of such  Person  that by its
     terms matures more than one year after the date of determination or matures
     within  one year from  such date but is  renewable  or  extendible,  at the
     option of such  Person,  to a date more  than one year  after  such date or
     arises under a revolving  credit or similar  agreement  that  obligates the
     lender or  lenders to extend  credit  during a period of more than one year
     after such date,  excluding,  however,  all  amounts of Funded Debt of such
     Person  required  to be paid or  prepaid  within one year after the date of
     determination.

         "GAAP" has the meaning specified in Section 1.03.

         "Guaranty" has the meaning specified in Section 9.01.

         "Hazardous  Materials"  means  (a)  petroleum  or  petroleum  products,
     radioactive  materials,   asbestos-containing  materials,   polychlorinated
     biphenyls  and  radon  gas  and  (b)  any  other  chemicals,  materials  or
     substances designated or classified as hazardous or toxic, regulated under,
     any Environmental Law.

         "Hedge  Agreements" means interest rate swap, cap or collar agreements,
     interest  rate  future  or  option  contracts,  currency  swap  agreements,
     currency future or option contracts and other similar agreements.

         "Holding" has the meaning specified in the recital of parties hereto.

         "Indemnified Party" has the meaning specified in Section 8.04(b).

         "Initial Extension of Credit" means the earlier to occur of the initial
     Borrowing and the initial issuance of a Letter of Credit hereunder.

         "Initial Issuing Bank" means Fleet.

          "Initial  Lenders" has the meaning specified in the recital of parties
     to this Agreement.

          "Initial  Purchase"  has  the  meaning  specified  in the  Preliminary
     Statements.

         "Insufficiency" means, with respect to any Plan, the amount, if any, of
     its unfunded  benefit  liabilities,  as defined in Section  4001(a)(18)  of
     ERISA.



<PAGE>


                                       17

         "Interest  Period" means,  for each Eurodollar Rate Advance  comprising
     part of the  same  Borrowing,  the  period  commencing  on the date of such
     Eurodollar  Rate  Advance or the date of the  Conversion  of any Prime Rate
     Advance into such  Eurodollar  Rate Advance,  and ending on the last day of
     the period selected by the Borrower  pursuant to the provisions  below and,
     thereafter,  each  subsequent  period  commencing  on the  last  day of the
     immediately  preceding  Interest  Period  and ending on the last day of the
     period  selected by the  Borrower  pursuant to the  provisions  below.  The
     duration  of each such  Interest  Period  shall be one,  two,  three or six
     months,  as the Borrower  may, upon notice  received by the  Administrative
     Agent  not later  than  11:00  A.M.  (Boston,  Massachusetts)  on the third
     Business  Day  prior to the  first  day of such  Interest  Period,  select;
     provided, however, that:

               (a) the Borrower may not select any Interest  Period with respect
          to any  Eurodollar  Rate Advance  under a Facility that ends after any
          principal repayment  installment date for such Facility unless,  after
          giving effect to such  selection,  the aggregate  principal  amount of
          Prime Rate Advances and of Eurodollar  Rate Advances  having  Interest
          Periods that end on or prior to such principal  repayment  installment
          date  for such  Facility  shall  be at  least  equal to the  aggregate
          principal amount of Advances under such Facility due and payable on or
          prior to such date;

               (b) Interest  Periods  commencing on the same date for Eurodollar
          Rate Advances  comprising  part of the same Borrowing  shall be of the
          same duration;

               (c) whenever the last day of any Interest  Period would otherwise
          occur  on a day  other  than a  Business  Day,  the  last  day of such
          Interest  Period  shall be  extended  to occur on the next  succeeding
          Business Day, provided,  however,  that, if such extension would cause
          the last day of such  Interest  Period to occur in the next  following
          calendar  month,  the last day of such Interest  Period shall occur on
          the next preceding Business Day; and

               (d) whenever the first day of any Interest Period occurs on a day
          of an  initial  calendar  month  for  which  there  is no  numerically
          corresponding  day in the calendar  month that  succeeds  such initial
          calendar  month by the number of months  equal to the number of months
          in such Interest  Period,  such Interest  Period shall end on the last
          Business Day of such succeeding calendar month.

         "Internal  Revenue  Code" means the Internal  Revenue Code of 1986,  as
     amended  from time to time,  and the  regulations  promulgated  and rulings
     issued thereunder.



<PAGE>


                                       18

          "Inventory"  means all  Inventory  referred to in Section  1(b) of the
     Security Agreement.

         "Investment"  in any Person  means any loan or advance to such  Person,
     any purchase or other  acquisition of any capital stock or other  ownership
     or  profit  interest,  warrants,  rights,  options,  obligations  or  other
     securities of such Person,  any capital  contribution to such Person or any
     other  investment  in  such  Person,  including,  without  limitation,  any
     arrangement  pursuant  to  which  the  investor  incurs  Debt of the  types
     referred to in clause (i) or (j) of the  definition of "Debt" in respect of
     such Person.

         "Issuing  Bank"  means  the  Initial  Issuing  Bank and  each  Eligible
     Assignee  to which  the  Letter  of Credit  Commitment  hereunder  has been
     assigned pursuant to Section 8.07.

         "J.W. Childs" has the meaning specified in the Preliminary Statements.

         "L/C Cash Collateral Account" has the meaning specified in the Security
     Agreement.

          "L/C  Related   Documents"  has  the  meaning   specified  in  Section
     2.04(e)(ii).

          "Lender  Party"  means any Lender,  the Issuing Bank or the Swing Line
     Bank.

         "Lenders" means the Initial Lenders and each Person that shall become a
     Lender hereunder pursuant to Section 8.07.

          "Letter  Agreements"  has the  meaning  specified  in the  Preliminary
     Statements.

         "Letter of Credit" has the meaning specified in Section 2.01(e).

         "Letter of Credit Advance" means an advance made by the Issuing Bank or
     any Revolving Credit Lender pursuant to Section 2.03(c).

          "Letter of Credit  Agreement"  has the  meaning  specified  in Section
     2.03(a).

         "Letter of Credit  Commitment"  means, with respect to the Issuing Bank
     at any time,  the amount set forth  opposite  the  Issuing  Bank's  name on
     Schedule I hereto under the caption  "Letter of Credit  Commitment"  or, if
     the Issuing Bank has entered into one or more  Assignments and Acceptances,
     set  forth  for  the  Issuing  Bank  in  the  Register  maintained  by  the
     Administrative Agent pursuant to Section 8.07(d) as the


<PAGE>


                                       19

     Issuing Bank's "Letter of Credit Commitment", as such amount may be reduced
     at or prior to such time pursuant to Section 2.05.

         "Letter of Credit  Facility" means, at any time, an amount equal to the
     amount of the Issuing  Bank's Letter of Credit  Commitment at such time, as
     such  amount may be reduced  at or prior to such time  pursuant  to Section
     2.05.

         "Lien" means any lien, security interest or other charge or encumbrance
     of any kind,  or any other  type of  preferential  arrangement,  including,
     without  limitation,  the lien or retained  security title of a conditional
     vendor and any easement, right of way or other encumbrance on title to real
     property.

         "Loan Documents" means (a) for purposes of this Agreement and the Notes
     and any  amendment  or  modification  hereof or  thereof  and for all other
     purposes  other than for  purposes of the  Collateral  Documents,  (i) this
     Agreement, (ii) the Notes, (iii) the Collateral Documents, (iv) each Letter
     of Credit  Agreement and (v) any guaranty entered into by any Subsidiary of
     the Borrower  pursuant to the provisions of Section  5.02(e) or (f) and (b)
     for purposes of the  Collateral  Documents,  (i) this  Agreement,  (ii) the
     Notes, (iii) the Collateral Documents, (iv) each Letter of Credit Agreement
     and  (v)  any  guaranty  entered  into by any  Subsidiary  of the  Borrower
     pursuant  to the  provisions  of Section  5.02(e)  or (f),  in each case as
     amended or otherwise modified from time to time.

         "Loan Parties" means the Borrower, Holding, the Purchaser and each
     Subsidiary of the Borrower.

         "Loan Value" means, with respect to (i) any Eligible Inventory,  50% of
     the value of such Eligible Inventory and (ii) any Eligible Receivable,  80%
     of the unpaid face Amount of such Eligible Receivable.

         "Management  Agreement"  means the  management  agreement to be entered
     into by the Borrower and J.W. Childs in substantially the form of Exhibit I
     hereto.

         "Margin Stock" has the meaning specified in Regulation U.

         "Material  Adverse  Change"  means any material  adverse  change in the
     business,  condition  (financial or  otherwise),  operations,  performance,
     properties or prospects of any Loan Party and its Subsidiaries,  taken as a
     whole.

         "Material  Adverse  Effect" means a material  adverse effect on (a) the
     business,  condition  (financial or  otherwise),  operations,  performance,
     properties or prospects of any Loan Party and its Subsidiaries,  taken as a
     whole, (b) the rights and remedies of


<PAGE>


                                       20

     the  Administrative  Agent or any Lender  Party under any Loan  Document or
     Related  Document  or (c) the  ability  of any Loan  Party to  perform  its
     Obligations  under any Loan Document or Related  Document to which it is or
     is to be a party.

         "Material Contract" means, with respect to any Person, each contract to
     which such Person is a party involving aggregate  consideration  payable to
     or by such Person of $2,000,000  or more in any year or otherwise  material
     to  the  business,   condition   (financial  or   otherwise),   operations,
     performance, properties or prospects of such Person.

         "Merger" has the meaning specified in the Preliminary Statements.

         "Merger  Agreement"  means the Agreement and Plan of Merger dated as of
     November  27,  1996 among  J.W.  Childs,  Holding,  the  Purchaser  and the
     Borrower and the other related documents,  agreements, and instruments,  in
     each case as the same may be amended,  modified or  otherwise  supplemented
     from time to time in accordance with the provisions of this Agreement.

         "Multiemployer  Plan" means a multiemployer plan, as defined in Section
     4001(a)(3)  of ERISA,  to which any Loan  Party or any ERISA  Affiliate  is
     making or accruing an obligation to make  contributions,  or has within any
     of the  preceding  five plan years made or  accrued an  obligation  to make
     contributions.

         "Multiple  Employer  Plan" means a single  employer plan, as defined in
     Section  4001(a)(15) of ERISA,  that (a) is maintained for employees of any
     Loan Party or any ERISA  Affiliate  and at least one Person  other than the
     Loan  Parties  and the ERISA  Affiliates  or (b) was so  maintained  and in
     respect of which any Loan Party or any ERISA Affiliate could have liability
     under Section 4064 or 4069 of ERISA in the event such plan has been or were
     to be terminated.

          "NationsBank"  has the meaning specified in the recital of the parties
     to this Agreement.

         "Net Cash Proceeds" means, with respect to any sale, lease, transfer or
     other  disposition  of any  asset  or the sale or  issuance  of any Debt or
     capital  stock  or other  ownership  or  profit  interest,  any  securities
     convertible  into or  exchangeable  for capital stock or other ownership or
     profit  interest or any warrants,  rights,  options or other  securities to
     acquire  capital stock or other ownership or profit interest by any Person,
     or any  Extraordinary  Receipt received by or paid to or for the account of
     any  Person,  the  aggregate  amount  of cash  received  from  time to time
     (whether as initial  consideration  or through  payment or  disposition  of
     deferred  consideration)  by or on behalf of such Person in connection with
     such transaction after deducting therefrom


<PAGE>


                                       21

     only  (without   duplication)   (a)  reasonable  and  customary   brokerage
     commissions, underwriting fees and discounts, legal fees, finder's fees and
     other similar fees and commissions, in each case to the extent, but only to
     the extent,  that the  amounts so  deducted  are, at the time of receipt of
     such  cash,  actually  paid to a Person  that is not an  Affiliate  of such
     Person or any Loan Party or any  Affiliate of any Loan Party,  (b) any Debt
     permitted by Section 5.02(b)(iv)(B) or (C) and secured by assets being sold
     in such transaction that is required to be paid from such proceeds, and (c)
     income taxes that,  as  estimated  by the  Borrower in good faith,  will be
     required  to be paid by the  Borrower  and  its  Subsidiaries  in cash as a
     result of, and within 15 months after,  such sale or  disposition,  in each
     case  specified in clauses (a), (b) and (c) to the extent,  but only to the
     extent,  that the amounts so deducted  are  properly  attributable  to such
     transaction or to the asset that is the subject thereof; provided, however,
     that Net Cash Proceeds from the sale, lease,  transfer or other disposition
     of any asset  shall not  include  any amount of cash  proceeds  received in
     connection  with such  transaction  to the extent  such cash  proceeds  are
     applied to replace  the asset in respect of which such cash  proceeds  were
     received,  so long as such  application  is made within 12 months after the
     occurrence of such sale, lease, transfer or other disposition.

         "Nonratable  Assignment" means an assignment by a Lender Party pursuant
     to Section  8.07(a) of a portion of its rights and  obligations  under this
     Agreement,  other  than an  assignment  of a  uniform,  and not a  varying,
     percentage of all of the rights and  obligations of such Lender Party under
     and in respect of all of the  Facilities  (other  than the Letter of Credit
     Facility and the Swing Line Facility).

         "Note" means a Term Note or a Revolving Credit Note.

         "Notice of Borrowing" has the meaning specified in Section 2.02(a).

         "Notice of Issuance" has the meaning specified in Section 2.03(a).

         "Notice of Renewal" has the meaning specified in Section 2.01(d).

         "Notice of Swing Line Borrowing" has the meaning specified in
     Section 2.02(b).

         "Notice of Termination" has the meaning specified in Section 2.01(d).

         "NPL" means the National Priorities List under CERCLA.

         "Obligation"   means,   with  respect  to  any  Person,   any  payment,
     performance  or other  obligation  of such  Person of any kind,  including,
     without limitation,  any liability of such Person on any claim,  whether or
     not the right of any creditor to


<PAGE>


                                       22

     payment  in respect  of such  claim is  reduced  to  judgment,  liquidated,
     unliquidated,  fixed, contingent,  matured,  disputed,  undisputed,  legal,
     equitable,  secured  or  unsecured,  and  whether  or  not  such  claim  is
     discharged,  stayed or otherwise affected by any proceeding  referred to in
     Section  6.01(f).  Without  limiting the generality of the  foregoing,  the
     Obligations  of the Loan Parties under the Loan  Documents  include (a) the
     obligation  to pay  principal,  interest,  Letter  of  Credit  commissions,
     charges, expenses, fees, attorneys' fees and disbursements, indemnities and
     other amounts payable by any Loan Party under any Loan Document and (b) the
     obligation  of any Loan Party to reimburse  any amount in respect of any of
     the foregoing that any Lender Party, in its sole  discretion,  may elect to
     pay or advance on behalf of such Loan Party.

         "OECD" means the Organization for Economic Cooperation and Development.

         "Open Year" has the meaning specified in Section 4.01(bb).

         "Other Taxes" has the meaning specified in Section 2.12(b).

          "PBGC"  means  the  Pension  Benefit  Guaranty   Corporation  (or  any
     successor).

          "Permanent  Debt"  means  the  senior  unsecured  notes or the  senior
     subordinated  notes issued in an aggregate  principal  amount not to exceed
     $115,000,000 by the Borrower as contemplated by the Engagement Letter dated
     November 26, 1996 from NationsBanc Capital Markets, Inc. to J.W. Childs.

         "Permanent Debt Documents"  means the agreements and instruments  which
     govern  the  terms of the  Permanent  Debt,  as the  same  may be  amended,
     modified or otherwise supplemented from time to time in accordance with the
     provisions of this Agreement.

         "Permitted   Liens"  means  such  of  the  following  as  to  which  no
     enforcement,  collection,  execution,  levy or foreclosure proceeding shall
     have been  commenced:  (a) Liens for taxes,  assessments  and  governmental
     charges  or levies to the  extent not  required  to be paid  under  Section
     5.01(b)  hereof;   (b)  Liens  imposed  by  law,  such  as   materialmen's,
     mechanics',  carriers',  workmen's and repairmen's  Liens and other similar
     Liens  arising  in the  ordinary  course of  business,  in each case (i) in
     existence less than 90 days from the date of creation thereof or (ii) being
     contested in good faith by the Borrower or any  Subsidiary  in  appropriate
     proceedings  (so  long  as  the  Borrower  or  such  Subsidiary  shall,  in
     accordance  with GAAP,  have set aside on its books adequate  reserves with
     respect  thereto);  (c) deposits or pledges made in the ordinary  course of
     business  (i)  in  connection  with,  or to  secure  payment  of,  workers'
     compensation,  unemployment  insurance,  old age  pensions or other  social
     security, (ii)


<PAGE>


                                       23

     in connection  with casualty  insurance  maintained in accordance  with the
     provisions of any Loan Document,  (iii) to secure the  performance of bids,
     tenders or leases, (iv) to secure statutory obligations or surety or appeal
     bonds or (v) to secure indemnity, performance or other similar bonds in the
     ordinary  course of business;  and (d)  easements,  rights of way and other
     encumbrances  on title to real  property  that do not  render  title to the
     property encumbered thereby unmarketable or materially adversely affect the
     use of such property for its present purposes.

         "Person" means an  individual,  partnership,  corporation  (including a
     business trust),  limited liability  company,  joint stock company,  trust,
     unincorporated association,  joint venture or other entity, or a government
     or any political subdivision or agency thereof.

         "Plan" means a Single Employer Plan or a Multiple Employer Plan.

         "Pledge Agreement" has the meaning specified in Section 5.01(q).

         "Preferred Stock" means, with respect to any corporation, capital stock
     issued by such  corporation  that is entitled to a  preference  or priority
     over  any  other  capital  stock  issued  by  such   corporation  upon  any
     distribution  of such  corporation's  assets,  whether by  dividend or upon
     liquidation.

         "Prime Rate" means a fluctuating interest rate per annum in effect from
     time to time,  which  rate  per  annum  shall at all  times be equal to the
     higher of:

               (a) the rate of interest  announced  publicly by Fleet in Boston,
          Massachusetts from time to time, as Fleet's prime rate; and

               (b) 1/2 of one percent per annum above the Federal Funds Rate.

         "Prime Rate Advance"  means an Advance that bears  interest as provided
     in Section 2.07(a)(i).

         "Pro Rata Share" of any amount  means,  with  respect to any  Revolving
     Credit Lender at any time,  the product of such amount times a fraction the
     numerator  of  which  is the  amount  of  such  Lender's  Revolving  Credit
     Commitment  at such  time and the  denominator  of  which is the  Revolving
     Credit Facility at such time.

          "Purchase  Agreement"  has the  meaning  specified  in the  recital of
     parties hereto.

         "Purchaser" has the meaning specified in the Preliminary Statements.


<PAGE>


                                       24

          "Receivables" means all Receivables referred to in Section 1(c) of the
     Security Agreement.

         "Redeemable"  means,  with  respect  to  any  capital  stock  or  other
     ownership or profit interest,  Debt or other right or Obligation,  any such
     right or  Obligation  that (a) the  issuer has  undertaken  to redeem on or
     prior to the  Termination  Date at a fixed or  determinable  date or dates,
     whether by operation of a sinking fund or otherwise, or upon the occurrence
     of a  condition  not  solely  within  the  control  of the issuer or (b) is
     redeemable at the option of the holder;  provided,  however,  that the term
     "Redeemable"  shall  not  include  any  such  right or  Obligation  that is
     redeemable solely by being exchanged for common stock of the issuer.

         "Register" has the meaning specified in Section 8.07(d).

         "Regulation  U" means  Regulation  U of the Board of  Governors  of the
     Federal Reserve System, as in effect from time to time.

          "Related   Documents"  means  the  Purchase   Agreement,   the  Merger
     Agreement, the Stockholders Agreement, the Management Agreement, the Letter
     Agreements,  the Stock  Purchase  Facilities  Documents,  the  Bridge  Note
     Documents and the Permanent Debt Documents.

         "Required Lenders" means at any time Lenders owed or holding at least a
     majority in interest of the sum of (a) the  aggregate  principal  amount of
     the Advances  outstanding at such time, (b) the aggregate  Available Amount
     of all Letters of Credit outstanding at such time, (c) the aggregate unused
     Commitments  under the Term  Facility  at such  time and (d) the  aggregate
     Unused Revolving Credit Commitments at such time; provided,  however,  that
     if any Lender  shall be a  Defaulting  Lender at such time,  there shall be
     excluded from the  determination  of Required  Lenders at such time (A) the
     aggregate  principal  amount of the  Advances  owing to such Lender (in its
     capacity as a Lender) and  outstanding  at such time, (B) such Lender's Pro
     Rata  Share of the  aggregate  Available  Amount of all  Letters  of Credit
     issued by such  Lender and  outstanding  at such time,  (C) the unused Term
     Commitments of such Lender at such time and (D) the Unused Revolving Credit
     Commitment  of such Lender at such time.  For purposes of this  definition,
     the aggregate  principal  amount of Swing Line Advances  owing to the Swing
     Line Bank and of Letter of Credit  Advances  owing to the Issuing  Bank and
     the  Available  Amount of each Letter of Credit shall be  considered  to be
     owed to the  Revolving  Credit  Lenders  ratably in  accordance  with their
     respective Revolving Credit Commitments.

          "Responsible Officer" means any executive officer of any Loan Party or
     any of its Subsidiaries.


<PAGE>


                                       25

         "Revolving Credit Advance" has the meaning specified in Section 
     2.01(b).

         "Revolving   Credit   Borrowing"   means  a  borrowing   consisting  of
     simultaneous  Revolving  Credit  Advances  of the  same  Type  made  by the
     Revolving Credit Lenders.

         "Revolving  Credit  Commitment"  means,  with respect to any  Revolving
     Credit Lender at any time, the amount set forth opposite such Lender's name
     on Schedule I hereto under the caption "Revolving Credit Commitment" or, if
     such Lender has entered into one or more Assignments and  Acceptances,  set
     forth for such  Lender in the  Register  maintained  by the  Administrative
     Agent  pursuant  to Section  8.07(d)  as such  Lender's  "Revolving  Credit
     Commitment",  as such  amount  may be  reduced  at or  prior  to such  time
     pursuant to Section 2.05.

         "Revolving Credit Facility" means, at any time, the aggregate amount of
     the Revolving Credit Lenders' Revolving Credit Commitments at such time.

         "Revolving Credit Lender" means any Lender that has a Revolving Credit
     Commitment.

         "Revolving Credit Note" means a promissory note of the Borrower payable
     to the order of any Revolving Credit Lender,  in substantially  the form of
     Exhibit A-2 hereto,  evidencing the aggregate  indebtedness of the Borrower
     to such Lender  resulting from the Revolving  Credit  Advances made by such
     Lender.

          "Secured  Obligations"  has  the  meaning  specified  in the  Security
     Agreement.

         "Secured Parties" means the Administrative Agent and the Lender 
     Parties.

         "Security Agreement" has the meaning specified in Section 
     3.01(o)(viii).

         "Single  Employer  Plan" means a single  employer  plan,  as defined in
     Section  4001(a)(15) of ERISA,  that (a) is maintained for employees of any
     Loan Party or any ERISA Affiliate and no Person other than the Loan Parties
     and the ERISA  Affiliates or (b) was so maintained  and in respect of which
     any Loan Party or any ERISA  Affiliate  could have liability  under Section
     4069 of ERISA in the event such plan has been or were to be terminated.

         "Solvent"  and  "Solvency"  mean,  with  respect  to  any  Person  on a
     particular  date,  that on such date (a) the fair value of the  property of
     such Person is greater  than the total  amount of  liabilities,  including,
     without limitation, contingent liabilities, of such Person, (b) the present
     fair salable value of the assets of such Person is not less than the amount
     that will be required to pay the probable liability of such Person on


<PAGE>


                                       26

     its debts as they become  absolute  and  matured,  (c) such Person does not
     intend to, and does not believe  that it will,  incur debts or  liabilities
     beyond  such  Person's  ability to pay such debts and  liabilities  as they
     mature and (d) such Person is not engaged in business or a transaction, and
     is not  about to engage  in  business  or a  transaction,  for  which  such
     Person's  property would  constitute an  unreasonably  small  capital.  The
     amount of  contingent  liabilities  at any time  shall be  computed  as the
     amount that,  in the light of all the facts and  circumstances  existing at
     such time,  represents the amount that can reasonably be expected to become
     an actual or matured liability.

         "Standby  Letter of Credit" means any Letter of Credit issued under the
     Letter of Credit Facility, other than a Trade Letter of Credit.

          "Stock  Purchase"  has  the  meaning   specified  in  the  Preliminary
     Statements.

         "Stock Purchase Facilities" means the "Loans" referred to in the Stock
     Purchase Facility Documents.

         "Stock Purchase Facility Documents" means the Credit Agreement dated as
     of December 23, 1996 among the  Purchaser,  the lenders  party  thereto and
     NationsBank,  as  administrative  agent and the "Loan  Papers"  referred to
     therein,  in each  case as such  agreements  may be  amended,  modified  or
     otherwise supplemented in accordance with the provisions of this Agreement.

         "Stockholders  Agreement" means the Stockholders  Agreement dated as of
     December 23, 1996 among Holding, the Persons listed as the "JWC Holders" on
     the signature  pages thereof and the Persons listed as the "Other  Holders"
     on the signature  pages  thereof,  as the same may be amended,  modified or
     otherwise  supplemented from time to time in accordance with the provisions
     of this Agreement.

         "Subsequent Purchase" has the meaning specified in the Preliminary
     Statements.

         "Subordinated Debt" means any Debt of the Borrower that is subordinated
     to the  Obligations  of the Borrower  under the Loan Documents on, and that
     otherwise  contains,  terms and conditions  reasonably  satisfactory to the
     Required Lenders.

         "Subsidiary" of any Person means any  corporation,  partnership,  joint
     venture,  limited liability company, trust or estate of which (or in which)
     more  than 50% of (a) the  issued  and  outstanding  capital  stock  having
     ordinary voting power to elect a majority of the Board of Directors of such
     corporation (irrespective of whether at the time capital stock of any other
     class or classes of such corporation  shall or might have voting power upon
     the occurrence of any contingency), (b) the interest in the capital


<PAGE>


                                       27

     or profits of such partnership,  joint venture or limited liability company
     or (c) the  beneficial  interest  in such  trust or  estate  is at the time
     directly or indirectly  owned or controlled by such Person,  by such Person
     and  one or  more  of its  other  Subsidiaries  or by one or  more  of such
     Person's other Subsidiaries.

         "Surviving Debt" has the meaning set forth in Section 3.01(h).

         "Swing Line  Advance"  means an advance made by (a) the Swing Line Bank
     pursuant to Section 2.01(c) or (b) any Revolving  Credit Lender pursuant to
     Section 2.02(b).

         "Swing Line Bank" means Fleet.

         "Swing Line  Borrowing"  means a borrowing  consisting  of a Swing Line
     Advance made by the Swing Line Bank.

         "Swing Line Facility" has the meaning specified in Section 2.01(c).

         "Tax Certificate" has the meaning specified in Section 5.03(o).

         "Taxes" has the meaning specified in Section 2.12(a).

         "Term Advance" has the meaning specified in Section 2.01(b).

         "Term  Borrowing"  means a borrowing  consisting of  simultaneous  Term
     Advances of the same Type made by the Term Lenders.

         "Term  Commitment"  means, with respect to any Term Lender at any time,
     the amount set forth opposite such Lender's name on Schedule I hereto under
     the caption  "Term  Commitment"  or, if such Lender has entered into one or
     more Assignments and Acceptances, set forth for such Lender in the Register
     maintained by the Administrative  Agent pursuant to Section 8.07(d) as such
     Lender's  "Term  Commitment",  as such amount may be reduced at or prior to
     such time pursuant to Section 2.05.

         "Term Facility"  means,  at any time, the aggregate  amount of the Term
     Lenders' Term Commitments at such time.

         "Term Lender" means any Lender that has a Term Commitment.

         "Term  Note" means a  promissory  note of the  Borrower  payable to the
     order of any Term Lender,  in substantially the form of Exhibit A-1 hereto,
     evidencing the


<PAGE>


                                       28

     indebtedness of the Borrower to such Lender resulting from the Term Advance
     made by such Lender.

         "Termination  Date" means the earlier of December 31, 2001 and the date
     of  termination  in whole of the Term  Commitments,  the  Letter  of Credit
     Commitments and the Revolving Credit  Commitments  pursuant to Section 2.05
     or 6.01.

         "Trade  Letter of  Credit"  means any  Letter of Credit  that is issued
     under the  Letter of Credit  Facility  for the  benefit  of a  supplier  of
     Inventory to the Borrower or any of its  Subsidiaries to effect payment for
     such Inventory.

         "Transaction" means the Stock Purchase and the Merger.

         "Type" refers to the distinction  between  Advances bearing interest at
     the Prime Rate and Advances bearing interest at the Eurodollar Rate.

         "Unused  Revolving  Credit  Commitment"  means,  with  respect  to  any
     Revolving  Credit Lender at any time,  (a) such Lender's  Revolving  Credit
     Commitment  at such time minus (b) the sum of (i) the  aggregate  principal
     amount of all Revolving Credit Advances,  Swing Line Advances and Letter of
     Credit  Advances  made by such  Lender (in its  capacity  as a Lender)  and
     outstanding at such time, plus (ii) such Lender's Pro Rata Share of (A) the
     aggregate  Available  Amount of all Letters of Credit  outstanding  at such
     time, (B) the aggregate  principal  amount of all Letter of Credit Advances
     made by the Issuing Bank  pursuant to Section  2.03(c) and  outstanding  at
     such time and (C) the aggregate principal amount of all Swing Line Advances
     made by the Swing Line Bank pursuant to Section  2.01(c) and outstanding at
     such time.

         "Voting  Stock"  means  capital  stock  issued  by  a  corporation,  or
     equivalent  interests  in any  other  Person,  the  holders  of  which  are
     ordinarily,  in the  absence  of  contingencies,  entitled  to vote for the
     election of directors  (or persons  performing  similar  functions) of such
     Person, even if the right so to vote has been suspended by the happening of
     such a contingency.

         "Welfare  Plan"  means a welfare  plan,  as defined in Section  3(1) of
     ERISA,  that is maintained for employees of any Loan Party or in respect of
     which any Loan Party could have liability.

          "Withdrawal Liability" has the meaning specified in Part I of Subtitle
     E of Title IV of ERISA.



<PAGE>


                                       29

         SECTION 1.02.  Computation  of Time Periods.  In this  Agreement in the
computation of periods of time from a specified date to a later  specified date,
the word "from" means "from and  including"  and the words "to" and "until" each
mean "to but excluding".

         SECTION 1.03.  Accounting  Terms. All accounting terms not specifically
defined  herein  shall  be  construed  in  accordance  with  generally  accepted
accounting  principles  consistent  with those applied in the preparation of the
financial statements referred to in Section 4.01(f) ("GAAP").


                                   ARTICLE II

                        AMOUNTS AND TERMS OF THE ADVANCES
                            AND THE LETTERS OF CREDIT

         SECTION 2.01.  The Advances.  (a) The Term  Advances.  Each Term Lender
severally agrees,  on the terms and conditions  hereinafter set forth, to make a
single advance (a "Term Advance") to the Borrower on any Business Day during the
period  from the date hereof  until  January 31, 1997 in an amount not to exceed
such Lender's Term  Commitment at such time. The Term Borrowing shall consist of
Term Advances made simultaneously by the Term Lenders ratably according to their
Term  Commitments.  Amounts  borrowed  under this Section  2.01(a) and repaid or
prepaid may not be reborrowed.

         (b)  The  Revolving  Credit  Advances.  Each  Revolving  Credit  Lender
severally  agrees,  on the terms and conditions  hereinafter  set forth, to make
advances (each a "Revolving  Credit  Advance") to the Borrower from time to time
on any Business Day during the period from the date hereof until the Termination
Date in an amount  for each such  Advance  not to exceed  such  Lender's  Unused
Revolving Credit  Commitment at such time. Each Revolving Credit Borrowing shall
be in an aggregate  amount of $1,000,000 or an integral  multiple of $250,000 in
excess  thereof  (other  than a  Borrowing  the  proceeds of which shall be used
solely to repay or prepay in full outstanding Swing Line Advances or outstanding
Letter of Credit  Advances) and shall consist of Revolving  Credit Advances made
simultaneously  by the  Revolving  Credit  Lenders  ratably  according  to their
Revolving  Credit  Commitments.  Within  the  limits  of each  Revolving  Credit
Lender's  Unused  Revolving  Credit  Commitment in effect from time to time, the
Borrower  may borrow  under this  Section  2.01(b),  prepay  pursuant to Section
2.06(a) and reborrow under this Section 2.01(b).

         (c) The Swing Line  Advances.  The  Borrower may request the Swing Line
Bank to make,  and the Swing Line Bank shall make,  on the terms and  conditions
hereinafter set forth,  Swing Line Advances to the Borrower from time to time on
any Business  Day during the period from the date hereof  until the  Termination
Date (i) in an aggregate amount


<PAGE>


                                       30

not to exceed at any time outstanding $5,000,000 (the "Swing Line Facility") and
(ii) in an amount for each such Swing Line Borrowing not to exceed the aggregate
of the Unused  Revolving  Credit  Commitments of the Revolving Credit Lenders at
such time.  No Swing Line  Advance  shall be used for the purpose of funding the
payment of principal of any other Swing Line Advance.  Each Swing Line Borrowing
shall be in an amount of $250,000 or an integral  multiple of $100,000 in excess
thereof  and shall be made as a Prime  Rate  Advance.  Within  the limits of the
Swing Line Facility and within the limits referred to in clause (ii) above,  the
Borrower  may borrow  under this  Section  2.01(c),  repay  pursuant  to Section
2.04(d) or prepay  pursuant to Section  2.06(a) and reborrow  under this Section
2.01(c).

         (d)  Letters of  Credit.  The  Issuing  Bank  agrees,  on the terms and
conditions  hereinafter  set forth,  to issue letters of credit (the "Letters of
Credit") for the account of the  Borrower  from time to time on any Business Day
during the period from the date hereof until 45 days before the Termination Date
(i) in an aggregate  Available Amount for all Letters of Credit not to exceed at
any time the Issuing Bank's Letter of Credit Commitment at such time and (ii) in
an  Available  Amount  for each such  Letter of Credit  not to exceed the Unused
Revolving  Credit  Commitments of the Revolving  Credit Lenders at such time. No
Letter of Credit  shall have an  expiration  date  (including  all rights of the
Borrower or the  beneficiary  to require  renewal)  later than the earlier of 45
days  before  the  Termination  Date and (A) in the case of a Standby  Letter of
Credit  one year  after the date of  issuance  thereof,  but may by its terms be
renewable annually upon notice (a "Notice of Renewal") given to the Issuing Bank
and the  Administrative  Agent on or prior to any date for notice of renewal set
forth in such  Letter of Credit but in any event at least  three  Business  Days
prior to the date of the proposed  renewal of such Standby  Letter of Credit and
upon  fulfillment of the  applicable  conditions set forth in Article III unless
the Issuing Bank has notified  the Borrower  (with a copy to the  Administrative
Agent)  on or prior to the date for  notice  of  termination  set  forth in such
Letter of Credit but in any event at least 30 Business Days prior to the date of
automatic  renewal of its election not to renew such Standby Letter of Credit (a
"Notice of  Termination")  and (B) in the case of a Trade  Letter of Credit,  45
days after the date of issuance thereof; provided that the terms of each Standby
Letter of Credit that is automatically  renewable annually shall (x) require the
Issuing  Bank to give the  beneficiary  named in such  Standby  Letter of Credit
notice of any Notice of Termination,  (y) permit such beneficiary,  upon receipt
of such notice,  to draw under such  Standby  Letter of Credit prior to the date
such Standby Letter of Credit  otherwise would have been  automatically  renewed
and (z) not permit the  expiration  date (after giving effect to any renewal) of
such  Standby  Letter of Credit in any event to be extended to a date later than
45 days before the Termination  Date. If either a Notice of Renewal is not given
by the Borrower or a Notice of Termination is given by the Issuing Bank pursuant
to the  immediately  preceding  sentence,  such  Standby  Letter of Credit shall
expire on the date on which it otherwise would have been automatically  renewed;
provided,  however,  that even in the  absence of receipt of a Notice of Renewal
the Issuing Bank may in its discretion, unless


<PAGE>


                                       31

instructed to the contrary by the  Administrative  Agent or the  Borrower,  deem
that a Notice of Renewal had been timely delivered and in such case, a Notice of
Renewal  shall be deemed to have been so delivered  for all purposes  under this
Agreement.  Within the limits of the Letter of Credit  Facility,  and subject to
the limits  referred to above,  the Borrower may request the issuance of Letters
of Credit  under  this  Section  2.01(d),  repay any  Letter of Credit  Advances
resulting from drawings  thereunder  pursuant to Section 2.03(c) and request the
issuance of additional Letters of Credit under this Section 2.01(d).

         SECTION 2.02. Making the Advances.  (a) Except as otherwise provided in
Section 2.02(b) or 2.03, each Borrowing shall be made on notice, given not later
than 12:00 Noon (Boston,  Massachusetts time) on the third Business Day prior to
the date of the  proposed  Borrowing  in the case of a Borrowing  consisting  of
Eurodollar  Rate  Advances,  or the first  Business Day prior to the date of the
proposed Borrowing in the case of a Borrowing consisting of Prime Rate Advances,
by  the  Borrower  to  the  Administrative  Agent,  which  shall  give  to  each
Appropriate  Lender prompt notice thereof by  telecopier.  Each such notice of a
Borrowing (a "Notice of Borrowing") shall be by telephone, confirmed immediately
in  writing  or  telecopier,  in  substantially  the form of  Exhibit  B hereto,
specifying therein the requested (i) date of such Borrowing, (ii) Facility under
which such  Borrowing  is to be made,  (iii) Type of  Advances  comprising  such
Borrowing,  (iv)  aggregate  amount of such  Borrowing  and (v) in the case of a
Borrowing  consisting of Eurodollar Rate Advances,  initial  Interest Period for
each such Advance.  Each Appropriate  Lender shall,  before 11:00 A.M.  (Boston,
Massachusetts  time)  on the  date of such  Borrowing,  make  available  for the
account of its  Applicable  Lending  Office to the  Administrative  Agent at the
Administrative Agent's Account, in same day funds, such Lender's ratable portion
of such  Borrowing  in  accordance  with the  respective  Commitments  under the
applicable Facility of such Lender and the other Appropriate Lenders.  After the
Administrative  Agent's  receipt  of such  funds  and  upon  fulfillment  of the
applicable  conditions set forth in Article III, the  Administrative  Agent will
make such funds available to the Borrower by crediting the Borrower's Account.

         (b) Each Swing Line Borrowing shall be made on notice,  given not later
than 12:00 Noon (Boston,  Massachusetts  time) on the date of the proposed Swing
Line  Borrowing,  by the Borrower to the Swing Line Bank and the  Administrative
Agent.  Each such  notice of a Swing  Line  Borrowing  (a  "Notice of Swing Line
Borrowing")  shall  be  by  telephone,  confirmed  immediately  in  writing,  or
telecopier,  specifying  therein the requested (i) date of such Borrowing,  (ii)
amount of such Borrowing and (iii) maturity of such  Borrowing  (which  maturity
shall  be no  later  than the  seventh  day  after  the  requested  date of such
Borrowing). The Swing Line Bank will make the amount of the requested Swing Line
Advance  available to the  Administrative  Agent at the  Administrative  Agent's
Account,  in same day funds.  After the  Administrative  Agent's receipt of such
funds and upon  fulfillment  of the  applicable  conditions set forth in Article
III, the Administrative  Agent will make such funds available to the Borrower by
crediting the  Borrower's  Account.  Upon written demand by the Swing Line Bank,
with a copy of such demand to the Administrative Agent, each


<PAGE>


                                       32

other  Revolving  Credit Lender shall purchase from the Swing Line Bank, and the
Swing  Line Bank  shall  sell and  assign to each such  other  Revolving  Credit
Lender,  such  other  Lender's  Pro Rata  Share of such  outstanding  Swing Line
Advance as of the date of such demand,  by making  available  for the account of
its Applicable Lending Office to the Administrative Agent for the account of the
Swing Line Bank, by deposit to the Administrative  Agent's Account,  in same day
funds,  an amount equal to the portion of the  outstanding  principal  amount of
such Swing Line  Advance to be purchased  by such  Lender.  The Borrower  hereby
agrees to each such sale and assignment.  Each Revolving Credit Lender agrees to
purchase  its Pro Rata Share of an  outstanding  Swing  Line  Advance on (i) the
Business Day on which demand  therefor is made by the Swing Line Bank,  provided
that  notice  of such  demand  is given  not  later  than  11:00  A.M.  (Boston,
Massachusetts  time) on such  Business  Day or (ii) the first  Business Day next
succeeding  such demand if notice of such demand is given after such time.  Upon
any such assignment by the Swing Line Bank to any other Revolving  Credit Lender
of a portion  of a Swing  Line  Advance,  the Swing  Line  Bank  represents  and
warrants  to such  other  Lender  that the  Swing  Line  Bank is the  legal  and
beneficial  owner of such  interest  being  assigned  by it,  but makes no other
representation  or warranty and assumes no  responsibility  with respect to such
Swing Line Advance,  the Loan Documents or any Loan Party.  If and to the extent
that any Revolving Credit Lender shall not have so made the amount of such Swing
Line Advance available to the Administrative Agent, such Revolving Credit Lender
agrees  to pay to the  Administrative  Agent  forthwith  on demand  such  amount
together  with  interest  thereon,  for each day from the date of  demand by the
Swing Line Bank until the date such amount is paid to the Administrative  Agent,
at the Federal Funds Rate. If such Lender shall pay to the Administrative  Agent
such amount for the  account of the Swing Line Bank on any  Business  Day,  such
amount so paid in respect of  principal  shall  constitute  a Swing Line Advance
made by such Lender on such Business Day for purposes of this Agreement, and the
outstanding  principal  amount of the Swing Line  Advance made by the Swing Line
Bank shall be reduced by such amount on such Business Day.

         (c) Anything in subsection  (a) above to the contrary  notwithstanding,
(i) the Borrower may not select  Eurodollar  Rate  Advances for any Borrowing if
the  aggregate  amount  of such  Borrowing  is less  than  $1,000,000  or if the
obligation of the  Appropriate  Lenders to make  Eurodollar  Rate Advances shall
then be suspended  pursuant to Section 2.09 or Section 2.10 and (ii) the Advance
may not be outstanding as part of more than 7 separate Borrowings.

         (d) Each Notice of Borrowing and Notice of Swing Line  Borrowing  shall
be  irrevocable  and binding on the Borrower.  In the case of any Borrowing that
the related Notice of Borrowing  specifies is to be comprised of Eurodollar Rate
Advances,  if the Borrower  fails to fulfill on or before the date  specified in
such Notice of Borrowing for such Borrowing the applicable  conditions set forth
in  Article  III and the  Advance  to be  made  by such  Lender  as part of such
Borrowing, as a result of such failure, is not made on such date,


<PAGE>


                                       33

the Borrower will pay to the Administrative Agent for each Appropriate Lender an
amount equal to the present value  (calculated  in accordance  with this Section
2.02(d))  of  interest  for the  Interest  Period  specified  in such  Notice of
Borrowing on the amount of such Advance, at a rate per annum equal to the excess
of (a) the  Eurodollar  Rate that would  have been in effect  for such  Interest
Period over (b) the Eurodollar Rate applicable on the date of determination to a
deemed  Interest  Period  ending on the last day of such  Interest  Period.  The
present value of such additional interest shall be calculated by discounting the
amount of such  interest for each day in the Interest  Period  specified in such
Notice of Borrowing  from such day to the date of such  repayment or termination
at an interest rate per annum equal to the interest rate determined  pursuant to
the preceding sentence,  and by adding all such amounts for all such days during
such period.  The  determination by the  Administrative  Agent of such amount of
interest shall, in the absence of manifest error, be conclusive.

         (e) Unless the Administrative  Agent shall have received notice from an
Appropriate  Lender prior to the date of any  Borrowing  under a Facility  under
which such Lender has a Commitment  that such Lender will not make  available to
the  Administrative  Agent such Lender's ratable portion of such Borrowing,  the
Administrative Agent may assume that such Lender has made such portion available
to the  Administrative  Agent on the date of such  Borrowing in accordance  with
subsection (a) or (b) of this Section 2.02 and the Administrative  Agent may, in
reliance  upon such  assumption,  make  available to the Borrower on such date a
corresponding  amount.  If and to the extent that such Lender  shall not have so
made such ratable portion available to the Administrative Agent, such Lender and
the  Borrower  severally  agree  to  repay  or pay to the  Administrative  Agent
forthwith on demand such corresponding  amount and to pay interest thereon,  for
each day from the date such amount is made  available to the Borrower  until the
date such amount is repaid or paid to the  Administrative  Agent,  at (i) in the
case of the Borrower,  the interest  rate  applicable at such time under Section
2.07 to Advances  comprising such Borrowing and (ii) in the case of such Lender,
the Federal  Funds Rate.  If such Lender shall pay to the  Administrative  Agent
such  corresponding  amount,  such amount so paid shall constitute such Lender's
Advance as part of such Borrowing for all purposes.

         (f) The  failure of any Lender to make the  Advance to be made by it as
part of any Borrowing shall not relieve any other Lender of its  obligation,  if
any, hereunder to make its Advance on the date of such Borrowing,  but no Lender
shall be responsible  for the failure of any other Lender to make the Advance to
be made by such other Lender on the date of any Borrowing.

         SECTION 2.03.  Issuance of and Drawings and Reimbursement Under Letters
of Credit. (a) Request for Issuance.  Each Letter of Credit shall be issued upon
notice,  given not later  than 12:00 Noon  (Boston,  Massachusetts  time) on the
third Business Day prior to the date of the proposed  issuance of such Letter of
Credit,  by  the  Borrower  to  the  Issuing  Bank,  which  shall  give  to  the
Administrative Agent and each Revolving Credit


<PAGE>


                                       34

Lender prompt notice  thereof by  telecopier.  Each such notice of issuance of a
Letter of Credit (a  "Notice  of  Issuance")  shall be by  telephone,  confirmed
immediately in writing or telecopier,  specifying therein the requested (A) date
of such issuance  (which shall be a Business Day), (B) Available  Amount of such
Letter of Credit,  (C)  expiration  date of such Letter of Credit,  (D) name and
address of the  beneficiary of such Letter of Credit and (E) form of such Letter
of Credit, and shall be accompanied by such application and agreement for letter
of credit as the Issuing Bank may specify to the Borrower for use in  connection
with such requested  Letter of Credit (a "Letter of Credit  Agreement").  If (x)
the requested form of such Letter of Credit is acceptable to the Issuing Bank in
its sole  discretion  and (y) it has not  received  notice of  objection to such
issuance  from  Lenders  holding at least a  majority  of the  Revolving  Credit
Commitments,   the  Issuing  Bank  will,  upon  fulfillment  of  the  applicable
conditions set forth in Article III, make such Letter of Credit available to the
Borrower at its office  referred to in Section 8.02 or as otherwise  agreed with
the Borrower in connection  with such  issuance.  In the event and to the extent
that the provisions of any Letter of Credit  Agreement  shall conflict with this
Agreement, the provisions of this Agreement shall govern.

         (b) Letter of Credit Reports. The Issuing Bank shall furnish (A) to the
Administrative  Agent on the first  Business  Day of each week a written  report
summarizing issuance and expiration dates of Letters of Credit issued during the
previous week and drawings during such week under all Letters of Credit,  (B) to
each  Revolving  Credit Lender on the first Business Day of each month a written
report  summarizing  issuance and  expiration  dates of Letters of Credit issued
during the preceding  month and drawings  during such month under all Letters of
Credit and (C) to the  Administrative  Agent and each Revolving Credit Lender on
the first  Business Day of each calendar  quarter a written report setting forth
the average daily  aggregate  Available  Amount  during the  preceding  calendar
quarter of all Letters of Credit.

         (c) Drawing  and  Reimbursement.  The payment by the Issuing  Bank of a
draft drawn under any Letter of Credit shall constitute for all purposes of this
Agreement  the making by the Issuing Bank of a Letter of Credit  Advance,  which
shall be a Prime Rate Advance,  in the amount of such draft. Upon written demand
by the Issuing  Bank,  with a copy of such demand to the  Administrative  Agent,
each  Revolving  Credit Lender shall  purchase  from the Issuing  Bank,  and the
Issuing Bank shall sell and assign to each such Revolving  Credit  Lender,  such
Lender's Pro Rata Share of such  outstanding  Letter of Credit Advance as of the
date of such  purchase,  by making  available for the account of its  Applicable
Lending Office to the Administrative  Agent for the account of the Issuing Bank,
by deposit to the Administrative  Agent's Account,  in same day funds, an amount
equal to the  portion  of the  outstanding  principal  amount of such  Letter of
Credit Advance to be purchased by such Lender.  Promptly after receipt  thereof,
the  Administrative  Agent shall  transfer such funds to the Issuing  Bank.  The
Borrower hereby agrees to each such sale and assignment.  Each Revolving  Credit
Lender agrees to purchase its Pro Rata Share of an outstanding Letter


<PAGE>


                                       35

of Credit  Advance on (i) the Business  Day on which demand  therefor is made by
the Issuing Bank,  provided  notice of such demand is given not later than 11:00
A.M.  ([Boston,  Massachusetts]  time) on such  Business  Day or (ii) the  first
Business Day next succeeding such demand if notice of such demand is given after
such time.  Upon any such  assignment by the Issuing Bank to any other Revolving
Credit  Lender of a portion  of a Letter of Credit  Advance,  the  Issuing  Bank
represents  and warrants to such other Lender that the Issuing Bank is the legal
and  beneficial  owner of such interest  being assigned by it, free and clear of
any  liens,  but  makes no other  representation  or  warranty  and  assumes  no
responsibility with respect to such Letter of Credit Advance, the Loan Documents
or any Loan Party.  If and to the extent that any Revolving  Credit Lender shall
not have so made the amount of such Letter of Credit  Advance  available  to the
Administrative  Agent,  such  Revolving  Credit  Lender  agrees  to  pay  to the
Administrative  Agent  forthwith on demand such amount  together  with  interest
thereon, for each day from the date of demand by the Issuing Bank until the date
such amount is paid to the  Administrative  Agent, at the Federal Funds Rate for
its account or the account of the Issuing  Bank, as  applicable.  If such Lender
shall pay to the Administrative Agent such amount for the account of the Issuing
Bank on any  Business  Day,  such amount so paid in respect of  principal  shall
constitute a Letter of Credit  Advance made by such Lender on such  Business Day
for purposes of this  Agreement,  and the  outstanding  principal  amount of the
Letter of Credit  Advance  made by the  Issuing  Bank  shall be  reduced by such
amount on such Business Day.

         (d)  Failure  to Make  Letter of Credit  Advances.  The  failure of any
Lender  to make  the  Letter  of  Credit  Advance  to be made by it on the  date
specified  in  Section  2.03(c)  shall  not  relieve  any  other  Lender  of its
obligation  hereunder to make its Letter of Credit  Advance on such date, but no
Lender  shall be  responsible  for the  failure of any other  Lender to make the
Letter of Credit Advance to be made by such other Lender on such date.

         SECTION 2.04.  Repayment of Advances.  (a) Term Advances.  The Borrower
shall  repay to the  Administrative  Agent for the  ratable  account of the Term
Lenders the aggregate  outstanding  principal amount of the Term Advances on the
following  dates in the amounts  indicated  (which amounts shall be reduced as a
result  of the  application  of  prepayments  in  accordance  with the  order of
priority set forth in Section 2.06):

                 Date                                      Amount

          June 30, 1997                                  $800,000
          October 31, 1997                                800,000
          June 30, 1998                                   800,000
          December 31, 1998                               800,000
          June 30, 1999                                   800,000
          December 31, 1999                               800,000
          June 30, 2000                                   800,000


<PAGE>


                                       36

          December 31, 2000                               800,000
          June 30, 2001                                   800,000
          December 31, 2001                               800,000


provided,  however,  that the final principal installment shall be repaid on the
Termination  Date and in any event shall be in an amount equal to the  aggregate
principal amount of the Term Advances outstanding on such date.

         (b)  Revolving  Credit  Advances.  The  Borrower  shall  repay  to  the
Administrative  Agent for the ratable account of the Revolving Credit Lenders on
the Termination Date the aggregate outstanding principal amount of the Revolving
Credit Advances then outstanding.

         (c) Swing Line Advances. The Borrower shall repay to the Administrative
Agent for the  account of the Swing Line Bank and each  other  Revolving  Credit
Lender that has made a Swing Line Advance the  outstanding  principal  amount of
each Swing Line Advance made by each of them on the earlier of the maturity date
specified in the applicable Notice of Swing Line Borrowing (which maturity shall
be no later than the seventh day after the requested date of such Borrowing) and
the Termination Date.

         (d) Letter of Credit  Advances.  (i) The  Borrower  shall  repay to the
Administrative  Agent  for the  account  of the  Issuing  Bank  and  each  other
Revolving  Credit Lender that has made a Letter of Credit Advance on the earlier
of demand and the Termination Date.

         (ii) The Obligations of the Borrower under this  Agreement,  any Letter
of Credit Agreement and any other agreement or instrument relating to any Letter
of Credit shall be unconditional and irrevocable,  and shall be paid strictly in
accordance with the terms of this Agreement, such Letter of Credit Agreement and
such other agreement or instrument under all circumstances,  including,  without
limitation, the following circumstances:

                  (A)  any  lack  of  validity  or  enforceability  of any  Loan
         Document,  any Letter of Credit Agreement,  any Letter of Credit or any
         other  agreement or instrument  relating  thereto (all of the foregoing
         being, collectively, the "L/C Related Documents");

                  (B) any change in the time,  manner or place of payment of, or
         in any other term of, all or any of the  Obligations of the Borrower in
         respect of any L/C Related Document or any other amendment or waiver of
         or any  consent  to  departure  from  all or  any  of the  L/C  Related
         Documents;



<PAGE>


                                       37

                  (C) the  existence  of any  claim,  set-off,  defense or other
         right that the Borrower may have at any time against any beneficiary or
         any  transferee of a Letter of Credit (or any Persons for whom any such
         beneficiary or any such transferee may be acting),  the Issuing Bank or
         any  other  Person,   whether  in  connection  with  the   transactions
         contemplated by the L/C Related Documents or any unrelated transaction;

                  (D) any  statement  or any other  document  presented  under a
         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;

                  (E)  payment  by the  Issuing  Bank  under a Letter  of Credit
         against  presentation of a draft or certificate  that does not strictly
         comply with the terms of such Letter of Credit;

                  (F) any exchange,  release or non-perfection of any Collateral
         or other  collateral,  or any  release  or  amendment  or  waiver of or
         consent to departure from the Guaranty or any other guarantee,  for all
         or any of the Obligations of the Borrower in respect of the L/C Related
         Documents; or

                  (G) any other circumstance or happening whatsoever, whether or
         not similar to any of the foregoing, including, without limitation, any
         other circumstance that might otherwise  constitute a defense available
         to, or a discharge  of, the  Borrower  or a  guarantor  (other than the
         gross negligence or willful misconduct of the Issuing Bank).

         SECTION  2.05.  Termination  or  Reduction  of  the  Commitments.   (a)
Optional.  The Borrower  may,  upon at least five  Business  Days' notice to the
Administrative  Agent,  terminate in whole or reduce in part the unused portions
of the Term  Commitments  and the  Letter  of  Credit  Facility  and the  Unused
Revolving Credit Commitments;  provided, however, that each partial reduction of
a Facility  (i) shall be in an  aggregate  amount of  $1,000,000  or an integral
multiple of $250,000 in excess  thereof and (ii) shall be made ratably among the
Appropriate  Lenders in accordance with their  Commitments  with respect to such
Facility.

         (b)  Mandatory.  (i) On the date of the Term  Borrowing,  after  giving
effect  to such  Term  Borrowing,  and from  time to time  thereafter  upon each
repayment or prepayment of the Term Advances,  the aggregate Term Commitments of
the Term Lenders shall be automatically and permanently  reduced,  on a pro rata
basis, by an amount equal to the amount by which the aggregate Term  Commitments
immediately prior to such reduction exceed the aggregate unpaid principal amount
of the Term Advances then outstanding.



<PAGE>


                                       38

         (ii) The Letter of Credit  Facility shall be  permanently  reduced from
time to time on the date of each reduction in the Revolving  Credit  Facility by
the amount, if any, by which the amount of the Letter of Credit Facility exceeds
the  Revolving  Credit  Facility  after giving  effect to such  reduction of the
Revolving Credit Facility.

         SECTION  2.06.  Prepayments.  (a)  Optional.  The Borrower may, upon at
least one  Business  Day's  notice in the case of Prime Rate  Advances and three
Business Days' notice in the case of Eurodollar  Rate Advances,  in each case to
the  Administrative  Agent  stating the proposed  date and  aggregate  principal
amount of the prepayment, and if such notice is given the Borrower shall, prepay
the outstanding  aggregate  principal amount of the Advances  comprising part of
the same Borrowing in whole or ratably in part,  together with accrued  interest
to the  date of such  prepayment  on the  aggregate  principal  amount  prepaid;
provided,  however, that (x) each partial prepayment (other than in respect of a
prepayment of the Swing Line Advances) shall be in an aggregate principal amount
of  $250,000 or an integral  multiple  of $250,000 in excess  thereof,  (y) each
partial  prepayment  of Swing Line Advances  shall be in an aggregate  principal
amount of $250,000 or an integral multiple of $100,000 in excess thereof and (z)
if any prepayment of a Eurodollar  Rate Advance is made on a date other than the
last day of an Interest  Period for such Advance the Borrower shall also pay any
amounts  owing  pursuant to Section  8.04(c).  In respect of each such  optional
prepayment of the Term Facility,  50% of such prepayment shall be applied to the
installments  of the Term Facility in direct order of maturity and the remaining
50% shall be applied to the  installments  of the Term Facility in inverse order
of maturity.

         (b) Mandatory.  (i) The Borrower  shall, on the 15th day following each
date on which the Borrower delivers the annual financial  statements pursuant to
Section  5.03(d)  (commencing  with  Fiscal  Year  1997),  prepay  an  aggregate
principal  amount of the Advances  comprising  part of the same Borrowings in an
amount  equal to 75% of  Excess  Cash  Flow  for such  Fiscal  Year.  Each  such
prepayment shall be applied to the Term Facility; provided, however, that 50% of
such amount shall be applied to the  installments of the Term Facility in direct
order of maturity and the remaining 50% shall be applied to the  installments of
the Term Facility in inverse order of maturity.  Upon the payment in full of the
Term Advances,  there shall be no further mandatory prepayments pursuant to this
Section 2.05(b)(i).

         (ii) The Borrower  shall,  on the third Business Day following the date
of receipt of the Net Cash Proceeds by any Loan Party or any of its Subsidiaries
from (A) the sale,  lease,  transfer or other  disposition  of any assets of any
Loan Party or any of its Subsidiaries  (other than any sale, lease,  transfer or
other disposition of assets pursuant to clause (i) of Section 5.02(e)),  (B) the
incurrence or issuance by any Loan Party or any of its  Subsidiaries of any Debt
(other than Debt incurred or issued pursuant to Section  5.02(b)),  (C) the sale
or issuance by any Loan Party or any of its Subsidiaries of any capital stock or
other  ownership  or  profit  interest,   any  securities  convertible  into  or
exchangeable for capital


<PAGE>


                                       39

stock or other ownership or profit  interest or any warrants,  rights or options
to acquire  capital  stock or other  ownership  or profit  interest  and (D) any
Extraordinary  Receipt  received  by or paid to or for the  account  of any Loan
Party or any of its Subsidiaries  and not otherwise  included in clause (A), (B)
or (C) above,  prepay an aggregate  principal amount of the Advances  comprising
part of the same  Borrowings  equal  to the  amount  of such Net Cash  Proceeds;
provided,  however,  that if, on such date of receipt,  any Debt is  outstanding
under  either  the  Stock  Purchase  Facilities  Documents  or the  Bridge  Note
Documents,  the Net Cash  Proceeds  from the  incurrence or issuance by any Loan
Party or any of its Subsidiaries of senior  unsecured Debt or Subordinated  Debt
may be applied to repay,  prepay or redeem the Debt outstanding  under the Stock
Purchase Facilities Documents or the Bridge Note Documents,  as the case may be.
Each such prepayment  shall be applied  ratably to the Term Facility;  provided,
however,  that 50% of such amount  shall be applied to the  installments  of the
Term Facility in direct order of maturity and the remaining 50% shall be applied
to the installments of the Term Facility in inverse order of maturity.  Upon the
payment  in full of the  Term  Advances,  there  shall be no  further  mandatory
prepayments pursuant to this Section 2.05(b)(ii).

         (iii) The Borrower  shall,  on each Business  Day,  prepay an aggregate
principal  amount of the Revolving  Credit Advances  comprising part of the same
Borrowings,  the Letter of Credit  Advances and the Swing Line Advances equal to
the  amount by which (A) the sum of the  aggregate  principal  amount of (x) the
Revolving Credit  Advances,  (y) the Letter of Credit Advances and (z) the Swing
Line  Advances  then  outstanding  plus the  aggregate  Available  Amount of all
Letters of Credit  then  outstanding  exceeds  (B) the  lesser of the  Revolving
Credit Facility and the Loan Value of Eligible Collateral on such Business Day.

         (iv)  The  Borrower   shall,   on  each   Business   Day,  pay  to  the
Administrative  Agent for deposit in the L/C Cash  Collateral  Account an amount
sufficient to cause the aggregate  amount on deposit in the L/C Cash  Collateral
Account  to equal  the  amount by which the  aggregate  Available  Amount of all
Letters of Credit then outstanding exceeds the Letter of Credit Facility on such
Business Day.

         (v)  Prepayments  of the  Revolving  Credit  Facility  made pursuant to
clause (iii) above shall be first  applied to prepay  Letter of Credit  Advances
then outstanding  until such Advances are paid in full, second applied to prepay
Swing Line Advances then outstanding until such Advances are paid in full, third
applied to prepay Revolving Credit Advances then outstanding  comprising part of
the same Borrowings until such Advances are paid in full and fourth deposited in
the L/C Cash  Collateral  Account to cash  collateralize  100% of the  Available
Amount of the Letters of Credit then outstanding. Upon the drawing of any Letter
of Credit for which  funds are on deposit  in the L/C Cash  Collateral  Account,
such funds  shall be applied to  reimburse  the  Issuing  Bank or the  Revolving
Credit Lenders, as applicable.


<PAGE>


                                       40

         (vi) All  prepayments  under this subsection (b) shall be made together
with accrued  interest to the date of such  prepayment on the  principal  amount
prepaid.

         SECTION 2.07. Interest.  (a) Scheduled Interest. The Borrower shall pay
interest on the unpaid  principal  amount of each  Advance  owing to each Lender
from the date of such Advance until such principal amount shall be paid in full,
at the following rates per annum:

                  (i) Prime Rate  Advances.  During such periods as such Advance
         is a Prime Rate Advance, a rate per annum equal at all times to the sum
         of (A) the  Prime  Rate in  effect  from  time  to  time  plus  (B) the
         Applicable Margin in effect from time to time,  payable in arrears last
         day of each March, June, September and December during such periods and
         on the date such Prime Rate Advance shall be Converted or paid in full.

                  (ii)  Eurodollar  Rate  Advances.  During such periods as such
         Advance is a  Eurodollar  Rate  Advance,  a rate per annum equal at all
         times  during each  Interest  Period for such Advance to the sum of (A)
         the Eurodollar  Rate for such Interest Period for such Advance plus (B)
         the  Applicable  Margin in  effect  on the  first day of such  Interest
         Period, payable in arrears on the last day of such Interest Period and,
         if such Interest  Period has a duration of more than three  months,  on
         each day that occurs  during such  Interest  Period  every three months
         from  the  first  day of such  Interest  Period  and on the  date  such
         Eurodollar Rate Advance shall be Converted or paid in full.

         (b) Default Interest. Upon the occurrence and during the continuance of
a Default under Section  6.01(a) or 6.01(f),  the Borrower shall pay interest on
(i) the unpaid principal amount of each Advance owing to each Lender, payable in
arrears  on the dates  referred  to in clause  (a)(i)  or  (a)(ii)  above and on
demand,  at a rate per annum  equal at all times to 2% per annum  above the rate
per annum  required  to be paid on such  Advance  pursuant  to clause  (a)(i) or
(a)(ii) above and (ii) to the fullest extent permitted by law, the amount of any
interest,  fee or other amount payable hereunder that is not paid when due, from
the date such  amount  shall be due  until  such  amount  shall be paid in full,
payable in arrears on the date such amount  shall be paid in full and on demand,
at a rate per annum  equal at all times to 2% per annum above the rate per annum
required to be paid,  in the case of  interest,  on the Type of Advance on which
such interest has accrued  pursuant to clause (a)(i) or (a)(ii)  above,  and, in
all other cases, on Prime Rate Advances pursuant to clause (a)(i) above.

         (c) Notice of  Interest  Rate.  Promptly  after  receipt of a Notice of
Borrowing  pursuant  to Section  2.02(a),  the  Administrative  Agent shall give
notice to the


<PAGE>


                                       41

Borrower and each Appropriate Lender of the applicable  interest rate determined
by the Administrative Agent for purposes of clause (a)(i) or (ii).

         SECTION 2.08.  Fees. (a) Commitment  Fee. The Borrower shall pay to the
Administrative  Agent for the account of the Lenders a commitment  fee, from the
date  hereof in the case of each  Initial  Lender  and from the  effective  date
specified in the Assignment and Acceptance  pursuant to which it became a Lender
in the case of each other Lender until the Termination Date,  payable in arrears
on the date of the initial Borrowing hereunder, thereafter quarterly on the last
Business Day of each March, June,  September and December,  commencing March 31,
1997,  and on the  Termination  Date,  at the rate of 1/2 of 1% per annum on the
average daily unused portion of each Appropriate Lender's Term Commitment and on
the sum of the average daily Unused Revolving  Credit  Commitment of such Lender
plus its Pro Rata Share of the average  daily  outstanding  Swing Line  Advances
during such quarter;  provided,  however, that no commitment fee shall accrue on
any of the Commitments of a Defaulting  Lender so long as such Lender shall be a
Defaulting Lender.

         (b)  Letter of Credit  Fees,  Etc.  (i) The  Borrower  shall pay to the
Administrative  Agent  for  the  account  of  each  Revolving  Credit  Lender  a
commission, payable in arrears quarterly on the last Business Day of each March,
June, September and December,  commencing March 31, 1997, and on the earliest to
occur of the full drawing  expiration,  termination or  cancellation of any such
Letter of Credit and on the Termination Date, on such Lender's Pro Rata Share of
the average daily aggregate  Available Amount during such quarter of all Letters
of  Credit  outstanding  from  time to time at a rate  per  annum  equal  to the
Applicable Margin in effect from time to time for Eurodollar Advances comprising
a Revolving Credit Borrowing.

         (ii) The Borrower  shall pay to the Issuing Bank,  for its own account,
such commissions, issuance fees, fronting fees, transfer fees and other fees and
charges in  connection  with the  issuance or  administration  of each Letter of
Credit as the Borrower and the Issuing Bank shall agree.

         (c)  Administrative  Agent's  Fees.  The  Borrower  shall  pay  to  the
Administrative  Agent for its own account  such fees as may from time to time be
agreed between the Borrower and the Administrative Agent.

         SECTION 2.09. Conversion of Advances. (a) Optional. The Borrower may on
any Business Day (without the payment of any fee or premium),  upon notice given
to the  Administrative  Agent not later than 11:00 A.M.  (Boston,  Massachusetts
time) on the third Business Day prior to the date of the proposed Conversion and
subject to the provisions of Sections 2.07 and 2.10,  Convert all or any portion
of the Advances of one Type  comprising  the same Borrowing into Advances of the
other Type; provided,  however,  that any Conversion of Eurodollar Rate Advances
into Prime Rate Advances shall be made only on


<PAGE>


                                       42

the last day of an  Interest  Period  for such  Eurodollar  Rate  Advances,  any
Conversion of Prime Rate Advances into  Eurodollar  Rate Advances shall be in an
amount  not less than the  minimum  amount  specified  in  Section  2.02(c),  no
Conversion  of any  Advances  shall  result  in more  separate  Borrowings  than
permitted under Section 2.02(c) and each Conversion of Advances  comprising part
of the same  Borrowing  under  any  Facility  shall be made  ratably  among  the
Appropriate  Lenders in accordance with their  Commitments  under such Facility.
Each such notice of Conversion shall,  within the restrictions  specified above,
specify (i) the date of such  Conversion,  (ii) the Advances to be Converted and
(iii) if such Conversion is into  Eurodollar Rate Advances,  the duration of the
initial  Interest Period for such Advances.  Each notice of Conversion  shall be
irrevocable and binding on the Borrower.

         (b) Mandatory.  (i) On the date on which the aggregate unpaid principal
amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced, by
payment or prepayment or otherwise, to less than $1,000,000, such Advances shall
automatically Convert into Prime Rate Advances.

         (ii) If the Borrower  shall fail to select the duration of any Interest
Period for any  Eurodollar  Rate  Advances  in  accordance  with the  provisions
contained  in  the  definition  of  "Interest   Period"  in  Section  1.01,  the
Administrative  Agent will forthwith so notify the Borrower and the  Appropriate
Lenders, whereupon each such Eurodollar Rate Advance will automatically,  on the
last day of the then existing  Interest  Period  therefor,  Convert into a Prime
Rate Advance.

         (iii) Upon the  occurrence  and during the  continuance of any Event of
Default, (x) each Eurodollar Rate Advance will automatically, on the last day of
the then existing  Interest Period  therefor,  Convert into a Prime Rate Advance
and (y) the  obligation  of the Lenders to make,  or to Convert  Advances  into,
Eurodollar Rate Advances shall be suspended.

         SECTION  2.10.  Increased  Costs,  Etc.  (a) If,  due to either (i) the
introduction  of or  any  change  in or in  the  interpretation  of  any  law or
regulation  after the date hereof or (ii) the  compliance  with any guideline or
request  issued or  promulgated  after the date hereof from any central  bank or
other  governmental  authority  (whether or not having the force of law),  there
shall be any  increase in the cost to any Lender Party of agreeing to make or of
making,  funding or maintaining Eurodollar Rate Advances or of agreeing to issue
or of issuing or  maintaining  Letters  of Credit or of  agreeing  to make or of
making or maintaining Letter of Credit Advances  (excluding for purposes of this
Section 2.10 any such  increased  costs  resulting from (i) Taxes or Other Taxes
(as to which  Section  2.12  shall  govern)  and (ii)  changes  in the  basis of
taxation of overall net income or overall  gross income by the United  States or
by the foreign  jurisdiction  or state under the laws of which such Lender Party
is organized or has its Applicable  Lending Office or any political  subdivision
thereof), then the Borrower shall from time to time, on or prior to the third


<PAGE>


                                       43

Business Day following  receipt by the Borrower of the  certificate  referred to
below from such Lender  Party (with a copy of such demand to the  Administrative
Agent),  pay to the  Administrative  Agent for the account of such Lender  Party
additional amounts sufficient to compensate such Lender Party for such increased
cost;  provided,  however,  that the Borrower shall not be responsible for costs
under this  Section  2.10(a)  arising  more than 90 days prior to receipt by the
Borrower of the  certificate  from the affected  Lender pursuant to this Section
2.10(a)  with  respect  to such  costs;  provided  further  that a Lender  Party
claiming  additional amounts under this Section 2.10(a) agrees to use reasonable
efforts   (consistent   with  its  internal  policy  and  legal  and  regulatory
restrictions) to designate a different  Applicable  Lending Office if the making
of such a  designation  would  avoid the need for, or reduce the amount of, such
increased  cost that may  thereafter  accrue  and would not,  in the  reasonable
judgment of such  Lender  Party,  be  otherwise  disadvantageous  to such Lender
Party.  A certificate  as to the amount of such  increased cost (together with a
schedule setting forth in reasonable detail the calculation thereof),  submitted
to the Borrower by such Lender Party,  shall be  conclusive  and binding for all
purposes, absent manifest error.

         (b) If any Lender  Party  determines  that  compliance  with any law or
regulation  or any  guideline or request  issued or  promulgated  after the date
hereof from any central  bank or other  governmental  authority  (whether or not
having the force of law) affects or would affect the amount of capital  required
or expected to be maintained by such Lender Party or any corporation controlling
such Lender  Party and that the amount of such  capital is increased by or based
upon the existence of such Lender Party's commitment to lend or to issue Letters
of Credit  hereunder  and other  commitments  of such  type or the  issuance  or
maintenance of the Letters of Credit (or similar contingent obligations),  then,
on or prior to the third  Business Day following  receipt by the Borrower of the
certificate referred to below from such Lender Party (with a copy of such demand
to the Administrative Agent), the Borrower shall pay to the Administrative Agent
for the account of such Lender  Party,  from time to time as  specified  by such
Lender Party,  additional  amounts sufficient to compensate such Lender Party in
the light of such circumstances, to the extent that such Lender Party reasonably
determines  such  increase in capital to be allocable  to the  existence of such
Lender Party's  commitment to lend or to issue Letters of Credit hereunder or to
the issuance or maintenance of any Letters of Credit;  provided,  however, that,
the  Borrower  shall not be  responsible  for costs under this  Section  2.10(b)
arising  more than 90 days prior to receipt by the  Borrower of the  certificate
from the affected  Lender  pursuant to this Section 2.10(b) with respect to such
costs. A certificate as to such amounts  (together with a schedule setting forth
in reasonable detail the calculation  thereof) submitted to the Borrower by such
Lender Party shall be conclusive and binding for all purposes,  absent  manifest
error.

         (c)  If,  with  respect  to any  Eurodollar  Rate  Advances  under  any
Facility,  Lenders  owed at  least  a  majority  of the  then  aggregate  unpaid
principal amount thereof Required Lenders notify the  Administrative  Agent that
the  Eurodollar  Rate  for any  Interest  Period  for  such  Advances  will  not
adequately reflect the cost to such Lenders of making,


<PAGE>


                                       44

funding or maintaining  their Eurodollar Rate Advances for such Interest Period,
the  Administrative  Agent  shall  forthwith  so  notify  the  Borrower  and the
Appropriate  Lenders,  whereupon (i) each such Eurodollar Rate Advance under any
Facility  will  automatically,  on the last day of the  then  existing  Interest
Period  therefor,  Convert into a Prime Rate Advance and (ii) the  obligation of
the Appropriate  Lenders to make, or to Convert  Advances into,  Eurodollar Rate
Advances  shall be  suspended  until the  Administrative  Agent shall notify the
Borrower that such Lenders have determined that the  circumstances  causing such
suspension no longer exist.

         (d)  Notwithstanding  any other  provision  of this  Agreement,  if the
introduction  of or  any  change  in or in  the  interpretation  of  any  law or
regulation  shall make it unlawful,  or any central  bank or other  governmental
authority  shall  assert that it is unlawful,  for any Lender or its  Eurodollar
Lending  Office to perform its  obligations  hereunder to make  Eurodollar  Rate
Advances or to continue to fund or maintain  Eurodollar Rate Advances hereunder,
then,  on notice  thereof and demand  therefor  by such  Lender to the  Borrower
through the  Administrative  Agent,  (i) each Eurodollar Rate Advance under each
Facility under which such Lender has a Commitment will automatically,  upon such
demand,  Convert  into a Prime  Rate  Advance  and  (ii) the  obligation  of the
Appropriate  Lenders  to make,  or to Convert  Advances  into,  Eurodollar  Rate
Advances  shall be  suspended  until the  Administrative  Agent shall notify the
Borrower that such Lender has  determined  that the  circumstances  causing such
suspension  no longer exist;  provided,  however,  that,  before making any such
demand,  such  Lender  agrees to use  reasonable  efforts  (consistent  with its
internal policy and legal and regulatory  restrictions) to designate a different
Eurodollar  Lending Office if the making of such a designation  would allow such
Lender or its Eurodollar  Lending Office to continue to perform its  obligations
to make Eurodollar  Rate Advances or to continue to fund or maintain  Eurodollar
Rate  Advances  and would not, in the  judgment  of such  Lender,  be  otherwise
disadvantageous to such Lender.

         SECTION 2.11.  Payments and  Computations.  (a) The Borrower shall make
each  payment  hereunder  and  under  the  Notes,  irrespective  of any right of
counterclaim  or set-off  (except as otherwise  provided in Section  2.15),  not
later than 12:00 Noon (Boston,  Massachusetts  time) on the day when due in U.S.
dollars to the  Administrative  Agent at the  Administrative  Agent's Account in
same day funds.  The  Administrative  Agent will promptly  thereafter cause like
funds to be  distributed  (i) if such  payment by the  Borrower is in respect of
principal,  interest,  commitment  fees or any  other  Obligation  then  payable
hereunder  and under the Notes to more than one  Lender  Party,  to such  Lender
Parties for the account of their respective  Applicable  Lending Offices ratably
in accordance  with the amounts of such respective  Obligations  then payable to
such Lender  Parties and (ii) if such  payment by the  Borrower is in respect of
any Obligation then payable  hereunder to one Lender Party, to such Lender Party
for the account of its Applicable  Lending Office, in each case to be applied in
accordance  with  the  terms  of  this  Agreement.  Upon  its  acceptance  of an
Assignment and Acceptance and recording of the information  contained therein in
the Register pursuant to


<PAGE>


                                       45

Section  8.07(d),  from and  after the  effective  date of such  Assignment  and
Acceptance, the Administrative Agent shall make all payments hereunder and under
the Notes in  respect of the  interest  assigned  thereby  to the  Lender  Party
assignee  thereunder,  and the parties to such  Assignment and Acceptance  shall
make all  appropriate  adjustments  in such  payments for periods  prior to such
effective date directly between themselves.

         (b) If the  Administrative  Agent receives funds for application to the
Obligations  under the Loan  Documents  under  circumstances  for which the Loan
Documents do not specify the Advances or the Facility to which, or the manner in
which, such funds are to be applied, the Administrative Agent may, but shall not
be obligated to, elect to distribute  such funds to each Lender Party ratably in
accordance with such Lender Party's  proportionate share of the principal amount
of all  outstanding  Advances and the Available  Amount of all Letters of Credit
then outstanding, in repayment or prepayment of such of the outstanding Advances
or other  Obligations  owed to such Lender Party,  and for  application  to such
principal installments, as the Administrative Agent shall direct.

         (c) The Borrower  hereby  authorizes  each Lender Party,  if and to the
extent  payment owed to such Lender Party is not made when due  hereunder or, in
the case of a Lender, under the Note held by such Lender, to charge from time to
time against any or all of the  Borrower's  accounts  with such Lender Party any
amount so due.

         (d) All computations of interest, fees and Letter of Credit commissions
shall be made by the Administrative Agent on the basis of a year of 360 days, in
each case for the actual number of days  (including  the first day but excluding
the  last  day)  occurring  in the  period  for  which  such  interest,  fees or
commissions are payable.  Each determination by the  Administrative  Agent of an
interest rate, fee or commission  hereunder  shall be conclusive and binding for
all purposes, absent manifest error.

         (e) Whenever  any payment  hereunder or under the Notes shall be stated
to be due on a day other than a Business  Day, such payment shall be made on the
next  succeeding  Business Day, and such extension of time shall in such case be
included in the  computation  of payment of interest or  commitment  fee, as the
case may be; provided,  however,  that, if such extension would cause payment of
interest on or  principal  of  Eurodollar  Rate  Advances to be made in the next
following  calendar  month,  such  payment  shall be made on the next  preceding
Business Day.

         (f) Unless the Administrative Agent shall have received notice from the
Borrower  prior to the date on which  any  payment  is due to any  Lender  Party
hereunder   that  the  Borrower  will  not  make  such  payment  in  full,   the
Administrative  Agent may assume that the Borrower has made such payment in full
to the Administrative  Agent on such date and the  Administrative  Agent may, in
reliance upon such assumption, cause to be distributed to each such Lender Party
on such due date an amount equal to the amount then due such


<PAGE>


                                       46

Lender  Party.  If and to the  extent the  Borrower  shall not have so made such
payment in full to the Administrative  Agent, each such Lender Party shall repay
to the Administrative  Agent forthwith on demand such amount distributed to such
Lender Party  together  with interest  thereon,  for each day from the date such
amount is  distributed  to such Lender  Party  until the date such Lender  Party
repays such amount to the Administrative Agent, at the Federal Funds Rate.

         SECTION 2.12. Taxes. (a) Any and all payments by the Borrower hereunder
or under the Notes shall be made,  in  accordance  with Section  2.11,  free and
clear of and without deduction for any and all present or future taxes,  levies,
imposts, deductions,  charges or withholdings,  and all liabilities with respect
thereto,  excluding,  in the case of each  Lender  Party and the  Administrative
Agent, taxes that are imposed on its overall net income by the United States and
taxes that are imposed on its overall net income (and franchise taxes imposed in
lieu thereof) by the state or foreign  jurisdiction under the laws of which such
Lender  Party or the  Administrative  Agent (as the case may be) is organized or
any political  subdivision  thereof and, in the case of each Lender Party, taxes
that are imposed on its overall net income (and franchise  taxes imposed in lieu
thereof) by the state or foreign  jurisdiction of such Lender Party's Applicable
Lending  Office or any  political  subdivision  thereof  (all such  non-excluded
taxes, levies,  imposts,  deductions,  charges,  withholdings and liabilities in
respect of payments  hereunder or under the Notes being hereinafter  referred to
as "Taxes").  If the Borrower  shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Note to any Lender Party
or the  Administrative  Agent,  (i) the sum payable shall be increased as may be
necessary  so that after making all required  deductions  (including  deductions
applicable to additional sums payable under this Section 2.12) such Lender Party
or the Administrative Agent (as the case may be) receives an amount equal to the
sum it would have received had no such  deductions  been made, (ii) the Borrower
shall make such  deductions  and (iii) the  Borrower  shall pay the full  amount
deducted to the relevant  taxation  authority or other  authority in  accordance
with applicable law.

         (b) In addition,  the Borrower  shall pay any present or future  stamp,
documentary,  excise,  property or similar  taxes,  charges or levies that arise
from any  payment  made  hereunder  or under  the  Notes or from the  execution,
delivery or  registration  of,  performing  under, or otherwise with respect to,
this Agreement or the Notes (hereinafter referred to as "Other Taxes").

         (c)  The   Borrower   shall   indemnify   each  Lender  Party  and  the
Administrative  Agent for and hold it harmless  against the full amount of Taxes
and Other  Taxes,  and for the full  amount of taxes of any kind  imposed by any
jurisdiction on amounts  payable under this Section 2.12,  imposed on or paid by
such  Lender  Party  or the  Administrative  Agent  (as the case may be) and any
liability (including penalties, additions to tax, interest and expenses) arising
therefrom or with respect thereto. This indemnification


<PAGE>


                                       47

shall  be  made  within  30  days  from  the  date  such  Lender  Party  or  the
Administrative Agent (as the case may be) makes written demand therefor.

         (d) Within 30 days after the date of any payment of Taxes, the Borrower
shall furnish to the Administrative Agent, at its address referred to in Section
8.02, the original or a certified copy of a receipt evidencing such payment.  In
the case of any  payment  hereunder  or under  the  Notes by or on behalf of the
Borrower  through  an account or branch  outside  the United  States or by or on
behalf of the  Borrower by a payor that is not a United  States  person,  if the
Borrower  determines that no Taxes are payable in respect thereof,  the Borrower
shall  furnish,  or shall  cause such payor to  furnish,  to the  Administrative
Agent, at such address,  an opinion of counsel  acceptable to the Administrative
Agent  stating  that such  payment is exempt  from Taxes.  For  purposes of this
subsection (d) and subsection  (e), the terms "United States" and "United States
person"  shall  have the  meanings  specified  in Section  7701 of the  Internal
Revenue Code.

         (e) Each  Lender  Party  organized  under  the  laws of a  jurisdiction
outside the United  States  shall,  on or prior to the date of its execution and
delivery of this Agreement in the case of each Initial Lender or Initial Issuing
Bank,  as the case  may be,  and on the date of the  Assignment  and  Acceptance
pursuant  to which it becomes a Lender  Party in the case of each  other  Lender
Party,  and from time to time thereafter as requested in writing by the Borrower
(but only so long  thereafter as such Lender Party  remains  lawfully able to do
so), provide each of the Administrative Agent and the Borrower with two original
Internal Revenue Service forms 1001 or 4224, as appropriate, or any successor or
other form  prescribed by the Internal  Revenue  Service,  certifying  that such
Lender  Party is exempt  from or  entitled  to a reduced  rate of United  States
withholding  tax on payments  pursuant to this  Agreement  or the Notes.  If the
forms  provided by a Lender Party at the time such Lender Party first  becomes a
party to this Agreement indicates a United States interest  withholding tax rate
in excess of zero,  withholding  tax at such rate shall be  considered  excluded
from Taxes unless and until such Lender  Party  provides  the  appropriate  form
certifying that a lesser rate applies,  whereupon withholding tax at such lesser
rate only shall be considered  excluded from Taxes for periods  governed by such
form; provided,  however,  that, if at the date of the Assignment and Acceptance
pursuant to which a Lender Party becomes a party to this  Agreement,  the Lender
Party  assignor  was  entitled to payments  under  subsection  (a) in respect of
United States  withholding tax with respect to interest paid at such date, then,
to such extent,  the term Taxes shall include (in addition to withholding  taxes
that may be imposed  in the  future or other  amounts  otherwise  includable  in
Taxes) United States  withholding  tax, if any,  applicable  with respect to the
Lender Party assignee on such date. If any form or document  referred to in this
subsection (e) requires the disclosure of  information,  other than  information
necessary to compute the tax payable and information required on the date hereof
by Internal  Revenue Service form 1001 or 4224, that the Lender Party reasonably
considers to be confidential, the Lender Party shall give notice thereof to


<PAGE>


                                       48

the Borrower and shall not be obligated to include in such form or document such
confidential information.

         (f) For any period with  respect to which a Lender  Party has failed to
provide the Borrower with the appropriate form described in subsection (e) above
(other than if such failure is due to a change in law  occurring  after the date
on which a form originally was required to be provided or if such form otherwise
is not  required  under  subsection  (e) above),  such Lender Party shall not be
entitled to  indemnification  under  subsection (a) or (c) with respect to Taxes
imposed by the United States by reason of such failure; provided,  however, that
should a Lender Party become  subject to Taxes because of its failure to deliver
a form  required  hereunder,  the Borrower  shall take such steps as such Lender
Party  shall  reasonably  request to assist such  Lender  Party to recover  such
Taxes.

         (g) Any Lender Party claiming any additional  amounts payable  pursuant
to this  Section  2.12 agrees to use  reasonable  efforts  (consistent  with its
internal   policy  and  legal  and  regulatory   restrictions)   to  change  the
jurisdiction  of its  Eurodollar  Lending  Office if the making of such a change
would avoid the need for, or reduce the amount of, any such  additional  amounts
that may  thereafter  accrue and would not, in the  reasonable  judgment of such
Lender Party, be otherwise disadvantageous to such Lender Party.

         (h) The Borrower  shall not have an  indemnification  obligation  under
subsection  (a) or (c) with respect to Taxes  imposed by the United  States as a
result of a change in law occurring  after the date hereof  arising more than 90
days prior to receipt by the Borrower of notice from the  affected  Lender Party
with respect to such change in law.

         SECTION  2.13.  Sharing of  Payments,  Etc.  If any Lender  Party shall
obtain at any time any  payment  (whether  voluntary,  involuntary,  through the
exercise of any right of set-off,  or otherwise)  (a) on account of  Obligations
due and payable to such Lender Party  hereunder and under the Notes at such time
in excess of its ratable share (according to the proportion of (i) the amount of
such  Obligations  due and payable to such Lender Party at such time to (ii) the
aggregate  amount of the  Obligations  due and  payable  to all  Lender  Parties
hereunder  and under the  Notes at such  time) of  payments  on  account  of the
Obligations due and payable to all Lender Parties  hereunder and under the Notes
at such time  obtained by all the Lender  Parties at such time or (b) on account
of  Obligations  owing (but not due and payable) to such Lender Party  hereunder
and under the Notes at such time in excess of its ratable  share  (according  to
the proportion of (i) the amount of such Obligations  owing to such Lender Party
at such time to (ii) the aggregate amount of the Obligations  owing (but not due
and payable) to all Lender  Parties  hereunder and under the Notes at such time)
of payments on account of the Obligations owing (but not due and payable) to all
Lender Parties hereunder and under the Notes at such time obtained by all of the
Lender Parties at such time, such Lender Party shall forthwith purchase from the
other Lender Parties such  participations  in the Obligations due and payable or
owing to them, as the case


<PAGE>


                                       49

may be, as shall be necessary to cause such purchasing Lender Party to share the
excess payment ratably with each of them; provided,  however, that if all or any
portion of such excess  payment is  thereafter  recovered  from such  purchasing
Lender Party,  such purchase from each other Lender Party shall be rescinded and
such other Lender Party shall repay to the purchasing  Lender Party the purchase
price to the extent of such  Lender  Party's  ratable  share  (according  to the
proportion  of (i) the  purchase  price  paid to such  Lender  Party to (ii) the
aggregate  purchase price paid to all Lender Parties) of such recovery  together
with an amount equal to such Lender  Party's  ratable  share  (according  to the
proportion of (i) the amount of such other Lender Party's required  repayment to
(ii) the total  amount so recovered  from the  purchasing  Lender  Party) of any
interest  or other  amount  paid or payable by the  purchasing  Lender  Party in
respect of the total amount so  recovered.  The Borrower  agrees that any Lender
Party so purchasing a  participation  from another Lender Party pursuant to this
Section  2.13 may, to the fullest  extent  permitted  by law,  exercise  all its
rights  of  payment  (including  the  right of  set-off)  with  respect  to such
participation  as fully as if such Lender Party were the direct  creditor of the
Borrower in the amount of such participation.

         SECTION  2.14.  Use of  Proceeds.  The  proceeds  of the  Advances  and
issuances of Letters of Credit shall be available (and the Borrower  agrees that
it shall use such proceeds and Letters of Credit) solely to pay transaction fees
and expenses,  refinance the Existing Debt and provide  working  capital for the
Borrower and its Subsidiaries.

         SECTION  2.15.  Defaulting  Lenders.  (a) In the event that, at any one
time, (i) any Lender Party shall be a Defaulting  Lender,  (ii) such  Defaulting
Lender  shall owe a Defaulted  Advance to the  Borrower  and (iii) the  Borrower
shall be required to make any payment hereunder or under any other Loan Document
to or for the account of such Defaulting Lender,  then the Borrower may, so long
as no Default  (other  than a Default  which  occurs  directly  as a result of a
Lender being a Defaulting  Lender) shall occur or be continuing at such time and
to the fullest extent  permitted by applicable  law, set off and otherwise apply
the  Obligation  of the  Borrower to make such  payment to or for the account of
such Defaulting  Lender against the obligation of such Defaulting Lender to make
such  Defaulted  Advance.  In the event that, on any date, the Borrower shall so
set off and otherwise  apply its obligation to make any such payment against the
obligation of such  Defaulting  Lender to make any such Defaulted  Advance on or
prior to such date, the amount so set off and otherwise  applied by the Borrower
shall constitute for all purposes of this Agreement and the other Loan Documents
an  Advance  by such  Defaulting  Lender  made on the date  under  the  Facility
pursuant to which such Defaulted  Advance was  originally  required to have been
made  pursuant to Section  2.01.  Such Advance shall be a Prime Rate Advance and
shall be considered, for all purposes of this Agreement, to comprise part of the
Borrowing  in  connection  with  which such  Defaulted  Advance  was  originally
required to have been made pursuant to Section 2.01,  even if the other Advances
comprising  such  Borrowing  shall be Eurodollar  Rate Advances on the date such
Advance is deemed to be made pursuant to this subsection (a). The Borrower shall
notify the Administrative Agent at any time the


<PAGE>


                                       50

Borrower  exercises  its right of set-off  pursuant to this  subsection  (a) and
shall set forth in such  notice  (A) the name of the  Defaulting  Lender and the
Defaulted  Advance  required  to be made by such  Defaulting  Lender and (B) the
amount  set off and  otherwise  applied in  respect  of such  Defaulted  Advance
pursuant to this subsection (a). Any portion of such payment otherwise  required
to be made by the Borrower to or for the account of such Defaulting Lender which
is paid by the Borrower, after giving effect to the amount set off and otherwise
applied by the Borrower pursuant to this subsection (a), shall be applied by the
Administrative Agent as specified in subsection (b) or (c) of this Section 2.15.

         (b) In the event that, at any one time, (i) any Lender Party shall be a
Defaulting  Lender,  (ii) such Defaulting Lender shall owe a Defaulted Amount to
the  Administrative  Agent or any of the  other  Lender  Parties  and  (iii) the
Borrower  shall make any payment  hereunder or under any other Loan  Document to
the  Administrative  Agent for the account of such Defaulting  Lender,  then the
Administrative  Agent  may,  on its  behalf or on behalf  of such  other  Lender
Parties and to the fullest  extent  permitted by applicable  law,  apply at such
time the amount so paid by the Borrower to or for the account of such Defaulting
Lender to the payment of each such  Defaulted  Amount to the extent  required to
pay such Defaulted Amount. In the event that the  Administrative  Agent shall so
apply any such amount to the payment of any such  Defaulted  Amount on any date,
the amount so applied  by the  Administrative  Agent  shall  constitute  for all
purposes of this Agreement and the other Loan Documents payment, to such extent,
of such  Defaulted  Amount  on such  date.  Any such  amount so  applied  by the
Administrative   Agent  shall  be  retained  by  the  Administrative   Agent  or
distributed by the Administrative Agent to such other Lender Parties, ratably in
accordance  with the respective  portions of such Defaulted  Amounts  payable at
such time to the Administrative  Agent and such other Lender Parties and, if the
amount of such payment made by the Borrower  shall at such time be  insufficient
to pay all Defaulted Amounts owing at such time to the Administrative  Agent and
the other Lender Parties, in the following order of priority:

                  (i) first, to the Administrative Agent for any Defaulted 
         Amount then owing to the Administrative Agent; and

                  (ii)  second,  to any other Lender  Parties for any  Defaulted
         Amounts then owing to such other Lender Parties,  ratably in accordance
         with such respective  Defaulted Amounts then owing to such other Lender
         Parties.

Any  portion  of such  amount  paid by the  Borrower  for  the  account  of such
Defaulting  Lender  remaining,  after giving effect to the amount applied by the
Administrative  Agent pursuant to this  subsection  (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.15.



<PAGE>


                                       51

         (c) In the event that, at any one time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted Advance
or a Defaulted Amount and (iii) the Borrower,  the  Administrative  Agent or any
other Lender Party shall be required to pay or distribute  any amount  hereunder
or under  any other  Loan  Document  to or for the  account  of such  Defaulting
Lender,  then the  Borrower or such other  Lender Party shall pay such amount to
the Administrative Agent to be held by the Administrative  Agent, to the fullest
extent permitted by applicable law, in escrow or the Administrative Agent shall,
to the fullest  extent  permitted by applicable  law, hold in escrow such amount
otherwise held by it. Any funds held by the Administrative Agent in escrow under
this subsection (c) shall be deposited by the Administrative Agent in an account
with Fleet, in the name and under the control of the  Administrative  Agent, but
subject to the provisions of this subsection  (c). The terms  applicable to such
account,  including  the rate of  interest  payable  with  respect to the credit
balance  of such  account  from time to time,  shall be Fleet's  standard  terms
applicable to escrow accounts  maintained with it. Any interest credited to such
account  from time to time shall be held by the  Administrative  Agent in escrow
under, and applied by the  Administrative  Agent from time to time in accordance
with the provisions of, this subsection (c). The Administrative  Agent shall, to
the fullest  extent  permitted  by  applicable  law,  apply all funds so held in
escrow from time to time to the extent  necessary to make any Advances  required
to be made by such  Defaulting  Lender  and to pay any  amount  payable  by such
Defaulting   Lender  hereunder  and  under  the  other  Loan  Documents  to  the
Administrative  Agent or any other Lender  Party,  as and when such  Advances or
amounts  are  required  to be made or paid and,  if the amount so held in escrow
shall at any time be  insufficient to make and pay all such Advances and amounts
required to be made or paid at such time, in the following order of priority:

                  (i) first, to the Administrative Agent for any amount then due
         and payable by such Defaulting Lender to the Administrative Agent 
         hereunder;

                  (ii) second,  to any other Lender  Parties for any amount then
         due and payable by such Defaulting  Lender to such other Lender Parties
         hereunder,  ratably in accordance with such respective amounts then due
         and payable to such other Lender Parties; and

                  (iii) third,  to the Borrower for any Advance then required to
         be made by such  Defaulting  Lender  pursuant to a  Commitment  of such
         Defaulting Lender.

In the event that any Lender Party that is a  Defaulting  Lender  shall,  at any
time,  cease to be a  Defaulting  Lender,  any funds held by the  Administrative
Agent in  escrow  at such  time  with  respect  to such  Lender  Party  shall be
distributed by the Administrative Agent to such Lender Party and applied by such
Lender  Party to the  Obligations  owing to such Lender Party at such time under
this  Agreement  and the other Loan  Documents  ratably in  accordance  with the
respective amounts of such Obligations outstanding at such time.


<PAGE>


                                       52

         (d) The rights and  remedies  against a  Defaulting  Lender  under this
Section 2.15 are in addition to other rights and remedies  that the Borrower may
have against such  Defaulting  Lender with respect to any Defaulted  Advance and
that the  Administrative  Agent  or any  Lender  Party  may  have  against  such
Defaulting Lender with respect to any Defaulted Amount.

         SECTION  2.16.  Removal of Lender.  In the event that any Lender  Party
demands  payment of costs or  additional  amounts  pursuant  to Section  2.10 or
Section  2.12 or asserts,  pursuant to Section  2.10(d)  that it is unlawful for
such Lender Party to make Eurodollar Rate Advances, then (subject to such Lender
Party's  right to  rescind  such  demand or  assertion  within 10 days after the
notice from the  Borrower  referred to below) the  Borrower  may,  upon 20 days'
prior written notice to such Lender Party and the Administrative Agent, elect to
cause such Lender  Party to assign its Advances  and  Commitments  in full to an
assignee  institution  selected by the  Borrower  that meets the  criteria of an
Eligible Assignee and is reasonably satisfactory to the Administrative Agent, so
long as such Lender Party  receives  payment in full in cash of the  outstanding
principal  amount of all Advances made by it and all accrued and unpaid interest
thereon and all other  amounts  due and  payable to such Lender  Party as of the
date of such assignment  (including without limitation amounts owing pursuant to
Section  2.10 or 2.3),  and in such case such Lender  Party  agrees to make such
assignment,  and such assignee shall agree to accept such  assignment and assume
all obligations of such Lender Party hereunder, in accordance with Section 8.07.


                                   ARTICLE III

                              CONDITIONS OF LENDING

         SECTION 3.01.  Conditions Precedent to Initial Extension of Credit. The
obligation  of each Lender to make an Advance or of the Issuing  Bank to issue a
Letter of Credit on the occasion of the Initial Extension of Credit hereunder is
subject to the  satisfaction  of the following  conditions  precedent  before or
concurrently with the Initial Extension of Credit:

                  (a) The final terms and  conditions of the Merger,  including,
         without limitation,  all legal and tax aspects thereof, shall be (i) as
         described in the  Commitment  Letter dated November 26, 1996 from Fleet
         to J.W. Childs and otherwise  consistent in all material  respects with
         the   description   thereof   received   in  writing  as  part  of  the
         Pre-Commitment  Information and (ii) otherwise reasonably  satisfactory
         to the Lenders.

                  (b)    The Merger Agreement shall be in full force and effect.


<PAGE>


                                       53

                  (c) The Additional Purchase shall have been consummated in all
         material respects in accordance with the Merger Agreement,  without any
         waiver or  amendment  not  consented  to by the  Lender  Parties of any
         material  term,  provision  or  condition  set  forth  therein,  and in
         compliance with all applicable laws.

                  (d) The Lender Parties shall be satisfied in their  reasonable
         discretion  that  the  restrictions  in  Section  2.03 of the  Delaware
         General  Corporation  Law are not  applicable to the Merger or that any
         conditions  to avoiding the  restrictions  contained  therein have been
         satisfied.

                  (e) The Lender  Parties shall be satisfied  with the corporate
         and legal structure and  capitalization  of each Loan Party and each of
         its  Subsidiaries,  including the terms and  conditions of the charter,
         bylaws and each class of capital stock of each Loan Party and each such
         Subsidiary  and of  each  agreement  or  instrument  relating  to  such
         structure or capitalization.

                  (f) The Lender  Parties shall be satisfied  with the terms and
         conditions  of the equity  (the  "Equity")  provided on or prior to the
         consummation  of  the  Additional  Purchase  by the  Equity  Investors,
         consisting of not less than  $65,000,000 of common and preferred equity
         (not less  than  $55,000,000  of which  shall be  common  equity);  and
         Holding shall have received at least $65,000,000 in gross cash proceeds
         from the Equity.

                  (g) The  terms  of the  Stock  Purchase  Facilities  shall  be
         consistent  with the  terms  of the  Acquisition  Financing  Commitment
         Letter dated November 26, 1996 among NationsBank,  NationsBanc  Capital
         Markets,  Inc.  and J.W.  Childs  and  shall  otherwise  be  reasonably
         satisfactory  to the  Lender  Parties;  and the  Purchaser  shall  have
         received sufficient gross cash proceeds from borrowings under the Stock
         Purchase Facilities to consummate the Additional Purchase.

                  (h) The Lender  Parties  shall be satisfied  that all Existing
         Debt,  other than the Debt of the  Borrower  set forth on Schedule  XIV
         (the "Surviving Debt"), has been prepaid,  redeemed or defeased in full
         or otherwise satisfied and extinguished.

                  (i) Before  giving effect to the  Additional  Purchase and the
         other  transactions  contemplated by this  Agreement,  there shall have
         occurred no Material Adverse Change since October 28, 1995.

                  (j)  There  shall  exist  no  action,   suit,   investigation,
         litigation  or  proceeding  affecting  any  Loan  Party  or  any of its
         Subsidiaries  pending or  threatened  before  any  court,  governmental
         agency or  arbitrator  that (i) could  reasonably be expected to have a
         Material Adverse Effect other than the matters described on Schedule II
         (the


<PAGE>


                                       54

         "Disclosed  Litigation")  or (ii)  purports  to  affect  the  legality,
         validity or enforceability of the Additional Purchase, the Merger, this
         Agreement,  any Note, any other Loan Document,  any Related Document or
         the consummation of the  transactions  contemplated  hereby,  and there
         shall have been no material adverse change in the status,  or financial
         effect on the  Borrower or any of its  Subsidiaries,  of the  Disclosed
         Litigation from that described on Schedule II.

                  (k) The Lender  Parties  shall have been given such  access to
         the management,  records, books of account, contracts and properties of
         the  Borrower and its  Subsidiaries  as they shall have  requested  and
         shall have  received  such  financial  business  and other  information
         regarding each of the foregoing  Persons as they shall have  reasonably
         requested.

                  (l) All  governmental  and third party  consents and approvals
         necessary in connection with the  Transaction and the Facilities  shall
         have been obtained  (without the imposition of any conditions  that are
         not acceptable to the Lender  Parties) and shall remain in effect;  all
         applicable  waiting  periods  shall have  expired  without  any adverse
         action being taken by any competent authority; and no law or regulation
         shall be applicable in the  reasonable  judgment of the Lender  Parties
         that restrains,  prevents or imposes materially adverse conditions upon
         the Transaction or the Facilities.

                  (m) All of the  information  provided  by or on behalf of J.W.
         Childs or by or on behalf of the Borrower to the  Administrative  Agent
         and the  Lender  Parties  prior to their  commitment  in respect of the
         Facilities (the "Pre-Commitment Information") shall be true and correct
         in all material respects; and no additional information shall have come
         to the attention of the Administrative Agent or the Lender Parties that
         is  inconsistent  in  any  material  respect  with  the  Pre-Commitment
         Information  or that could  reasonably  be  expected to have a Material
         Adverse Effect.

                  (n) The Borrower shall have paid all accrued fees of the 
         Administrative Agent and the Lender Parties.

                  (o) The Administrative  Agent shall have received on or before
         the day of the Initial  Extension of Credit the  following,  each dated
         such  day  (unless   otherwise   specified),   in  form  and  substance
         satisfactory  to the Lender Parties  (unless  otherwise  specified) and
         (except for the Notes) in sufficient copies for each Lender Party:

                           (i)   The Notes payable to the order of the Lenders.

                           (ii) Certified copies of the resolutions of the Board
                  of  Directors  of the  Borrower  and  each  other  Loan  Party
                  approving the Stock  Purchase,  Merger,  this  Agreement,  the
                  Notes, each other Loan Document and each


<PAGE>


                                       55

                  Related  Document  to which it is or is to be a party,  and of
                  all documents  evidencing other necessary corporate action and
                  governmental and other third party approvals and consents,  if
                  any,  with  respect to the Stock  Purchase,  the Merger,  this
                  Agreement,  the  Notes,  each  other  Loan  Document  and each
                  Related Document.

                           (iii) A copy of the charter of the  Borrower and each
                  other Loan Party and each amendment thereto,  certified (as of
                  a date  reasonably  near the date of the Initial  Extension of
                  Credit) by the Secretary of State of the  jurisdiction  of its
                  incorporation as being a true and correct copy thereof.

                           (iv) A copy  of a  certificate  of the  Secretary  of
                  State  of  the  jurisdiction  of  its   incorporation,   dated
                  reasonably  near the date of the Initial  Extension of Credit,
                  listing the charter of the  Borrower and each other Loan Party
                  and  each  amendment   thereto  on  file  in  his  office  and
                  certifying that (A) such amendments are the only amendments to
                  the  Borrower's or such other Loan Party's  charter on file in
                  his office,  (B) the  Borrower  and each other Loan Party have
                  paid all franchise  taxes to the date of such  certificate and
                  (C)  the   Borrower   and  each  other  Loan  Party  are  duly
                  incorporated  and in good standing under the laws of the State
                  of the jurisdiction of its incorporation.

                           (v) A copy of a certificate of the Secretary of State
                  of each of the  State  of Ohio and the  State  of Iowa,  dated
                  reasonably  near the date of the Initial  Extension of Credit,
                  stating  that  the  Borrower  is  duly  qualified  and in good
                  standing as a foreign  corporation in such State and has filed
                  all annual  reports  required  to be filed to the date of such
                  certificate.

                           (vi) A  certificate  of the  Borrower  and each other
                  Loan Party,  signed on behalf of the  Borrower  and such other
                  Loan  Party  by its  President  or a Vice  President  and  its
                  Secretary or any  Assistant  Secretary,  dated the date of the
                  Initial  Extension  of Credit  (the  statements  made in which
                  certificate shall be true on and as of the date of the Initial
                  Extension of Credit),  certifying as to (A) the absence of any
                  amendments  to the charter of the  Borrower or such other Loan
                  Party since the date of the  Secretary of State's  certificate
                  referred  to in Section  3.01(m)(iii),  (B) a true and correct
                  copy of the bylaws of the  Borrower  and such other Loan Party
                  as in effect on the date of the Initial  Extension  of Credit,
                  (C) the due  incorporation  and good  standing of the Borrower
                  and such other Loan Party as a corporation organized under the
                  laws  of  the  State  of  Delaware,  and  the  absence  of any
                  proceeding for the dissolution or liquidation of the Borrower,
                  the  Company or such other  Loan  Party,  (D) the truth of the
                  representations and warranties contained in the Loan


<PAGE>


                                       56

                  Documents  as though made on and as of the date of the Initial
                  Extension of Credit and (E) the absence of any event occurring
                  and  continuing,  or resulting  from the Initial  Extension of
                  Credit, that constitutes a Default.

                           (vii) A certificate  of the Secretary or an Assistant
                  Secretary of the Borrower and each other Loan Party certifying
                  the names and true  signatures of the officers of the Borrower
                  and such other Loan Party  authorized to sign this  Agreement,
                  the Notes,  each other Loan Document and each Related Document
                  to which they are or are to be parties and the other documents
                  to be delivered hereunder and thereunder.

                           (viii) A security agreement in substantially the form
                  of  Exhibit D  (together  with each other  security  agreement
                  delivered  pursuant  to  Section  5.01(p),  in  each  case  as
                  amended,  supplemented or otherwise modified from time to time
                  in accordance with its terms, the "Security Agreement"),  duly
                  executed by the Borrower, together with:

                                    (A)  certificates  representing  the Pledged
                           Shares  referred  to therein  accompanied  by undated
                           stock  powers   executed  in  blank  and  instruments
                           evidencing  the  Pledged  Debt  referred  to  therein
                           indorsed in blank,

                                    (B) acknowledgment copies or stamped receipt
                           copies of proper financing statements,  duly filed on
                           or before the day of the Initial  Extension of Credit
                           under   the   Uniform    Commercial   Code   of   all
                           jurisdictions that the Administrative  Agent may deem
                           necessary  or  desirable  in  order  to  perfect  and
                           protect  the  first   priority   liens  and  security
                           interests  created  under  the  Security   Agreement,
                           covering  the  Collateral  described  in the Security
                           Agreement,

                                    (C)  completed   requests  for  information,
                           dated on or before the date of the Initial  Extension
                           of Credit,  listing the financing statements referred
                           to in  clause  (B)  above  and  all  other  effective
                           financing   statements  filed  in  the  jurisdictions
                           referred  to  in  clause  (B)  above  that  name  the
                           Borrower  as  debtor,  together  with  copies of such
                           other financing statements,

                                    (D) evidence of the  completion of all other
                           recordings  and  filings  of or with  respect  to the
                           Security Agreement that the Administrative  Agent may
                           deem  necessary  or desirable in order to perfect and
                           protect the Liens created thereby,



<PAGE>


                                                        57

                                    (E) evidence of the insurance required by 
                           the terms of the Security Agreement,

                                    (F)  copies  of  the   Assigned   Agreements
                           referred to in the Security Agreement,  together with
                           a consent to such assignment,  in  substantially  the
                           form of  Exhibit B to the  Security  Agreement,  duly
                           executed  by each party to such  Assigned  Agreements
                           other than the Borrower, and

                                    (G) evidence  that all other action that the
                           Administrative  Agent may deem necessary or desirable
                           in order to perfect and  protect  the first  priority
                           liens  and  security   interests  created  under  the
                           Security Agreement has been taken.

                           (ix)   Certified   copies  of  each  of  the  Related
                  Documents  in  existence  on such date,  duly  executed by the
                  parties thereto and in form and substance  satisfactory to the
                  Lender Parties, together with all agreements,  instruments and
                  other  documents  delivered in connection  therewith,  in each
                  case certified by a Responsible Officer.

                           (x)  Certificates,   in  substantially  the  form  of
                  Exhibit G,  attesting to the Solvency of each Loan Party after
                  giving  effect  to  the  Additional  Purchase  and  the  other
                  transactions  contemplated  hereby,  from its chief  financial
                  officer.

                           (xi) Evidence of insurance naming the  Administrative
                  Agent as  insured  and loss payee  with such  responsible  and
                  reputable  insurance  companies or  associations,  and in such
                  amounts and covering  such risks,  as is  satisfactory  to the
                  Lender  Parties,  including,   without  limitation,   business
                  interruption insurance.

                           (xii) Certified  copies of each employment  agreement
                  and other compensation arrangement with each executive officer
                  of any Loan Party or any of its Subsidiaries.

                           (xiii) Certified copies of all Material  Contracts of
                  each Loan Party and its  Subsidiaries,  in each case certified
                  by a Responsible Officer.

                           (xiv) A Borrowing Base Certificate.

                           (xv)  A favorable opinion of Sullivan & Worcester, 
                  counsel for the Purchaser and Holding, in substantially the 
                  form of Exhibit E hereto and as to


<PAGE>


                                       58

                  such  other   matter  as  any   Lender   Party   through   the
                  Administrative Agent may reasonably request.

                           (xvi) A  favorable  opinion of  Dickinson,  Mackaman,
                  Tyler & Hagen,  P.C., local counsel to the Loan Parties in the
                  State of Iowa, in  substantially  the form of Exhibit F hereto
                  and as to such other  matters as any Lender Party  through the
                  Administrative Agent may reasonably request.

                           (xvii) A  favorable  opinion of  Shearman & Sterling,
                  counsel for the  Administrative  Agent,  in form and substance
                  satisfactory to the Administrative Agent.

         SECTION 3.02.  Conditions Precedent to the First Extension of Credit on
or After the Date of the  Consummation  of the Merger.  The  obligation  of each
Lender to make an Advance or of the Issuing  Bank to issue a Letter of Credit on
the occasion of the first Extension of Credit  hereunder on or after the date of
the consummation of the Merger is subject to the following  conditions precedent
before or concurrently with such Extension of Credit:

                  (a) The proxy statement mailed to the Borrower's  shareholders
         in connection with the Merger (the "Proxy  Statement") shall be in form
         and substance reasonably satisfactory to the Lenders.

                  (b) The Merger  shall have been  consummated  in all  material
         respects  in  accordance  with  the  Merger  Agreement  and  the  Proxy
         Statement,  without any waiver or  amendment  not  consented  to by the
         Lenders of any material term, provision or condition set forth therein,
         and in compliance with all applicable laws.

                  (c) Holding shall own all of the outstanding  capital stock of
         the Borrower,  free and clear of all Liens,  except those created under
         the  Collateral  Documents  and those  created  under the  Bridge  Note
         Documents.

                  (d) The Borrower shall have received at least  $100,000,000 in
         gross cash proceeds from the issuance of the Permanent Debt or, in lieu
         thereof,  the Bridge  Notes,  and Holding  shall have received at least
         $4,000,000 of equity (which shall be in the form of  rolled-over  stock
         and  options)  from  certain  members of  management.  The terms of the
         Permanent  Notes shall be consistent  with the terms of the  Engagement
         Letter dated November 26, 1996 from NationsBanc  Capital Markets,  Inc.
         to J.W.  Childs and shall  otherwise be reasonably  satisfactory to the
         Lender  Parties;  and,  if the  Bridge  Notes are issued in lieu of the
         Permanent  Debt, the terms of the Bridge Notes shall be consistent with
         the terms of the Bridge Commitment Letter


<PAGE>


                                       59

         dated November 26, 1996 from NationsBridge L.L.C. to J.W. Childs and 
         shall otherwise be reasonably satisfactory to the Lender Parties.

                  (e)  After   giving   effect  to  the  Merger  and  the  other
         transactions contemplated by this Agreement,  there shall have occurred
         no Material Adverse Change since October 28, 1995.

                  (f)  There  shall  exist  no  action,   suit,   investigation,
         litigation  or  proceeding  affecting  any  Loan  Party  or  any of its
         subsidiaries  pending or  threatened  before  any  court,  governmental
         agency or  arbitrator  that (i) could  reasonably be expected to have a
         Material  Adverse  Effect other than the  Disclosed  Litigation or (ii)
         purports  to affect the  legality,  validity or  enforceability  of the
         Transaction,  this  Agreement,  any Note, any other Loan Document,  any
         Related Document or the  consummation of the transactions  contemplated
         hereby,  and there  shall have been no material  adverse  change in the
         status, or financial effect on the Borrower or any of its Subsidiaries,
         of the Disclosed Litigation from that described on Schedule II.

                  (g) All  governmental  and third party  consents and approvals
         necessary in connection with the  Transaction and the Facilities  shall
         have been obtained  (without the imposition of any conditions  that are
         not acceptable to the Lender  Parties) and shall remain in effect;  all
         applicable  waiting  periods  shall have  expired  without  any adverse
         action being taken by any competent authority; and no law or regulation
         shall be applicable in the  reasonable  judgment of the Lender  Parties
         that restrains,  prevents or imposes materially adverse conditions upon
         the Transaction or the Facilities.

                  (h) The Borrower shall have paid all accrued fees and expenses
         of the  Administrative  Agent and the  Lender  Parties  (including  the
         accrued  fees and expenses of counsel to the  Administrative  Agent and
         local counsel to the Lender Parties).

                  (i) The Administrative  Agent shall have received on or before
         the day of such Extension of Credit the following,  each dated such day
         (unless otherwise specified), in form and substance satisfactory to the
         Lender Parties (unless  otherwise  specified) and in sufficient  copies
         for each Lender Party:

                           (i) A copy of the  charter of the  Borrower  and each
                  other Lender Party and each amendment  thereto,  certified (as
                  of a date  reasonably  near  the  date  of such  Extension  of
                  Credit) by the Secretary of State of the  jurisdiction  of its
                  incorporation as being a true and correct copy thereof;

                           (ii) A copy  of a  certificate  of the  Secretary  of
                  State  of  the  jurisdiction  of  its   incorporation,   dated
                  reasonably near the date of such Extension of Credit,  listing
                  the charter of the Borrower and each other Lender


<PAGE>


                                       60

                  Party and each  amendment  thereto  on file in his  office and
                  certifying that (A) such amendments are the only amendments to
                  the Borrower's or such other Lender Party's charter on file in
                  his office,  (B) the Borrower and each other Lender Party have
                  paid all franchise  taxes to the date of such  certificate and
                  (C)  the  Borrower  and  each  other  Lender  Party  are  duly
                  incorporated  and in good standing under the laws of the State
                  of the jurisdiction of its incorporation;

                           (iii) Certified  copies of a certificate of merger or
                  other confirmation from the Secretary of State of the State of
                  Delaware   satisfactory   to  the   Lender   Parties   of  the
                  consummation of the Merger.

                           (iv)   Certified   copies  of  each  of  the  Related
                  Documents  in  existence  on such  date  (and  not  previously
                  delivered to the Lender Parties  pursuant to the provisions of
                  Section  3.01),  duly  executed by the parties  thereto and in
                  form  and  substance   satisfactory  to  the  Lender  Parties,
                  together with all agreements,  instruments and other documents
                  delivered in connection therewith, in each case certified by a
                  Responsible Officer.

                           (v)  Certificates,   in  substantially  the  form  of
                  Exhibit G,  attesting  to the  Solvency of each  Lender  Party
                  after giving  effect to the Merger and the other  transactions
                  contemplated hereby, from its chief financial officer.

                           (vi) A  favorable  opinion of  Sullivan &  Worcester,
                  counsel for the Purchaser and Holding,  in  substantially  the
                  form of Exhibit G hereto  and as to such other  matters as any
                  Lender Party through the  Administrative  Agent may reasonably
                  request.

         SECTION 3.03. Conditions Precedent to Each Borrowing and Issuance.  The
obligation of each Appropriate Lender to make an Advance (other than a Letter of
Credit Advance made by the Issuing Bank or a Revolving Credit Lender pursuant to
Section  2.03(c)  and a Swing Line  Advance  made by a Revolving  Credit  Lender
pursuant to Section  2.02(b)) on the occasion of each  Borrowing  (including the
Initial Extension of Credit),  and the obligation of the Issuing Bank to issue a
Letter of Credit  (including  the initial  issuance) or renew a Letter of Credit
and the right of the  Borrower  to  request  a Swing  Line  Borrowing,  shall be
subject to the further  conditions  precedent that on the date of such Borrowing
or issuance or renewal (a) the following  statements  shall be true (and each of
the  giving  of the  applicable  Notice  of  Borrowing,  Notice  of  Swing  Line
Borrowing,  Notice of Issuance or Notice of Renewal  and the  acceptance  by the
Borrower of the  proceeds of such  Borrowing  or of such Letter of Credit or the
renewal of such Letter of Credit shall constitute a representation  and warranty
by the  Borrower  that both on the date of such  notice  and on the date of such
Borrowing or issuance or renewal such statements are true):


<PAGE>


                                       61

                  (i) the representations and warranties  contained in each Loan
         Document  are correct on and as of such date,  before and after  giving
         effect to such Borrowing or issuance or renewal and to the  application
         of the proceeds therefrom,  as though made on and as of such date other
         than any such representations or warranties that, by their terms, refer
         to a specific date other than the date of such Borrowing or issuance or
         renewal, in which case as of such specific date;

                  (ii) no event has occurred and is continuing,  or would result
         from such  Borrowing or issuance or renewal or from the  application of
         the proceeds therefrom, that constitutes a Default; and

                  (iii) for each Revolving  Credit Advance or Swing Line Advance
         made by the Swing  Line Bank or  issuance  or  renewal of any Letter of
         Credit,  the sum of the Loan Values of the Eligible  Collateral exceeds
         the aggregate  principal  amount of the Revolving  Credit Advances plus
         Swing Line  Advances plus Letter of Credit  Advances to be  outstanding
         plus the  aggregate  Available  Amount of all  Letters  of Credit  then
         outstanding after giving effect to such Advance or issuance or renewal,
         respectively;

and (b) the  Administrative  Agent  shall have  received  such other  approvals,
opinions or documents as any Appropriate Lender through the Administrative Agent
may reasonably request.

         SECTION 3.04. Determinations Under Sections 3.01 and 3.02. For purposes
of determining compliance with the conditions specified in Section 3.01 or 3.02,
each Lender Party shall be deemed to have consented to,  approved or accepted or
to be satisfied  with each  document or other matter  required  thereunder to be
consented to or approved by or acceptable or  satisfactory to the Lender Parties
unless an officer of the  Administrative  Agent responsible for the transactions
contemplated  by the Loan Documents  shall have received notice from such Lender
Party  prior to the  Initial  Extension  of  Credit or the  extension  of Credit
specified in Section 3.02, as the case may be,  specifying its objection thereto
and if the Initial Extension of Credit or such Extension of Credit consists of a
Borrowing, such Lender Party shall not have made available to the Administrative
Agent such Lender Party's ratable portion of such Borrowing.


                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

         SECTION 4.01.  Representations  and  Warranties.  Each of Holding,  the
Purchaser and the Borrower represents and warrants as follows:



<PAGE>


                                       62

                  (a) Each  Loan  Party  (i) is a  corporation  duly  organized,
         validly   existing  and  in  good  standing   under  the  laws  of  the
         jurisdiction of its  incorporation,  (ii) is duly qualified and in good
         standing as a foreign  corporation in each other  jurisdiction in which
         it owns or leases  property  or in which the  conduct  of its  business
         requires it to so qualify or be licensed except where the failure to so
         qualify  or be  licensed  is not  reasonably  likely to have a Material
         Adverse  Effect  and  (iii)  has  all  requisite  corporate  power  and
         authority (including,  without limitation,  all governmental  licenses,
         permits and other approvals) to own or lease and operate its properties
         and to carry on its  business  as now  conducted  and as proposed to be
         conducted.  All of the  outstanding  capital stock of the Purchaser has
         been validly issued, is fully paid and  non-assessable  and is owned by
         Holding free and clear of all Liens; and all of the outstanding capital
         stock  of the  Borrower  has been  validly  issued,  is fully  paid and
         non-assessable  and, on and after the date of the  consummation  of the
         Merger, is owned by Holding,  free and clear of all Liens, except those
         created  under the  Collateral  Documents  and those  created under the
         Bridge Note Documents.

                  (b) Set  forth  on  Schedule  III  hereto  is a  complete  and
         accurate list of all Subsidiaries of each Loan Party, showing as of the
         date  hereof  (as to each  such  Subsidiary)  the  jurisdiction  of its
         incorporation,  the  number of shares of each  class of  capital  stock
         authorized,  and the  number  outstanding,  on the date  hereof and the
         percentage of the outstanding shares of each such class owned (directly
         or  indirectly)  by such Loan Party and the number of shares covered by
         all outstanding options, warrants, rights of conversion or purchase and
         similar rights at the date hereof. All of the outstanding capital stock
         of all of such  Subsidiaries has been validly issued, is fully paid and
         non-assessable  and is owned by such  Loan  Party or one or more of its
         Subsidiaries  free and clear of all Liens,  except those  created under
         the  Collateral  Documents.  Each such  Subsidiary (i) is a corporation
         duly organized, validly existing and in good standing under the laws of
         the  jurisdiction of its  incorporation,  (ii) is duly qualified and in
         good standing as a foreign  corporation in each other  jurisdiction  in
         which  it owns or  leases  property  or in  which  the  conduct  of its
         business  requires  it to so qualify or be  licensed  except  where the
         failure to so qualify or be licensed is not reasonably likely to have a
         Material Adverse Effect and (iii) has all requisite corporate power and
         authority (including,  without limitation,  all governmental  licenses,
         permits and other approvals) to own or lease and operate its properties
         and to carry on its  business  as now  conducted  and as proposed to be
         conducted.

                  (c) The execution, delivery and performance by each Loan Party
         of this Agreement, the Notes, each other Loan Document and each Related
         Document to which it is or is to be a party,  and the  consummation  of
         the Stock Purchase, the Merger and the other transactions  contemplated
         hereby,  are within such Loan Party's corporate powers,  have been duly
         authorized by all necessary corporate action, and do not (i) contravene
         such Loan Party's charter or bylaws, (ii) violate any law


<PAGE>


                                       63

         (including, without limitation, the Securities Exchange Act of 1934 and
         the  Racketeer  Influenced  and  Corrupt  Organizations  Chapter of the
         Organized  Crime  Control Act of 1970),  rule,  regulation  (including,
         without  limitation,  Regulation  X of the  Board of  Governors  of the
         Federal Reserve System),  order, writ,  judgment,  injunction,  decree,
         determination or award, (iii) conflict with or result in the breach of,
         or constitute a default under, any contract, loan agreement, indenture,
         mortgage,  deed of  trust,  lease or  other  instrument  binding  on or
         affecting  any  Loan  Party,  any of its  Subsidiaries  or any of their
         properties  or (iv)  except  for  the  Liens  created  under  the  Loan
         Documents,  result in or require the creation or imposition of any Lien
         upon or with respect to any of the  properties of any Loan Party or any
         of its  Subsidiaries.  No Loan Party or any of its  Subsidiaries  is in
         violation of any such law, rule,  regulation,  order,  writ,  judgment,
         injunction,  decree,  determination  or award or in  breach of any such
         contract, loan agreement,  indenture, mortgage, deed of trust, lease or
         other instrument, the violation or breach of which is reasonably likely
         to have a Material Adverse Effect.

                  (d) (i) As of the date hereof and hereafter,  no authorization
         or approval or other  action by, and no notice to or filing  with,  any
         governmental  authority or regulatory  body or any other third party is
         required for (i) the due execution,  delivery,  recordation,  filing or
         performance by any Loan Party of this Agreement,  the Notes,  any other
         Loan  Document  or any  Related  Document  to which it is or is to be a
         party,  or for the  consummation  of the  Stock  Purchase  or the other
         transactions  contemplated  hereby  (other than the  Merger),  (ii) the
         grant by any Loan  Party of the Liens  granted  by it  pursuant  to the
         Collateral Documents,  (iii) the perfection or maintenance of the Liens
         created by the  Collateral  Documents  (including  the priority  nature
         thereof  required by the Collateral  Documents) or (iv) the exercise by
         the  Administrative  Agent or any Lender  Party of its rights under the
         Loan Documents or the remedies in respect of the Collateral pursuant to
         the Collateral  Documents,  except for the  authorizations,  approvals,
         actions,  notices and filings  listed on Schedule IV, all of which have
         been  duly  obtained,  taken,  given or made and are in full  force and
         effect.  All applicable  waiting  periods in connection  with the Stock
         Purchase and the other transactions contemplated hereby (other than the
         Merger)  have  expired  without  any  action  having  been taken by any
         competent  authority  restraining,  preventing  or imposing  materially
         adverse  conditions  upon the Stock  Purchase or the rights of the Loan
         Parties or their  Subsidiaries  freely to transfer or otherwise dispose
         of, or to create any Lien on,  any  properties  now owned or  hereafter
         acquired by any of them.

                           (ii) As of the date of the consummation of the Merger
                  and thereafter,  no  authorization or approval or other action
                  by,  and  no  notice  to  or  filing  with,  any  governmental
                  authority  or  regulatory  body or any third party is required
                  for (i) the due execution,  delivery,  recordation,  filing or
                  performance  by any Loan Party of this  Agreement,  the Notes,
                  any other Loan


<PAGE>


                                       64

                  Document or any Related  Document to which it is or is to be a
                  party,  or for the  consummation  of the Stock  Purchase,  the
                  Merger or the other transactions contemplated hereby, (ii) the
                  grant by any Loan Party of the Liens  granted by its  pursuant
                  to  the   Collateral   Documents,   (iii)  the  perfection  or
                  maintenance of the Liens created by the  Collateral  Documents
                  (including  the  priority  nature  thereof   required  by  the
                  Collateral   Documents)   or   (iv)   the   exercise   by  the
                  Administrative  Agent or any Lender  Party of its rights under
                  the  Loan   Documents  or  the  remedies  in  respect  of  the
                  Collateral  pursuant to the Collateral  Documents,  except for
                  the  authorizations,  approvals,  actions,  notice and filings
                  listed on Schedule  IV, all of which have been duly  obtained,
                  taken,  given or made and are in full  force and  effect.  All
                  applicable  waiting  periods  in  connection  with  the  Stock
                  Purchase or the Merger and the other transactions contemplated
                  hereby have  expired  without any action  having been taken by
                  any competent  authority  restraining,  preventing or imposing
                  materially  adverse  conditions upon the Stock Purchase or the
                  rights of the Loan  Parties  or their  Subsidiaries  freely to
                  transfer  or  otherwise  dispose of, or to create any Lien on,
                  any properties now owned or hereafter acquired by any of them.

                  (e) This Agreement has been, and each of the Notes, each other
         Loan Document and each Related  Document when delivered  hereunder will
         have been, duly executed and delivered by each Loan Party thereto. This
         Agreement is, and each of the Notes,  each other Loan Document and each
         Related Document when delivered hereunder will be, the legal, valid and
         binding  obligation  of each  Loan  Party  party  thereto,  enforceable
         against such Loan Party in accordance with its terms.

                  (f) The  Consolidated  balance  sheet of the  Borrower and its
         Subsidiaries  as at October  28,  1995,  and the  related  Consolidated
         statement  of income and  Consolidated  statement  of cash flows of the
         Borrower  and  its   Subsidiaries  for  the  fiscal  year  then  ended,
         accompanied  by an opinion of Ernst & Young,  LLP,  independent  public
         accountants, and the Consolidated balance sheet of the Borrower and its
         Subsidiaries  as  at  July  27,  1996,  and  the  related  Consolidated
         statement  of income and  Consolidated  statement  of cash flows of the
         Borrower  and its  Subsidiaries  for the nine months  then ended,  duly
         certified by the chief  financial  officer of the  Borrower,  copies of
         which  have  been  furnished  to each  Lender  Party,  fairly  present,
         subject,  in the case of said balance  sheet as at July 27,  1996,  and
         said statement of income and cash flows for the nine months then ended,
         to year-end audit adjustments,  the Consolidated financial condition of
         the Borrower and its  Subsidiaries as at such date and the Consolidated
         results of the operations of the Borrower and its  Subsidiaries for the
         period ended on such date, all in accordance  with  generally  accepted
         accounting  principles applied on a consistent basis, and since October
         28, 1995, there has been no Material Adverse Change.



<PAGE>


                                       65

                  (g)  The  Consolidated   forecasted  balance  sheets,   income
         statements   and  cash  flows   statements  of  the  Borrower  and  its
         Subsidiaries  delivered,  or to be  delivered,  to the  Lender  Parties
         pursuant to Section  3.01(m) or 5.03 were prepared in good faith on the
         basis of the assumptions stated therein, which assumptions were fair in
         the  light  of  conditions  existing  at the time of  delivery  of such
         forecasts,  and  represented,  at the time of delivery,  the Borrower's
         best estimate of its future financial performance.

                  (h) None of the information,  exhibits or reports furnished by
         any Loan  Party to the  Administrative  Agent  or any  Lender  Party in
         connection  with the  negotiation  of the Loan Documents or pursuant to
         the terms of the Loan  Documents  contained  any untrue  statement of a
         material fact or omitted to state a material fact necessary to make the
         statements made therein not misleading.

                  (i) There is no action,  suit,  investigation,  litigation  or
         proceeding  affecting  any  Loan  Party  or any  of  its  Subsidiaries,
         including any  Environmental  Action,  pending or threatened before any
         court,  governmental  agency or arbitrator that (i) would be reasonably
         likely to have a Material Adverse Effect or (ii) purports to affect the
         legality,  validity or enforceability of the Additional  Purchase,  the
         Merger,  this  Agreement,  any Note,  any other  Loan  Document  or any
         Related Document or the  consummation of the transactions  contemplated
         hereby,  and  there  has  been no  adverse  change  in the  status,  or
         financial effect on any Loan Party or any of its  Subsidiaries,  of the
         Disclosed Litigation from that described on Schedule II.

                  (j) No proceeds of any Advance or drawings under any Letter of
         Credit will be used to acquire  any equity  security of a class that is
         registered  pursuant to Section 12 of the  Securities  Exchange  Act of
         1934.

                  (k) The  Borrower is not engaged in the  business of extending
         credit for the purpose of purchasing or carrying  Margin Stock,  and no
         proceeds of any Advance or drawings  under any Letter of Credit will be
         used to  purchase  or carry any  Margin  Stock or to  extend  credit to
         others for the purpose of purchasing or carrying any Margin Stock.

                  (l) Following  application  of the proceeds of each Advance or
         drawing  under each  Letter of Credit,  not more than 25 percent of the
         value of the assets (either of the Borrower only or of the Borrower and
         its Subsidiaries on a Consolidated  basis) subject to the provisions of
         Section 5.02(a) or 5.02(e) or subject to any  restriction  contained in
         any agreement or  instrument  between the Borrower and any Lender Party
         or any  Affiliate of any Lender  Party  relating to Debt and within the
         scope of Section 6.01(e) will be Margin Stock.



<PAGE>


                                       66

                  (m) All Plans of the  Borrower  and its ERISA  Affiliates  are
         listed on  Schedule V. No ERISA  Event has  occurred  or is  reasonably
         expected  to occur with  respect to any Plan  listed on Schedule V that
         has  resulted  in or is  reasonably  expected  to result in a  material
         liability of any Loan Party or any ERISA Affiliate.

                  (n) As of the last annual actuarial valuation date, the funded
         current liability percentage, as defined in Section 302(d)(8) of ERISA,
         of each Plan exceeds 90% and there has been no material  adverse change
         in the funding status of any such Plan since such date.

                  (o)  Schedule B  (Actuarial  Information)  to the most  recent
         annual  report  (Form 5500  Series) for each Plan listed on Schedule V,
         copies of which have been filed with the Internal  Revenue  Service and
         furnished  to the Lender  Parties,  is complete and accurate and fairly
         presents  the funding  status of such Plan,  and since the date of such
         Schedule B there has been no material  adverse  change in such  funding
         status.

                  (p)  Neither  any  Loan  Party  nor any  ERISA  Affiliate  has
         incurred or is reasonably expected to incur any Withdrawal Liability to
         any Multiemployer Plan listed on Schedule V.

                  (q)  Neither any Loan Party nor any ERISA  Affiliate  has been
         notified  by the sponsor of a  Multiemployer  Plan listed on Schedule V
         that  such   Multiemployer  Plan  is  in  reorganization  or  has  been
         terminated,  within  the  meaning  of  Title IV of  ERISA,  and no such
         Multiemployer Plan is reasonably expected to be in reorganization or to
         be terminated, within the meaning of Title IV of ERISA.

                  (r) Except as set forth in the financial  statements  referred
         to in this Section 4.01 and in Section 5.03, the Loan Parties and their
         respective  Subsidiaries  have no material  liability  with  respect to
         "expected post retirement  benefit  obligations"  within the meaning of
         Statement of Financial Accounting Standards No. 106.

                  (s) Neither the business nor the  properties of any Loan Party
         or  any of its  Subsidiaries  are  affected  by  any  fire,  explosion,
         accident, strike, lockout or other labor dispute, drought, storm, hail,
         earthquake,  embargo,  act  of  God or of the  public  enemy  or  other
         casualty (whether or not covered by insurance) that would be reasonably
         likely to have a Material Adverse Effect.

                  (t) The  operations and properties of each Loan Party and each
         of its Subsidiaries comply in all material respects with all applicable
         Environmental Laws and Environmental  Permits,  all past non-compliance
         with  such  Environmental  Laws  and  Environmental  Permits  has  been
         resolved without ongoing obligations or costs,


<PAGE>


                                       67

         and no circumstances  exist that would be reasonably likely to (i) form
         the basis of an  Environmental  Action against any Loan Party or any of
         its  Subsidiaries or any of their  properties that could  reasonably be
         expected  to have a  Material  Adverse  Effect  or (ii)  cause any such
         property to be subject to any restrictions on ownership, occupancy, use
         or transferability under any Environmental Law that could reasonably be
         expected to have a Material Adverse Effect.

                  (u)  Except as  disclosed  in the Phase I  Environmental  Site
         Assessment Reports prepared by Dames & Moore for the properties at 3915
         Delaware Avenue,  Des Moines,  Iowa and 650 Meridian Road,  Youngstown,
         Ohio, dated November 15, 1996 or as otherwise disclosed on Schedule XV,
         none of the properties  currently or, to the best knowledge of the Loan
         Parties and their Subsidiaries,  formerly owned or operated by any Loan
         Party or any of its  Subsidiaries  is listed or proposed for listing on
         the NPL or on the CERCLIS or any analogous foreign, state or local list
         or is adjacent to any such property;  to the best knowledge of the Loan
         Parties  and their  Subsidiaries,  there are no and never have been any
         underground  or  aboveground  storage  tanks on any property  currently
         owned or operated by any Loan Party or any of its  Subsidiaries;  there
         are no and never  have been any  surface  impoundments,  septic  tanks,
         pits,  sumps or lagoons in which Hazardous  Materials are being or have
         been treated,  stored or disposed on any property  currently or, to the
         best  knowledge  of the Loan Parties and their  Subsidiaries,  formerly
         owned or  operated by any Loan Party or any of its  Subsidiaries  in an
         manner  that  would be  reasonably  likely to have a  Material  Adverse
         Effect;  there is no  asbestos or  asbestos-containing  material on any
         property  currently  owned or  operated by any Loan Party or any of its
         Subsidiaries  in a manner  that  would be  reasonably  likely to have a
         Material  Adverse  Effect;  and  Hazardous   Materials  have  not  been
         released,  discharged  or disposed of on any property  currently or, to
         the best knowledge of the Loan Parties and their Subsidiaries, formerly
         owned or  operated  by any Loan Party or any of its  Subsidiaries  in a
         manner,  quantity or concentration  that would be reasonably  likely to
         have a Material Adverse Effect.

                  (v)  Neither  any Loan  Party nor any of its  Subsidiaries  is
         undertaking,  and has not completed,  either  individually  or together
         with  other  potentially  responsible  parties,  any  investigation  or
         assessment  or remedial or  response  action  relating to any actual or
         threatened release, discharge or disposal of Hazardous Materials at any
         site,  location or  operation,  either  voluntarily  or pursuant to the
         order of any  governmental or regulatory  authority or the requirements
         of any Environmental Law; and all Hazardous Materials generated,  used,
         treated,  handled or stored at, or transported to or from, any property
         currently or formerly owned or operated by any Loan Party or any of its
         Subsidiaries have been disposed of in a manner not reasonably  expected
         to  result  in  material  liability  to any  Loan  Party  or any of its
         Subsidiaries.



<PAGE>


                                       68

                  (w)  Neither any Loan Party nor any of its  Subsidiaries  is a
         party to any indenture,  loan or credit agreement or any lease or other
         agreement  or  instrument  or  subject  to  any  charter  or  corporate
         restriction that would be reasonably  likely to have a Material Adverse
         Effect.

                  (x) The  Collateral  Documents  create a valid  and  perfected
         security  interest in the  Collateral  having the priority set forth in
         such  Collateral  Documents,   securing  the  payment  of  the  Secured
         Obligations,  and all filings and other actions  necessary or desirable
         to perfect and protect such security interest have been duly taken. The
         Loan Parties are the legal and beneficial owners of the Collateral free
         and clear of any Lien,  except  for the  liens and  security  interests
         created or permitted under the Loan Documents.

                  (y) The Borrower has filed, has caused to be filed or has been
         included in all Federal tax returns and all material  other tax returns
         (state,  local and foreign) required to be filed and has paid all taxes
         shown  thereon  to  be  due,  together  with  applicable  interest  and
         penalties.

                  (z) The aggregate  unpaid  amount,  as of the date hereof,  of
         adjustments  to the  Federal  income  tax  liability  of  the  Borrower
         proposed by the  Internal  Revenue  Service  with respect to Open Years
         does not exceed  $250,000.  No issues have been raised by the  Internal
         Revenue Service in respect of Open Years that, in the aggregate,  would
         be reasonably likely to have a Material Adverse Effect.

                  (aa) The aggregate  unpaid amount,  as of the date hereof,  of
         adjustments  to the  state,  local and  foreign  tax  liability  of the
         Borrower  proposed by all state,  local and foreign taxing  authorities
         (other than amounts  arising  from  adjustments  to Federal  income tax
         returns) does not exceed  $250,000.  No issues have been raised by such
         taxing  authorities that, in the aggregate,  would be reasonably likely
         to have a Material Adverse Effect.

                  (bb) The Merger will not be taxable to the Borrower or any of 
         its Subsidiaries or Affiliates.

                  (cc) Neither any Loan Party nor any of its  Subsidiaries is an
         "investment  company," or an  "affiliated  person" of, or "promoter" or
         "principal underwriter" for, an "investment company," as such terms are
         defined in the Investment Company Act of 1940, as amended.  Neither the
         making of any Advances,  nor the issuance of any Letters of Credit, nor
         the  application of the proceeds or repayment  thereof by the Borrower,
         nor the  consummation of the other  transactions  contemplated  hereby,
         will violate any provision of such Act or any rule, regulation or order
         of the Securities and Exchange Commission thereunder.


<PAGE>


                                       69

                  (dd) Each Loan Party is, individually and together with its 
         Subsidiaries, Solvent.

                  (ee)  Set  forth on  Schedule  VI  hereto  is a  complete  and
         accurate list of all Existing  Debt,  showing as of the date hereof the
         principal amount outstanding thereunder.

                  (ff) Set  forth on  Schedule  VII  hereto  is a  complete  and
         accurate  list of all real  property  owned by any Loan Party or any of
         its  Subsidiaries as of the date hereof,  showing as of the date hereof
         the  street  address,  county or other  relevant  jurisdiction,  state,
         record owner and book and estimated fair value thereof. Each Loan Party
         or such Subsidiary has good,  marketable and insurable fee simple title
         to such real  property,  free and clear of all Liens,  other than Liens
         created or permitted by the Loan Documents.

                  (gg) Set  forth on  Schedule  VIII  hereto is a  complete  and
         accurate list of all leases of real property under which any Loan Party
         or any of its Subsidiaries is the lessee as of the date hereof, showing
         as of the date  hereof the  street  address,  county or other  relevant
         jurisdiction,  state, lessor, lessee, expiration date and annual rental
         cost thereof. To the best of the Borrower's knowledge,  each such lease
         is the legal,  valid and  binding  obligation  of the  lessor  thereof,
         enforceable in accordance with its terms.

                  (hh)  Set  forth on  Schedule  IX  hereto  is a  complete  and
         accurate  list of all  Material  Contracts  of each Loan  Party and its
         Subsidiaries  as of the date hereof,  showing as of the date hereof the
         parties, subject matter and term thereof. To the best of the Borrower's
         knowledge  (with  respect to parties  other than the Loan  Parties  and
         their  Subsidiaries),   each  such  Material  Contract  has  been  duly
         authorized, executed and delivered by all parties thereto, has not been
         amended  or  otherwise  modified,  is in full  force and  effect and is
         binding upon and enforceable  against all parties thereto in accordance
         with its terms, and there exists no default under any Material Contract
         by any party thereto.

                  (ii) Set forth on Schedule X hereto is a complete and accurate
         list  of  all  Investments  held  by  any  Loan  Party  or  any  of its
         Subsidiaries  as of the date hereof,  showing as of the date hereof the
         amount, obligor or issuer and maturity, if any, thereof.

                  (jj)  Set  forth on  Schedule  XI  hereto  is a  complete  and
         accurate list of all patents,  trademarks,  trade names,  service marks
         and copyrights,  and all applications therefor and licenses thereof, of
         each Loan Party or any of its Subsidiaries as of the


<PAGE>


                                       70

         date hereof,  showing as of the date hereof the  jurisdiction  in which
         registered,  the registration  number, the date of registration and the
         expiration date.


                                    ARTICLE V

                            COVENANTS OF THE BORROWER

         SECTION  5.01.  Affirmative  Covenants.  So long as any  Advance  shall
remain  unpaid,  any Letter of Credit shall be  outstanding  or any Lender Party
shall have any  Commitment  hereunder,  each of Holding,  the  Purchaser and the
Borrower will:

                  (a) Compliance with Laws, Etc.  Comply,  and cause each of its
         Subsidiaries to comply, in all material  respects,  with all applicable
         laws,  rules,  regulations  and  orders,  such  compliance  to include,
         without limitation,  compliance with ERISA and the Racketeer Influenced
         and Corrupt Organizations Chapter of the Organized Crime Control Act of
         1970.

                  (b) Payment of Taxes,  Etc. Pay and discharge,  and cause each
         of its Subsidiaries to pay and discharge,  before the same shall become
         delinquent,  (i) all taxes,  assessments  and  governmental  charges or
         levies  imposed upon it or upon its property and (ii) all lawful claims
         that,  if  unpaid,  might  by law  become  a Lien  upon  its  property;
         provided,   however,   that   neither  the  Borrower  nor  any  of  its
         Subsidiaries  shall be  required  to pay or  discharge  any  such  tax,
         assessment,  charge or claim that is being  contested in good faith and
         by proper  proceedings and as to which  appropriate  reserves are being
         maintained.

                  (c) Compliance with Environmental Laws. Comply, and cause each
         of its Subsidiaries and use all reasonable efforts to cause all lessees
         and other Persons  operating or occupying its properties to comply,  in
         all  material  respects,  with all  applicable  Environmental  Laws and
         Environmental  Permits;   obtain  and  renew  and  cause  each  of  its
         Subsidiaries  to obtain and renew all  material  Environmental  Permits
         necessary for its operations  and  properties;  and conduct,  and cause
         each of its Subsidiaries to conduct, any investigation, study, sampling
         and testing,  and  undertake  any cleanup,  removal,  remedial or other
         action  necessary to remove and clean up all Hazardous  Materials  from
         any of its  properties,  to the extent  required by, and in  accordance
         with, the  requirements  of applicable  Environmental  Laws;  provided,
         however, that neither the Borrower nor any of its Subsidiaries shall be
         required to  undertake  any such  cleanup,  removal,  remedial or other
         action to the extent that its obligation to do so is being contested in
         good faith and by proper proceedings and appropriate reserves are being
         maintained with respect to such circumstances.



<PAGE>


                                       71

                  (d) Maintenance of Insurance.  Maintain, and cause each of its
         Subsidiaries  to maintain,  insurance  with  responsible  and reputable
         insurance  companies or  associations in such amounts and covering such
         risks as is usually carried by companies engaged in similar  businesses
         and owning  similar  properties  in the same general areas in which the
         Borrower or such Subsidiary operates.

                  (e)  Preservation of Corporate  Existence,  Etc.  Preserve and
         maintain,  and  cause  each of its  Subsidiaries  (other  than  Central
         Tractor  Distributing  Co.) to preserve and  maintain,  its  existence,
         legal structure,  legal name, rights (charter and statutory),  permits,
         licenses, approvals, privileges and franchises; provided, however, that
         the Borrower and the Purchaser may consummate the Merger;  and provided
         further that neither the Borrower nor any of its Subsidiaries  shall be
         required to preserve any right, permit, license, approval, privilege or
         franchise if the Board of Directors of the Borrower or such  Subsidiary
         shall determine that the preservation thereof is no longer desirable in
         the conduct of the business of the Borrower or such Subsidiary,  as the
         case may be, and that the loss  thereof is not  disadvantageous  in any
         material  respect  to the  Borrower,  such  Subsidiary  or  the  Lender
         Parties.

                  (f) Visitation Rights. At any reasonable time and from time to
         time, permit the  Administrative  Agent or any of the Lender Parties or
         any agents or  representatives  thereof,  to examine and make copies of
         and  abstracts  from the records and books of account of, and visit the
         properties of, the Borrower and any of its Subsidiaries, and to discuss
         the  affairs,  finances  and  accounts of the  Borrower  and any of its
         Subsidiaries  with any of their  officers or  directors  and with their
         independent  certified public  accountants,  provided that the Borrower
         shall  have  received  prior  notice of any such  discussion  with such
         independent   certified   public   accountants   and  shall   have  the
         opportunity, at its option, to participate in such discussion.

                  (g) Keeping of Books. Keep, and cause each of its Subsidiaries
         to keep, proper books of record and account,  in which full and correct
         entries shall be made of all financial  transactions and the assets and
         business of the Borrower and each such  Subsidiary in  accordance  with
         generally accepted accounting principles in effect from time to time.

                  (h) Maintenance of Properties, Etc. Maintain and preserve, and
         cause each of its  Subsidiaries  to maintain and  preserve,  all of its
         properties  that are used or useful in the  conduct of its  business in
         good working order and condition, ordinary wear and tear excepted.

                  (i) Performance of Related Documents.  Perform and observe all
         of the terms and  provisions of each Related  Document  (other than the
         Financing Documents)


<PAGE>


                                       72

         to be performed or observed by it, maintain each such Related  Document
         in full force and effect,  enforce such Related  Document in accordance
         with its terms, take all such action to such end as may be from time to
         time  requested by the  Administrative  Agent and,  upon request of the
         Administrative  Agent,  make to each other  party to each such  Related
         Document such demands and requests for  information  and reports or for
         action as the Borrower is entitled to make under such Related Document.

                  (j) Transactions with Affiliates.  Conduct,  and cause each of
         its Subsidiaries to conduct, all transactions otherwise permitted under
         the Loan Documents with any of their  Affiliates on terms that are fair
         and reasonable and no less favorable to the Borrower or such Subsidiary
         than it would obtain in a comparable  arm's-length  transaction  with a
         Person not an Affiliate,  other than the performance of its obligations
         under the Management Agreement.

                  (k)  Cash   Concentration   Accounts.   Maintain   main   cash
         concentration  accounts  with Fleet or one or more banks  acceptable to
         the  Administrative  Agent that have  accepted the  assignment  of such
         accounts to the Administrative Agent pursuant to the Security Agreement
         and Lockbox  Accounts  into which all proceeds of  Collateral  are paid
         with Fleet or one or more banks acceptable to the Administrative  Agent
         that  have   accepted   the   assignment   of  such   accounts  to  the
         Administrative Agent pursuant to the Security Agreement.

                  (l) Stock of the  Borrower.  In the case of Holding (i) on the
         date on which the Merger is consummated  deliver to the  Administrative
         Agent a pledge  agreement  in form and  substance  satisfactory  to the
         Required Lenders  (together with each other pledge agreement  delivered
         pursuant to Section 5.01(p),  in each case as amended,  supplemented or
         otherwise  modified from time to time in accordance with its terms, the
         "Pledge  Agreement"),  duly  executed  by  Holding,  together  with (x)
         acknowledgment  copies or stamped  receipt  copies of proper  financing
         statements,  duly  filed  under  the  Uniform  Commercial  Code  in all
         jurisdictions  that the  Administrative  Agent  may deem  necessary  or
         desirable  in order to  perfect  and  protect  the liens  and  security
         interests created under the Pledge  Agreement,  covering the Collateral
         described  in the  Pledge  Agreement  and (y)  completed  requests  for
         information listing the financing  statements referred to in clause (x)
         and all other effective financing statements filed in the jurisdictions
         referred to in clause (x) that name  Holding as debtor,  together  with
         copies of such other financing statements and (ii) on the date on which
         the Merger is  consummated  or, if the  Bridge  Notes are issued on the
         date on which the Merger is  consummated,  the date on which the Bridge
         Notes are paid in full, deliver to the Administrative Agent pursuant to
         the terms of the Security  Agreement  certificates  representing all of
         the  outstanding  capital stock of the Borrower  accompanied by undated
         stock powers executed in blank.



<PAGE>


                                       73

                  (m) Termination of Financing  Statements.  Upon the request of
         the Administrative Agent, and at the expense of the Borrower, within 10
         days after such  request,  furnish to the  Administrative  Agent proper
         termination statements on Form UCC-3 covering such financing statements
         as the Administrative  Agent may reasonably request that were listed in
         the  completed   requests  for  information   referred  to  in  Section
         3.01(o)(viii)(C).

                  (n) Merger.  In the case of Holding and the  Purchaser,  cause
         the Merger to occur as promptly as practicable.

                  (o) Lockbox  Accounts.  On or prior to April 30, 1996,  and at
         the expense of the Borrower,  deliver to the  Administrative  Agent the
         Lockbox Letters referred to in the Security Agreement, duly executed by
         each Lockbox Bank referred to in the Security Agreement.

                  (p) Expenses.  On the earlier of the date of  consummation  of
         the Merger and the termination of the Merger Agreement, pay all accrued
         expenses of the  Administrative  Agent  (including the accrued fees and
         expenses of counsel to the  Administrative  Agent and local  counsel to
         the Administrative Agent).

         SECTION 5.02. Negative  Covenants.  So long as any Advance shall remain
unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have
any Commitment  hereunder,  each of Holding, the Purchaser and the Borrower will
not, at any time:

                  (a) Liens, Etc. Create,  incur,  assume or suffer to exist, or
         permit any of its  Subsidiaries to create,  incur,  assume or suffer to
         exist,  any Lien on or with  respect  to any of its  properties  of any
         character (including,  without limitation,  accounts) whether now owned
         or hereafter  acquired,  or sign or file or suffer to exist,  or permit
         any of its  Subsidiaries to sign or file or suffer to exist,  under the
         Uniform Commercial Code of any jurisdiction, a financing statement that
         names Holding, the Purchasers,  the Borrower or any of its Subsidiaries
         as  debtor,  or  sign  or  suffer  to  exist,  or  permit  any  of  its
         Subsidiaries  to  sign or  suffer  to  exist,  any  security  agreement
         authorizing  any  secured  party  thereunder  to  file  such  financing
         statement,  or assign, or permit any of its Subsidiaries to assign, any
         accounts or other right to receive income, excluding, however, from the
         operation of the foregoing restrictions the following:

                           (i)  Liens created under the Loan Documents;




<PAGE>


                                       74

                           (ii)  in the case of the Purchaser, Liens on the 
                  assets of the Purchaser pursuant to the Stock Purchase
                  Facilities Documents;

                           (iii) in the case of Holding, Liens on the capital 
                  stock of the Borrower pursuant to the Bridge Note Documents;

                           (iv) in the case of the Borrower and its 
                  Subsidiaries, Permitted Liens;

                           (v) Liens existing on the date hereof and described
                  on Schedule XIII hereto;

                           (vi)   in  the   case   of  the   Borrower   and  its
                  Subsidiaries, purchase money Liens upon or in real property or
                  equipment  acquired  or  held  by the  Borrower  or any of its
                  Subsidiaries  in the ordinary course of business to secure the
                  purchase price of such property or equipment or to secure Debt
                  incurred solely for the purpose of financing the  acquisition,
                  construction  or improvement of any such property or equipment
                  to be subject to such  Liens,  or Liens  existing  on any such
                  property or equipment at the time of  acquisition  (other than
                  any such Liens created in  contemplation  of such  acquisition
                  that  do  not  secure  the  purchase  price),  or  extensions,
                  renewals or  replacements of any of the foregoing for the same
                  or a lesser amount; provided, however, that no such Lien shall
                  extend to or cover any  property or  equipment  other than the
                  property or equipment being acquired, constructed or improved,
                  and no such extension,  renewal or replacement shall extend to
                  or cover any property or equipment not theretofore  subject to
                  the Lien being  extended,  renewed or  replaced;  and provided
                  further  that  the  aggregate  principal  amount  of the  Debt
                  secured by Liens  permitted by this clause (vi) at the time of
                  acquisition,  construction  or  improvement  of  the  property
                  subject  thereto  shall  not  exceed  80% of the  cost of such
                  property,  construction  or  improvement  or of the then  fair
                  value thereof,  whichever shall be less and that any such Debt
                  shall not  otherwise  be  prohibited  by the terms of the Loan
                  Documents; and

                           (vii)   in  the   case  of  the   Borrower   and  its
                  Subsidiaries,  Liens  arising in connection  with  Capitalized
                  Leases permitted under Section  5.02(b)(iv)(C),  provided that
                  no such Lien shall extend to or cover any Collateral or assets
                  other than the assets subject to such Capitalized Leases.

                  (b) Debt. Create,  incur, assume or suffer to exist, or permit
         any of its  Subsidiaries to create,  incur,  assume or suffer to exist,
         any Debt other than:



<PAGE>


                                       75

                           (i) in the case of  Holding,  (A) Debt under the Loan
                  Documents,  the Stock  Purchase  Facilities  Documents and the
                  Bridge  Note  Documents,  (B) Debt in an  aggregate  principal
                  amount not to exceed  $5,000,000  at any time  outstanding  to
                  certain  members of management of the Borrower in exchange for
                  their equity ownership interests in Holding, provided that (w)
                  such  Debt  is   subordinated  in  right  of  payment  to  the
                  Obligations  of Holding under the Loan  Documents on terms and
                  conditions reasonably  satisfactory to the Lender Parties, (x)
                  such Debt shall not bear interest on a cash basis prior to the
                  Termination Date, (y) the final maturity of such Debt is after
                  the Termination  Date and (z) there is no amortization of such
                  Debt on or  prior  to the  Termination  Date,  and (C) Debt in
                  connection  with the conversion of Preferred  Stock of Holding
                  with a liquidation value on the date of issue not in excess of
                  $10,000,000,  provided  that  (x)  such  Debt  shall  not bear
                  interest on a cash basis prior to the  Termination  Date,  (y)
                  the final maturity of such Debt is after the Termination  Date
                  and (z) there is no  amortization  of such Debt on or prior to
                  the Termination Date,

                           (ii)     in the case of the Borrower,

                                    (A) on and  after  the  consummation  of the
                           Merger   and  so  long  as  no   Permanent   Debt  is
                           outstanding,   the  Bridge   Notes  in  an  aggregate
                           principal amount not to exceed $100,000,000, and

                                    (B) on and  after  the  consummation  of the
                           Merger   and  so  long  as  no   Bridge   Notes   are
                           outstanding,  the  Permanent  Debt  in  an  aggregate
                           principal amount not to exceed $115,000,000;

                           (iii) in the case of any of the  Subsidiaries  of the
                  Borrower,  Debt  owed  to the  Borrower  or to a  wholly-owned
                  Subsidiary of the Borrower,  provided that any such Debt shall
                  be (A) evidenced by a promissory note and (B) pledged in favor
                  of the Lender  Parties  pursuant to the terms of the  Security
                  Agreement; and

                           (iv) in the case of the Borrower and any of its 
                  Subsidiaries,

                                    (A) Debt under the Loan Documents,

                                    (B) Debt secured by Liens permitted by 
                           Section 5.02(a)(vi) not to exceed in the aggregate 
                           $5,000,000 at any time outstanding,

                                    (C) Capitalized Leases not to exceed in the 
                           aggregate $10,000,000 at any time outstanding,


<PAGE>


                                       76

                                    (D) unsecured  Debt incurred in the ordinary
                           course of business for the deferred purchase price of
                           property or services,  maturing  within one year from
                           the date created, and aggregating,  on a Consolidated
                           basis,  not  more  than  $5,000,000  at any one  time
                           outstanding,

                                    (E) indorsement of negotiable instruments 
                           for deposit or collection or similar transactions in 
                           the ordinary course of business, and

                                    (F)  Debt  (whether  or  not  of  the  types
                           described  above in clauses  (A)  through  (D)) in an
                           aggregate  principal amount not to exceed  $2,500,000
                           at any time outstanding.

                  (c) Lease Obligations.  Create, incur, assume,  extend, renew,
         modify or amend , or permit any of its  Subsidiaries to create,  incur,
         assume,  extend,  renew, modify or amend, any obligations as lessee (i)
         for the rental or hire of real or personal  property in connection with
         any sale and leaseback  transaction,  or (ii) for the rental or hire of
         other real or personal  property of any kind under leases or agreements
         to lease (including  Capitalized Leases) having an original term of one
         year or more that would cause the direct and contingent  liabilities of
         the Borrower and its Subsidiaries,  on a Consolidated basis, in respect
         of all such  obligations  to exceed,  in the 12 month period  following
         incurrence,  asumption,  extension, renewal, modification or amendment,
         5.0% of Consolidated sales of the Borrower and its Subsidiaries for the
         12 month period immediately prior thereto.

                  (d) Mergers, Etc. Merge into or consolidate with any Person or
         permit any  Person to merge into it, or permit any of its  Subsidiaries
         to do so, except that (i) the Borrower and the Purchaser may consummate
         the Merger and (ii) any  Subsidiary  of the  Borrower may merge into or
         consolidate with any other  Subsidiary of the Borrower,  provided that,
         in the case of any such merger or  consolidation,  the Person formed by
         such merger or consolidation shall be a wholly-owned  Subsidiary of the
         Borrower;  provided,  however,  that in each  case,  immediately  after
         giving  effect  thereto,  no event shall occur and be  continuing  that
         constitutes  a Default and, in the case of any such merger to which the
         Borrower is a party, the Borrower is the surviving corporation.

                  (e) Sales, Etc. of Assets. Sell, lease,  transfer or otherwise
         dispose of, or permit any of its Subsidiaries to sell, lease,  transfer
         or otherwise dispose of, any assets, or grant any option or other right
         to purchase, lease or otherwise acquire any assets, except:



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                                       77

                           (i) sales of Inventory by the Borrower and its 
                  Subsidiaries in the ordinary course of its business,

                           (ii) sales or other disposals of obsolete or worn-out
                  equipment or other assets in the ordinary course of business,

                           (iii) in a transaction authorized by subsection (d) 
                  of this Section,

                           (iv)  sales  of  assets  by  the   Borrower   or  any
                  Subsidiary  of the  Borrower for cash and for fair value in an
                  aggregate amount not to exceed  $2,000,000 in any Fiscal Year,
                  provided that the Borrower  shall,  on the third Business Date
                  following  the date of receipt by the  Borrower  or any of its
                  Subsidiaries  of the Net Cash  Proceeds  from such sale prepay
                  the  Advances  pursuant  to,  and in the  amount  and order of
                  priority set forth in, Section 2.06(b)(ii), and

                           (v) sales or other  transfers  of assets  from any of
                  the  Borrower's   Subsidiaries  to  a  wholly-owned   domestic
                  Subsidiary  of  the  Borrower   (other  than  Central  Tractor
                  Distributing  Co.),  provided that such wholly-owned  domestic
                  Subsidiary shall become an additional  grantor pursuant to the
                  terms of the Security  Agreement  and shall execute a guaranty
                  in form and substance reasonably  satisfactory to the Required
                  Lenders.

                  (f) Investments in Other Persons.  Make or hold, or permit any
         of its Subsidiaries to make or hold, any Investment in any Person other
         than:

                           (i) Investments by the Borrower and its  Subsidiaries
                  in their Subsidiaries (other than Central Tractor Distributing
                  Co.) outstanding on the date hereof and additional investments
                  in wholly-owned  Subsidiaries in an aggregate  amount invested
                  from the date hereof not to exceed $5,000,000;  provided that,
                  with respect to  Investments  in any newly acquired or created
                  wholly-owned  Subsidiary,  such  Subsidiary  shall  become  an
                  additional  grantor  pursuant  to the  terms  of the  Security
                  Agreement  and shall  execute a guaranty in form and substance
                  reasonably satisfactory to the Required Lenders;

                           (ii) loans and advances to employees of the Borrower
                  and its Subsidiaries in an aggregate principal amount not to 
                  exceed $750,000 at any time outstanding;

                           (iii) Investments by the Borrower and its 
                  Subsidiaries in Cash Equivalents;



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                                       78

                           (iv) Investments consisting of intercompany Debt 
                  permitted under Section 5.02(b)(iii);

                           (v) Investments existing on the date hereof and 
                  described on  Schedule X hereto;

                           (vi)   in  the   case   of  the   Borrower   and  its
                  Subsidiaries,   other   Investments  in  an  aggregate  amount
                  invested not to exceed  $2,500,000  (other than any Investment
                  in  Central  Tractor  Distributing  Co.);  provided  that with
                  respect to  Investments  made under this clause (vi):  (1) any
                  newly acquired or created Subsidiary of the Borrower or any of
                  its Subsidiaries shall be a wholly-owned  Subsidiary  thereof,
                  shall become an  additional  grantor  pursuant to the terms of
                  the Security  Agreement  and shall  execute a guaranty in form
                  and substance reasonably satisfactory to the Required Lenders;
                  (2)  immediately  before and after giving effect  thereto,  no
                  Default  shall have occurred and be continuing or would result
                  therefrom;  and (3)  any  business  acquired  or  invested  in
                  pursuant  to this  clause  (vi)  shall be in the same  line of
                  business  as  the  business  of  the  Borrower  or  any of its
                  Subsidiaries; and

                           (vii) in the case of Holding,  Investments by Holding
                  in its capital stock as a result of the transactions described
                  in Section 5.02(b)(i)(B).

                  (g)  Dividends,  Etc. In the case of the Borrower,  declare or
         pay any  dividends,  purchase,  redeem,  retire,  defease or  otherwise
         acquire for value any of its capital stock or any  warrants,  rights or
         options to acquire such capital  stock,  now or hereafter  outstanding,
         return any capital to its  stockholders as such, make any  distribution
         of assets, capital stock,  warrants,  rights,  options,  obligations or
         securities  to its  stockholders  as such or issue or sell any  capital
         stock or any warrants, rights or options to acquire such capital stock,
         or permit any of its  Subsidiaries to do any of the foregoing or permit
         any of  its  Subsidiaries  to  purchase,  redeem,  retire,  defease  or
         otherwise  acquire for value any capital  stock of the  Borrower or any
         warrants,  rights or options to acquire such capital  stock or to issue
         or sell any capital stock or any warrants, rights or options to acquire
         such  capital  stock,  except  that,  so long as no Default  shall have
         occurred  and be  continuing  at the time of any  action  described  in
         clauses  (A)  through  (C)  below or would  result  therefrom,  (i) the
         Borrower may (A) declare and pay  dividends and  distributions  payable
         only in common stock of the Borrower,  (B) except to the extent the Net
         Cash Proceeds  thereof are required to be applied to the  prepayment of
         the Bridge  Notes or to the  prepayment  of the  Advances  pursuant  to
         Section 2.06(b), purchase, redeem, retire, defease or otherwise acquire
         shares of its capital  stock with the proceeds  received from the issue
         of new  shares of its  capital  stock  with  equal or  inferior  voting
         powers,  designations,  preferences and rights, and (C) declare and pay
         cash dividends to Holding solely to make payments


<PAGE>


                                       79

         required to be made by Holding under the Stockholders  Agreement and to
         permit  Holding to pay its  current  obligations  up to $100,000 in any
         Fiscal Year in the ordinary  course of business and (ii) any Subsidiary
         of the Borrower may (A) declare and pay cash  dividends to the Borrower
         and (B)  declare  and pay  cash  dividends  to any  other  wholly-owned
         Subsidiary of the Borrower of which it is a Subsidiary.

                  (h) Change in Nature of Business.  Make,  or permit any of its
         Subsidiaries to make, any material change in the nature of its business
         as carried on at the date hereof.

                  (i)  Charter   Amendments.   Amend,   or  permit  any  of  its
         Subsidiaries to amend, its certificate of incorporation or bylaws.

                  (j) Accounting  Changes.  Make or permit, or permit any of its
         Subsidiaries to make or permit,  any change in (i) accounting  policies
         or  reporting  practices,  except as  required  by  generally  accepted
         accounting principles or (ii) Fiscal Year.

                  (k)  Prepayments,  Etc.  of Debt.  Prepay,  redeem,  purchase,
         defease or otherwise satisfy prior to the scheduled maturity thereof in
         any manner, or make any payment in violation of any subordination terms
         of,  any  Debt,  other  than  (i) the  prepayment  of the  Advances  in
         accordance with the terms of this Agreement,  (ii) regularly  scheduled
         or  required  repayments,  prepayments  or  redemptions  of  the  Stock
         Purchase Facilities and the Bridge Notes and (iii) optional prepayments
         or redemptions of the Bridge Notes,  or amend,  modify or change in any
         manner  any  term  or  condition  of  the  Stock  Purchase   Facilities
         Documents,  the Bridge Note  Documents or the Permanent  Debt Documents
         that  would  impair  the  value of the  interest  or rights of the Loan
         Parties  thereunder or that would impair the rights or interests of the
         Administrative  Agent  or  any  Lender  Party,  or  permit  any  of its
         Subsidiaries  to do any of the foregoing  other than to prepay any Debt
         payable to the Borrower.

                  (l) Amendment, Etc. of Related Documents.  Cancel or terminate
         any Related Document (other than the Financing Documents) or consent to
         or accept any  cancellation or termination  thereof,  amend,  modify or
         change in any manner any term or condition of any such Related Document
         or give any consent,  waiver or approval thereunder,  waive any default
         under or any  breach  of any  term or  condition  of any  such  Related
         Document,  agree in any manner to any other amendment,  modification or
         change of any term or condition  of any such  Related  Document or take
         any other  action in  connection  with any such Related  Document  that
         would  impair the value of the  interest or rights of the Loan  Parties
         thereunder  or  that  would  impair  the  rights  or  interests  of the
         Administrative  Agent  or  any  Lender  Party,  or  permit  any  of its
         Subsidiaries to do any of the foregoing.


<PAGE>


                                       80

                  (m) Negative Pledge.  Enter into or suffer to exist, or permit
         any of its Subsidiaries to enter into or suffer to exist, any agreement
         prohibiting or conditioning the creation or assumption of any Lien upon
         any of its  property  or assets  other than (i) in favor of the Secured
         Parties or (ii) any  prohibition  or  condition  contained in the Stock
         Purchase  Facilities  Documents,  the  Bridge  Note  Documents  and the
         Permanent Debt Documents.

                  (n) Partnerships, Etc. Become a general partner in any general
         or  limited  partnership  or  joint  venture,  or  permit  any  of  its
         Subsidiaries  to do so,  other than any  Subsidiary  the sole assets of
         which consist of its interest in such partnership or joint venture.

                  (o)  Speculative  Transactions.  Engage,  or permit any of its
         Subsidiaries to engage, in any transaction  involving commodity options
         or  futures   contracts   or  any  similar   speculative   transactions
         (including,  without  limitation,  take-or-pay  contracts),  except for
         Hedge Agreements permitted under Section 5.02(b).

                  (p) Capital Expenditures.  In the case of the Borrower,  make,
         or permit any of its  Subsidiaries  to make,  any Capital  Expenditures
         that would cause the aggregate of all such Capital Expenditures made by
         the  Borrower  and its  Subsidiaries  in any period set forth  below to
         exceed the amount set forth below for such period.




         Fiscal Year Ending In                   Amount
         ---------------------                   ------
                1997                           9,000,000
                1998                           12,000,000
                1999                           12,000,000
                2000                           12,500,000
                2001                           12,500,000

                  ;  provided,  however,  that if, in any Fiscal Year  specified
                  above, the amount of Capital  Expenditures set forth above for
                  such  period  exceeds  the  amount  of  Capital   Expenditures
                  actually  made by the  Borrower and its  Subsidiaries  in such
                  Fiscal  Year,  the  Borrower  and its  Subsidiaries  shall  be
                  entitled to make additional  Capital  Expenditures in the next
                  Fiscal Year up to the amount of such excess.



<PAGE>


                                       81


         SECTION  5.03.  Reporting  Requirements.  So long as any Advance  shall
remain  unpaid,  any Letter of Credit shall be  outstanding  or any Lender Party
shall have any  Commitment  hereunder,  the Borrower  will furnish to the Lender
Parties:

                  (a)  Default  Notice.  As soon as  possible  and in any  event
         within two Business  Days after a  Responsible  Officer of a Loan Party
         knows,  or has reason to know,  of the  occurrence  of a Default or any
         event,  development or occurrence  reasonably likely to have a Material
         Adverse Effect continuing on the date of such statement, a statement of
         the chief  financial  officer of the Borrower  setting forth details of
         such Default and the action that the Borrower has taken and proposes to
         take with respect thereto.

                  (b) Monthly Financials.  As soon as available and in any event
         within 30 days after the end of each month  (other than any month which
         is the last month of a fiscal quarter), a Consolidated balance sheet of
         the  Borrower  and its  Subsidiaries  as of the end of such month and a
         Consolidated  statement of income and a Consolidated  statement of cash
         flows of the Borrower and its Subsidiaries for the period commencing at
         the end of the previous month and ending with the end of such month and
         a  Consolidated  statements of income and a  Consolidated  statement of
         cash  flows  of the  Borrower  and  its  Subsidiaries  for  the  period
         commencing  at the end of the previous  Fiscal Year and ending with the
         end of such month,  setting forth in each case in comparative  form the
         corresponding  figures  for the  corresponding  month of the  preceding
         Fiscal Year,  all in reasonable  detail and duly certified by the chief
         financial officer of the Borrower.

                  (c)  Quarterly  Financials.  As soon as  available  and in any
         event within 45 days after the end of each of the first three  quarters
         of each Fiscal Year, a  Consolidated  balance sheet of the Borrower and
         its  Subsidiaries  as of  the  end of  such  quarter  and  Consolidated
         statement of income and a  Consolidated  statement of cash flows of the
         Borrower and its Subsidiaries  for the period  commencing at the end of
         the  previous  fiscal  quarter  and ending  with the end of such fiscal
         quarter  and a  Consolidated  statement  of income  and a  Consolidated
         statement of cash flows of the Borrower  and its  Subsidiaries  for the
         period  commencing  at the end of the  previous  Fiscal Year and ending
         with the end of such quarter, setting forth in each case in comparative
         form the  corresponding  figures  for the  corresponding  period of the
         preceding  Fiscal Year,  all in  reasonable  detail and duly  certified
         (subject to year-end audit  adjustments) by the chief financial officer
         of the  Borrower  as having  been  prepared  in  accordance  with GAAP,
         together with (i) a certificate of said officer stating that no Default
         has  occurred  and is  continuing  or, if a Default has occurred and is
         continuing,  a statement  as to the nature  thereof and the action that
         the Borrower  has taken and  proposes to take with respect  thereto and
         (ii) a schedule in


<PAGE>


                                       82

         form satisfactory to the Administrative  Agent of the computations used
         by the Borrower in determining  compliance with the covenants contained
         in Sections  5.04(a)  through  (d),  provided  that in the event of any
         change in GAAP used in the  preparation of such  financial  statements,
         the Borrower shall also provide,  if necessary for the determination of
         compliance with Section 5.04, a statement of reconciliation  conforming
         such financial statements to GAAP.

                  (d) Annual  Financials.  As soon as available and in any event
         within 90 days after the end of each Fiscal  Year, a copy of the annual
         audit  report  for such  year for the  Borrower  and its  Subsidiaries,
         including therein a Consolidated  balance sheet of the Borrower and its
         Subsidiaries  as of the  end of such  Fiscal  Year  and a  Consolidated
         statement of income and a  Consolidated  statement of cash flows of the
         Borrower  and its  Subsidiaries  for such  Fiscal  Year,  in each  case
         accompanied  by an unqualified  opinion of Ernst & Young,  LLP or other
         independent public accountants of recognized standing acceptable to the
         Required  Lenders,  together with (i) a certificate of such  accounting
         firm to the Lender  Parties  stating  that in the course of the regular
         audit of the business of the Borrower and its Subsidiaries, which audit
         was  conducted by such  accounting  firm in accordance  with  generally
         accepted  auditing  standards,  such  accounting  firm has  obtained no
         knowledge  that a Default has occurred and is continuing  under Section
         5.02(p) or Section 5.04, or if, in the opinion of such accounting firm,
         such a Default has  occurred and is  continuing,  a statement as to the
         nature   thereof,   (ii)  a  schedule  in  form   satisfactory  to  the
         Administrative  Agent of the  computations  used by such accountants in
         determining,  as of the end of such Fiscal  Year,  compliance  with the
         covenants  contained in Sections 5.04(a) through (d),  provided that in
         the  event  of any  change  in  GAAP  used in the  preparation  of such
         financial statements, the Borrower shall also provide, if necessary for
         the  determination  of  compliance  with  Section  5.04, a statement of
         reconciliation conforming such financial statements to GAAP and (iii) a
         certificate of the chief financial officer of the Borrower stating that
         no Default has occurred and is continuing or, if a default has occurred
         and is continuing,  a statement as to the nature thereof and the action
         that the Borrower has taken and proposes to take with respect thereto.

                  (e) Annual Forecasts. As soon as available and in any event no
         later  than  30 days  after  the end of  each  Fiscal  Year,  forecasts
         prepared by management of the Borrower, in form reasonably satisfactory
         to the Administrative  Agent, of balance sheets,  income statements and
         cash flow  statements on a monthly basis for the Fiscal Year  following
         such Fiscal Year then ended and on an annual basis for each Fiscal Year
         thereafter until the Termination Date.

                  (f) ERISA Events and ERISA Reports.  Promptly and in any event
         within 10 days after any Loan Party or any ERISA Affiliate knows or has
         reason to know


<PAGE>


                                       83

         that any ERISA Event has occurred,  a statement of the chief  financial
         officer of the Borrower  describing such ERISA Event and the action, if
         any,  that  such  Loan  Party or such  ERISA  Affiliate  has  taken and
         proposes to take with respect thereto and (ii) on the date any records,
         documents  or other  information  must be  furnished  to the PBGC  with
         respect to any Plan  pursuant to Section 4010 of ERISA,  a copy of such
         records, documents and information.

                  (g) Plan  Terminations.  Promptly  and in any event within two
         Business  Days  after  receipt  thereof  by any Loan Party or any ERISA
         Affiliate, copies of each notice from the PBGC stating its intention to
         terminate  any Plan or to have a trustee  appointed to  administer  any
         Plan.

                  (h) Actuarial  Reports.  Promptly upon receipt  thereof by any
         Loan  Party or any  ERISA  Affiliate,  a copy of the  annual  actuarial
         valuation report for each Plan the funded current liability  percentage
         (as defined in Section 302(d)(8) of ERISA) of which is less than 90% or
         the unfunded current liability of which exceeds $100,000.

                  (i)  Multiemployer  Plan  Notices.  Promptly  and in any event
         within five Business  Days after  receipt  thereof by any Loan Party or
         any ERISA Affiliate from the sponsor of a Multiemployer Plan, copies of
         each notice  concerning (i) the  imposition of Withdrawal  Liability by
         any such  Multiemployer  Plan, (ii) the  reorganization or termination,
         within the meaning of Title IV of ERISA, of any such Multiemployer Plan
         or (iii) the amount of liability incurred,  or that may be incurred, by
         such Loan Party or any ERISA  Affiliate  in  connection  with any event
         described in clause (i) or (ii).

                  (j)  Litigation.  Promptly  after  the  commencement  thereof,
         notice  of  all  actions,   suits,   investigations,   litigation   and
         proceedings  before any court or governmental  department,  commission,
         board,  bureau,   agency  or  instrumentality,   domestic  or  foreign,
         affecting  any  Loan  Party  or  any of its  Subsidiaries  of the  type
         described  in  Section  4.01(i),  and  promptly  after  the  occurrence
         thereof,  notice of any adverse  change in the status or the  financial
         effect on any Loan Party or any of its  Subsidiaries  of the  Disclosed
         Litigation from that described on Schedule II.

                  (k) Securities  Reports.  Promptly after the sending or filing
         thereof,  copies  of all proxy  statements,  financial  statements  and
         reports that the Borrower (or, after the Merger,  Holding) sends to its
         stockholders generally, and copies of all regular, periodic and special
         reports, and all registration statements, that any Loan Party or any of
         its Subsidiaries  files with the Securities and Exchange  Commission or
         any governmental  authority that may be substituted  therefor,  or with
         any national securities exchange.



<PAGE>


                                       84

                  (l) Creditor Reports.  Promptly after the furnishing  thereof,
         copies of any statement or report  furnished to any other holder of the
         securities of any Loan Party or of any of its Subsidiaries  pursuant to
         the terms of any indenture, loan or credit or similar agreement and not
         otherwise  required to be furnished to the Lender  Parties  pursuant to
         any other clause of this Section 5.03.

                  (m) Agreement Notices.  Promptly upon receipt thereof,  copies
         of all notices, requests and other documents received by any Loan Party
         or any of its Subsidiaries under or pursuant to any Related Document or
         indenture,  loan or credit or similar agreement  relating to Debt in an
         aggregate principal amount in excess of $2,500,000 regarding or related
         to any breach or default by any party  thereto or any other  event that
         could materially impair the value of the interests or the rights of any
         Loan Party or otherwise  have a Material  Adverse  Effect and copies of
         any amendment,  modification  or waiver of any provision of any Related
         Agreement or Material Contract or indenture,  loan or credit or similar
         agreement  and,  from time to time upon  request by the  Administrative
         Agent, such information and reports regarding the Related Documents and
         the  Material  Contracts  as the  Administrative  Agent may  reasonably
         request.

                  (n)  Revenue  Agent  Reports.  Within 10 days  after  receipt,
         copies of all Revenue  Agent  Reports  (Internal  Revenue  Service Form
         886), or other written proposals of the Internal Revenue Service,  that
         propose,  determine or otherwise set forth positive  adjustments to the
         Federal  income tax  liability  of the  affiliated  group  (within  the
         meaning of Section  1504(a)(1)  of the Internal  Revenue Code) of which
         the Borrower is a member aggregating $1,000,000 or more.

                  (o) Tax Certificates.  Promptly,  and in any event within five
         Business Days after the due date (with extensions) for filing the final
         Federal   income  tax  return  in  respect  of  each  taxable  year,  a
         certificate (a "Tax Certificate"), signed by the President or the chief
         financial  officer of the  Borrower,  stating that the common parent of
         the affiliated  group (within the meaning of Section  1504(a)(1) of the
         Internal  Revenue  Code) of which the  Borrower is a member has paid to
         the Internal  Revenue Service or other taxing authority the full amount
         that such  affiliated  group is  required  to pay in respect of Federal
         income tax for such year.

                  (p) Environmental Conditions.  Promptly after the assertion or
         occurrence  thereof,  notice of any Environmental  Action against or of
         any noncompliance by any Loan Party or any of its Subsidiaries with any
         Environmental Law or Environmental  Permit that (i) could reasonably be
         expected to have a Material  Adverse  Effect or (ii) cause any property
         described  in  the  Mortgages  to be  subject  to any  restrictions  on
         ownership,  occupancy,  use or transferability  under any Environmental
         Law that  could  reasonably  be  expected  to have a  Material  Adverse
         Effect.


<PAGE>


                                       85

                  (q)  Real  Property.  As soon as  available  and in any  event
         within  30  days  after  the  end  of  each  Fiscal   Year,   a  report
         supplementing  Schedules  4.01(hh)  and 4.01(ii)  hereto,  including an
         identification  of all  real and  leased  property  disposed  of by the
         Borrower or any of its Subsidiaries during such Fiscal Year, a list and
         description  (including  the street  address,  county or other relevant
         jurisdiction,  state, record owner, book value thereof, and in the case
         of leases of  property,  lessor,  lessee,  expiration  date and  annual
         rental cost  thereof) of all real  property  acquired or leased  during
         such  Fiscal  Year  and a  description  of such  other  changes  in the
         information  included in such  Schedules as may be  necessary  for such
         Schedules to be accurate and complete.

                  (r) Insurance. As soon as available and in any event within 30
         days  after  the end of each  Fiscal  Year,  a report  summarizing  the
         insurance coverage  (specifying type, amount and carrier) in effect for
         the  Borrower  and its  Subsidiaries  and  containing  such  additional
         information as any Lender Party (through the Administrative  Agent) may
         reasonably specify.

                  (s) Borrowing  Base  Certificate.  As soon as available and in
         any event within 15 days after the end of each month,  a Borrowing Base
         Certificate,  as at the end of the  previous  month,  certified  by the
         chief financial officer of the Borrower.

                  (t) Plan  Schedule.  As soon as  practicable  and in any event
         within  10 days  after  the  Borrower  or one of its  ERISA  Affiliates
         becomes a party to a Plan,  an updated  Schedule V listing all Plans of
         the Borrower and its ERISA Affiliates.

                  (u) Other Information.  Such other information  respecting the
         business, condition (financial or otherwise), operations,  performance,
         properties or prospects of any Loan Party or any of its Subsidiaries as
         any Lender Party  (through the  Administrative  Agent) may from time to
         time reasonably request.

         SECTION 5.04. Financial Covenants.  So long as any Advance shall remain
unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have
any Commitment hereunder, Holding will:

                  (a)  Minimum  Net  Worth.  Maintain  at all times an excess of
         Consolidated total assets over Consolidated total liabilities,  in each
         case, of the Borrower and its Subsidiaries of not less than $58,000,000
         plus  75%  of   Consolidated   net  income  of  the  Borrower  and  its
         Subsidiaries  for the period  after  November 2, 1996 to and  including
         each date of  determination  computed  on a  cumulative  basis for said
         entire period.




<PAGE>


                                       86

                  (b) Minimum EBITDA. Maintain at the end of each fiscal quarter
         of Holding  Consolidated  EBITDA for the most recently  completed  four
         fiscal  quarters of Holding and its  Subsidiaries  of not less than the
         amount set forth below for such period:

             Four Fiscal Quarters Ending Closest To                Amount

             January 31, 1997                                      $20,900,000
             April 30, 1997                                        $20,900,000
             July 31, 1997                                         $21,700,000
             October 31, 1997                                      $21,700,000
             January 31, 1998                                      $21,700,000
             April 30, 1998                                        $23,400,000
             July 31, 1998                                         $24,100,000
             October 31, 1998                                      $24,800,000
             January 31, 1999                                      $26,200,000
             April 30, 1999                                        $26,900,000
             July 31, 1999                                         $28,300,000
             October 31, 1999                                      $29,000,000
             January 31, 2000                                      $29,800,000
             April 30, 2000                                        $30,800,000
             July 31, 2000                                         $32,200,000
             October 31, 2000                                      $33,000,000
             January 31, 2001                                      $33,700,000
             April 30, 2001                                        $34,700,000
             July 31, 2001                                         $36,600,000
             October 31, 2001                                      $37,500,000



                  (c)  Interest  Coverage  Ratio.  Maintain  at the  end of each
         fiscal quarter of Holding a ratio of  Consolidated  EBITDA for the most
         recently completed four fiscal quarters of Holding and its Subsidiaries
         to cash  interest  payable on all Debt  payable by the Borrower and its
         Subsidiaries  during such four fiscal  quarter  period of not less than
         the ratio set forth below for such period:




<PAGE>


                                       87


                 Four Fiscal Quarters               Amount
                   Ending Closest To                ------
                 -------------------- 
                   January 31, 1997                  1.55
                   April 30, 1997                    1.60
                   July 31, 1997                     1.60
                   October 31, 1997                  1.60
                   January 31, 1998                  1.70
                   April 30, 1998                    1.75
                   July 31, 1998                     1.80
                   October 31, 1998                  1.85
                   January 31, 1999                  1.95
                   April 30, 1999                    2.00
                   July 31, 1999                     2.10
                   October 31, 1999                  2.15
                   January 31, 2000                  2.20
                   April 30, 2000                    2.25
                   July 31, 2000                     2.35
                   October 31, 2000                  2.40
                   January 31, 2001                  2.45
                   April 30, 2001                    2.50
                   July 31, 2001                     2.60
                   October 31, 2001                  2.70




                  (d) Debt to EBITDA  Ratio.  Maintain at the end of each fiscal
         quarter  of  Holding  a  Debt  to  EBITDA  Ratio  of  Holding  and  its
         Subsidiaries of not more than the ratio set forth below for each period
         set forth below:




<PAGE>


                                       88


                    Four Fiscal Quarters                   Amount
                     Ending Closest To                     ------
                    --------------------
                   January 31, 1997                         5.60
                   April 30,  1997                          5.55
                   July 31, 1997                            5.25
                   October 31, 1997                         5.25
                   January 31, 1998                         5.25
                   April 30, 1998                           5.25
                   July 31, 1998                            4.60
                   October 31, 1998                         4.60
                   January 31, 1999                         4.60
                   April 30, 1999                           4.60
                   July 31, 1999                            4.15
                   October 31, 1999                         4.15
                   January 31, 2000                         4.15
                   April 30, 2000                           4.15
                   July 31, 2000                            3.75
                   October 31, 2000                         3.75
                   January 31, 2001                         3.75
                   April 30, 2001                           3.75
                   July 31, 2001                            2.80
                   October 31, 2001                         2.80




                                   ARTICLE VI

                                EVENTS OF DEFAULT

         SECTION  6.01.  Events  of  Default.  If any of  the  following  events
("Events of Default") shall occur and be continuing:

                  (a) (i) the  Borrower  shall fail to pay any  principal of any
         Advance when the same shall become due and payable or (ii) the Borrower
         shall fail to pay any interest on any Advance,  or any Loan Party shall
         fail to make any other  payment under any Loan  Document,  in each case
         under  this  clause  (ii)  within  three  Business  Days after the same
         becomes due and payable; or



<PAGE>


                                       89

                  (b) any  representation or warranty made by any Loan Party (or
         any of its  officers)  under or in  connection  with any Loan  Document
         shall prove to have been  incorrect in any material  respect when made;
         or

                  (c) (i) any Loan Party  shall  fail to perform or observe  any
         term, covenant or agreement  contained in Section 2.14,  5.01(f),  (j),
         (l), or (o), 5.02 or 5.04 or (ii) any Loan Party shall fail to maintain
         its corporate  existence or to perform or observe any term, covenant or
         agreement  contained  in  Section  5.03 if such  failure  shall  remain
         unremedied for 10 days; or

                  (d) any Loan  Party  shall  fail to  perform  any other  term,
         covenant or agreement  contained in any Loan Document on its part to be
         performed or observed if such failure  shall remain  unremedied  for 30
         days after the earlier of the date on which (A) a  Responsible  Officer
         of the Borrower  becomes  aware of such  failure or (B) written  notice
         thereof  shall have been given to the  Borrower  by the  Administrative
         Agent or any Lender Party; or

                  (e) any Loan  Party or any of its  Subsidiaries  shall fail to
         pay any  principal  of,  premium  or  interest  on or any other  amount
         payable in respect of any Debt that is  outstanding  in a principal  or
         notional amount of at least  $5,000,000  either  individually or in the
         aggregate (but excluding Debt outstanding hereunder) of such Loan Party
         or such  Subsidiary (as the case may be), when the same becomes due and
         payable   (whether  by   scheduled   maturity,   required   prepayment,
         acceleration,  demand or  otherwise),  and such failure shall  continue
         after the applicable grace period,  if any,  specified in the agreement
         or instrument  relating to such Debt; or any other event shall occur or
         condition shall exist under any agreement or instrument relating to any
         such Debt and shall continue after the applicable grace period, if any,
         specified in such agreement or instrument,  if the effect of such event
         or condition is to accelerate,  or to permit the  acceleration  of, the
         maturity of such Debt or  otherwise  to cause,  or to permit the holder
         thereof  to cause,  such  Debt to  mature;  or any such  Debt  shall be
         declared  to be due and  payable or  required to be prepaid or redeemed
         (other  than  by  a  regularly   scheduled   required   prepayment   or
         redemption),  purchased  or  defeased,  or an offer to prepay,  redeem,
         purchase or defease  such Debt shall be  required  to be made,  in each
         case prior to the stated maturity thereof; or

                  (f) any Loan Party or any of its Subsidiaries  shall generally
         not pay its debts as such debts  become  due, or shall admit in writing
         its  inability  to pay its  debts  generally,  or shall  make a general
         assignment  for the benefit of creditors;  or any  proceeding  shall be
         instituted  by or  against  any Loan  Party or any of its  Subsidiaries
         seeking  to  adjudicate   it  a  bankrupt  or  insolvent,   or  seeking
         liquidation,  winding  up,  reorganization,   arrangement,  adjustment,
         protection,  relief,  or  composition  of it or its debts under any law
         relating to bankruptcy, insolvency or reorganization or relief of


<PAGE>


                                       90

         debtors, or seeking the entry of an order for relief or the appointment
         of a receiver,  trustee,  or other  similar  official for it or for any
         substantial  part  of its  property  and,  in  the  case  of  any  such
         proceeding  instituted  against it (but not  instituted  by it) that is
         being diligently  contested by it in good faith, either such proceeding
         shall remain  undismissed or unstayed for a period of 45 days or any of
         the actions sought in such proceeding  (including,  without limitation,
         the entry of an order  for  relief  against,  or the  appointment  of a
         receiver,  trustee,  custodian or other similar official for, it or any
         substantial part of its property) shall occur; or any Loan Party or any
         of its Subsidiaries shall take any corporate action to authorize any of
         the actions set forth above in this subsection (f); or

                  (g) any  judgment  or order for the payment of money in excess
         of  $5,000,000  shall be rendered  against any Loan Party or any of its
         Subsidiaries  and either (i)  enforcement  proceedings  shall have been
         commenced  by any  creditor  upon such  judgment or order or (ii) there
         shall be any  period  of 30  consecutive  days  during  which a stay of
         enforcement of such judgment or order, by reason of a pending appeal or
         otherwise, shall not be in effect; or

                  (h) any  non-monetary  judgment  or order  shall  be  rendered
         against any Loan Party or any of its  Subsidiaries  that is  reasonably
         likely to have a Material Adverse Effect, and there shall be any period
         of 10  consecutive  days  during  which a stay of  enforcement  of such
         judgment or order,  by reason of a pending  appeal or otherwise,  shall
         not be in effect; or

                  (i) any provision of any Loan Document after delivery  thereof
         pursuant to Section  3.01 or 5.01(l)  shall for any reason  cease to be
         valid and binding on or enforceable against any Loan Party party to it,
         or any such Loan Party shall so state in writing; or

                  (j) any Collateral Document after delivery thereof pursuant to
         Section 3.01 or 5.01(p)  shall for any reason  (other than  pursuant to
         the terms  thereof)  cease to create a valid and perfected  lien on and
         security  interest in the  Collateral  purported to be covered  thereby
         with the priority required thereunder; or

                  (k) J.W.  Childs and its  Affiliates  and  co-investors  shall
         cease to have beneficial ownership (within the meaning of Rule 13d-3 of
         the Securities and Exchange  Commission  under the Securities  Exchange
         Act of  1934),  directly  or  indirectly,  of Voting  Stock of  Holding
         representing  51% or more of the  combined  voting  power of all Voting
         Stock of Holding;

                  (l) any ERISA Event shall have occurred with respect to a Plan
         and the sum  (determined  as of the date of  occurrence  of such  ERISA
         Event) of the


<PAGE>


                                       91

         Insufficiency  of such Plan and the  Insufficiency of any and all other
         Plans with respect to which an ERISA Event shall have occurred and then
         exist (or the  liability of the Loan  Parties and the ERISA  Affiliates
         related to such ERISA Event) exceeds $5,000,000; or

                  (m) any Loan  Party or any  ERISA  Affiliate  shall  have been
         notified by the sponsor of a  Multiemployer  Plan that it has  incurred
         Withdrawal Liability to such Multiemployer Plan in an amount that, when
         aggregated with all other amounts  required to be paid to Multiemployer
         Plans  by the Loan  Parties  and the  ERISA  Affiliates  as  Withdrawal
         Liability  (determined  as of the date of such  notification),  exceeds
         $5,000,000 or requires payments exceeding $1,000,000 per annum; or

                  (n) any Loan  Party or any  ERISA  Affiliate  shall  have been
         notified by the sponsor of a Multiemployer Plan that such Multiemployer
         Plan is in reorganization or is being terminated, within the meaning of
         Title  IV  of  ERISA,  and  as  a  result  of  such  reorganization  or
         termination the aggregate annual  contributions of the Loan Parties and
         the  ERISA  Affiliates  to all  Multiemployer  Plans  that  are then in
         reorganization  or being terminated have been or will be increased over
         the amounts  contributed to such Multiemployer Plans for the plan years
         of such  Multiemployer  Plans  immediately  preceding  the plan year in
         which such  reorganization or termination occurs by an amount exceeding
         $5,000,000; or

                  (o)  any  Borrowing  Base   Deficiency   shall  occur  and  be
         continuing;

then, and in any such event, the Administrative  Agent (i) shall at the request,
or may with the consent,  of the Required  Lenders,  by notice to the  Borrower,
declare the obligation of each  Appropriate  Lender to make Advances (other than
Letter of Credit  Advances by the  Issuing  Bank or a  Revolving  Credit  Lender
pursuant to Section 2.03(c) and Swing Line Advances by a Revolving Credit Lender
pursuant to Section  2.02(b)) and of the Issuing Bank to issue Letters of Credit
to be terminated,  whereupon the same shall forthwith terminate,  and (ii) shall
at the request,  or may with the consent,  of the Required Lenders, by notice to
the  Borrower,  declare the Notes,  all interest  thereon and all other  amounts
payable under this  Agreement  and the other Loan  Documents to be forthwith due
and payable,  whereupon the Notes,  all such interest and all such amounts shall
become and be forthwith due and payable, without presentment, demand, protest or
further  notice of any kind,  all of which are  hereby  expressly  waived by the
Borrower;  provided,  however, that in the event of an actual or deemed entry of
an order for relief with respect to any Loan Party under the Federal  Bankruptcy
Code, (x) the  obligation of each Lender to make Advances  (other than Letter of
Credit  Advances by the Issuing Bank or a Revolving  Credit  Lender  pursuant to
Section 2.03(c) and Swing Line Advances by a Revolving Credit Lender pursuant to
Section  2.02(b))  and of the  Issuing  Bank to issue  Letters of Credits  shall
automatically  be terminated  and (y) the Notes,  all such interest and all such
amounts shall automatically become and be due


<PAGE>


                                       92

and payable, without presentment, demand, protest or any notice of any kind, all
of which are hereby expressly waived by the Borrower.

         SECTION 6.02. Actions in Respect of the Letters of Credit upon Default.
If  any  Event  of  Default   shall  have  occurred  and  be   continuing,   the
Administrative  Agent  may,  or shall at the  request of the  Required  Lenders,
irrespective  of whether it is taking any of the  actions  described  in Section
6.01 or  otherwise,  make demand upon the Borrower to, and  forthwith  upon such
demand  the  Borrower  will,  pay to the  Administrative  Agent on behalf of the
Lender Parties in same day funds at the Administrative Agent's office designated
in such demand, for deposit in the L/C Cash Collateral  Account, an amount equal
to the aggregate Available Amount of all Letters of Credit then outstanding.  If
at any time the  Administrative  Agent determines that any funds held in the L/C
Cash  Collateral  Account are subject to any right or claim of any Person  other
than the Administrative Agent and the Lender Parties or that the total amount of
such funds is less than the aggregate Available Amount of all Letters of Credit,
the Borrower will, forthwith upon demand by the Administrative Agent, pay to the
Administrative  Agent,  as additional  funds to be deposited and held in the L/C
Cash  Collateral  Account,  an amount equal to the excess of (a) such  aggregate
Available  Amount over (b) the total amount of funds,  if any,  then held in the
L/C Cash Collateral Account that the Administrative  Agent determines to be free
and clear of any such right and claim.


                                   ARTICLE VII

                            THE ADMINISTRATIVE AGENT

         SECTION  7.01.  Authorization  and Action.  Each  Lender  Party (in its
capacities as a Lender, the Swing Line Bank (if applicable) and the Issuing Bank
(if applicable) hereby appoints and authorizes the Administrative  Agent to take
such  action as agent on its behalf and to exercise  such powers and  discretion
under  this  Agreement  and the other Loan  Documents  as are  delegated  to the
Administrative Agent by the terms hereof and thereof,  together with such powers
and  discretion  as are  reasonably  incidental  thereto.  As to any matters not
expressly  provided for by the Loan Documents  (including,  without  limitation,
enforcement or collection of the Notes), the  Administrative  Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain  from  acting  (and shall be fully  protected  in so acting or
refraining from acting) upon the instructions of the Required Lenders,  and such
instructions  shall be binding upon all Lender Parties and all holders of Notes;
provided,  however,  that the Administrative Agent shall not be required to take
any action that exposes the  Administrative  Agent to personal liability or that
is contrary to this Agreement or applicable law. The Administrative Agent agrees
to give to each Lender  Party  prompt  notice of each notice  given to it by the
Borrower pursuant to the terms of this Agreement.



<PAGE>


                                       93

         SECTION  7.02.   Administrative  Agent's  Reliance,  Etc.  Neither  the
Administrative  Agent nor any of its  directors,  officers,  agents or employees
shall be liable for any action  taken or omitted to be taken by it or them under
or in  connection  with the Loan  Documents,  except  for its or their own gross
negligence or willful  misconduct.  Without  limitation of the generality of the
foregoing,  the Administrative Agent: (a) may treat the payee of any Note as the
holder thereof until the Administrative Agent receives and accepts an Assignment
and  Acceptance  entered  into by the Lender that is the payee of such Note,  as
assignor,  and an Eligible Assignee,  as assignee,  as provided in Section 8.07;
(b) may consult  with legal  counsel  (including  counsel  for any Loan  Party),
independent public accountants and other experts selected by it and shall not be
liable  for any  action  taken or  omitted  to be  taken in good  faith by it in
accordance with the advice of such counsel, accountants or experts; (c) makes no
warranty or  representation  to any Lender Party and shall not be responsible to
any Lender Party for any  statements,  warranties  or  representations  (whether
written or oral) made in or in connection with the Loan Documents; (d) shall not
have any duty to ascertain or to inquire as to the  performance or observance of
any of the terms,  covenants or  conditions  of any Loan Document on the part of
any Loan Party or to inspect the property  (including  the books and records) of
any Loan Party;  (e) shall not be  responsible  to any Lender  Party for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of, or the  perfection or priority of any lien or security  interest  created or
purported to be created  under or in connection  with,  any Loan Document or any
other instrument or document furnished pursuant thereto;  and (f) shall incur no
liability  under or in respect of any Loan  Document  by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telegram or
telecopy) believed by it to be genuine and signed or sent by the proper party or
parties.

         SECTION 7.03.  Fleet and Affiliates.  With respect to its  Commitments,
the  Advances  made by it and the Notes  issued to it, Fleet shall have the same
rights and powers  under the Loan  Documents  as any other  Lender Party and may
exercise the same as though it were not the  Administrative  Agent; and the term
"Lender Party" or "Lenders Parties" shall, unless otherwise expressly indicated,
include Fleet in its  individual  capacity.  Fleet and its affiliates may accept
deposits  from,  lend money to,  act as  trustee  under  indentures  of,  accept
investment banking engagements from and generally engage in any kind of business
with, any Loan Party, any of its Subsidiaries and any Person who may do business
with or own securities of any Loan Party or any such Subsidiary, all as if Fleet
were not the  Administrative  Agent and without any duty to account  therefor to
the Lender Parties.

         SECTION  7.04.   Lender  Party  Credit  Decision.   Each  Lender  Party
acknowledges   that  it  has,   independently  and  without  reliance  upon  the
Administrative  Agent or any  other  Lender  Party  and  based on the  financial
statements  referred to in Section 4.01 and such other documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into  this  Agreement.  Each  Lender  Party  also  acknowledges  that  it  will,
independently and without reliance upon the Administrative Agent or any other


<PAGE>


                                       94

Lender  Party and  based on such  documents  and  information  as it shall  deem
appropriate at the time,  continue to make its own credit decisions in taking or
not taking action under this Agreement.

         SECTION 7.05.  Indemnification.  (a) Each Lender Party severally agrees
to indemnify the Administrative  Agent (to the extent not promptly reimbursed by
the Borrower) from and against such Lender Party's ratable share  (determined as
provided  below)  of any  and all  liabilities,  obligations,  losses,  damages,
penalties,  actions,  judgments,  suits, costs, expenses or disbursements of any
kind or nature  whatsoever  that may be imposed  on,  incurred  by, or  asserted
against the  Administrative  Agent in any way  relating to or arising out of the
Loan Documents or any action taken or omitted by the Administrative  Agent under
the Loan Documents;  provided, however, that no Lender Party shall be liable for
any  portion  of such  liabilities,  obligations,  losses,  damages,  penalties,
actions,  judgments,  suits, costs, expenses or disbursements resulting from the
Administrative   Agent's  gross  negligence  or  willful   misconduct.   Without
limitation  of  the  foregoing,  each  Lender  Party  agrees  to  reimburse  the
Administrative Agent promptly upon demand for its ratable share of any costs and
expenses (including,  without limitation,  fees and expenses of counsel) payable
by the Borrower under Section 8.04, to the extent that the Administrative  Agent
is not  promptly  reimbursed  for such costs and expenses by the  Borrower.  For
purposes of this Section 7.05(a),  the Lender Parties' respective ratable shares
of any amount shall be determined,  at any time, according to the sum of (a) the
aggregate principal amount of the Advances outstanding at such time and owing to
the  respective  Lender  Parties,  (b) their  respective  Pro Rata Shares of the
aggregate  Available  Amount of all Letters of Credit  outstanding at such time,
(c) the aggregate  unused portion of their  respective Term  Commitments at such
time and (d) their respective Unused Revolving Credit  Commitments at such time;
provided,  that the aggregate  principal  amount of Swing Line Advances owing to
the Swing Line Bank and of Letter of Credit  Advances  owing to the Issuing Bank
shall be  considered  to be owed to the  Revolving  Credit  Lenders  ratably  in
accordance with their respective Revolving Credit Commitments. In the event that
any Defaulted  Advance shall be owing by any Defaulting Lender at any time, such
Lender  Party's  Commitment  with  respect  to the  Facility  under  which  such
Defaulted  Advance  was  required  to have been made shall be  considered  to be
unused for purposes of this Section  7.05(a) to the extent of the amount of such
Defaulted   Advance.   The  failure  of  any  Lender  Party  to  reimburse   the
Administrative  Agent  promptly  upon demand for its ratable share of any amount
required to be paid by the Lender Party to the Administrative  Agent as provided
herein shall not relieve any other Lender Party of its  obligation  hereunder to
reimburse the Administrative  Agent for its ratable share of such amount, but no
Lender Party shall be  responsible  for the failure of any other Lender Party to
reimburse the  Administrative  Agent for such other Lender Party's ratable share
of such amount.  Without prejudice to the survival of any other agreement of any
Lender Party  hereunder,  the  agreement  and  obligations  of each Lender Party
contained  in  this  Section  7.05(a)  shall  survive  the  payment  in  full of
principal,  interest and all other amounts payable hereunder and under the other
Loan Documents.


<PAGE>


                                       95

         (b) Each Lender Party  severally  agrees to indemnify  the Issuing Bank
(to the extent not promptly  reimbursed by the  Borrower)  from and against such
Lender  Party's  ratable  share  (determined  as provided  below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs,  expenses or disbursements  of any kind or nature  whatsoever that may be
imposed  on,  incurred  by, or  asserted  against  the  Issuing  Bank in any way
relating to or arising out of the Loan  Documents or any action taken or omitted
by the Issuing Bank under the Loan Documents;  provided, however, that no Lender
Party shall be liable for any portion of such liabilities,  obligations, losses,
damages, penalties,  actions, judgments, suits, costs, expenses or disbursements
resulting  from the  Issuing  Bank's  gross  negligence  or willful  misconduct.
Without  limitation of the foregoing,  each Lender Party agrees to reimburse the
Issuing  Bank  promptly  upon  demand  for its  ratable  share of any  costs and
expenses (including,  without limitation,  fees and expenses of counsel) payable
by the Borrower  under  Section 8.04, to the extent that the Issuing Bank is not
promptly reimbursed for such costs and expenses by the Borrower. For purposes of
this Section  7.05(b),  the Lender  Parties'  respective  ratable  shares of any
amount  shall  be  determined,  at any  time,  according  to the  sum of (a) the
aggregate principal amount of the Advances outstanding at such time and owing to
the  respective  Lender  Parties,  (b) their  respective  Pro Rata Shares of the
aggregate  Available  Amount of all Letters of Credit  outstanding at such time,
(c) the aggregate  unused portion of their  respective Term  Commitments at such
time plus (d) their respective  Unused Working  Revolving Credit  Commitments at
such time; provided,  that the aggregate principal amount of Swing Line Advances
owing to the Swing  Line Bank and of  Letter  of  Credit  Advances  owing to the
Issuing Bank shall be  considered  to be owed to the  Revolving  Credit  Lenders
ratably in accordance with their respective Revolving Credit Commitments. In the
event that any Defaulted  Advance shall be owing by any Defaulting Lender at any
time,  such Lender Party's  Commitment  with respect to the Facility under which
such Defaulted  Advance was required to have been made shall be considered to be
unused for purposes of this Section  7.05(b) to the extent of the amount of such
Defaulted Advance. The failure of any Lender Party to reimburse the Issuing Bank
promptly upon demand for its ratable share of any amount  required to be paid by
the Lender Parties to the Issuing Bank as provided  herein shall not relieve any
other Lender Party of its obligation hereunder to reimburse the Issuing Bank for
its ratable share of such amount,  but no Lender Party shall be responsible  for
the failure of any other  Lender  Party to  reimburse  the Issuing Bank for such
other Lender  Party's  ratable  share of such amount.  Without  prejudice to the
survival of any other agreement of any Lender Party hereunder, the agreement and
obligations of each Lender Party contained in this Section 7.05(b) shall survive
the  payment  in full of  principal,  interest  and all  other  amounts  payable
hereunder and under the other Loan Documents.

         SECTION 7.06. Successor Administrative Agents. The Administrative Agent
may  resign as to any or all of the  Facilities  at any time by  giving  written
notice  thereof to the Lender  Parties and the Borrower and may be removed as to
all of the Facilities at any time with or without cause by the Required Lenders.
Upon any such resignation or removal,


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                                       96

the Required Lenders shall have the right to appoint a successor  Administrative
Agent as to such of the  Facilities  as to which  the  Administrative  Agent has
resigned or been removed. If no successor  Administrative  Agent shall have been
so appointed by the Required Lenders,  and shall have accepted such appointment,
within 30 days after the  retiring  Administrative  Agent's  giving of notice of
resignation  or the Required  Lenders'  removal of the  retiring  Administrative
Agent,  then the  retiring  Administrative  Agent  may,  on behalf of the Lender
Parties,  appoint a successor  Administrative Agent, which shall be a commercial
bank  organized  under the laws of the United States or of any State thereof and
having  a  combined  capital  and  surplus  of at least  $250,000,000.  Upon the
acceptance of any appointment as  Administrative  Agent hereunder by a successor
Administrative  Agent as to all of the  Facilities  and upon the  execution  and
filing or recording of such financing  statements,  or amendments  thereto,  and
such amendments or supplements to the Mortgages,  and such other  instruments or
notices,  as may be  necessary  or  desirable,  or as the  Required  Lenders may
request,  in order to continue the  perfection of the Liens granted or purported
to be granted by the Collateral Documents,  such successor  Administrative Agent
shall  succeed to and become  vested  with all the rights,  powers,  discretion,
privileges  and duties of the retiring  Administrative  Agent,  and the retiring
Administrative  Agent shall be discharged from its duties and obligations  under
the Loan  Documents.  Upon the acceptance of any  appointment as  Administrative
Agent hereunder by a successor  Administrative  Agent as to less than all of the
Facilities  and upon the  execution  and filing or recording  of such  financing
statements,  or amendments  thereto,  and such  amendments or supplements to the
Mortgages,  and such  other  instruments  or  notices,  as may be  necessary  or
desirable,  or as the  Required  Lenders may  request,  in order to continue the
perfection  of the Liens  granted or purported  to be granted by the  Collateral
Documents,  such  successor  Administrative  Agent  shall  succeed to and become
vested with all the rights,  powers,  discretion,  privileges  and duties of the
retiring Administrative Agent as to such Facilities,  other than with respect to
funds  transfers and other similar aspects of the  administration  of Borrowings
under such  Facilities,  issuances  of Letters  of Credit  (notwithstanding  any
resignation  as  Administrative  Agent  with  respect  to the  Letter  of Credit
Facility)  and payments by the Borrower in respect of such  Facilities,  and the
retiring   Administrative   Agent  shall  be  discharged  from  its  duties  and
obligations under this Agreement as to such Facilities, other than as aforesaid.
After any retiring  Administrative  Agent's  resignation or removal hereunder as
Administrative Agent as to all of the Facilities, the provisions of this Article
VII shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Administrative Agent as to any Facilities under this Agreement.




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                                       97

                                  ARTICLE VIII

                                  MISCELLANEOUS

         SECTION 8.01. Amendments,  Etc. No amendment or waiver of any provision
of this  Agreement or the Notes or any other Loan  Document,  nor consent to any
departure by the Borrower therefrom,  shall in any event be effective unless the
same  shall  be in  writing  and  signed  (or,  in the  case  of the  Collateral
Documents,  consented  to) by the  Required  Lenders,  and then  such  waiver or
consent  shall be effective  only in the specific  instance and for the specific
purpose for which given;  provided,  however,  that (a) no amendment,  waiver or
consent  shall,  unless in writing and signed by all of the Lenders  (other than
any Lender  Party that is, at such time,  a  Defaulting  Lender),  do any of the
following at any time: (i) waive any of the conditions specified in Section 3.01
or, in the case of the Initial  Extension of Credit,  Section 3.02,  (ii) change
the  number  of  Lenders  or the  percentage  of (x)  the  Commitments,  (y) the
aggregate unpaid principal amount of the Advances or (z) the aggregate Available
Amount of  outstanding  Letters of Credit that, in each case,  shall be required
for the  Lenders or any of them to take any action  hereunder,  (iii)  reduce or
limit the  obligations of either Holding or the Purchaser  under Section 9.01 or
otherwise  limit  Holding'  or the  Purchaser's  liability  with  respect to the
Obligations  owing to the  Administrative  Agent and the  Lender  Parties,  (iv)
release any material  portion of the Collateral in any  transaction or series of
related transactions or permit the creation, incurrence, assumption or existence
of any Lien on any material  portion of the  Collateral  in any  transaction  or
series of related  transactions to secure any Obligations other than Obligations
owing to the Secured  Parties under the Loan Documents and other than Debt owing
to any other  Person,  provided  that,  in the case of any Lien on any  material
portion of the  Collateral  to secure  Debt owing to any other  Person,  (A) the
Borrower  shall,  on the date such Debt shall be incurred or issued,  prepay the
Advances  pursuant  to,  and in the order of  priority  set  forth  in,  Section
2.06(b)(ii)  in an  aggregate  principal  amount equal to the amount of such Net
Cash Proceeds to the extent required to do so under Section  2.06(b)(ii) and (B)
the Required Lenders shall otherwise permit the creation, incurrence, assumption
or  existence  of such Lien and,  to the extent not  otherwise  permitted  under
Section 5.02(b), of such Debt, (v) amend this Section 8.01 and (b) no amendment,
waiver or consent  shall,  unless in writing and signed by the Required  Lenders
and each  Lender that has a  Commitment  under the Term  Facility  or  Revolving
Credit Facility if affected by such amendment,  waiver or consent,  (i) increase
the  Commitments  of such  Lender  or  subject  such  Lender  to any  additional
obligations,  (ii) reduce the  principal  of, or interest  on, the Notes held by
such Lender or any fees or other amounts payable hereunder to such Lender, (iii)
postpone  any date fixed for any payment of  principal  of, or interest  on, the
Notes held by such Lender or any fees or other amounts payable hereunder to such
Lender or (iv) change the order of  application  of any  prepayment set forth in
Section 2.06 in any manner that materially affects such Lender; provided further
that no amendment,  waiver or consent shall, unless in writing and signed by the
Swing Line Bank or the Issuing Bank, as


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                                       98

the case may be, in addition to the Lenders  required above to take such action,
affect the rights or  obligations of the Swing Line Bank or of the Issuing Bank,
as the  case  may  be,  under  this  Agreement;  and  provided  further  that no
amendment,  waiver  or  consent  shall,  unless  in  writing  and  signed by the
Administrative  Agent in  addition to the  Lenders  required  above to take such
action,  affect  the  rights or duties of the  Administrative  Agent  under this
Agreement.

         SECTION  8.02.  Notices,  Etc.  All  notices  and other  communications
provided for hereunder shall be in writing  (including  telecopy  communication)
and mailed,  telecopied or delivered, if to the Borrower, at its address at 3915
Delaware Avenue, Des Moines, Iowa 50313, Attention:  Dean Longnecker;  if to any
Initial  Lender or the Initial  Issuing  Bank,  at its Domestic  Lending  Office
specified  opposite its name on Schedule I hereto; if to any other Lender Party,
at its Domestic  Lending  Office  specified  in the  Assignment  and  Acceptance
pursuant to which it became a Lender Party; and if to the Administrative  Agent,
at its address at One Federal Street, Boston, MA 02110,  Attention:  Jed Duncan;
or, as to each party, at such other address as shall be designated by such party
in a written  notice to the other parties.  All such notices and  communications
shall,  when mailed or  telecopied,  be effective when deposited in the mails or
transmitted by telecopier,  respectively, except that notices and communications
to the  Administrative  Agent  pursuant  to Article  II, III or VII shall not be
effective until received by the Administrative  Agent. Delivery by telecopier of
an executed  counterpart  of any  amendment  or waiver of any  provision of this
Agreement  or the Notes or of any Exhibit  hereto to be executed  and  delivered
hereunder  shall be  effective  as delivery of a manually  executed  counterpart
thereof.

         SECTION 8.03. No Waiver; Remedies. No failure on the part of any Lender
Party or the Administrative Agent to exercise,  and no delay in exercising,  any
right hereunder or under any Note shall operate as a waiver  thereof;  nor shall
any single or partial  exercise of any such right  preclude any other or further
exercise  thereof  or the  exercise  of any other  right.  The  remedies  herein
provided are cumulative and not exclusive of any remedies provided by law.

         SECTION  8.04.  Costs and Expenses.  (a) The Borrower  agrees to pay on
demand (i) all  reasonable  costs and  expenses of the  Administrative  Agent in
connection   with  the   preparation,   execution,   delivery,   administration,
modification and amendment of the Loan Documents (including, without limitation,
(A) all due diligence, collateral review, syndication, transportation, computer,
duplication,   appraisal,  audit,  insurance,  consultant,  search,  filing  and
recording fees and expenses and (B) the reasonable  fees and expenses of counsel
for the Administrative Agent with respect thereto,  with respect to advising the
Administrative Agent as to its rights and  responsibilities,  or the perfection,
protection or  preservation  of rights or interests,  under the Loan  Documents,
with respect to negotiations  with any Loan Party or with other creditors of any
Loan Party or any of its  Subsidiaries  arising out of any Default or any events
or circumstances that may give rise to a Default and


<PAGE>


                                       99

with respect to presenting claims in or otherwise participating in or monitoring
any  bankruptcy,  insolvency or other similar  proceeding  involving  creditors'
rights  generally and any proceeding  ancillary  thereto) and (ii) all costs and
expenses of the  Administrative  Agent and the Lender Parties in connection with
the  enforcement  of  the  Loan  Documents,  whether  in  any  action,  suit  or
litigation,  any bankruptcy,  insolvency or other similar  proceeding  affecting
creditors' rights generally (including,  without limitation, the reasonable fees
and expenses of counsel for the Administrative  Agent and each Lender Party with
respect thereto).

         (b)  The   Borrower   agrees  to  indemnify   and  hold   harmless  the
Administrative  Agent,  the  Co-Agent,  each  Lender  Party  and  each of  their
Affiliates and their officers, directors,  employees, agents and advisors (each,
an "Indemnified  Party") from and against any and all claims,  damages,  losses,
liabilities and expenses  (including,  without  limitation,  reasonable fees and
expenses of counsel) that may be incurred by or asserted or awarded  against any
Indemnified  Party,  in each case  arising  out of or in  connection  with or by
reason of (including,  without limitation, in connection with any investigation,
litigation or proceeding or  preparation  of a defense in connection  therewith)
(i) the  Facilities,  the actual or proposed use of the proceeds of the Advances
or the  Letters  of  Credit,  the  Loan  Documents  or  any of the  transactions
contemplated thereby, including, without limitation, any acquisition or proposed
acquisition (including,  without limitation,  the Stock Purchase, the Merger and
any of the other  transactions  contemplated  hereby)  by  Holding,  the  Equity
Investors or any of their  Subsidiaries  or  Affiliates of all or any portion of
the  stock  or  substantially  all  the  assets  of  the  Company  or any of its
Subsidiaries  or (ii) the actual or alleged  presence of Hazardous  Materials on
any property +of any Loan Party or any of its Subsidiaries or any  Environmental
Action relating in any way to any Loan Party or any of its Subsidiaries,  except
to the extent such claim,  damage,  loss, liability or expense results from such
Indemnified  Party's gross negligence or willful  misconduct.  In the case of an
investigation,  litigation  or other  proceeding  to which the indemnity in this
Section 8.04(b) applies,  such indemnity shall be effective  whether or not such
investigation,  litigation  or  proceeding  is  brought by any Loan  Party,  its
directors,  shareholders or creditors or an Indemnified Party or any Indemnified
Party  is  otherwise  a  party  thereto  and  whether  or not  the  transactions
contemplated hereby are consummated.  The Borrower also agrees not to assert any
claim against the Administrative Agent, the Co-Agent, any Lender Party or any of
their Affiliates,  or any of their respective  officers,  directors,  employees,
attorneys  and  agents,  on any  theory of  liability,  for  special,  indirect,
consequential  or punitive  damages arising out of or otherwise  relating to the
Facilities,  the actual or proposed  use of the  proceeds of the Advances or the
Letters of Credit,  the Loan Documents or any of the  transactions  contemplated
thereby.

         (c) If any payment of principal  of, or Conversion  of, any  Eurodollar
Rate  Advance is made by the  Borrower to or for the  account of a Lender  Party
other than on the last day of the Interest Period for such Advance,  as a result
of a payment or Conversion


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                                       100

pursuant to Section  2.09(b)(i) or 2.10(d),  acceleration of the maturity of the
Notes  pursuant to Section 6.01 or for any other reason,  the Borrower shall pay
to the  Administrative  Agent for each Appropriate Lender an amount equal to the
present value  (calculated in accordance with this Section  8.04(c)) of interest
for the remaining  portion of the relevant Interest Period on the amount of such
Advance,  at a rate per annum equal to the excess of (a) the existing Eurodollar
Rate  applicable to such Advance over (b) the Eurodollar Rate then applicable to
a deemed  Interest  Period ending on the last day of such Interest  Period.  The
present value of such additional interest shall be calculated by discounting the
amount of such interest for each day in the  remaining  portion of such Interest
Period from such date of payment or  Conversion at a rate per annum equal to the
interest rate determined pursuant to the preceding  sentence,  and by adding all
such  amounts for all such days during such  period.  The  determination  by the
Administrative  Agent of such  amount  of  interest  shall,  in the  absence  of
manifest error, be conclusive.

         (d) If any Loan  Party  fails to pay when due any  costs,  expenses  or
other  amounts  payable  by it  under  any  Loan  Document,  including,  without
limitation,  fees and  expenses of counsel and  indemnities,  such amount may be
paid on behalf  of such Loan  Party by the  Administrative  Agent or any  Lender
Party, in its sole discretion.

         (e) Without  prejudice  to the  survival of any other  agreement of any
Loan  Party  hereunder  or under any other Loan  Document,  the  agreements  and
obligations of the Borrower contained in Sections 2.10 and 2.12 and this Section
8.04 shall  survive the  payment in full of  principal,  interest  and all other
amounts payable hereunder and under any of the other Loan Documents.

         SECTION 8.05. Right of Set-off.  Upon (a) the occurrence and during the
continuance  of any Event of Default  and (b) the  making of the  request or the
granting  of  the  consent   specified  by  Section   6.01  to   authorize   the
Administrative  Agent to  declare  the Notes  due and  payable  pursuant  to the
provisions  of  Section  6.01,  each  Lender  Party  and each of its  respective
Affiliates  is  hereby  authorized  at any time and  from  time to time,  to the
fullest  extent  permitted  by law, to set off and  otherwise  apply any and all
deposits (general or special, time or demand,  provisional or final) at any time
held and  other  indebtedness  at any time  owing by such  Lender  Party or such
Affiliate  to or for the credit or the account of the  Borrower  against any and
all of the  Obligations  of the Borrower now or  hereafter  existing  under this
Agreement and the Note or Notes (if any) held by such Lender Party, irrespective
of whether such Lender Party shall have made any demand under this  Agreement or
such Note or Notes and although such  obligations may be unmatured.  Each Lender
Party  agrees  promptly  to  notify  the  Borrower  after any such  set-off  and
application;  provided,  however, that the failure to give such notice shall not
affect the validity of such set-off and  application.  The rights of each Lender
Party and its respective  Affiliates under this Section are in addition to other
rights and remedies  (including,  without  limitation,  other rights of set-off)
that such Lender Party and its respective Affiliates may have.


<PAGE>


                                       101

         SECTION 8.06.  Binding Effect.  This Agreement  shall become  effective
when it shall have been  executed by the Borrower and the  Administrative  Agent
and when the  Administrative  Agent  shall have been  notified  by each  Initial
Lender and the Initial  Issuing  Bank that such  Initial  Lender and the Initial
Issuing Bank has executed it and  thereafter  shall be binding upon and inure to
the benefit of the Borrower,  the Administrative Agent and each Lender Party and
their respective successors and assigns, except that the Borrower shall not have
the right to assign its rights  hereunder  or any  interest  herein  without the
prior written consent of the Lender Parties.

         SECTION 8.07. Assignments and Participations.  (a) Each Lender may and,
if  demanded by the  Borrower  (following  a demand to such  Lender  pursuant to
Section 2.16),  will, assign to one or more Eligible  Assignees all or a portion
of  its  rights  and  obligations  under  this  Agreement  (including,   without
limitation,  all or a portion of its  Commitment  or  Commitments,  the Advances
owing to it and the Note or Notes held by it); provided,  however, that (i) each
such  assignment  shall be of a uniform,  and not a varying,  percentage  of all
rights and  obligations  under and in respect  of one or more  Facilities,  (ii)
except in the case of an assignment to a Person that,  immediately prior to such
assignment,  was a Lender  or an  assignment  of all of a  Lender's  rights  and
obligations under this Agreement,  the amount of the Commitment of the assigning
Lender being  assigned  pursuant to each such  assignment  (determined as of the
date of the Assignment and Acceptance with respect to such assignment)  shall in
no event be less than  $5,000,000,  (iii)  each such  assignment  shall be to an
Eligible Assignee, (iv) each such assignment made as a result of a demand by the
Borrower  pursuant to this  Section  8.07(a)  shall be arranged by the  Borrower
after  consultation  with  the  Administrative  Agent  and  shall be  either  an
assignment of all of the rights and  obligations  of the assigning  Lender under
this Agreement or an assignment of a portion of such rights and obligations made
concurrently  with  another  such  assignment  or other  such  assignments  that
together cover all of the rights and  obligations of the assigning  Lender under
this Agreement,  (v) no Lender shall be obligated to make any such assignment as
a result of a demand by the Borrower pursuant to this Section 8.07(a) unless and
until such  Lender  shall have  received  one or more  payments  from either the
Borrower or one or more Eligible Assignees in an aggregate amount at least equal
to the  aggregate  outstanding  principal  amount of the Advances  owing to such
Lender,  together with accrued  interest  thereon to the date of payment of such
principal  amount  and all other  amounts  payable  to such  Lender  under  this
Agreement,  (vi) no such assignments  shall be permitted  without the consent of
the Administrative  Agent until the Administrative Agent shall have notified the
Lender Parties that syndication of the Commitments hereunder has been completed,
and (vii) the parties to each such  assignment  shall execute and deliver to the
Administrative  Agent,  for its  acceptance  and recording in the  Register,  an
Assignment  and  Acceptance,  together  with any Note or Notes  subject  to such
assignment and a processing and recordation fee of $3000.00.



<PAGE>


                                       102

         (b) Upon such execution,  delivery,  acceptance and recording, from and
after the effective date specified in such  Assignment and  Acceptance,  (x) the
assignee  thereunder  shall be a party hereto and, to the extent that rights and
obligations  hereunder have been assigned to it pursuant to such  Assignment and
Acceptance,  have the rights and obligations of a Lender or Issuing Bank, as the
case may be,  hereunder and (y) the Lender or Issuing Bank  assignor  thereunder
shall, to the extent that rights and obligations hereunder have been assigned by
it pursuant to such  Assignment  and  Acceptance,  relinquish  its rights and be
released  from its  obligations  under this  Agreement  (and,  in the case of an
Assignment and Acceptance  covering all or the remaining portion of an assigning
Lender's or Issuing Bank's rights and  obligations  under this  Agreement,  such
Lender or Issuing Bank shall cease to be a party hereto).

         (c) By executing  and  delivering  an Assignment  and  Acceptance,  the
Lender Party  assignor  thereunder  and the assignee  thereunder  confirm to and
agree with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender Party makes no
representation  or warranty  and assumes no  responsibility  with respect to any
statements,  warranties or  representations  made in or in connection  with this
Agreement  or any other Loan  Document  or the  execution,  legality,  validity,
enforceability,  genuineness,  sufficiency  or value  of, or the  perfection  or
priority of any lien or security  interest  created or  purported  to be created
under or in connection  with,  this  Agreement or any other Loan Document or any
other  instrument or document  furnished  pursuant hereto or thereto;  (ii) such
assigning  Lender  Party  makes no  representation  or  warranty  and assumes no
responsibility  with respect to the  financial  condition of the Borrower or any
other Loan Party or the  performance  or  observance by any Loan Party of any of
its  obligations  under any Loan  Document or any other  instrument  or document
furnished pursuant thereto;  (iii) such assignee confirms that it has received a
copy of  this  Agreement,  together  with  copies  of the  financial  statements
referred to in Section 4.01 and such other  documents and  information as it has
deemed  appropriate  to make its own credit  analysis and decision to enter into
such  Assignment  and  Acceptance;  (iv) such assignee will,  independently  and
without reliance upon the  Administrative  Agent, such assigning Lender Party or
any other Lender Party and based on such  documents and  information as it shall
deem  appropriate  at the time,  continue  to make its own credit  decisions  in
taking or not taking action under this  Agreement;  (v) such  assignee  confirms
that it is an Eligible Assignee;  (vi) such assignee appoints and authorizes the
Administrative  Agent to take such action as agent on its behalf and to exercise
such powers and  discretion  under the Loan  Documents  as are  delegated to the
Administrative  Agent  by the  terms  hereof,  together  with  such  powers  and
discretion as are reasonably  incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the obligations which
by the terms of this Agreement are required to be performed by it as a Lender or
Issuing Bank, as the case may be.



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                                       103

         (d) The Administrative  Agent shall maintain at its address referred to
in  Section  8.02 a copy of each  Assignment  and  Acceptance  delivered  to and
accepted by it and a register for the  recordation of the names and addresses of
the Lender  Parties and the  Commitment  under each  Facility of, and  principal
amount of the Advances owing under each Facility to, each Lender Party from time
to time (the  "Register").  The entries in the Register  shall be conclusive and
binding  for  all  purposes,  absent  manifest  error,  and  the  Borrower,  the
Administrative  Agent and the Lender Parties may treat each Person whose name is
recorded in the  Register as a Lender Party  hereunder  for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any
Lender Party at any reasonable time and from time to time upon reasonable  prior
notice.

         (e) Upon its receipt of an  Assignment  and  Acceptance  executed by an
assigning Lender Party and an assignee,  together with any Note or Notes subject
to such  assignment,  the  Administrative  Agent shall,  if such  Assignment and
Acceptance  has been  completed  and is in  substantially  the form of Exhibit C
hereto,  (i) accept such Assignment and Acceptance,  (ii) record the information
contained  therein in the Register and (iii) give prompt  notice  thereof to the
Borrower.  In the case of any assignment by a Lender,  within five Business Days
after its  receipt of such  notice,  the  Borrower,  at its own  expense,  shall
execute and deliver to the Administrative  Agent in exchange for the surrendered
Note or Notes a new Note to the  order of such  Eligible  Assignee  in an amount
equal  to the  Commitment  assumed  by it  under  a  Facility  pursuant  to such
Assignment and Acceptance and, if the assigning Lender has retained a Commitment
hereunder under such Facility,  a new Note to the order of the assigning  Lender
in an amount equal to the Commitment retained by it hereunder.  Such new Note or
Notes shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered  Note or Notes,  shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially  the form
of Exhibit A-1 or A-2 hereto, as the case may be.

         (f) The  Issuing  Bank may assign to an  Eligible  Assignee  all of its
rights  and  obligations  under  the  undrawn  portion  of its  Letter of Credit
Commitment at any time; provided,  however,  that (i) each such assignment shall
be to an Eligible  Assignee and (ii) the parties to each such  assignment  shall
execute  and  deliver  to the  Administrative  Agent,  for  its  acceptance  and
recording  in the  Register,  an  Assignment  and  Acceptance,  together  with a
processing and recordation fee of $3000.00.

         (g) Each Lender  Party may sell  participations  to one or more Persons
(other than any Loan Party or any of its  Affiliates)  in or to all or a portion
of  its  rights  and  obligations  under  this  Agreement  (including,   without
limitation,  all or a portion of its  Commitments,  the Advances owing to it and
the Note or Notes (if any) held by it); provided,  however, that (i) such Lender
Party's obligations under this Agreement  (including,  without  limitation,  its
Commitments) shall remain unchanged,  (ii) such Lender Party shall remain solely
responsible to the other parties hereto for the performance of such obligations,


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                                       104

(iii)  such  Lender  Party  shall  remain  the  holder  of any such Note for all
purposes of this Agreement,  (iv) the Borrower, the Administrative Agent and the
other Lender Parties shall continue to deal solely and directly with such Lender
Party in connection with such Lender Party's rights and  obligations  under this
Agreement and (v) no  participant  under any such  participation  shall have any
right to approve any amendment or waiver of any provision of any Loan  Document,
or any  consent  to any  departure  by any Loan Party  therefrom,  except to the
extent that such amendment,  waiver or consent would reduce the principal of, or
interest on, the Notes or any fees or other amounts payable  hereunder,  in each
case to the extent  subject to such  participation,  postpone any date fixed for
any  payment of  principal  of, or  interest  on, the Notes or any fees or other
amounts  payable  hereunder,  in  each  case  to  the  extent  subject  to  such
participation.

         (h) Any  Lender  Party  may,  in  connection  with  any  assignment  or
participation or proposed  assignment or participation  pursuant to this Section
8.07,   disclose  to  the  assignee  or  participant  or  proposed  assignee  or
participant,  any information  relating to the Borrower furnished to such Lender
Party by or on behalf of the Borrower;  provided,  however,  that,  prior to any
such disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve  the  confidentiality  of any  Confidential  Information
received by it from such Lender Party.

         (i)  Notwithstanding  any other  provision set forth in this Agreement,
any  Lender  Party  may at any time  create a  security  interest  in all or any
portion of its rights under this Agreement (including,  without limitation,  the
Advances  owing to it and the Note or Notes held by it) in favor of any  Federal
Reserve Bank in  accordance  with  Regulation A of the Board of Governors of the
Federal Reserve System.

         SECTION 8.08. Execution in Counterparts. This Agreement may be executed
in any  number of  counterparts  and by  different  parties  hereto in  separate
counterparts,  each of which when so executed  shall be deemed to be an original
and all of which taken  together shall  constitute  one and the same  agreement.
Delivery of an executed  counterpart  of a signature  page to this  Agreement by
telecopier shall be effective as delivery of a manually executed  counterpart of
this Agreement.

         SECTION 8.09. No Liability of the Issuing  Bank.  The Borrower  assumes
all risks of the acts or  omissions  of any  beneficiary  or  transferee  of any
Letter of Credit with  respect to its use of such Letter of Credit.  Neither the
Issuing Bank nor any of its officers or directors shall be liable or responsible
for:  (a) the use  that  may be made of any  Letter  of  Credit  or any  acts or
omissions of any  beneficiary  or transferee in  connection  therewith;  (b) the
validity,  sufficiency  or  genuineness  of  documents,  or of  any  endorsement
thereon,  even if  such  documents  should  prove  to be in any or all  respects
invalid,  insufficient,  fraudulent  or forged;  (c) payment by the Issuing Bank
against  presentation of documents that do not comply with the terms of a Letter
of Credit, including failure of any documents to


<PAGE>


                                       105

bear any  reference or adequate  reference  to the Letter of Credit;  or (d) any
other  circumstances  whatsoever  in making or failing to make payment under any
Letter of  Credit,  except  that the  Borrower  shall have a claim  against  the
Issuing  Bank,  and the  Issuing  Bank shall be liable to the  Borrower,  to the
extent of any direct,  but not  consequential,  damages suffered by the Borrower
that  the  Borrower  proves  were  caused  by (i)  the  Issuing  Bank's  willful
misconduct or gross negligence in determining  whether documents presented under
any Letter of Credit  comply  with the terms of the Letter of Credit or (ii) the
Issuing Bank's  willful  failure to make lawful payment under a Letter of Credit
after the presentation to it of a draft and certificates strictly complying with
the terms and  conditions  of the Letter of Credit.  In  furtherance  and not in
limitation of the foregoing,  the Issuing Bank may accept  documents that appear
on their face to be in order, without  responsibility for further investigation,
regardless of any notice or information to the contrary.

         SECTION 8.10. Confidentiality. Neither the Administrative Agent nor any
Lender Party shall disclose any  Confidential  Information to any Person without
the consent of the  Borrower,  other than (a) to the  Administrative  Agent's or
such Lender Party's Affiliates and their officers, directors,  employees, agents
and advisors and to actual or prospective  Eligible  Assignees and participants,
and then only on a  confidential  basis,  (b) as  required  by any law,  rule or
regulation  or judicial  process and (c) as  requested or required by any state,
federal or foreign authority or examiner regulating banks or banking.

         SECTION 8.11. Jurisdiction,  Etc. (a) Each of the parties hereto hereby
irrevocably and  unconditionally  submits,  for itself and its property,  to the
nonexclusive  jurisdiction  of any New York State court or federal  court of the
United States of America  sitting in New York City, and any appellate court from
any  thereof,  in any action or  proceeding  arising  out of or relating to this
Agreement  or any of the other  Loan  Documents  to which it is a party,  or for
recognition  or  enforcement  of any  judgment,  and each of the parties  hereto
hereby irrevocably and unconditionally  agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York State
court or, to the extent  permitted  by law, in such federal  court.  Each of the
parties  hereto  agrees that a final  judgment in any such action or  proceeding
shall be conclusive  and may be enforced in other  jurisdictions  by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect  any  right  that any  party may  otherwise  have to bring any  action or
proceeding  relating to this Agreement or any of the other Loan Documents in the
courts of any jurisdiction.

         (b) Each of the parties hereto irrevocably and unconditionally  waives,
to the fullest  extent it may legally and  effectively do so, any objection that
it may now or  hereafter  have to the  laying  of venue of any  suit,  action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is a party in any New York State or federal court. Each of
the parties hereto hereby irrevocably waives, to


<PAGE>


                                       106

the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

         SECTION  8.12.  Governing  Law.  This  Agreement and the Notes shall be
governed by, and  construed  in  accordance  with,  the laws of the State of New
York.

         SECTION  8.13.  Waiver  of  Jury  Trial.  Each  of  the  Borrower,  the
Administrative  Agent and the  Lender  Parties  irrevocably  waives all right to
trial  by jury in any  action,  proceeding  or  counterclaim  (whether  based on
contract,  tort or  otherwise)  arising  out of or  relating  to any of the Loan
Documents, the Advances or the actions of the Administrative Agent or any Lender
Party in the negotiation, administration, performance or enforcement thereof.


                                   ARTICLE IX

                                    GUARANTY

         SECTION   9.01.   Guaranty.   Each  of   Holding   and  the   Purchaser
unconditionally and irrevocably  guarantees (the undertakings by Holding and the
Purchaser under this Article IX being the "Guaranty") the punctual  payment when
due,  whether  at  stated  maturity,  by  acceleration  or  otherwise,   of  all
Obligations  of each other Loan Party now or hereafter  existing  under the Loan
Documents,  whether for  principal,  interest,  fees,  commissions,  expenses or
otherwise (such Obligations being the "Guaranteed  Obligations"),  and agrees to
pay any and all expenses  (including,  without  limitation,  reasonable fees and
expenses of counsel)  incurred by the  Administrative  Agent or any other Lender
Party in  enforcing  any  rights  under  this  Guaranty.  Without  limiting  the
generality  of the  foregoing,  each of Holding' and the  Purchaser's  liability
shall extend to all amounts that constitute  part of the Guaranteed  Obligations
and would be owed by any other  Loan  Party to the  Administrative  Agent or any
other  Lender  Party  under  the Loan  Documents  but for the fact that they are
unenforceable   or  not   allowable  due  to  the  existence  of  a  bankruptcy,
reorganization or similar proceeding involving such other Loan Party.

         SECTION  9.02.  Guaranty  Absolute.  Each of Holding and the  Purchaser
guarantees that the Guaranteed  Obligations  will be paid strictly in accordance
with the terms of the Loan Documents, regardless of any law, regulation or order
now or hereafter in effect in any  jurisdiction  affecting  any of such terms or
the rights of the  Administrative  Agent or any other Secured Party with respect
thereto.  The  Obligations  of each of  Holding  and the  Purchaser  under  this
Guaranty are independent of the Guaranteed  Obligations or any other Obligations
of any Loan Party under the Loan Documents, and a separate action or actions may
be brought and  prosecuted  against  Holding or the  Purchaser  to enforce  this
Guaranty,  irrespective  of whether any action is brought against any other Loan
Party or whether any


<PAGE>


                                       107

other Loan Party is joined in any such action or actions.  The liability of each
of  Holding  and  the  Purchaser   under  this   Guaranty   shall  be  absolute,
unconditional  and  irrevocable  irrespective  of, and each of  Holding  and the
Purchaser hereby irrevocably waives any defenses it may now or hereafter have in
any way relating to, any and all of the following:

                  (a)  any  lack  of  validity  or  enforceability  of any  Loan
         Document or any other agreement or instrument relating thereto;

                  (b) any change in the time,  manner or place of payment of, or
         in any other term of, all or any of the  Guaranteed  Obligations or any
         other  Obligations of any Loan Party under the Loan  Documents,  or any
         other  amendment or waiver of or any consent to departure from any Loan
         Document (including, without limitation, any increase in the Guaranteed
         Obligations  resulting  from the extension of additional  credit to any
         Loan Party or any of its Subsidiaries or otherwise);

                  (c) any  taking,  exchange,  release or  nonperfection  of any
         Collateral, or any taking, release or amendment or waiver of or consent
         to departure from any other guarantee, for all or any of the Guaranteed
         Obligations;

                  (d) any  manner of  application  of  Collateral,  or  proceeds
         thereof, to all or any of the Guaranteed Obligations,  or any manner of
         sale  or  other  disposition  of any  Collateral  for all or any of the
         Guaranteed Obligations or any other Obligations of any Loan Party under
         the Loan Documents,  or any other property and assets of any other Loan
         Party or any of its Subsidiaries;

                  (e) any change,  restructuring or termination of the corporate
         structure  or  existence  of  any  other  Loan  Party  or  any  of  its
         Subsidiaries;

                  (f) any  failure  of the  Administrative  Agent or any  Lender
         Party to  disclose  to any Loan Party any  information  relating to the
         financial condition,  operations,  properties or prospects of any other
         Loan Party now or hereafter known to the  Administrative  Agent or such
         Lender Party, as the case may be; or

                  (g) any other circumstance (including, without limitation, any
         statute  of  limitations  or  any  existence  of  or  reliance  on  any
         representation  by the  Administrative  Agent or any Lender Party) that
         might otherwise  constitute a defense  available to, or a discharge of,
         Holding, the Purchaser,  any other Loan Party or any other guarantor or
         surety.

This Guaranty shall  continue to be effective or be reinstated,  as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Administrative Agent or any Lender Party or
by any other Person upon the


<PAGE>


                                       108

insolvency,  bankruptcy or  reorganization of any other Loan Party or otherwise,
all as though such payment had not been made.

         SECTION 9.03. Waivers and Acknowledgments.  (a) Each of Holding and the
Purchaser hereby  unconditionally and irrevocably waives promptness,  diligence,
notice of acceptance  and any other notice with respect to any of the Guaranteed
Obligations and this Guaranty, and any requirement that the Administrative Agent
or any Lender Party protect,  secure, perfect or insure any Lien or any property
or assets  subject  thereto or exhaust any right or take any action  against any
other Loan Party or any other Person or any Collateral.

         (b)  Each of  Holding  and the  Purchaser  hereby  unconditionally  and
irrevocably waives any duty on the part of the Administrative Agent or any other
Lender  Party to disclose to Holding or the  Purchaser,  as the case may be, any
matter,  fact or thing  relating to the business,  operation or condition of any
other Loan Party or any of its  Subsidiaries  or its  property and assets now or
hereafter known by the Administrative Agent or such Lender Party.

         (c) Each of Holding and the Purchaser hereby unconditionally waives any
right to revoke this Guaranty, and acknowledges that this Guaranty is continuing
in nature and applies to all Guaranteed Obligations,  whether existing now or in
the future.

         (d) Each of Holding and the Purchaser acknowledges that it will receive
substantial  direct  and  indirect  benefits  from  the  financing  arrangements
contemplated  by the  Loan  Documents  and that the  waivers  set  forth in this
Section 9.03 are knowingly made in contemplation of such benefits.

         SECTION 9.04.  Subrogation.  Each of Holding and the  Purchaser  hereby
unconditionally  and  irrevocably  agrees not to exercise any rights that it may
now have or may  hereafter  acquire  against  any other  Loan Party or any other
insider  guarantor  that  arise  from the  existence,  payment,  performance  or
enforcement  of its  Obligations  under  this  Guaranty  or under any other Loan
Document,   including,   without   limitation,   any   right   of   subrogation,
reimbursement,  exoneration,  contribution or  indemnification  and any right to
participate  in any claim or remedy of the  Administrative  Agent or any  Lender
against such other Loan Party or any other insider  guarantor or any Collateral,
whether or not such claim,  remedy or right arises in equity or under  contract,
statute  or common  law,  including,  without  limitation,  the right to take or
receive from such other Loan Party or any other insider  guarantor,  directly or
indirectly,  in cash or other  property  or by setoff  or in any  other  manner,
payment or security on account of such claim,  remedy or right,  until such time
as all of the Guaranteed  Obligations  and all other amounts  payable under this
Guaranty  shall  have been paid in full in cash,  all of the  Letters  of Credit
shall have expired,  terminated or been cancelled and the Commitments shall have
expired or  terminated.  If any amount shall be paid to Holding or the Purchaser
in violation of the immediately preceding sentence at any


<PAGE>


                                       109

time  prior  to the  latest  of (a)  the  payment  in full in cash of all of the
Guaranteed  Obligations and all other amounts  payable under this Guaranty,  (b)
the full  drawing,  termination,  expiration or  cancellation  of all Letters of
Credit and, (c) the Termination Date, such amount shall be held in trust for the
benefit  of the  Administrative  Agent and the other  Lender  Parties  and shall
forthwith be paid to the Administrative  Agent to be credited and applied to the
Guaranteed  Obligations  and all other  amounts  payable  under  this  Guaranty,
whether  matured  or  unmatured,  in  accordance  with  the  terms  of the  Loan
Documents,  or to be held as Collateral for any Guaranteed  Obligations or other
amounts payable under this Guaranty thereafter arising. If (i) either Holding or
the  Purchaser  shall  pay to the  Administrative  Agent  all or any part of the
Guaranteed  Obligations,  (ii) all of the Guaranteed  Obligations  and all other
amounts payable under this Guaranty shall have been paid in full in cash,  (iii)
all of the Letters of Credit shall have expired,  terminated or been  cancelled,
and (iv) the Termination Date shall have occurred,  the Administrative Agent and
the Lender  Parties  will, at Holding' or the  Purchaser's  request and expense,
execute and deliver to Holding or the Purchaser,  as the case may be appropriate
documents, without recourse and without representation or warranty, necessary to
evidence the transfer of subrogation  to Holding or the  Purchaser,  as the case
may be, of an interest in the Guaranteed  Obligations resulting from the payment
made by Holding or the Purchaser, as the case may be.

         SECTION 9.05.  Continuing  Guarantee;  Assignments.  This Guaranty is a
continuing  guaranty  and shall (a) remain in full  force and  effect  until the
latest of (i) the payment in full in cash of all of the  Guaranteed  Obligations
and all other  amounts  payable  under  this  Guaranty,  (ii) the full  drawing,
termination,  expiration or cancellation of all Letters of Credit, and (iii) the
Termination  Date,  (b) be binding  upon each of Holding and the  Purchaser  and
their respective  successors and assigns and (c) inure to the benefit of, and be
enforceable  by,  the  Administrative  Agent and the  Lender  Parties  and their
respective successors,  transferees and assigns. Without limiting the generality
of clause (c) of the immediately preceding sentence, any Lender Party may assign
or  otherwise  transfer all or any portion of its rights and  obligations  under
this  Agreement  (including,  without  limitation,  all  or any  portion  of its
Commitment or Commitments, the Advances owing to it and the Notes held by it) to
any other Person,  and such other Person shall thereupon  become vested with all
the benefits in respect  thereof granted to such Lender Party under this Article
IX or otherwise, in each case as provided in Section 8.07.




<PAGE>


                                       110

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

                             CENTRAL TRACTOR FARM &
                                  COUNTRY, INC.


                             By /s/ James T. McKitrick
                                 Title: President and C.E.O.


                             CT HOLDING INC.


                             By /s/ Adam L. Suttin
                                 Title: Vice President


                             JWC ACQUISITION I, INC.


                             By /s/ Adam L. Suttin
                                 Title: Vice President


                             FLEET NATIONAL BANK, as
                              Administrative Agent


                             By /s/ John E. Duncan
                                 Title: Managing Director



                              NATIONSBANK, N.A., as
                                    Co- Agent


                             By /s/ J. Lynn Callicott
                                 Title: Vice President


<PAGE>


                                       111

                    Initial Issuing Bank


                             FLEET NATIONAL BANK


                             By /s/ John E. Duncan
                                 Title: Managing Director


                    Initial Lenders


                             FLEET NATIONAL BANK


                             By /s/ John E. Duncan
                                 Title: Managing Director



<PAGE>


                                       112

                                   SCHEDULE I

                   COMMITMENTS AND APPLICABLE LENDING OFFICES

<TABLE>
<CAPTION>



                                                  Revolving         Letter of         Domestic       Eurodollar
                                  Term              Credit            Credit          Lending         Lending
 Name of Initial Lender        Commitment         Commitment        Commitment         Office          Office
 ----------------------        ----------         ----------        ----------        --------       ----------
<S>                            <C>               <C>                <C>  

Fleet National Bank             $8,000,000        $30,000,000        $10,000,000
</TABLE>


<PAGE>

                               [Exhibits Omitted]