Document:

<PAGE>

                                                                   EXHIBIT 10.8

                                  $230,000,000

                      AMENDED AND RESTATED CREDIT AGREEMENT

                                      AMONG

                               NBC HOLDINGS CORP.,

                             NBC ACQUISITION CORP.,

                          NEBRASKA BOOK COMPANY, INC.,
                                  AS BORROWER,

                               THE SEVERAL LENDERS
                        FROM TIME TO TIME PARTIES HERETO,

                              JPMORGAN CHASE BANK,
                           AS ADMINISTRATIVE AGENT AND
                                COLLATERAL AGENT,

                         CITIGROUP GLOBAL MARKETS INC.,
                              AS SYNDICATION AGENT

                                       AND

             FLEET NATIONAL BANK AND WELLS FARGO BANK N.A., AS CO-
                              DOCUMENTATION AGENTS

                         DATED AS OF FEBRUARY 13, 1998,
     AS AMENDED AND RESTATED AS OF DECEMBER 10, 2003 AND AS FURTHER AMENDED
                        AND RESTATED AS OF MARCH 4, 2004

--------------------------------------------------------------------------------

                         J.P. MORGAN SECURITIES INC. AND
                         CITIGROUP GLOBAL MARKETS INC.,
                  AS JOINT LEAD ARRANGERS AND JOINT BOOKRUNNERS

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                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                                PAGE
<S>                                                                                                             <C>
SECTION 1.    DEFINITIONS..............................................................................           2

         1.1         Defined Terms.....................................................................           2
         1.2         Other Definitional Provisions.....................................................          34

SECTION 2.    AMOUNT AND TERMS OF COMMITMENTS..........................................................          34

         2.1         Term Loan Commitments.............................................................          34
         2.2         Procedure for Term Loan Borrowing.................................................          35
         2.3         Repayment of Term Loans...........................................................          35
         2.4         Revolving Credit Commitments......................................................          36
         2.5         Procedure for Revolving Credit Borrowing..........................................          36
         2.6         Swing Line Commitment.............................................................          37
         2.7         Procedure for Swing Line Borrowing; Refunding of Swing Line Loans.................          37
         2.8         Repayment of Loans; Evidence of Debt..............................................          39
         2.9         Commitment Fees, etc..............................................................          39
         2.10        Termination or Reduction of Revolving Credit Commitments..........................          40
         2.11        Optional Prepayments..............................................................          40
         2.12        Mandatory Prepayments.............................................................          40
         2.13        Conversion and Continuation Options...............................................          42
         2.14        Minimum Amounts and Maximum Number of Eurodollar Tranches.........................          42
         2.15        Interest Rates and Payment Dates..................................................          42
         2.16        Computation of Interest and Fees..................................................          43
         2.17        Inability to Determine Interest Rate..............................................          43
         2.18        Pro Rata Treatment and Payments...................................................          44
         2.19        Requirements of Law...............................................................          46
         2.20        Taxes.............................................................................          47
         2.21        Indemnity.........................................................................          49
         2.22        Illegality........................................................................          49
         2.23        Change of Lending Office..........................................................          49
         2.24        Replacement of Lenders under Certain Circumstances................................          50

SECTION 3.    LETTERS OF CREDIT........................................................................          50

         3.1         L/C Commitment....................................................................          50
         3.2         Procedure for Issuance of Letter of Credit........................................          50
         3.3         Commissions, Fees and Other Charges...............................................          51
         3.4         L/C Participations................................................................          51
         3.5         Reimbursement Obligation of the Borrower..........................................          52
         3.6         Obligations Absolute..............................................................          52
         3.7         Letter of Credit Payments.........................................................          53
         3.8         Applications......................................................................          53

SECTION 4.    REPRESENTATIONS AND WARRANTIES...........................................................          53

         4.1         Financial Condition...............................................................          53
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<TABLE>
                                                                                                                PAGE
<S>                                                                                                             <C>
         4.2         No Change.........................................................................          55
         4.3         Corporate Existence; Compliance with Law..........................................          56
         4.4         Corporate Power; Authorization; Enforceable Obligations...........................          56
         4.5         No Legal Bar......................................................................          56
         4.6         No Material Litigation............................................................          56
         4.7         No Default........................................................................          57
         4.8         Ownership of Property; Liens......................................................          57
         4.9         Intellectual Property.............................................................          57
         4.10        Taxes.............................................................................          57
         4.11        Federal Regulations...............................................................          57
         4.12        Labor Matters.....................................................................          58
         4.13        ERISA.............................................................................          58
         4.14        Investment Company Act; Other Regulations.........................................          58
         4.15        Subsidiaries......................................................................          58
         4.16        Use of Proceeds...................................................................          58
         4.17        Environmental Matters.............................................................          59
         4.18        Accuracy of Information, etc......................................................          60
         4.19        Security Documents................................................................          60
         4.20        Solvency..........................................................................          61
         4.21        Senior Indebtedness...............................................................          61
         4.22        Regulation H......................................................................          61

SECTION 5.    CONDITIONS PRECEDENT.....................................................................          61

         5.1         Conditions to Initial Extension of Credit.........................................          61
         5.2         Conditions to Each Extension of Credit............................................          64

SECTION 6.    AFFIRMATIVE COVENANTS....................................................................          65

         6.1         Financial Statements..............................................................          65
         6.2         Certificates; Other Information...................................................          66
         6.3         Payment of Obligations............................................................          68
         6.4         Conduct of Business and Maintenance of Existence, etc.............................          68
         6.5         Maintenance of Property; Insurance................................................          68
         6.6         Inspection of Property; Books and Records; Discussions............................          68
         6.7         Notices...........................................................................          70
         6.8         Environmental Laws................................................................          70
         6.9         Interest Rate Protection..........................................................          71
         6.10        Additional Collateral, etc........................................................          71

SECTION 7.    NEGATIVE COVENANTS.......................................................................          72

         7.1         Financial Covenants...............................................................          72
         7.2         Limitation on Indebtedness........................................................          75
         7.3         Limitation on Liens...............................................................          77
         7.4         Limitation on Fundamental Changes.................................................          78
         7.5         Limitation on Sale of Assets......................................................          79
         7.6         Limitation on Dividends...........................................................          79
</TABLE>

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<TABLE>
                                                                                                                PAGE
<S>                                                                                                             <C>
         7.7         Limitation on Capital Expenditures................................................          80
         7.8         Limitation on Investments, Loans and Advances.....................................          81
         7.9         Limitation on Optional Payments and Modifications of Debt Instruments, etc........          82
         7.10        Limitation on Transactions with Affiliates........................................          83
         7.11        Limitation on Sales and Leasebacks................................................          83
         7.12        Limitation on Changes in Fiscal Periods...........................................          83
         7.13        Limitation on Negative Pledge Clauses.............................................          84
         7.14        Limitation on Restrictions on Subsidiary Distributions............................          84
         7.15        Limitation on Lines of Business...................................................          84
         7.16        Merger Agreement..................................................................          84
         7.17        Limitation on Activities of Holdings and SuperHoldings............................          84

SECTION 8.    EVENTS OF DEFAULT........................................................................          85

SECTION 9.    THE AGENTS...............................................................................          88

         9.1         Appointment.......................................................................          88
         9.2         Delegation of Duties..............................................................          89
         9.3         Exculpatory Provisions............................................................          89
         9.4         Reliance by Administrative Agent..................................................          89
         9.5         Notice of Default.................................................................          90
         9.6         Non-Reliance on Agents and Other Lenders..........................................          90
         9.7         Indemnification...................................................................          90
         9.8         Agent in Its Individual Capacity..................................................          91
         9.9         Successor Administrative Agent....................................................          91
         9.10        Authorization to Release Liens....................................................          91
         9.11        Documentation Agent and Syndication Agent.........................................          92

SECTION 10.    MISCELLANEOUS...........................................................................          92

         10.1        Amendments and Waivers............................................................          92
         10.2        Notices...........................................................................          93
         10.3        No Waiver; Cumulative Remedies....................................................          94
         10.4        Survival of Representations and Warranties........................................          94
         10.5        Payment of Expenses...............................................................          94
         10.6        Successors and Assigns; Participations and Assignments............................          95
         10.7        Adjustments; Set-off..............................................................          98
         10.8        Counterparts......................................................................          99
         10.9        Severability......................................................................          99
         10.10       Integration.......................................................................          99
         10.11       GOVERNING LAW.....................................................................          99
         10.12       Submission To Jurisdiction; Waivers...............................................          99
         10.13       Acknowledgements.................................................................          100
         10.14       WAIVERS OF JURY TRIAL............................................................          100
         10.15       Confidentiality..................................................................          100
         10.16       Effect of Amendment and Restatement of the Existing Credit Agreement.............          101
</TABLE>

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ANNEXES:
A              Pricing Grid

SCHEDULES:

1.1A           Commitments
1.1B           Mortgaged Property
4.4            Consents, Authorizations, Filings and Notices
4.9            Intellectual Property
4.15           Subsidiaries
4.19(a)        UCC Filing Jurisdictions
4.19(b)        Mortgage Filing Jurisdictions
7.2(e)         Existing Indebtedness
7.3(f)         Existing Liens
7.8            Existing Investments

EXHIBITS:

A              Form of Amended and Restated Guarantee and Collateral Agreement
B-1            Form of Borrower Compliance Certificate
B-2            Form of Holdings Compliance Certificate
B-3            Form of SuperHoldings Compliance Certificate
C-1            Form of Borrower Closing Certificate
C-2            Form of Holdings Closing Certificate
C-3            Form of Subsidiary Closing Certificate
C-4            Form of SuperHoldings Closing Certificate
D              Form of Mortgage
E              Form of Assignment and Assumption
F              Form of Legal Opinion of Bingham McCutchen LLP
G-1            Form of Term Note
G-2            Form of Revolving Credit Note
G-3            Form of Swing Line Note
H              Form of Prepayment Option Notice
I              Form of Exemption Certificate
J              Form of Borrowing Base Certificate

                                      -iv-

<PAGE>

         AMENDED AND RESTATED CREDIT AGREEMENT, dated as of February 13, 1998,
as amended and restated as of December 10, 2003, as further amended and restated
as of March 4, 2004, among NBC Holdings Corp., a Delaware corporation
("SuperHoldings"), NBC Acquisition Corp., a Delaware corporation ("Holdings"),
Nebraska Book Company, Inc., a Kansas corporation (the "Borrower"), the several
banks and other financial institutions or entities from time to time parties to
this Agreement (the "Lenders") and JPMORGAN CHASE BANK, as administrative agent
and collateral agent (in such capacity, the "Administrative Agent"), CITIGROUP
GLOBAL MARKETS INC., as syndication agent (in such capacity, the "Syndication
Agent") and FLEET NATIONAL BANK and WELLS FARGO BANK, N.A., as co-documentation
agents (in such capacities, the "Co-Documentation Agents").

                              W I T N E S S E T H:

         WHEREAS, the Borrower is a direct wholly-owned subsidiary of Holdings,
and Holdings is a direct subsidiary of SuperHoldings;

         WHEREAS, the Borrower, Holdings, the Administrative Agent and certain
of the Lenders are parties to the Credit Agreement, dated as of February 13,
1998, as amended and restated as of December 10, 2003 (the "Existing Credit
Agreement");

         WHEREAS, the Borrower and Holdings intend to enter into a
recapitalization transaction pursuant to which (i) indebtedness of the Borrower
under the Existing Credit Agreement will be refinanced, (ii) the Existing Credit
Agreement and the credit facilities thereunder will be amended and restated
pursuant to this Agreement, (iii) the Tender Offers (as hereinafter defined)
will be consummated, (iv) Weston Presidio Capital and certain of its affiliates
(collectively "WP") will purchase certain shares of the capital stock of
Holdings held by certain existing shareholders of Holdings, (v) WP and certain
members of management will contribute their shares of Holdings to SuperHoldings,
a newly created entity, (vi) WP will make a new equity contribution into
SuperHoldings, and will capitalize a newly created entity called New NBC
Acquisition Corp. with the proceeds of such contribution and (vii) the
transactions contemplated by the Merger Agreement (as hereinafter defined) will
be consummated (the foregoing, the "Transactions");

         WHEREAS, in connection with the Transactions, the Borrower has
requested that the Lenders to provide senior credit facilities aggregating
$230,000,000; and

         WHEREAS, the Lenders party hereto, including certain of the Lenders
under the Existing Credit Agreement (the "Continuing Lenders"), are willing to
make such senior credit facilities available upon and subject to the terms and
conditions hereinafter set forth;

         NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree that, upon the
effectiveness of this Agreement, the Existing Credit Agreement is hereby amended
and restated in its entirety as follows:

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                                                                               2

                             SECTION 1. DEFINITIONS

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

                  "Account": as defined in the Uniform Commercial Code in effect
         in the Sate of New York from time to time.

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

                  "Administrative Agent": JPMorgan Chase Bank, in its capacity
         as administrative agent and collateral agent.

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

                  "Agents": the collective reference to the Syndication Agent,
         the Co-Documentation Agents and the Administrative Agent.

                  "Aggregate Exposure": with respect to any Lender, an amount
         equal to (a) until the Closing Date, the aggregate amount of such
         Lender's Commitments and (b) thereafter, the sum of (i) the aggregate
         unpaid principal amount of such Lender's Term Loans and (ii) the amount
         of such Lender's Revolving Credit Commitment or, if the Revolving
         Credit Commitments have been terminated, the amount of such Lender's
         Revolving Extensions of Credit.

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

                  "Agreement": this Amended and Restated Credit Agreement, as
         amended, supplemented or otherwise modified from time to time.

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

<TABLE>
<CAPTION>
                             Base Rate             Eurodollar
                               Loans                 Loans
                             ---------             ----------
<S>                          <C>                   <C>
Revolving Credit Loans        1.75%                  2.75%
Swing Line Loans              1.75%                   N/A
Term Loans                    1.75%                  2.75%
</TABLE>

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                                                                               3

         provided, that on and after the first Adjustment Date occurring after
         the completion of one full fiscal quarter of the Borrower after the
         Closing Date, the Applicable Margin with respect to Revolving Credit
         Loans and Swing Line Loans will be determined pursuant to the Pricing
         Grid.

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

                  "Approved Fund": as defined in Section 10.6(b).

                  "Arrangers": J.P. Morgan Securities Inc. and Citicorp Global
         Markets Inc.

                  "Asset Sale": any Disposition of Property or series of related
         Dispositions of Property (excluding any such Disposition permitted by
         clause (a), (b), (c) or (d) of Section 7.5).

                  "Assignee": as defined in Section 10.6(b).

                  "Assignment and Assumption": an Assignment and Assumption,
         substantially in the form of Exhibit E.

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

                  "Base Rate": for any day, a rate per annum (rounded upwards,
         if necessary, to the next 1/16 of 1%) equal to the greater of (a) the
         Prime Rate in effect on such day and (b) the Federal Funds Effective
         Rate in effect on such day plus 1/2 of 1%. For purposes hereof: "Prime
         Rate" shall mean the rate of interest per annum publicly announced from
         time to time by JPMorgan Chase Bank as its prime or base rate in effect
         at its principal office in New York City (the Prime Rate not being
         intended to be the lowest rate of interest charged by JPMorgan Chase
         Bank in connection with extensions of credit to debtors). Any change in
         the Base Rate due to a change in the Prime Rate or the Federal Funds
         Effective Rate shall be effective as of the opening of business on the
         effective day of such change in the Prime Rate or the Federal Funds
         Effective Rate, respectively.

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

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

<PAGE>

                                                                               4

                  "Bookstore": any business establishment that has as its
         primary business the sale of textbooks.

                  "Borrower": as defined in the recitals hereto.

                  "Borrower Pro Forma Financial Statements": as defined in
         Section 4.1(a)(ii).

                  "Borrower Projections": as defined in Section 6.2(c)(ii).

                  "Borrowing Base": at the time of any determination an amount
         equal to the sum, without duplication, of (a) the sum of (i) 60% of
         Eligible Accounts Receivable in respect of Standard Sales Invoices at
         such time and (ii) 85% of Eligible Accounts Receivable in respect of
         Buy-Fund Invoices at such time; (b) 55% of Wholesale Inventory, Retail
         Inventory and Information Systems Inventory that, in each case,
         constitutes Eligible Inventory at such time (provided, however, that
         the amount in respect of such Information Systems Inventory shall not
         at any time exceed $500,000) minus the aggregate Rent Reserve at such
         time; and (c) the sum of the Over Advance Amount then in effect and if
         the time of such determination is (i) during the Peak Period, an amount
         equal to 55% of Buy-Funds at such time and (ii) during the Non-Peak
         Period, the lesser of (A) $1,000,000 and (B) an amount equal to 55% of
         Buy-Funds at such time. The Borrowing Base at any time shall be
         determined by reference to the most recent Borrowing Base Certificate
         delivered to the Administrative Agent pursuant to Section 6.2(g),
         absent any error in such Borrowing Base Certificate. In the event that
         at any time after the date hereof (a) the Borrower materially alters
         any of its accounting policies or procedures, (b) there occurs a
         material change in the Borrower's customer base or (c) there occurs a
         material change in the nature of the Borrower's Inventory, then the
         Administrative Agent will be entitled in its reasonable discretion with
         the consent of the Borrower, which consent shall not be unreasonably
         withheld, to adjust the eligibility criteria and reserves in respect of
         Eligible Accounts Receivable and Eligible Inventory.

                  "Borrowing Base Certificate": a certificate in substantially
         the form of Exhibit J hereto (with such changes thereto from time to
         time as may reasonably be required by the Administrative Agent to
         reflect the components of and reserves against the Borrowing Base as
         provided for herein), executed and certified by a Responsible Officer
         of the Borrower, which certificate shall include appropriate exhibits,
         schedules, supporting documentation and additional reports (i) as
         outlined in Schedule 1 to Exhibit J and (ii) as provided for in Section
         6.2(g).

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

                  "Business": as defined in Section 4.17.

                  "Business Day": (i) for all purposes other than as covered by
         clause (ii) below, a day other than a Saturday, Sunday or other day on
         which commercial banks in New York City are authorized or required by
         law to close and (ii) with respect to all notices and determinations in
         connection with, and payments of principal and interest on, Eurodollar

<PAGE>
                                                                               5

         Loans, any day which is a Business Day described in clause (i) and
         which is also a day for trading by and between banks in Dollar deposits
         in the interbank eurodollar market.

                  "Buy-Funds": the aggregate amount of cash in the possession of
         the Borrower's buyers conducting book-buys during any buy-back period
         at an educational institution or commercial Bookstore, less the
         aggregate amount represented by outstanding drafts issued by the
         Borrower in respect of purchases of used books during such buy-back
         period.

                  "Buy-Fund Invoice": an invoice resulting from the sale or
         advance by the Borrower to, or the agreement by the Borrower with, an
         educational institution or commercial Bookstore in respect of used
         books that (a) have been purchased by the Borrower during any buy-back
         period at such educational institution or commercial Bookstore and (b)
         are designated to remain on the campus of such educational institution
         or on the premises of such commercial Bookstore, in each case net of
         any commission owed by the Borrower to such educational institution or
         commercial Bookstore in respect of such sale.

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

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

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

                  "Cash Equivalents": (a) marketable direct obligations issued
         by, or unconditionally guaranteed by, the United States Government or
         issued by any agency thereof and backed by the full faith and credit of
         the United States, in each case maturing within one year from the date
         of acquisition; (b) certificates of deposit, time deposits, eurodollar
         time deposits or overnight bank deposits having maturities of six
         months or less from the date of acquisition issued by any Lender or by
         any commercial bank organized under the laws of the United States of
         America or any state thereof having combined capital and surplus of not
         less than $500,000,000; (c) commercial paper of an issuer rated at
         least A-1 by Standard & Poor's Ratings Services ("S&P") or P-1 by

<PAGE>

                                                                               6

         Moody's Investors Service, Inc. ("Moody's"), or carrying an equivalent
         rating by a nationally recognized rating agency, if both of the two
         named rating agencies cease publishing ratings of commercial paper
         issuers generally, and maturing within six months from the date of
         acquisition; (d) repurchase obligations of any Lender or of any
         commercial bank satisfying the requirements of clause (b) of this
         definition, having a term of not more than 30 days with respect to
         securities issued or fully guaranteed or insured by the United States
         government; (e) securities with maturities of one year or less from the
         date of acquisition issued or fully guaranteed by any state,
         commonwealth or territory of the United States, by any political
         subdivision or taxing authority of any such state, commonwealth or
         territory or by any foreign government, the securities of which state,
         commonwealth, territory, political subdivision, taxing authority or
         foreign government (as the case may be) are rated at least A by S&P or
         A by Moody's; (f) securities with maturities of six months or less from
         the date of acquisition backed by standby letters of credit issued by
         any Lender or any commercial bank satisfying the requirements of clause
         (b) of this definition; or (g) shares of money market mutual or similar
         funds which invest exclusively in assets satisfying the requirements of
         clauses (a) through (f) of this definition.

                  "Closing Date": March 4, 2004 or such later date not beyond
         March 30, 2004 on which the conditions precedent set forth in Section
         5.1 shall have been satisfied.

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

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

                  "Commitment": as to any Lender, the sum of the Term Loan
         Commitment and the Revolving Credit Commitment of such Lender.

                  "Commitment Fee Rate": 1/2 of 1% per annum.

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

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

                  "Conduit Lender": any special purpose corporation organized
         and administered by any Lender for the purpose of making Loans
         otherwise required to be made by such Lender and designated by such
         Lender in a written instrument; provided, that the designation by any
         Lender of a Conduit Lender shall not relieve the designating Lender of
         any of its obligations to fund a Loan under this Agreement if, for any
         reason, its Conduit Lender fails to fund any such Loan, and the
         designating Lender (and not the Conduit Lender) shall have the sole
         right and responsibility to deliver all consents and waivers required
         or requested under this Agreement with respect to its Conduit Lender,
         and provided, further, that no Conduit Lender shall (a) be entitled to
         receive any greater

<PAGE>

                                                                               7

         amount pursuant to Section 2.19, 2.20, 2.21 or 10.5 than the
         designating Lender would have been entitled to receive in respect of
         the extensions of credit made by such Conduit Lender or (b) be deemed
         to have any Commitment.

                  "Confidential Information Memorandum": the Confidential
         Information Memorandum dated February 2004 and furnished to the
         Lenders.

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

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

                  "Consolidated EBITDA": for any period, Consolidated Net Income
         for such period plus, without duplication and to the extent reflected
         as a charge in the statement of such Consolidated Net Income for such
         period, the sum of (a) income tax expense, (b) interest expense,
         amortization or writeoff of debt discount and debt issuance costs and
         commissions, discounts and other fees and charges associated with
         Indebtedness (including the Loans), (c) depreciation and amortization
         expense, (d) amortization of intangibles (including, but not limited
         to, goodwill) and organization costs, (e) any non-cash extraordinary,
         unusual or non-recurring expenses or losses (including, whether or not
         otherwise includable as a separate item in the statement of such
         Consolidated Net Income for such period, losses on sales of assets
         outside of the ordinary course of business and excluding any non-cash
         expense to the extent that it represents an accrual of or reserve for
         cash expenditures in any future period), (f) any other non-cash charges
         and (g) any non-recurring stock compensation expenses and other
         non-capitalized expenses incurred in connection with the Stock
         Repurchase (as defined in the Existing Credit Agreement), and minus, to
         the extent included in the statement of such Consolidated Net Income
         for such period, the sum of (i) interest income, (ii) any
         extraordinary, unusual or non-recurring income or gains (including,
         whether or not otherwise includable as a separate item in the statement
         of such Consolidated Net Income for such period, gains on the sales of
         assets outside of the ordinary course of business) and (iii) any other
         non-cash income, all as determined on a consolidated basis.

                  "Consolidated Fixed Charge Coverage Ratio": for any period,
         the ratio of (a) Consolidated EBITDA for such period less the aggregate
         amount actually paid by the Borrower and its Subsidiaries in cash
         during such period on account of Capital Expenditures to (b)
         Consolidated Fixed Charges for such period; provided that for purposes
         of calculating Consolidated EBITDA and Consolidated Fixed Charges of
         the Borrower and its Subsidiaries for any period, the Consolidated
         EBITDA and Consolidated Fixed Charges of any Person or bookstore
         location acquired or disposed of

<PAGE>

                                                                               8

         by the Borrower or its Subsidiaries during such period shall be
         included on a pro forma basis, including the effect of identified
         business synergies, for such period (assuming the consummation of each
         such acquisition and the incurrence or assumption of any Indebtedness
         in connection therewith occurred on the first day of such period) if
         (other than the pro forma adjustments to Consolidated EBITDA included
         in the calculation thereof for the twelve-month period ended January
         31, 2004 for the purposes of Section 5.1(k)) either (x) the
         consolidated balance sheet of such acquired Person and its consolidated
         Subsidiaries as at the end of the period preceding the acquisition of
         such Person and the related consolidated statements of income and
         stockholders' equity and of cash flows for the period in respect of
         which Consolidated EBITDA and Consolidated Fixed Charges is to be
         calculated have been previously provided to the Administrative Agent
         and the Lenders and reported on without a qualification arising out of
         the scope of the audit by independent certified public accountants of
         nationally recognized standing or (y) other financial information in
         respect of such acquired Person or bookstore location shall have been
         provided to the Administrative Agent and the Lenders and shall have
         been found reasonably acceptable by the Required Lenders.

                  "Consolidated Fixed Charges": for any period, the sum (without
         duplication) of (a) Consolidated Interest Expense for such period, (b)
         provision for cash income taxes made by the Borrower or any of its
         Subsidiaries on a consolidated basis in respect of such period and (c)
         scheduled payments made during such period on account of principal of
         Indebtedness of the Borrower or any of its Subsidiaries (including
         scheduled principal payments in respect of the Term Loans but excluding
         scheduled principal payments under the Original Credit Agreement and
         excluding payments made to redeem the Existing Senior Subordinated
         Notes prior to June 30, 2004).

                  "Consolidated Interest Coverage Ratio": for any period, the
         ratio of (a) Consolidated EBITDA for such period to (b) Consolidated
         Interest Expense for such period; provided that for purposes of
         calculating Consolidated EBITDA and Consolidated Interest Expense of
         the Borrower and its Subsidiaries for any period, the Consolidated
         EBITDA and Consolidated Interest Expense of any Person or bookstore
         location acquired or disposed of by the Borrower or its Subsidiaries
         during such period shall be included on a pro forma basis, including
         the effect of identified business synergies, for such period (assuming
         the consummation of each such acquisition and the incurrence or
         assumption of any Indebtedness in connection therewith occurred on the
         first day of such period) if (other than the pro forma adjustments to
         Consolidated EBITDA included in the calculation thereof for the
         twelve-month period ended January 31, 2004 for the purposes of Section
         5.1(k)) either (x) the consolidated balance sheet of such acquired
         Person and its consolidated Subsidiaries as at the end of the period
         preceding the acquisition of such Person and the related consolidated
         statements of income and stockholders' equity and of cash flows for the
         period in respect of which Consolidated EBITDA and Consolidated
         Interest Expense is to be calculated have been previously provided to
         the Administrative Agent and the Lenders and reported on without a
         qualification arising out of the scope of the audit by independent
         certified public accountants of nationally recognized standing or (y)
         other financial information in respect of such acquired Person or
         bookstore location shall have been provided to the Administrative Agent
         and the Lenders and shall have been found reasonably acceptable by the
         Required Lenders.

<PAGE>

                                                                               9

                  "Consolidated Interest Expense": for any period, the sum of
         (i) total cash interest expense (including that attributable to Capital
         Lease Obligations) of the Borrower and its Subsidiaries for such period
         with respect to all outstanding Indebtedness of the Borrower and its
         Subsidiaries (including, without limitation, all commissions, discounts
         and other fees and charges owed with respect to letters of credit and
         bankers' acceptance financing and net costs under Interest Rate
         Protection Agreements to the extent such net costs are allocable to
         such period in accordance with GAAP but excluding any amounts payable
         on the Existing Senior Subordinated Notes prior to June 30, 2004) net
         of cash interest income received during such period and (ii) the amount
         of dividends paid in cash by the Borrower to Holdings during such
         period to permit Holdings to pay cash interest on the Holdings Discount
         Notes or the Existing Holdings Discount Debentures, other than amounts
         used to redeem the Existing Holdings Discount Debentures prior to June
         30, 2004.

                  "Consolidated Leverage Ratio": as at the last day of any
         period of four consecutive fiscal quarters, the ratio of (a)
         Consolidated Total Debt on such day to (b) Consolidated EBITDA for such
         period; provided that for purposes of calculating Consolidated EBITDA
         of the Borrower and its Subsidiaries for any period, the Consolidated
         EBITDA of any Person or bookstore location acquired or disposed of by
         the Borrower or its Subsidiaries during such period shall be included
         on a pro forma basis, including the effect of identified business
         synergies, for such period (assuming the consummation of each such
         acquisition and the incurrence or assumption of any Indebtedness in
         connection therewith occurred on the first day of such period) if
         (other than the pro forma adjustments to Consolidated EBITDA included
         in the calculation thereof for the twelve-month period ended January
         31, 2004 for the purposes of Section 5.1(k)) either (x) the
         consolidated balance sheet of such acquired Person and its consolidated
         Subsidiaries as at the end of the period preceding the acquisition of
         such Person and the related consolidated statements of income and
         stockholders' equity and of cash flows for the period in respect of
         which Consolidated EBITDA is to be calculated have been previously
         provided to the Administrative Agent and the Lenders and reported on
         without a qualification arising out of the scope of the audit by
         independent certified public accountants of nationally recognized
         standing or (y) other financial information in respect of such acquired
         Person or bookstore location shall have been provided to the
         Administrative Agent and the Lenders and shall have been found
         reasonably acceptable by the Required Lenders.

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

<PAGE>

                                                                              10

         Contractual Obligation (other than under any Loan Document) or
         Requirement of Law applicable to such Subsidiary.

                  "Consolidated Senior Leverage Ratio": as at the last day of
         any period of four consecutive fiscal quarters, the ratio of (a)
         Consolidated Total Debt less the aggregate principal amount of the
         Senior Subordinated Notes and the Existing Senior Subordinated Notes
         and any refinancing Indebtedness permitted by Section 7.2(g)(ii) on
         such day to (b) Consolidated EBITDA for such period; provided that for
         purposes of calculating Consolidated EBITDA of the Borrower and its
         Subsidiaries for any period, the Consolidated EBITDA of any Person or
         bookstore location acquired or disposed of by the Borrower or its
         Subsidiaries during such period shall be included on a pro forma basis,
         including the effect of identified business synergies, for such period
         (assuming the consummation of each such acquisition and the incurrence
         or assumption of any Indebtedness in connection therewith occurred on
         the first day of such period) if (other than the pro forma adjustments
         to Consolidated EBITDA included in the calculation thereof for the
         twelve-month period ended January 31, 2004 for the purposes of Section
         5.1(k)) either (x) the consolidated balance sheet of such acquired
         Person and its consolidated Subsidiaries as at the end of the period
         preceding the acquisition of such Person and the related consolidated
         statements of income and stockholders' equity and of cash flows for the
         period in respect of which Consolidated EBITDA is to be calculated have
         been previously provided to the Administrative Agent and the Lenders
         and reported on without a qualification arising out of the scope of the
         audit by independent certified public accountants of nationally
         recognized standing or (y) other financial information in respect of
         such acquired Person or bookstore location shall have been provided to
         the Administrative Agent and the Lenders and shall have been found
         reasonably acceptable by the Required Lenders.

                  "Consolidated Total Debt": at any date, the aggregate
         principal amount of all Indebtedness of the Borrower and its
         Subsidiaries at such date, determined on a consolidated basis in
         accordance with GAAP (other than Revolving Extensions of Credit made
         under the Borrowing Base) provided, however, any Existing Senior
         Subordinated Notes shall be deemed to be not outstanding prior to June
         30, 2004 for purposes of calculating Consolidated Total Debt.

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

                  "Continuing Directors": as defined in Section 8(j) hereof.

                  "Continuing Lenders": as defined in the recitals hereto.

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

                  "Converted Term Loan": as defined in Section 2.1(b) hereof.

<PAGE>

                                                                              11

                  "Default": any of the events specified in Section 8, whether
         or not any requirement for the giving of notice, the lapse of time, or
         both, has been satisfied.

                  "Defaulted Account": as defined in the definition of the
         "Eligible Accounts Receivable".

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

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

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

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

                  "ECF Percentage": 75%; provided, that with respect to each
         fiscal year of the Borrower, the ECF Percentage shall be reduced to 50%
         if the Consolidated Leverage Ratio as of the last day of such fiscal
         year is not greater than 3.5 to 1.0.

                  "Eligible Accounts Receivable": at the time of any
         determination, the gross outstanding balance at such time, determined
         in accordance with GAAP and stated on a basis consistent with the
         historical practices of the Borrower as of the date hereof, of Accounts
         of the Borrower and its Subsidiaries, including the aggregate amount of
         all Past-due Addbacks less, as applicable and without duplication, the
         aggregate amount of (i) all charge-backs for returns, (ii) all finance
         agreements, (iii) all trade discounts, (iv) all finance charges, late
         fees and other fees that are unearned, (v) the aggregate amount of all
         reserves for service fees and such other fees or commissions or similar
         amounts that the Borrower or such Subsidiary has agreed to pay and (vi)
         at the discretion of the Administrative Agent, a dilution reserve,
         reasonably determined by the Administrative Agent based upon the
         calculations set forth in the most recent Borrowing Base Certificate
         delivered by the Borrower, in an amount equal to the product of (A) the
         amount, expressed as a percentage, by which dilution of Eligible
         Accounts Receivable in respect of Standard Sales Invoices exceeds 25%
         and (B) the amount that would constitute Eligible Accounts Receivable
         prior to the implementation of the reserve contemplated by this clause
         (vi). Notwithstanding the foregoing, an Account shall not be included
         in this definition of Eligible Accounts Receivable if, at the time of
         any determination, without duplication:

                           (a) the Borrower or such Subsidiary has not complied
                  with all material requirements of applicable Federal, state
                  and local and laws, rules, regulations and orders (including
                  all laws, rules, regulations and orders of any governmental or
                  judicial authority relating to truth in lending, billing
                  practices, fair credit reporting, equal credit opportunity,
                  debt collection practices and consumer debtor protection)
                  applicable to such Account (or any related contracts) or
                  affecting the collectibility of such Account; or

<PAGE>

                                                                              12

                           (b) (i) such Account is not assignable or requires
                  consent of the Account debtor and such a requirement of
                  consent is enforceable law or (ii) a first priority security
                  interest in such Account in favor of the Administrative Agent
                  for the ratable benefit of the Lenders has not been obtained
                  and fully perfected by filing Uniform Commercial Code
                  financing statements against the Borrower or such Subsidiary;
                  or

                           (c) such Account is subject to any Lien whatsoever,
                  other than Liens expressly permitted by Section 7.3; or

                           (d) the Borrower or such Subsidiary, in order to be
                  entitled to collect such Account, is required to perform any
                  additional service for, or perform or incur any additional
                  obligation to, the Account debtor, except the portion of such
                  Account that has arisen in respect of the sale of any
                  Information Systems Inventory; or

                           (e) such Account does not constitute a legal, valid
                  and binding irrevocable payment obligation of the Account
                  debtor to pay the balance thereof in accordance with its terms
                  or is subject to any defense, setoff, recoupment or
                  counterclaim; or

                           (f) the Account debtor is an Affiliate, division or
                  employee of the Borrower or such Subsidiary; or

                           (g) (i) if such Account (A) is an account of the
                  United States Government or any of its agencies or
                  instrumentalities, (B) is subject to any Lien pursuant to the
                  Federal Assignment of Claims Act and (C) the Administrative
                  Agent has not received an assignment of claims in form and
                  substance satisfactory to it within 45 days of the creation of
                  such Account or (ii) such Account is (A) an account of the
                  government of any state of the United States or any political
                  subdivision thereof or any agency or instrumentality of any of
                  the foregoing and (B) a first priority security interest in
                  such account in favor of the Administrative Agent for the
                  ratable benefit of the Lenders has not been obtained and fully
                  perfected by filing Uniform Commercial Code financing
                  statements against the Borrower or such Subsidiary; or

                           (h) an estimated or accrual loss has been recognized
                  in respect of such Account, as determined in accordance with
                  the Borrower's or such Subsidiary's usual business practice
                  (each such Account, a "Defaulted Account"); or

                           (i) 20% or more of the aggregate outstanding amount
                  of all Accounts from the Account debtor in respect of such
                  Account and its Affiliates constitute Defaulted Accounts; or

                           (j) any representation or warranty contained in this
                  Agreement or in any other Loan Documents applicable either to
                  Accounts in general or to any such specific Account shall
                  prove to have been false or misleading in any material respect
                  when made or deemed made with respect to such Account; or

<PAGE>

                                                                              13

                           (k) 50% or more of the outstanding amount of all
                  Accounts from the same Account debtor have become, or have
                  been determined by the Administrative Agent to be, ineligible
                  pursuant to subparagraph (m) below; or

                           (l) the Account debtor (i) has filed a petition for
                  relief under the United States Bankruptcy Code (or similar
                  action under any successor law or under any comparable law),
                  (ii) has made a general assignment for the benefit of
                  creditors, (iii) has filed against it any petition or other
                  application for relief under the United States Bankruptcy Code
                  (or similar action under any successor law or under any
                  comparable law), (iv) has failed, suspended business
                  operations, become insolvent, called a meeting of its
                  creditors for the purpose of obtaining any financial
                  concession or accommodation or (v) had or suffered a receiver
                  or a trustee to be appointed for all or a significant portion
                  of its assets or affairs; or

                           (m) (i) any portion of such Account has remained
                  unpaid 120 or more days past the original invoice date thereof
                  or (ii) the Borrower or such Subsidiary has reason to believe
                  that all or a material portion of such Account is
                  uncollectible (in the reasonable discretion of the
                  Administrative Agent); or

                           (n) in respect of Buy-Fund Invoices, any portion of
                  such Account has remained unpaid 31 or more days past the
                  original invoice date therefor; or

                           (o) the sale represented by such Account is to an
                  Account debtor organized or located outside the states of the
                  United States, the District of Columbia or Canada unless, in
                  the case of any Account debtor controlled by an entity
                  organized or located outside one of the states of the United
                  States or the District of Columbia, the Administrative Agent
                  has, for the benefit of the Lenders, a valid, legal and
                  perfected first-priority security interest in such Account; or

                           (p) the Account debtor is a supplier or creditor of
                  the Borrower or such Subsidiary (but only to the extent of the
                  lesser of (i) the amount owing from such Account debtor to the
                  Borrower or such Subsidiary pursuant to Accounts that are
                  otherwise eligible and (ii) the amount owing to such Account
                  debtor by the Borrower or such Subsidiary); or

                           (q) such Account is not denominated in dollars or is
                  payable outside the United States; or

                           (r) if applicable, the sale represented by such
                  Account is on a bill-and-hold, undelivered sale, guaranteed
                  sale, sale-or-return, consignment or sale-on-approval basis or
                  is subject to any right of return (other than (i) in the
                  ordinary course of business or (ii) a standard right of claim
                  for defective goods for which neither the related Account
                  debtor has made a claim nor the Borrower or such Subsidiary
                  has any basis to believe that such Account debtor is entitled
                  to such a claim), charge-back or setoff; or

<PAGE>

                                                                              14

                           (s) the Administrative Agent believes, in its
                  reasonable discretion, that the collection of such Account may
                  not be paid and the Administrative Agent shall so notify the
                  Borrower; or

                           (t) the Borrower or such Subsidiary is in default, in
                  any material respect, in the performance or observance of any
                  of the terms of any agreement giving rise to such Account; or

                           (u) the Borrower or such Subsidiary does not have
                  good and marketable title to such Account as sole owner of
                  such Account; or

                           (v) such Account does not arise from the sale and
                  delivery of goods or provision of services in the ordinary
                  course of business of the Borrower or such Subsidiary to the
                  Account debtor; or

                           (w) such Account is on terms other than those normal
                  or customary in the business or the Borrower or such
                  Subsidiary; or

                           (x) any amounts payable under or in connection with
                  such Account are evidenced by promissory notes, agreements to
                  repay cash advances or other instruments, unless such
                  promissory notes, agreements or instruments have been endorsed
                  and delivered to the Administrative Agent; or

                           (y) such Account has been paid by a check that has
                  been returned for insufficient funds; or

                           (z) the Account debtor is a third party credit card
                  company or a debit card company; or

                           (aa) such Account is not subject to the standard
                  credit and collection policies of the Borrower or such
                  Subsidiary; or

                           (bb) such Account has been placed with an attorney or
                  other third party for collection; or

                           (cc) the aggregate credit balances of the Borrower or
                  such Subsidiary on an Account debtor by Account debtor basis
                  of all Accounts have remained unpaid for the past due amounts
                  referenced in subparagraphs (m) and (n) above; or

                           (dd) such Account is subject to any adverse security
                  deposit, retainage or other similar advance made by or for the
                  benefit of the applicable Account debtor, in each case only to
                  the extent thereof; or

                           (ee) such Account was invoiced (i) in advance of
                  goods or services provided, or (ii) twice or more, or (iii)
                  the associated income has not been earned; or

<PAGE>

                                                                              15

                           (ff) the goods giving rise to such Account have not
                  been shipped and title has not been transferred to the Account
                  debtor, or the Account represents a progress-billing or
                  otherwise does not represent a complete sale, except the
                  portion of such Account that has arisen in respect of the sale
                  of any Information Systems Inventory; for purposes hereof,
                  "progress-billing" means any invoice for goods sold or leased
                  or services rendered under a contract or agreement pursuant to
                  which the Account debtor's obligation to pay such invoice is
                  conditioned upon the Borrower's or such Subsidiary's
                  completion of any further performance under the contract or
                  agreement; or

                           (gg) such Account is created on cash on delivery
                  terms;

                  provided that, all Accounts of any single Account debtor and
                  its Affiliates which, in the aggregate exceed (i) 20% in
                  respect of an Account debtor whose securities are rated
                  Investment Grade, and (ii) 15% in respect of all other Account
                  debtors, of the total amount of all Accounts at the time of
                  any determination shall be deemed not to be Eligible Accounts
                  Receivable to the extent of such excess.

                  "Eligible Inventory": at any date of determination thereof,
         the value (determined at the lowest of cost or market or the
         written-down value in accordance with the Borrower's historical
         practice in accordance with GAAP) at such date of all inventories
         ("Inventory") of the Borrower and its Subsidiaries owned by the
         Borrower and its Subsidiaries and in the possession of the Borrower and
         its Subsidiaries or any warehouseman, bailee, agent or processor of the
         Borrower and its Subsidiaries, including any educational institution or
         commercial Bookstore, net of (i) any interdivisional profit, (ii) any
         amounts payable by the Borrower and its Subsidiaries in respect of
         commissions, processing fees or other charges, (iii) any advance
         payments and unliquidated progress billings in respect of such
         Inventory, (iv) the Obsolescence Reserve and (v) the RTV Reserve.
         Notwithstanding the foregoing, Inventory shall not constitute Eligible
         Inventory if, without duplication:

                           (a) such item of Inventory is not assignable or a
                  first priority security interest in such item of Inventory in
                  favor of the Administrative Agent for the ratable benefit of
                  the Lenders has not been obtained and fully perfected by
                  filing Uniform Commercial Code financing statements against
                  the Borrower or such Subsidiary; or

                           (b) such item of Inventory is subject to any Lien
                  whatsoever, other than Liens expressly permitted by Section
                  7.3 of this Agreement; or

                           (c) there shall have occurred any event that, or any
                  condition with respect to such item of Inventory, would
                  substantially impede the ability of the Borrower or such
                  Subsidiary to continue to use or sell such item of Inventory
                  in the normal course of business; or

<PAGE>

                                                                              16

                           (d) any claim disputing the title of the Borrower or
                  such Subsidiary to, or right to possession of or dominion
                  over, such item of Inventory shall have been asserted; or

                           (e) any representation or warranty contained in this
                  Agreement or in any other Loan Document applicable to either
                  Inventory in general or to such specific item of Inventory has
                  been breached with respect to such item of Inventory; or

                           (f) the Borrower or such Subsidiary does not have
                  good and marketable title to such item of Inventory as sole
                  owner of such item of Inventory; or

                           (g) such item of Inventory is located outside of the
                  United States; or

                           (h) such item of Inventory is evidenced by an
                  Account; or

                           (i) such item of Inventory consists of packing,
                  packaging and/or shipping supplies or materials; or

                           (j) such item of Inventory has been shipped to a
                  customer, even if on a consignment or "sale or return" basis;
                  or

                           (k) such item of Inventory consists of obsolete
                  Information Systems Inventory or Retail Inventory, including
                  books and related materials with titles classified as
                  slow-moving; or

                           (l) such item of Inventory consists of any unsaleable
                  Inventory; or

                           (m) such item of Inventory is located on a leasehold,
                  or is in the possession or control of any lessor,
                  warehouseman, bailee, agent or processor, unless (i) a Rent
                  Reserve has been established for Inventory at that location,
                  or (ii) the applicable lessor, warehouseman, bailee, agent or
                  processor (including any educational institution or commercial
                  Bookstore), has been notified of the Lien granted under the
                  Security Documents and has entered into a Landlord Waiver, or
                  (iii) (A) the Administrative Agent shall have received an
                  opinion, in form and substance acceptable to and from local
                  counsel approved by the Administrative Agent, and addressed to
                  the Administrative Agent, the Issuing Bank and the Lenders, to
                  the effect that there is no law in the jurisdiction where such
                  Inventory is located that would allow Inventory located on
                  such leasehold, or in the possession or control of such
                  warehouseman, bailee, agent or processor, to be subjected to
                  any Lien in favor of the applicable lessor, warehouseman,
                  bailee, agent or processor arising by operation of law and (B)
                  the Administrative Agent shall have received a certificate of
                  a Responsible Officer of the Borrower or such Subsidiary
                  certifying that there is no term or condition of any agreement
                  or other document governing the relationship between the
                  Borrower or such Subsidiary and the applicable lessor,
                  warehouseman, bailee, agent or processor that provides for any
                  such Lien; or

<PAGE>

                                                                              17

                           (n) such item of Inventory consists of food,
                  beverages or sundries; or

                           (o) such item of Inventory consists of cigarettes; or

                           (p) such item of Inventory is to be sold by the
                  Borrower or such Subsidiary from a vending machine; or

                           (q) such item of Inventory has been determined by the
                  Administrative Agent, exercising its reasonable discretion, to
                  be unacceptable because (i) the Administrative Agent believes
                  that such item of Inventory is not readily saleable under the
                  customary terms on which it is usually sold or (ii) such item
                  of Inventory (other than Information Systems Inventory) is not
                  of a type typically sold by campus Bookstores; or

                           (r) such item of Inventory is goods returned or
                  rejected by the Borrower's or such Subsidiary's customers due
                  to quality issues or is goods in transit to a third party; or

                           (s) such item of Inventory is a reserve computed by
                  the Borrower or such Subsidiary to accrue for future
                  adjustments to Inventory relating to inaccuracies arising from
                  the utilization of the gross profit method of accounting for
                  Retail Inventory; or

                           (t) such item of Inventory is an accrual computed by
                  the Borrower or such Subsidiary to accrue for anticipated
                  returns of sold Inventory.

                  "Environmental Laws": any and all foreign, Federal, state,
         local or municipal laws, rules, orders, regulations, statutes,
         ordinances, codes, decrees, requirements of any Governmental Authority
         or other Requirements of Law (including common law) regulating,
         relating to or imposing liability or standards of conduct concerning
         protection of human health or the environment, as now or may at any
         time hereafter be in effect.

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

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

                  "Eurodollar Base Rate": with respect to each day during each
         Interest Period pertaining to a Eurodollar Loan, the rate per annum
         determined on the basis of the rate for deposits in Dollars for a
         period equal to such Interest Period commencing on the first day of
         such Interest Period appearing on Page 3750 of the Telerate screen as
         of 11:00

<PAGE>

                                                                              18

         A.M., London time, two Business Days prior to the beginning of such
         Interest Period. In the event that such rate does not appear on Page
         3750 of the Telerate screen (or otherwise on such service), the
         "Eurodollar Base Rate" for purposes of this definition shall be
         determined by reference to such other comparable publicly available
         service for displaying eurodollar rates as may be selected by the
         Administrative Agent or, in the absence of such availability, by
         reference to the rate at which the Administrative Agent is offered
         Dollar deposits at or about 11:00 A.M., New York City time, two
         Business Days prior to the beginning of such Interest Period in the
         interbank eurodollar market where its eurodollar and foreign currency
         and exchange operations are then being conducted for delivery on the
         first day of such Interest Period for the number of days comprised
         therein.

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

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

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

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

                  "Event of Default": any of the events specified in Section 8,
         provided that any requirement for the giving of notice, the lapse of
         time, or both, has been satisfied.

                  "Excess Cash Flow": for any fiscal year of the Borrower, the
         excess, if any, of (a) the sum, without duplication, of (i)
         Consolidated Net Income for such fiscal year, (ii) an amount equal to
         the amount of all non-cash charges (including depreciation and
         amortization) deducted in arriving at such Consolidated Net Income,
         (iii) an amount equal to the aggregate net non-cash loss on the
         Disposition of Property by the Borrower and its Subsidiaries during
         such fiscal year (other than sales of inventory in the ordinary course
         of business), to the extent deducted in arriving at such Consolidated
         Net Income, (iv) the net increase during such fiscal year (if any) in
         deferred tax accounts of the Borrower and its Subsidiaries and (v)
         decreases in Consolidated Working Capital for such fiscal year over (b)
         the sum, without duplication, of (i) an amount equal to the amount of
         all non-cash credits included in arriving at such Consolidated Net
         Income, (ii) the aggregate amount actually paid by the Borrower and its
         Subsidiaries in cash during such fiscal year on account of Capital
         Expenditures, (iii) the aggregate amount actually paid by the Borrower
         and its Subsidiaries in cash during such fiscal year on account of
         acquisitions (net of any debt incurred in such fiscal year in
         connection with such acquisition and without duplication of any amounts
         included in clause (b)(ix) below), (iv) the aggregate amount of all
         prepayments of Revolving Credit Loans and Swing Line Loans during such
         fiscal year to the extent accompanying permanent optional reductions

<PAGE>

                                                                              19

         of the Revolving Credit Commitments, (v) the aggregate amount of all
         optional prepayments of the Term Loans during such fiscal year, (vi)
         the aggregate amount of all regularly scheduled principal payments of
         Funded Debt (including, without limitation, the Term Loans) of the
         Borrower and its Subsidiaries made during such fiscal year (other than
         in respect of any revolving credit facility to the extent there is not
         an equivalent permanent reduction in commitments thereunder), (vii) an
         amount equal to the aggregate net non-cash gain on the Disposition of
         Property by the Borrower and its Subsidiaries during such fiscal year
         (other than sales of inventory in the ordinary course of business), to
         the extent included in arriving at such Consolidated Net Income, (viii)
         the net decrease during such fiscal year (if any) in deferred tax
         accounts of the Borrower and its Subsidiaries, (ix) increases in
         Consolidated Working Capital for such fiscal year (without duplication
         of any amounts included in clause (b)(iii) above) and (x) the aggregate
         amount actually paid by the Borrower to Holdings during such fiscal
         year pursuant to Section 7.6(b).

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

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

                  "Existing Credit Agreement": as defined in the recitals
         hereto.

                  "Existing Holdings Discount Debentures": the 10 3/4% Senior
         Discount Debentures of Holdings due 2009 and issued pursuant to the
         Existing Holdings Discount Debentures Indenture.

                  "Existing Holdings Discount Debentures Indenture": the
         Indenture dated as of February 13, 1998 entered into by Holdings in
         connection with the issuance of the Existing Holdings Discount
         Debentures, together with all instruments and other agreements entered
         into by Holdings in connection therewith, as the same may be amended,
         supplemented or otherwise modified from time to time in accordance with
         Section 7.9.

                  "Existing Senior Subordinated Note Indenture": the Indenture
         dated as of February 13, 1998 entered into by the Borrower in
         connection with the issuance of the Existing Senior Subordinated Notes,
         together with all instruments and other agreements entered into by the
         Borrower in connection therewith, as the same may be amended,
         supplemented or otherwise modified from time to time in accordance with
         Section 7.9.

                  "Existing Senior Subordinated Notes": the 8 3/4% Senior
         Subordinated Notes of the Borrower due 2008 and issued pursuant to the
         Existing Senior Subordinated Note Indenture.

                  "Exiting Lender": each Lender (as defined in the Existing
         Credit Agreement) that is not a Continuing Lender.

<PAGE>

                                                                              20

                  "Facility": each of (a) the Term Loan Commitments and the Term
         Loans made thereunder (the "Term Loan Facility") and (b) the Revolving
         Credit Commitments and the extensions of credit made thereunder (the
         "Revolving Credit Facility").

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

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

                  "Funded Debt": as to any Person, all Indebtedness of such
         Person that matures more than one year from the date of its creation 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 from 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 from such date, including, without limitation, all
         current maturities and current sinking fund payments in respect of such
         Indebtedness whether or not required to be paid within one year from
         the date of its creation and, in the case of the Borrower, Indebtedness
         in respect of the Loans.

                  "Funding Office": the office specified from time to time by
         the Administrative Agent as its funding office by notice to the
         Borrower and the Lenders pursuant to Section 10.2.

                  "GAAP": generally accepted accounting principles in the United
         States of America as in effect from time to time, except that for
         purposes of Section 7.1, GAAP shall be determined on the basis of such
         principles in effect on the date hereof and consistent with those used
         in the preparation of the most recent audited financial statements
         delivered pursuant to Section 4.1(b). In the event that any "Accounting
         Change" (as defined below) shall occur and such change results in a
         change in the method of calculation of financial covenants, standards
         or terms in this Agreement, then the Borrower and the Administrative
         Agent agree to enter into negotiations in order to amend such
         provisions of this Agreement so as to equitably reflect such Accounting
         Changes with the desired result that the criteria for evaluating the
         Borrower's financial condition shall be the same after such Accounting
         Changes as if such Accounting Changes had not been made. Until such
         time as such an amendment shall have been executed and delivered by the
         Borrower, the Administrative Agent and the Required Lenders, all
         financial covenants, standards and terms in this Agreement shall
         continue to be calculated or construed as if such Accounting Changes
         had not occurred. "Accounting Changes" refers to changes in accounting
         principles required by the promulgation of any rule, regulation,
         pronouncement or opinion by the Financial Accounting Standards Board

<PAGE>

                                                                              21

         of the American Institute of Certified Public Accountants or, if
         applicable, the Securities and Exchange Commission (or successors
         thereto or agencies with similar functions).

                  "Governmental Authority": any nation or government, any state
         or other political subdivision thereof and any entity exercising
         executive, legislative, judicial, regulatory or administrative
         functions of or pertaining to government (including, without
         limitation, the National Association of Insurance Commissioners).

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

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

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

                  "Holdings": as defined in the preamble hereto.

<PAGE>

                                                                              22

                  "Holdings Discount Notes": the 11 % Senior Discount Notes of
         Holdings due 2013 and issued pursuant to the Holdings Discount Notes
         Indenture.

                  "Holdings Discount Notes Indenture": the Indenture dated as of
         March 4, 2004 entered into by Holdings in connection with the issuance
         of the Holdings Discount Notes, together with all instruments and other
         agreements entered into by Holdings in connection therewith, as the
         same may be amended, supplemented or otherwise modified from time to
         time in accordance with Section 7.9.

                  "Holdings Pro Forma Financial Statements": as defined in
         Section 4.1(a)(i).

                  "Holdings Projections": as defined in Section 6.2(c)(i).

                  "Indebtedness": of any Person at any date, without duplication
         (a) all indebtedness of such Person for borrowed money, (b) all
         obligations of such Person for the deferred purchase price of Property
         or services (other than current trade payables incurred in the ordinary
         course of such Person's business), (c) all obligations of such Person
         evidenced by notes, bonds, debentures or other similar instruments, (d)
         all indebtedness created or arising under any conditional sale or other
         title retention agreement with respect to Property acquired by such
         Person (even though the rights and remedies of the seller or lender
         under such agreement in the event of default are limited to
         repossession or sale of such Property), (e) all Capital Lease
         Obligations of such Person, (f) all obligations of such Person,
         contingent or otherwise, as an account party under acceptance, letter
         of credit or similar facilities, (g) all obligations of such Person,
         contingent or otherwise, to purchase, redeem, retire or otherwise
         acquire for value any Capital Stock (other than common stock) of such
         Person, (h) all Guarantee Obligations of such Person in respect of
         obligations of the kind referred to in clauses (a) through (g) above;
         (i) all obligations of the kind referred to in clauses (a) through (h)
         above secured by (or for which the holder of such obligation has an
         existing right, contingent or otherwise, to be secured by) any Lien on
         Property (including, without limitation, accounts and contract rights)
         owned by such Person, whether or not such Person has assumed or become
         liable for the payment of such obligation, (j) for the purposes of
         Section 8(e) only, all obligations of such Person in respect of
         Interest Rate Protection Agreements and (k) the liquidation value of
         any mandatorily redeemable preferred Capital Stock of such Person or
         its Subsidiaries held by any Person other than such Person and its
         Wholly Owned Subsidiaries.

                  "Information Systems Inventory": all Inventory located at the
         Borrower's warehouses consisting of computer hardware and software,
         including IBM point-of-sale register systems and related software.

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

                  "Insolvent": pertaining to a condition of Insolvency.

                  "Intellectual Property": the collective reference to all
         rights, priorities and privileges relating to intellectual property,
         whether arising under United States,

<PAGE>

                                                                              23

         multinational or foreign laws or otherwise, including, without
         limitation, copyrights, copyright licenses, patents, patent licenses,
         trademarks, trademark licenses, technology, know-how and processes, and
         all rights to sue at law or in equity for any infringement or other
         impairment thereof, including the right to receive all proceeds and
         damages therefrom.

                  "Interest Payment Date": (a) as to any Base Rate Loan, the
         last day of each January, April, July and October to occur while such
         Loan is outstanding and the final maturity date of such Loan, (b) as to
         any Eurodollar Loan having an Interest Period of three months or less,
         the last day of such Interest Period, (c) as to any Eurodollar Loan
         having an Interest Period longer than three months, each day which is
         three months, or a whole multiple thereof, after the first day of such
         Interest Period and the last day of such Interest Period and (d) as to
         any Loan (other than any Revolving Credit Loan that is a Base Rate Loan
         and any Swing Line Loan), the date of any repayment or prepayment made
         in respect thereof.

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

                           (i) if any Interest Period would otherwise end on a
                  day that is not a Business Day, such Interest Period shall be
                  extended to the next succeeding Business Day unless the result
                  of such extension would be to carry such Interest Period into
                  another calendar month in which event such Interest Period
                  shall end on the immediately preceding Business Day;

                           (ii) any Interest Period that would otherwise extend
                  beyond the Revolving Credit Termination Date or beyond the
                  date final payment is due on the Term Loans shall end on the
                  Revolving Credit Termination Date or such due date, as
                  applicable;

                           (iii) any Interest Period that begins on the last
                  Business Day of a calendar month (or on a day for which there
                  is no numerically corresponding day in the calendar month at
                  the end of such Interest Period) shall end on the last
                  Business Day of a calendar month; and

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

<PAGE>

                                                                              24

                  "Interest Rate Protection Agreement": any interest rate
         protection agreement, interest rate futures contract, interest rate
         option, interest rate cap or other interest rate hedge arrangement, to
         or under which the Holdings or any of its Subsidiaries is a party or a
         beneficiary on the date hereof or becomes a party or a beneficiary
         after the date hereof.

                  "Inventory": as defined in the definition of "Eligible
         Inventory".

                  "Investment Grade": having a rating established by a third
         party rating agency, equivalent to a Standard & Poor's Ratings Group
         BBB- or a Moody's Investor's Services, Inc. Baa3 or better.

                  "Issuing Lender": JPMorgan Chase Bank, in its capacity as
         issuer of any Letter of Credit.

                  "Landlord Waiver": a written agreement satisfactory in form
         and substance to the Administrative Agent (i) acknowledging that
         Inventory located on a leasehold or in possession or control of any
         warehouseman, bailee, agent or processor is subject to the Lien granted
         under the Security Documents, (ii) waiving and releasing any applicable
         Lien held by such lessor, warehouseman, bailee, agent or processor with
         respect to such item of Inventory (whether arising by operation of law
         or otherwise) and (iii) providing the Administrative Agent with the
         right to receive notice of default, the right to repossess such item of
         Inventory at any time upon the occurrence or during the continuance of
         a Default or Event of Default and such other rights as may be
         reasonably required by the Administrative Agent.

                  "L/C Commitment": $10,000,000.

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

                  "L/C Obligations": at any time, an amount equal to the sum of
         (a) the aggregate then undrawn and unexpired amount of the then
         outstanding Letters of Credit and (b) the aggregate amount of drawings
         under Letters of Credit which have not then been reimbursed pursuant to
         Section 3.5.

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

                  "Lenders": as defined in the preamble hereto; provided, that
         unless the context otherwise requires, each reference herein to the
         Lenders shall be deemed to include any Conduit Lender.

                  "Letters of Credit": as defined in Section 3.1(a).

                  "Lien": any mortgage, pledge, hypothecation, assignment,
         deposit arrangement, encumbrance, lien (statutory or other), charge or
         other security interest or any preference, priority or other security
         agreement or preferential arrangement of any kind or nature whatsoever
         (including, without limitation, any conditional sale or other title
         retention

<PAGE>

                                                                              25

         agreement and any capital lease having substantially the same economic
         effect as any of the foregoing).

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

                  "Loan Documents": this Agreement, the Security Documents and
         the Notes as the same may be amended, supplemented or otherwise
         modified from time to time.

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

                  "Majority Facility Lenders": with respect to any Facility, the
         holders of more than 50% of the aggregate unpaid principal amount of
         the Term Loans or the Total Revolving Extensions of Credit, as the case
         may be, outstanding under such Facility (or, in the case of the
         Revolving Credit Facility, prior to any termination of the Revolving
         Credit Commitments, the holders of more than 50% of the Total Revolving
         Credit Commitments).

                  "Majority Revolving Credit Facility Lenders": the Majority
         Facility Lenders in respect of the Revolving Credit Facility.

                  "Material Adverse Effect": a material adverse effect on (a)
         the Transactions, (b) the business, operations, property, condition
         (financial or otherwise) of the Borrower and its Subsidiaries taken as
         a whole, or (c) the validity or enforceability of this Agreement or any
         of the other Loan Documents or the rights or remedies of the
         Administrative Agent or the Lenders hereunder or thereunder.

                  "Material Environmental Amount": an amount payable by
         SuperHoldings and/or its Subsidiaries in excess of $1,000,000 for
         remedial costs, compliance costs, compensatory damages, punitive
         damages, fines, penalties or any combination thereof.

                  "Materials of Environmental Concern": any gasoline or
         petroleum (including crude oil or any fraction thereof) or petroleum
         products or any hazardous or toxic substances, materials or wastes,
         defined or regulated as such in or under any Environmental Law,
         including, without limitation, asbestos, polychlorinated biphenyls and
         urea-formaldehyde insulation.

                  "Merger": the merger pursuant to the Merger Agreement of New
         NBC Acquisition Corp. with and into Holdings, with Holdings as the
         surviving corporation.

                  "Merger Agreement": the Agreement and Plan of Merger dated as
         of February 18, 2004 among the Borrower, Holdings, SuperHoldings and
         New NBC Acquisition Corp. and all documents and agreements entered in
         connection therewith, as the same may be amended, modified or
         supplemented from time to time pursuant to Section 7.16.

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

<PAGE>

                                                                              26

                  "Mortgages": each mortgage referred to in Section 5.1(a) and
         each of the mortgages and deeds of trust made by any Loan Party in
         favor of, or for the benefit of, the Administrative Agent for the
         benefit of the Lenders, substantially in the form of Exhibit D (with
         such changes thereto as shall be advisable under the law of the
         jurisdiction in which such mortgage or deed of trust is to be
         recorded), as the same may be amended, supplemented or otherwise
         modified from time to time.

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

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

                  "Non-Excluded Taxes": as defined in Section 2.20(a).

                  "Non-Peak Period": the collective reference to (i) the period
         from and including January 16 of any year to and including April 30 of
         the same year and (ii) the period from and including September 16 of
         any year to and including November 30 of the same year.

                  "Non-U.S. Lender": as defined in Section 2.20(d).

                  "Notes": the collective reference to any promissory note
         evidencing Loans.

                  "Obligations": the unpaid principal of and interest on
         (including, without limitation, interest accruing after the maturity of
         the Loans and Reimbursement Obligations and interest accruing after the
         filing of any petition in bankruptcy, or the commencement of any
         insolvency, reorganization or like proceeding, relating to the
         Borrower, whether or not a claim for post-filing or post-petition
         interest is allowed in such proceeding) the Loans and all other
         obligations and liabilities of the Borrower to the Administrative Agent
         or to any Lender (or, in the case of Interest Rate Protection
         Agreements, any affiliate of any Lender), whether direct or indirect,
         absolute or

<PAGE>

                                                                              27

         contingent, due or to become due, or now existing or hereafter
         incurred, which may arise under, out of, or in connection with, this
         Agreement, any other Loan Document, the Letters of Credit, any Interest
         Rate Protection Agreement entered into with any Lender or any affiliate
         of any Lender or any other document made, delivered or given in
         connection herewith or therewith, whether on account of principal,
         interest, reimbursement obligations, fees, indemnities, costs, expenses
         (including, without limitation, all fees, charges and disbursements of
         counsel to the Administrative Agent or to any Lender that are required
         to be paid by the Borrower pursuant hereto) or otherwise.

                  "Obsolescence Reserve": an amount equal to 50% of the excess
         of (a) total Wholesale Inventory held by the Borrower over (b) the
         Inventory listed in the Borrower's buyers' guide; provided that during
         the Peak Period such percentage shall be reduced to 25% so long as the
         Borrower provides the supporting documentation and additional reports
         described in Schedule I to Exhibit J with respect to such Wholesale
         Inventory.

                  "Optional Payment Amount": $15,000,000 plus the amount of any
         Term Loan Prepayment Amount not accepted by the Accepting Lenders
         pursuant to Section 2.18(d).

                  "Original Credit Agreement": the Credit Agreement, dated as of
         February 18, 1998, among Holdings, the Borrower, the Administrative
         Agent and the lenders party thereto.

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

                  "Over Advance Amount": (i) for the period from and including
         January 16 of any year to and including April 30 of the same year, $0,
         (ii) for the period from and including May 1 of any year to and
         including June 30 of the same year, $10,000,000, (iii) for the period
         from and including July 1 of any year to and including August 9 of the
         same year, $5,000,000, (iv) for the period from and including August 10
         of any year to and including September 15 of the same year,
         $10,000,000, (v) for the period from and including September 16 of any
         year to and including November 30 of the same year, $0, and (vi) for
         the period from and including December 1 of any year to and including
         January 15 of next succeeding year, $10,000,000.

                  "Participant": as defined in Section 10.6(c).

                  "Past-due Addbacks": the aggregate amount of past due credit
         balances aged over 120 days from the original invoice date.

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

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

<PAGE>

                                                                              28

                  "Peak Period": the collective reference to (i) the period from
         and including May 1 of any year to and including September 15 of the
         same year and (ii) the period from and including December 1 of any year
         to and including January 15 of next succeeding year.

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

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

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

                  "Primary Investors": the collective reference to the Sponsors
         and their Related Parties, and any additional investment fund for which
         any of the Sponsors is the sole advisor or which is effectively
         controlled by any of the Sponsors.

                  "Pro Forma Financial Statements": the collective reference to
         the Borrower Pro Forma Financial Statements and the Holdings Pro Forma
         Financial Statements.

                  "Properties": as defined in Section 4.17.

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

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

                  "Reference Lender": the Administrative Agent.

                  "Refunded Swing Line Loans": as defined in Section 2.7.

                  "Refunding Date": as defined in Section 2.7.

                  "Register": as defined in Section 10.6(b).

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

                  "Reimbursement Obligation": the obligation of the Borrower to
         reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn
         under Letters of Credit.

                  "Reinvestment Deferred Amount": with respect to any
         Reinvestment Event, the aggregate Net Cash Proceeds received by
         SuperHoldings, Holdings, the Borrower or any

<PAGE>

                                                                              29

         of their respective Subsidiaries in connection therewith which are not
         applied to prepay the Term Loans or reduce the Revolving Credit
         Commitments pursuant to Section 2.12(b) as a result of the delivery of
         a Reinvestment Notice.

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

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

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

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

                  "Related Party": with respect to any of the Sponsors (A) any
         controlling stockholder or partner, a direct or indirect 80% (or more)
         owned Subsidiary, or spouse or immediate family member (in the case of
         an individual) of such Sponsor, (B) any trust, corporation, partnership
         or other entity, the controlling beneficiaries, stockholders, partners
         or owners of which, directly or indirectly, consist of the Sponsor
         and/or such other Persons referred to in the immediately preceding
         clause (A) and/or in the succeeding clause (D), (C) any partner or
         stockholder of such Sponsor as of the Closing Date who acquires any
         assets or voting stock of the Borrower or Holdings pursuant to a
         general distribution by such Sponsor to each of its partners or
         stockholders or (D) any officer or director of such Sponsor.

                  "Rent Reserve": on any date, with respect to any retail store,
         distribution center, warehouse, or other location where any Eligible
         Inventory subject to a Lien arising by operation of contract and/or law
         is located and with respect to which no Landlord Waiver is in effect, a
         reserve equal to three months' rent at such retail store, distribution
         center, warehouse, or other location.

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

                  "Reportable Event": any of the events set forth in Section
         4043(b) of ERISA, other than those events as to which the thirty day
         notice period is waived under subsection .13, .14, .16, .18, .19 or .20
         of PBGC Reg. Section 2615.

<PAGE>

                                                                              30

                  "Required Lenders": the holders of more than 50% of (a) until
         the Closing Date, the Commitments and (b) thereafter, the sum of (i)
         the aggregate unpaid principal amount of the Term Loans and (ii) the
         Total Revolving Credit Commitments or, if the Revolving Credit
         Commitments have been terminated, the Total Revolving Extensions of
         Credit.

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

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

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

                  "Retail Inventory": all Inventory located at a Bookstore
         consisting of: new and used textbooks, including any related study
         aids; general subject books; medical, technical and reference books;
         periodicals and magazines; clothing, including school insignia items;
         electronics; gifts; stationery and cards; school and office supplies
         and art; food, beverages and sundries; and all other items held for
         resale in the ordinary course of business.

                  "Revolving Credit Commitment": as to any Lender, the
         obligation of such Lender, if any, to make Revolving Credit Loans and
         participate in Swing Line Loans and Letters of Credit, in an aggregate
         principal and/or face amount not to exceed the amount set forth under
         the heading "Revolving Credit Commitment" opposite such Lender's name
         on Schedule 1.1A or in the Assignment and Assumption pursuant to which
         such Lender became a party hereto, as the same may be changed from time
         to time pursuant to the terms hereof. The original amount of the Total
         Revolving Credit Commitments is $50,000,000.

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

                  "Revolving Credit Lender": each Lender which has a Revolving
         Credit Commitment or which has made Revolving Credit Loans.

                  "Revolving Credit Loans": as defined in Section 2.4.

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

<PAGE>

                                                                              31

         constitutes of the aggregate principal amount of the Total Revolving
         Extensions of Credit then outstanding).

                  "Revolving Credit Termination Date": March 4, 2009.

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

                  "RTV Reserve": at any time, an amount equal to the amount of
         Inventory that is identified as to be returned to vendor.

                  "Securities Act": as defined in Section 4.1(a)(i) hereof.

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

                  "Senior Subordinated Note Indenture": the Indenture dated as
         of March 4, 2004 entered into by the Borrower in connection with the
         issuance of the Senior Subordinated Notes, together with all
         instruments and other agreements entered into by the Borrower in
         connection therewith, as the same may be amended, supplemented or
         otherwise modified from time to time in accordance with Section 7.9.

                  "Senior Subordinated Notes": the 8 5/8% Senior Subordinated
         Notes of the Borrower due 2012 and issued pursuant to the Senior
         Subordinated Note Indenture.

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

                  "Solvent": when used with respect to any Person, means that,
         as of any date of determination, (a) the amount of the "present fair
         saleable value" of the assets of such Person will, as of such date,
         exceed the amount of all "liabilities of such Person, contingent or
         otherwise", as of such date, as such quoted terms are determined in
         accordance with applicable federal and state laws governing
         determinations of the insolvency of debtors, (b) the present fair
         saleable value of the assets of such Person will, as of such date, be
         greater than the amount that will be required to pay the liability of
         such Person on its debts as such debts become absolute and matured, (c)
         such Person will not have, as of such date, an unreasonably small
         amount of capital with which to conduct its business, and (d) such
         Person will be able to pay its debts as they mature. For purposes of
         this definition, (i) "debt" means liability on a "claim", and (ii)
         "claim" means any (x) right to payment, whether or not such a right is
         reduced to judgment, liquidated, unliquidated, fixed, contingent,
         matured, unmatured, disputed, undisputed, legal, equitable, secured or
         unsecured or (y) right to an equitable remedy for breach of

<PAGE>

                                                                              32

         performance if such breach gives rise to a right to payment, whether or
         not such right to an equitable remedy is reduced to judgment, fixed,
         contingent, matured or unmatured, disputed, undisputed, secured or
         unsecured.

                  "Sponsors": Weston Presidio Capital III, L.P., a Delaware
         limited partnership, Weston Presidio Capital IV, L.P., a Delaware
         limited partnership, WPC Entrepreneur Fund, L.P., a Delaware limited
         partnership, and WPC Entrepreneur Fund II, L.P., a Delaware limited
         partnership.

                  "Standard Sales Invoices": the collective reference to (i)
         invoices resulting from sales by the Borrower to educational
         institutions or commercial Bookstores of new or used books and other
         instructional educational materials and (ii) invoices resulting from
         sales by the Borrower to educational institutions or commercial
         Bookstores of Information Systems Inventory or other Inventory in an
         aggregate amount at any time of up to 10% of the gross Accounts with
         respect to all invoices to educational institutions or commercial
         Bookstores, excluding Buy-Fund Invoices, provided that the percentage
         of the gross Accounts with respect to invoices to educational
         institutions or commercial Bookstores which may result from sales of
         Information Systems Inventory or other Inventory shall be subject to
         revision by the Administrative Agent in its reasonable discretion with
         the consent of the Borrower, which consent shall not be unreasonably
         withheld.

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

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

                  "SuperHoldings": NBC Holdings Corp., a Delaware corporation
         and, prior to the merger permitted by Section 7.4(d), the primary
         stockholder of Holdings.

                  "Swing Line Commitment": the obligation of the Swing Line
         Lender to make Swing Line Loans pursuant to Section 2.6 in an aggregate
         principal amount at any one time outstanding not to exceed $5,000,000.

                  "Swing Line Lender": JPMorgan Chase Bank, in its capacity as
         the lender of Swing Line Loans.

                  "Swing Line Loans": as defined in Section 2.6.

                  "Swing Line Participation Amount": as defined in Section 2.7.

<PAGE>

                                                                              33

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

                  "Tender Offers": the tender offers made to purchase the
         Existing Holdings Discount Debentures and the Existing Senior
         Subordinated Notes.

                  "Term Loan Commitment": as to any Lender, the obligation of
         such Lender, if any, to make a Term Loan to the Borrower hereunder in a
         principal amount not to exceed the amount set forth under the heading
         "Term Loan Commitment" opposite such Lender's name on Schedule 1.1A.
         The original aggregate amount of the Term Loan Commitments is
         $180,000,000.

                  "Term Loan Lenders": the collective reference to each Lender
         which has a Term Loan Commitment or which has made a Term Loan.

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

                  "Term Loans": as defined in Section 2.1.

                  "Total Revolving Credit Commitments": at any time, the
         aggregate amount of the Revolving Credit Commitments at such time.

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

                  "Transactions": as defined in the recitals hereto.

                  "Transferee": as defined in Section 10.15.

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

                  "Uniform Customs": the Uniform Customs and Practice for
         Documentary Credits (1993 Revision), International Chamber of Commerce
         Publication No. 500, as the same may be amended from time to time.

                  "Warehouse": any warehouses being used by the Borrower or its
         Subsidiaries.

                  "Wholesale Inventory": at any time, Inventory that is located
         at a Warehouse at such time and consists of textbooks.

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

<PAGE>

                                                                              34

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

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

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

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

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

         (e) From and after the effective date of the merger permitted by
Section 7.4(d), (i) all references to SuperHoldings in the Credit Documents
shall be deemed to be inapplicable and (ii) the surviving corporation of such
merger shall assume all payment and performance obligations of the other
constituent corporation(s) and be "Holdings" for all purposes of the Credit
Documents and shall remain a guarantor of the Obligations and the pledgor of the
Capital Stock of the Borrower pursuant to the Guarantee and Collateral
Agreement.

                   SECTION 2. AMOUNT AND TERMS OF COMMITMENTS

         2.1 Term Loan Commitments. (a) Subject to the terms and conditions
hereof, each Term Loan Lender severally agrees to make a term loan (or, in the
case of a Continuing Lender, pursuant to clause (b), elect to convert all or a
portion of such Continuing Lender's loans under the Existing Credit Agreement)
(a "Term Loan") to the Borrower on the Closing Date in an amount not to exceed
the amount of the Term Loan Commitment of such Lender. The Term Loans may from
time to time be Eurodollar Loans or Base Rate Loans, as determined by the
Borrower and notified to the Administrative Agent in accordance with Sections
2.2 and 2.13.

         (b) In connection with the making of the Term Loans pursuant to clause
(a) above, by delivering written notice to the Administrative Agent on or prior
to the Closing Date, any Continuing Lender may elect to make all or any portion
of such Lender's Term Loan requested by the Borrower to be made on the Closing
Date by converting all or a portion of the outstanding principal amount of the
loans held by such Lender under the Existing Credit Agreement into Term Loans in
a principal amount equal to the amount of the loans so converted (each, a
"Converted Term Loan"). On the Closing Date, the Converted Term Loans shall be
converted for all purposes of this Agreement into Term Loans, and the
Administrative Agent shall record in the Register the aggregate amounts of
Converted Term Loans converted into

<PAGE>

                                                                              35

Term Loans. Any written notice to the Administrative Agent delivered by an
applicable Lender pursuant to this Section shall specify the amount of such
Lender's Term Loan Commitment and the principal amount of the loans under the
Existing Credit Agreement held by such Lender that are to be converted into Term
Loans.

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

         2.3 Repayment of Term Loans. The Term Loan of each Term Loan Lender
shall mature in 28 consecutive quarterly installments, commencing on June 30,
2004 and ending on March 4, 2011, each of which shall be in an amount equal to
such Lender's Term Loan Percentage multiplied by the amount set forth below
opposite such installment:

<TABLE>
<CAPTION>
Installment                            Principal Amount
-----------                            ----------------
<S>                                    <C>
June 30, 2004                            $   450,000
September 30, 2004                       $   450,000
December 31, 2004                        $   450,000
March 31, 2005                           $   450,000
June 30, 2005                            $   450,000
September 30, 2005                       $   450,000
December 31, 2005                        $   450,000
March 31, 2006                           $   450,000
June 30, 2006                            $   450,000
September 30, 2006                       $   450,000
December 31, 2006                        $   450,000
March 31, 2007                           $   450,000
June 30, 2007                            $   450,000
September 30, 2007                       $   450,000
December 31, 2007                        $   450,000
March 31, 2008                           $   450,000
June 30, 2008                            $   450,000
September 30, 2008                       $   450,000
December 31, 2008                        $   450,000
March 31, 2009                           $   450,000
June 30, 2009                            $   450,000
September 30, 2009                       $   450,000
</TABLE>

<PAGE>

                                                                              36

<TABLE>
<CAPTION>
Installment                            Principal Amount
-----------                            ----------------
<S>                                    <C>
December 31, 2009                        $   450,000
March 31, 2010                           $   450,000
June 30, 2010                            $42,300,000
September 30, 2010                       $42,300,000
December 31, 2010                        $42,300,000
March 4, 2011                            $42,300,000
</TABLE>

         2.4 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, each Revolving Credit Lender severally agrees to make
revolving credit loans ("Revolving Credit Loans") to the Borrower from time to
time during the Revolving Credit Commitment Period in an aggregate principal
amount at any one time outstanding which, when added to such Lender's Revolving
Credit Percentage of the sum of (i) the L/C Obligations then outstanding and
(ii) the aggregate principal amount of the Swing Line Loans then outstanding,
does not exceed the amount of such Lender's Revolving Credit Commitment;
provided that no Revolving Credit Loans shall be made if, after giving effect to
the making of such Revolving Credit Loans, the Total Revolving Extensions of
Credit would exceed the lesser of (A) the Borrowing Base then in effect and (B)
the Total Revolving Credit Commitments. During the Revolving Credit Commitment
Period the Borrower may use the Revolving Credit Commitments by borrowing,
prepaying the Revolving Credit Loans in whole or in part, and reborrowing, all
in accordance with the terms and conditions hereof. The Revolving Credit Loans
may from time to time be Eurodollar Loans or Base Rate Loans, as determined by
the Borrower and notified to the Administrative Agent in accordance with
Sections 2.5 and 2.13, provided that no Revolving Credit Loan shall be made as a
Eurodollar Loan after the day that is one month prior to the Revolving Credit
Termination Date.

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

         2.5 Procedure for Revolving Credit Borrowing. The Borrower may borrow
under the Revolving Credit Commitments during the Revolving Credit Commitment
Period on any Business Day, provided that the Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 12:00 Noon, New York City time, (a) three Business
Days prior to the requested Borrowing Date, in the case of Eurodollar Loans, or
(b) one Business Day prior to the requested Borrowing Date, in the case of Base
Rate Loans), specifying (i) the amount and Type of Revolving Credit Loans to be
borrowed, (ii) the requested Borrowing Date and (iii) in the case of Eurodollar
Loans, the respective amounts of each such Type of Loan and the respective
lengths of the initial Interest Period therefor. Any Revolving Credit Loans made
on the Closing Date shall initially be Base Rate Loans. Each borrowing under the
Revolving Credit Commitments shall be in an amount equal to (x) in the case of
Base Rate Loans, $1,000,000 or a whole multiple thereof (or, if the then
aggregate Available Revolving Credit Commitments are less than $1,000,000, such
lesser amount) and (y) in the case of Eurodollar Loans, $2,500,000 or a whole
multiple of $500,000 in excess thereof; provided, that the Swing Line Lender may
request, on behalf of the Borrower, borrowings under the Revolving Credit
Commitments which are Base Rate Loans in other amounts pursuant to Section 2.7.
Upon receipt of any such notice from the Borrower, the

<PAGE>

                                                                              37

Administrative Agent shall promptly notify each Revolving Credit Lender thereof.
Each Revolving Credit Lender will make the amount of its pro rata share of each
borrowing available to the Administrative Agent for the account of the Borrower
at the Funding Office prior to 12:00 Noon, New York City time, on the Borrowing
Date requested by the Borrower in funds immediately available to the
Administrative Agent. Such borrowing will then be made available to the Borrower
by the Administrative Agent in like funds as received by the Administrative
Agent.

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

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

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

         (b) The Swing Line Lender, at any time and from time to time in its
sole and absolute discretion may, on behalf of the Borrower (which hereby
irrevocably directs the Swing Line Lender to act on its behalf), on one Business
Day's notice given by the Swing Line Lender no later than 12:00 Noon, New York
City time, request each Revolving Credit Lender to make, and each Revolving
Credit Lender hereby agrees to make, a Revolving Credit Loan, in an amount equal
to such Revolving Credit Lender's Revolving Credit Percentage of the aggregate

<PAGE>

                                                                              38

amount of the Swing Line Loans (the "Refunded Swing Line Loans") outstanding on
the date of such notice, to repay the Swing Line Lender. Each Revolving Credit
Lender shall make the amount of such Revolving Credit Loan available to the
Administrative Agent at the Funding Office in immediately available funds, not
later than 10:00 A.M., New York City time, one Business Day after the date of
such notice. The proceeds of such Revolving Credit Loans shall be immediately
applied by the Swing Line Lender to repay the Refunded Swing Line Loans. The
Borrower irrevocably authorizes the Swing Line Lender to charge the Borrower's
accounts with the Administrative Agent (up to the amount available in each such
account) in order to immediately pay the amount of such Refunded Swing Line
Loans to the extent amounts received from the Revolving Credit Lenders are not
sufficient to repay in full such Refunded Swing Line Loans.

         (c) If prior to the time a Revolving Credit Loan would have otherwise
been made pursuant to Section 2.7(b), one of the events described in Section
8(f) shall have occurred and be continuing with respect to the Borrower or if
for any other reason, as determined by the Swing Line Lender in its sole
discretion, Revolving Credit Loans may not be made as contemplated by Section
2.7(b), each Revolving Credit Lender shall, on the date such Revolving Credit
Loan was to have been made pursuant to the notice referred to in Section 2.7(b)
(the "Refunding Date"), purchase for cash an undivided participating interest in
an amount equal to (i) its Revolving Credit Percentage times (ii) the aggregate
principal amount of Swing Line Loans then outstanding which were to have been
repaid with such Revolving Credit Loans (the "Swing Line Participation Amount").

         (d) Whenever, at any time after the Swing Line Lender has received from
any Revolving Credit Lender such Lender's Swing Line Participation Amount, the
Swing Line Lender receives any payment on account of the Swing Line Loans, the
Swing Line Lender will distribute to such Lender its Swing Line Participation
Amount (appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Lender's participating interest was outstanding
and funded and, in the case of principal and interest payments, to reflect such
Lender's pro rata portion of such payment if such payment is not sufficient to
pay the principal of and interest on all Swing Line Loans then due); provided,
however, that in the event that such payment received by the Swing Line Lender
is required to be returned, such Revolving Credit Lender will return to the
Swing Line Lender any portion thereof previously distributed to it by the Swing
Line Lender.

         (e) Each Revolving Credit Lender's obligation to make the Loans
referred to in Section 2.7(b) and to purchase participating interests pursuant
to Section 2.7(c) shall be absolute and unconditional and shall not be affected
by any circumstance, including, without limitation, (i) any setoff,
counterclaim, recoupment, defense or other right which such Revolving Credit
Lender or the Borrower may have against the Swing Line Lender, the Borrower or
any other Person for any reason whatsoever; (ii) the occurrence or continuance
of a Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 5; (iii) any adverse change in the condition
(financial or otherwise) of the Borrower; (iv) any breach of this Agreement or
any other Loan Document by the Borrower, any other Loan Party or any other
Revolving Credit Lender; or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.

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                                                                              39

         2.8 Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
the appropriate Revolving Credit Lender or Term Loan Lender or the Swing Line
Lender, as the case may be, (i) the then unpaid principal amount of each
Revolving Credit Loan of such Revolving Credit Lender on the Revolving Credit
Termination Date (or such earlier date on which the Loans become due and payable
pursuant to Section 8), (ii) the then unpaid principal amount of each Swing Line
Loan of the Swing Line Lender on the Revolving Credit Termination Date (or such
earlier date on which the Loans become due and payable pursuant to Section 8)
and (iii) the principal amount of each Term Loan of such Term Loan Lender in
installments according to the amortization schedule set forth in Section 2.3 (or
on such earlier date on which the Loans become due and payable pursuant to
Section 8). The Borrower hereby further agrees to pay interest on the unpaid
principal amount of the Loans from time to time outstanding from the date hereof
until payment in full thereof at the rates per annum, and on the dates, set
forth in Section 2.15.

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

         (c) The Administrative Agent, on behalf of the Borrower, shall maintain
the Register pursuant to Section 10.6(b), and a subaccount therein for each
Lender, in which shall be recorded (i) the amount of each Loan made hereunder
and any Note evidencing such Loan, the Type thereof and each Interest Period
applicable thereto, (ii) the amount of any principal or interest due and payable
or to become due and payable from the Borrower to each Lender hereunder and
(iii) both the amount of any sum received by the Administrative Agent hereunder
from the Borrower and each Lender's share thereof.

         (d) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 2.8(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
such Borrower by such Lender in accordance with the terms of this Agreement.

         (e) The Borrower agrees that, upon the request to the Administrative
Agent by any Lender, the Borrower will execute and deliver to such Lender a
promissory note of the Borrower evidencing any Term Loans, Revolving Credit
Loans or Swing Line Loans, as the case may be, of such Lender, substantially in
the forms of Exhibit G-1, G-2 or G-3, respectively, with appropriate insertions
as to date and principal amount.

         2.9 Commitment Fees, etc. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from and including the Closing Date to the last
day of the Revolving Credit Commitment Period, computed at the Commitment Fee
Rate on the average daily amount of the Available Revolving Credit Commitment of
such Lender during the period for which payment is made,

<PAGE>

                                                                              40

payable quarterly in arrears on the last day of each March, June, September and
December and on the Revolving Credit Termination Date, commencing on the first
of such dates to occur after the date hereof.

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

         2.10 Termination or Reduction of Revolving Credit Commitments. The
Borrower shall have the right, upon not less than three Business Days' notice to
the Administrative Agent, to terminate the Revolving Credit Commitments or, from
time to time, to reduce the amount of the Revolving Credit Commitments; provided
that no such termination or reduction of Revolving Credit Commitments shall be
permitted if, after giving effect thereto and to any prepayments of the
Revolving Credit Loans and Swing Line Loans made on the effective date thereof,
the Total Revolving Extensions of Credit would exceed the Total Revolving Credit
Commitments. Any such reduction shall be in an amount equal to $500,000, or a
whole multiple thereof, and shall reduce permanently the Revolving Credit
Commitments then in effect.

         2.11 Optional Prepayments. The Borrower may at any time and from time
to time prepay the Loans, in whole or in part, without premium or penalty, upon
irrevocable notice delivered to the Administrative Agent at least three Business
Days prior thereto in the case of Eurodollar Loans and at least one Business Day
prior thereto in the case of Base Rate Loans, which notice shall specify the
date and amount of prepayment and whether the prepayment is of Eurodollar Loans
or Base Rate Loans; provided, that if a Eurodollar Loan is prepaid on any day
other than the last day of the Interest Period applicable thereto, the Borrower
shall also pay any amounts owing pursuant to Section 2.21. Upon receipt of any
such notice the Administrative Agent shall promptly notify each relevant Lender
thereof. If any such notice is given, the amount specified in such notice shall
be due and payable on the date specified therein, together with (except in the
case of Revolving Credit Loans which are Base Rate Loans and Swing Line Loans)
accrued interest to such date on the amount prepaid. Partial prepayments of Term
Loans and Revolving Credit Loans shall be in an aggregate principal amount not
less than $500,000. Partial prepayments of the Term Loans shall be applied to
remaining installments thereof in any order selected by the Borrower. Partial
prepayments of Swing Line Loans shall be in an aggregate principal amount not
less than $500,000.

         2.12 Mandatory Prepayments . (a) Unless the Required Prepayment Lenders
shall otherwise agree, if any Indebtedness shall be incurred by SuperHoldings,
Holdings, the Borrower or any of their respective Subsidiaries, an amount equal
to 100% of the Net Cash Proceeds thereof shall be applied on the date of such
incurrence toward the prepayment of the Term Loans as set forth in Section
2.12(d), provided, however, that the foregoing requirements of this paragraph
(a)(ii) shall not apply to any Indebtedness incurred in accordance with Section
7.2 as in effect on the date of this Agreement.

         (b) Unless the Required Prepayment Lenders shall otherwise agree, if on
any date SuperHoldings, Holdings, the Borrower or any of their respective
Subsidiaries shall receive Net Cash Proceeds from any Asset Sale or Recovery
Event (or, in the event of damage by casualty, the date the repair or
restoration of the relevant Property is completed) then, unless a

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                                                                              41

Reinvestment Notice shall be delivered in respect thereof, such Net Cash
Proceeds shall be applied on such date toward the prepayment of the Term Loans
as set forth in Section 2.12(d); provided, that, notwithstanding the foregoing,
(i) the aggregate Net Cash Proceeds of Asset Sales and Recovery Events that may
be excluded from the foregoing requirement pursuant to a Reinvestment Notice
shall not exceed $1,000,000 in any fiscal year of the Borrower, or $2,000,000 in
any fiscal year of the Borrower immediately succeeding a fiscal year of the
Borrower as of the last day of which the Consolidated Leverage Ratio is less
than or equal to 4.0 to 1.0, and (ii) on each Reinvestment Prepayment Date, an
amount equal to the Reinvestment Prepayment Amount with respect to the relevant
Reinvestment Event shall be applied toward the prepayment of the Term Loans as
set forth in Section 2.12(d); and provided further, that notwithstanding the
foregoing, such Net Cash Proceeds which are not subject to a Reinvestment Notice
shall not be required to be applied toward the prepayment of the Term Loans
until the date upon which the aggregate amount of such Net Cash Proceeds
received by SuperHoldings, Holdings, the Borrower and their respective
Subsidiaries and not previously applied toward the prepayment of the Term Loans
shall exceed $1,000,000.

         (c) Unless the Required Prepayment Lenders shall otherwise agree, if,
for any fiscal year of the Borrower commencing with the fiscal year ending March
31, 2005, there shall be Excess Cash Flow, the Borrower shall, on the relevant
Excess Cash Flow Application Date, apply the ECF Percentage of such Excess Cash
Flow toward the prepayment of the Term Loans as set forth in Section 2.12(d).
Each such prepayment shall be made on a date (an "Excess Cash Flow Application
Date") no later than three months after the date on which the financial
statements of the Borrower referred to in Section 6.1(a), for the fiscal year
with respect to which such prepayment is made, are required to be delivered to
the Lenders.

         (d) Amounts to be applied in connection with prepayments made pursuant
to this Section 2.12 shall be applied to the prepayment of the Term Loans. The
application of any prepayment pursuant to this Section 2.12 shall be made first
to Base Rate Loans and second to Eurodollar Loans. Each prepayment of the Loans
under this Section 2.12 shall be accompanied by accrued interest to the date of
such prepayment on the amount prepaid. Partial prepayments of the Term Loans
pursuant to this Section 2.12 shall be applied in the order set forth in Section
2.18

         (e) If, at any time the Total Revolving Extensions of Credit exceeds
the lesser of (A) the Borrowing Base in effect on such date and (B) the Total
Revolving Credit Commitments, the Borrower shall repay the Revolving Credit
Loans to the extent of such excess, provided that if the aggregate principal
amount of Revolving Credit Loans then outstanding is less than the amount of
such excess (because L/C Obligations constitute a portion thereof), the Borrower
shall, to the extent of the balance of such excess, replace outstanding Letters
of Credit and/or deposit an amount in cash in a cash collateral account
established with the Administrative Agent for the benefit of the Lenders on
terms and conditions satisfactory to the Administrative Agent.

         (f) The Borrower agrees that during each calendar year there shall be a
period of at least 30 consecutive days during which there are no Revolving
Extensions of Credit outstanding.

<PAGE>

                                                                              42

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

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

         2.14 Minimum Amounts and Maximum Number of Eurodollar Tranches.
Notwithstanding anything to the contrary in this Agreement, all borrowings,
conversions, continuations and optional prepayments of Eurodollar Loans
hereunder and all selections of Interest Periods hereunder shall be in such
amounts and be made pursuant to such elections so that, (a) after giving effect
thereto, the aggregate principal amount of the Eurodollar Loans comprising each
Eurodollar Tranche shall be equal to $2,500,000 or a whole multiple of $500,000
in excess thereof and (b) no more than ten Eurodollar Tranches shall be
outstanding at any one time.

         2.15 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin (it being understood that Eurodollar Loans bear interest from
and including the first day of each Interest Period to but not including the
last day of such Interest Period).

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

<PAGE>

                                                                              43

         (c) (i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), all outstanding Loans and Reimbursement
Obligations (whether or not overdue) shall bear interest at a rate per annum
which is equal to (x) in the case of the Loans, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this Section 2.15
plus 2% or (y) in the case of Reimbursement Obligations, the rate applicable to
Base Rate Loans under the Revolving Credit Facility plus 2%, and (ii) if all or
a portion of any interest payable on any Loan or Reimbursement Obligation or any
commitment fee or other amount payable hereunder shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise), such overdue
amount shall bear interest at a rate per annum equal to the rate applicable to
Base Rate Loans under the relevant Facility plus 2%.

         (d) Interest shall be payable in arrears on each Interest Payment Date,
provided that interest accruing pursuant to paragraph (c) of this Section 2.15
shall be payable from time to time on demand.

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

         (b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.15(a) and the manner of
performing any required calculation hereunder.

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

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

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

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                                                                              44

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

         2.18 Pro Rata Treatment and Payments. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee and any reduction of the Commitments of the Lenders shall be
made pro rata according to the respective Term Loan Percentages or Revolving
Credit Percentages, as the case may be, of the relevant Lenders.

         (b) Each payment (including each prepayment) by the Borrower on account
of principal of and interest on the Term Loans shall be made pro rata according
to the respective outstanding principal amounts of the Term Loans then held by
the Term Loan Lenders (except as otherwise provided in Section 2.18(d)). Except
as otherwise provided in Section 2.11, as among the Term Loans, prepayments
shall be applied 75% ratably to the respective remaining installments thereof
and 25% in the direct order to the respective next four installments thereof
(or, to the extent that the aggregate principal amount of the next four
installments of the Term Loan Facility is less than such 25%, the excess shall
be applied ratably to the respective remaining installments thereof). Amounts
prepaid on account of the Term Loans may not be reborrowed.

         (c) Each payment (including each prepayment) by the Borrower on account
of principal of and interest on the Revolving Credit Loans shall be made pro
rata according to the respective outstanding principal amounts of the Revolving
Credit Loans then held by the Revolving Credit Lenders.

         (d) Notwithstanding anything to the contrary in Section 2.12 or 2.18,
so long as any Revolving Credit Loans are outstanding, each Term Loan Lender
may, at its option, decline up to 100% of the portion of any mandatory payment
applicable to the Term Loans of such Lender; accordingly, with respect to the
amount of any mandatory prepayment described in Section 2.12 that is allocated
to Term Loans (such amounts, the "Term Loan Prepayment Amount"), at any time
when Revolving Credit Loans remain outstanding, the Borrower will, in lieu of
applying such amount to the prepayment of Term Loans, on the date specified in
Section 2.12 for such prepayment, give the Administrative Agent telephonic
notice (promptly confirmed in writing) requesting that the Administrative Agent
prepare and provide to each Term Loan Lender a notice (each, a "Prepayment
Option Notice") as described below. As promptly as practicable after receiving
such notice from the Borrower, the Administrative Agent will send to each Term
Loan Lender a Prepayment Option Notice, which shall be in the form of Exhibit H,
and shall include an offer by the Borrower to prepay on the date (each a
"Prepayment Date") that

<PAGE>

                                                                              45

is five Business Days after the date of the Prepayment Option Notice, the
relevant Term Loans of such Lender by an amount equal to the portion of the
Prepayment Amount indicated in such Lender's Prepayment Option Notice as being
applicable to such Lender's Term Loans. On the Prepayment Date (i) the Borrower
shall pay to the Administrative Agent the aggregate amount necessary to prepay
that portion of the outstanding relevant Term Loans in respect of which Term
Loan Lenders have accepted prepayment as described above (such Lenders, the
"Accepting Lenders"), and such amount shall be applied to reduce the Term Loan
Prepayment Amounts, with respect to each Accepting Lender and (ii) the Borrower
shall pay to the Administrative Agent an amount equal to 100% of the portion of
the Term Loan Prepayment Amount not accepted by the Accepting Lenders, and such
amount shall be applied to the prepayment of the Revolving Credit Loans without
a reduction in the Revolving Credit Commitments.

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

         (f) Unless the Administrative Agent shall have been notified in writing
by any Lender prior to a borrowing that such Lender will not make the amount
that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this Section 2.18(f) shall be conclusive in
the absence of manifest error. If such Lender's share of such borrowing is not
made available to the Administrative Agent by such Lender within three Business
Days of such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
Base Rate Loans under the relevant Facility (in lieu of interest otherwise
provided for hereunder), on demand, from the Borrower.

         (g) Unless the Administrative Agent shall have been notified in writing
by the Borrower prior to the date of any payment being made hereunder that the
Borrower will not

<PAGE>

                                                                              46

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

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

         (i) shall subject any Lender to any tax of any kind whatsoever with
     respect to this Agreement, any Letter of Credit, any Application or any
     Eurodollar Loan made by it, or change the basis of taxation of payments to
     such Lender in respect thereof (except for Non-Excluded Taxes covered by
     Section 2.20 and changes in the rate of tax on the overall net income of
     such Lender);

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

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

and the result of any of the foregoing is to increase, relative to the date
hereof, the cost to such Lender, by an amount which such Lender deems to be
material, of making, converting into, continuing or maintaining Eurodollar Loans
or issuing or participating in Letters of Credit, or to reduce, relative to the
date hereof, any amount receivable hereunder in respect thereof, then, in any
such case, the Borrower shall promptly pay such Lender, upon its demand, any
additional amounts necessary to compensate such Lender for such increased cost
or reduced amount receivable. If any Lender becomes entitled to claim any
additional amounts pursuant to this Section 2.19, it shall promptly notify the
Borrower (with a copy to the Administrative Agent) of the event by reason of
which it has become so entitled.

         (b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking

<PAGE>

                                                                              47

into consideration such Lender's or such corporation's policies with respect to
capital adequacy) by an amount deemed by such Lender to be material, then from
time to time, after submission by such Lender to the Borrower (with a copy to
the Administrative Agent) of a written request therefor, the Borrower shall pay
to such Lender such additional amount or amounts as will compensate such Lender
for such reduction; provided that the Borrower shall not be required to
compensate a Lender pursuant to this paragraph for any amounts incurred more
than six months prior to the date that such Lender notifies the Borrower of such
Lender's intention to claim compensation therefor; and provided further that, if
the circumstances giving rise to such claim have a retroactive effect, then such
six-month period shall be extended to include the period of such retroactive
effect.

         (c) A certificate as to any additional amounts payable pursuant to this
Section 2.19 submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. The
obligations of the Borrower pursuant to this Section 2.19 shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.

         2.20 Taxes. (a) All payments made by the Borrower under this Agreement
shall be made free and clear of, and without deduction or withholding for or on
account of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, excluding
net income taxes and franchise taxes (imposed in lieu of net income taxes)
imposed on the Administrative Agent or any Lender as a result of a present or
former connection between the Administrative Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from the Administrative Agent or such Lender having
executed, delivered or performed its obligations or received a payment under, or
enforced, this Agreement or any other Loan Document). If any such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions or withholdings
("Non-Excluded Taxes") or Other Taxes are required to be withheld from any
amounts payable to the Administrative Agent or any Lender hereunder, the amounts
so payable to the Administrative Agent or such Lender shall be increased to the
extent necessary to yield to the Administrative Agent or such Lender (after
payment of all Non-Excluded Taxes and Other Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement, provided, however, that the Borrower shall not be required to
increase any such amounts payable to any Lender with respect to any Non-Excluded
Taxes (i) that are attributable to such Lender's failure to comply with the
requirements of paragraph (d) or (e) of this Section, (ii) that are United
States withholding taxes imposed on amounts payable to such Lender (including
United States withholding taxes with respect to amounts payable under this
Section 2.20) under laws in effect at the time the Lender becomes a party to
this Agreement, except to the extent that such Lender's assignor (if any) was
entitled, at the time of assignment, to receive additional amounts from the
Borrower with respect to such Non-Excluded Taxes pursuant to Section 2.20(a) or
(iii) that is imposed as a result of an event occurring after the Lender becomes
a Lender other than a change in law or regulation or the introduction of any law
or regulation or a change in interpretation or administration of any law.
<PAGE>

                                                                              48

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

         (c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for the account of the relevant Agent or Lender, as the
case may be, a certified copy of an original official receipt received by the
Borrower showing payment thereof. If the Borrower fails to pay any Non-Excluded
Taxes or Other Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Administrative Agent and
the Lenders for any incremental taxes, interest or penalties that may become
payable by the Administrative Agent or any Lender as a result of any such
failure. The agreements in this Section 2.20 shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.

         (d) Each Lender (or Participant) that is not a "U.S. Person" as defined
in Section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver to the
Borrower and the Administrative Agent (or, in the case of a Participant, to the
Lender from which the related participation shall have been purchased) two
copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or,
in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest" a statement substantially in the form of
Exhibit I and a Form W-8BEN, or any subsequent versions thereof or successors
thereto properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this Section 2.20(d), a Non-U.S. Lender shall not be required
to deliver any form pursuant to this Section 2.20(d) that such Non-U.S. Lender
is not legally able to deliver.

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

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                                                                              49

Lender to the effect that such Non-Excluded Taxes or Other Taxes were wrongfully
or illegally imposed and (ii) the Administrative Agent or such Lender
determines, in sole discretion, that it would not be disadvantaged or prejudiced
in any manner whatsoever as a result of such contest.

         2.21 Indemnity. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of (a) default by the Borrower in making a borrowing
of, conversion into or continuation of Eurodollar Loans after the Borrower has
given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment after the
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (c) the making of a prepayment of Eurodollar Loans on a day which
is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein (excluding, however, the Applicable Margin included therein, if any)
over (ii) the amount of interest (as reasonably determined by such Lender) which
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank eurodollar
market. A certificate as to any amounts payable pursuant to this Section 2.21
submitted to the Borrower by any Lender shall be conclusive in the absence of
manifest error. This covenant shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.

         2.22 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert Base Rate Loans to Eurodollar Loans shall forthwith be cancelled and (b)
such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 2.21.

         2.23 Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.19 or 2.20(a)
with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided, that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage, and provided, further, that nothing in this Section 2.23 shall
affect or postpone any of the obligations of any Borrower or the rights of any
Lender pursuant to Section 2.19 or 2.20(a).

<PAGE>
                                                                              50

         2.24 Replacement of Lenders under Certain Circumstances. The Borrower
shall be permitted to replace any Lender which (a) requests reimbursement for
amounts owing pursuant to Section 2.19 or 2.20 or (b) defaults in its obligation
to make Loans hereunder, with a replacement financial institution; provided that
(i) such replacement does not conflict with any Requirement of Law, (ii) no
Default or Event of Default shall have occurred and be continuing at the time of
such replacement, (iii) prior to any such replacement, such Lender shall have
taken no action under Section 2.23 so as to eliminate the continued need for
payment of amounts owing pursuant to Section 2.19 or 2.20, (iv) the replacement
financial institution shall purchase, at par, all Loans and other amounts owing
to such replaced Lender on or prior to the date of replacement, (v) the Borrower
shall be liable to such replaced Lender under Section 2.21 if any Eurodollar
Loan owing to such replaced Lender shall be purchased other than on the last day
of the Interest Period relating thereto, (vi) the replacement financial
institution, if not already a Lender, shall be reasonably satisfactory to the
Administrative Agent, (vii) the replaced Lender shall be obligated to make such
replacement in accordance with the provisions of Section 10.6 (provided that the
Borrower shall be obligated to pay the registration and processing fee referred
to therein), (viii) until such time as such replacement shall be consummated,
the Borrower shall pay all additional amounts (if any) required pursuant to
Section 2.19 or 2.20, as the case may be, and (ix) any such replacement shall
not be deemed to be a waiver of any rights which the Borrower, the
Administrative Agent or any other Lender shall have against the replaced Lender.

                          SECTION 3. LETTERS OF CREDIT

         3.1 L/C Commitment. (a) Subject to the terms and conditions hereof, the
Issuing Lender, in reliance on the agreements of the other Revolving Credit
Lenders set forth in Section 3.4(a), agrees to issue letters of credit ("Letters
of Credit") for the account of the Borrower on any Business Day during the
Revolving Credit Commitment Period in such form as may be approved from time to
time by the Issuing Lender; provided that the Issuing Lender shall have no
obligation to issue any Letter of Credit if, after giving effect to such
issuance (i) the L/C Obligations would exceed the L/C Commitment, (ii) the
aggregate amount of the Available Revolving Credit Commitments would be less
than zero or (iii) the Total Revolving Extensions of Credit would exceed the
Borrowing Base then in effect. Each Letter of Credit shall (i) be denominated in
Dollars and (ii) expire no later than the earlier of (x) the first anniversary
of its date of issuance and (y) the date which is five Business Days prior to
the Revolving Credit Termination Date, provided that any Letter of Credit with a
one-year term may provide for the renewal thereof for additional one-year
periods (which shall in no event extend beyond the date referred to in clause
(y) above).

         (b) Each Letter of Credit shall be subject to the Uniform Customs and,
to the extent not inconsistent therewith, the laws of the State of New York.

         (c) The Issuing Lender shall not at any time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause the
Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.

         3.2 Procedure for Issuance of Letter of Credit. The Borrower may from
time to time request that the Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender at its address for notices specified herein an
Application therefor, completed to the

<PAGE>
                                                                              51

satisfaction of the Issuing Lender, and such other certificates, documents and
other papers and information as the Issuing Lender may request. Upon receipt of
any Application, the Issuing Lender will process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby (but in no event shall the
Issuing Lender be required to issue any Letter of Credit earlier than three
Business Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed to by the Issuing Lender and the Borrower. The Issuing
Lender shall furnish a copy of such Letter of Credit to the Borrower promptly
following the issuance thereof. The Issuing Lender shall promptly furnish to the
Administrative Agent, which shall in turn promptly furnish to the Lenders,
notice of the issuance of each Letter of Credit (including the amount thereof).

         3.3 Commissions, Fees and Other Charges. (a) The Borrower will pay a
commission on all outstanding Letters of Credit at a per annum rate equal to the
Applicable Margin then in effect with respect to Eurodollar Loans under the
Revolving Credit Facility, shared ratably among the Revolving Credit Lenders and
payable quarterly in arrears on each L/C Fee Payment Date after the issuance
date. In addition, the Borrower shall pay to the Issuing Lender for its own
account a fronting fee of 1/4 of 1% per annum, payable quarterly in arrears on
each L/C Fee Payment Date after the issuance date.

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

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

         (b) If any amount required to be paid by any L/C Participant to the
Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion
of any payment made by the Issuing Lender under any Letter of Credit is paid to
the Issuing Lender within three Business Days after the date such payment is
due, such L/C Participant shall pay to the Issuing Lender on demand an amount
equal to the product of (i) such amount, times (ii) the daily average Federal
Funds Effective Rate during the period from and including the date such payment
is

<PAGE>
                                                                              52

required to the date on which such payment is immediately available to the
Issuing Lender, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. If any
such amount required to be paid by any L/C Participant pursuant to Section
3.4(a) is not made available to the Issuing Lender by such L/C Participant
within three Business Days after the date such payment is due, the Issuing
Lender shall be entitled to recover from such L/C Participant, on demand, such
amount with interest thereon calculated from such due date at the rate per annum
applicable to Base Rate Loans under the Revolving Credit Facility. A certificate
of the Issuing Lender submitted to any L/C Participant with respect to any
amounts owing under this Section shall be conclusive in the absence of manifest
error.

         (c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its pro
rata share of such payment in accordance with Section 3.4(a), the Issuing Lender
receives any payment related to such Letter of Credit (whether directly from the
Borrower or otherwise, including proceeds of collateral applied thereto by the
Issuing Lender), or any payment of interest on account thereof, the Issuing
Lender will distribute to such L/C Participant its pro rata share thereof;
provided, however, that in the event that any such payment received by the
Issuing Lender shall be required to be returned by the Issuing Lender, such L/C
Participant shall return to the Issuing Lender the portion thereof previously
distributed by the Issuing Lender to it.

         3.5 Reimbursement Obligation of the Borrower. The Borrower agrees to
reimburse the Issuing Lender on each date on which the Issuing Lender notifies
the Borrower of the date and amount of a draft presented under any Letter of
Credit and paid by the Issuing Lender for the amount of (a) such draft so paid
and (b) any taxes, fees, charges or other costs or expenses incurred by the
Issuing Lender in connection with such payment. Each such payment shall be made
to the Issuing Lender at its address for notices specified herein in lawful
money of the United States of America and in immediately available funds.
Interest shall be payable on any and all amounts remaining unpaid by the
Borrower under this Section from the date such amounts become payable (whether
at stated maturity, by acceleration or otherwise) until payment in full at the
rate set forth in Section 2.15(c). Each drawing under any Letter of Credit shall
(unless an event of the type described in clause (i) or (ii) of Section 8(f)
shall have occurred and be continuing with respect to the Borrower, in which
case the procedures specified in Section 3.4 for funding by L/C Participants
shall apply) constitute a request by the Borrower to the Administrative Agent
for a borrowing pursuant to Section 2.5 of Base Rate Loans (or, at the option of
the Administrative Agent and the Swing Line Lender in their sole discretion, a
borrowing pursuant to Section 2.7 of Swing Line Loans) in the amount of such
drawing. The Borrowing Date with respect to such borrowing shall be the date of
such drawing.

         3.6 Obligations Absolute. The Borrower's obligations under this Section
3 shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which the
Borrower may have or have had against the Issuing Lender, any beneficiary of a
Letter of Credit or any other Person. The Borrower also agrees with the Issuing
Lender that the Issuing Lender shall not be responsible for, and the Borrower's
Reimbursement Obligations under Section 3.5 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or

<PAGE>
                                                                              53

among the Borrower and any beneficiary of any Letter of Credit or any other
party to which such Letter of Credit may be transferred or any claims whatsoever
of the Borrower against any beneficiary of such Letter of Credit or any such
transferee. The Issuing Lender shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit, except for
errors or omissions found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of the Issuing Lender. The Borrower agrees that any action taken or
omitted by the Issuing Lender under or in connection with any Letter of Credit
or the related drafts or documents, if done in the absence of gross negligence
or willful misconduct and in accordance with the standards or care specified in
the Uniform Commercial Code of the State of New York, shall be binding on the
Borrower and shall not result in any liability of the Issuing Lender to the
Borrower.

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

         3.8 Applications. To the extent that any provision of any Application
related to any Letter of Credit is inconsistent with the provisions of this
Section 3, the provisions of this Section 3 shall apply.

                   SECTION 4. REPRESENTATIONS AND WARRANTIES

         To induce the Administrative Agent and the Lenders to enter into this
Agreement and to make the Loans and issue or participate in the Letters of
Credit, Holdings and the Borrower hereby jointly and severally represent and
warrant to the Administrative Agent and each Lender that:

         4.1 Financial Condition. (a) (i) The unaudited pro forma consolidated
balance sheet of Holdings and its consolidated Subsidiaries as at December 31,
2003 (including the notes thereto) (the "Holdings Pro Forma Balance Sheet"),
copies of which have heretofore been furnished to each Lender, has been prepared
giving effect (as if such events had occurred on December 31, 2003) to (i) the
consummation of the Transactions, (ii) the Loans to be made on the Closing Date
and the use of proceeds thereof, (iii) the payment of fees and expenses in
connection with the foregoing and (iv) material acquisitions consummated during
the last two fiscal years of Holdings. The Holdings Pro Forma Balance Sheet has
been prepared based on the best information available to Holdings as of the date
of delivery thereof, and presents fairly in all material respects on a pro forma
basis the estimated financial position of Holdings and its consolidated
Subsidiaries as at December 31, 2003, assuming that the events specified in the
preceding sentence had actually occurred on such date, prepared in accordance
with Regulation S-X under the Securities Act of 1933, as amended (the
"Securities Act"). The unaudited pro forma consolidated statement of operations
of Holdings and its Subsidiaries for the nine-month period ended December 31,
2003 (including the notes thereto) (the "Holdings Pro Forma Income

<PAGE>
                                                                              54

Statement"; collectively with the Holdings Pro Forma Balance Sheet, the
"Holdings Pro Forma Financial Statements"), copies of which have heretofore been
furnished to each Lender, has been prepared giving effect (as if such events had
occurred on the first day of such nine-month period) to (i) the consummation of
the Transactions, (ii) the Loans to be made on the Closing Date and the use of
proceeds thereof and (iii) the payment of fees and expenses in connection with
the foregoing. The Holdings Pro Forma Income Statement has been prepared based
on the best information available to Holdings as of the date of delivery
thereof, and presents fairly in all material respects on a pro forma basis the
estimated consolidated financial condition of Holdings and its consolidated
Subsidiaries as at December 31, 2003 and the consolidated results of their
operations for the nine-month period then ended assuming that the events
specified in the preceding sentence had actually occurred on the first day of
such nine-month period, prepared in accordance with Regulation S-X under the
Securities Act.

         (ii) The unaudited pro forma consolidated balance sheet of the Borrower
and its consolidated Subsidiaries as at December 31, 2003 (including the notes
thereto) (the "Borrower Pro Forma Balance Sheet"), copies of which have
heretofore been furnished to each Lender, has been prepared giving effect (as if
such events had occurred on December 31, 2003) to (i) the consummation of the
Transactions, (ii) the Loans to be made on the Closing Date and the use of
proceeds thereof, (iii) the payment of fees and expenses in connection with the
foregoing and (iv) material acquisitions consummated during the last two fiscal
years of the Borrower. The Borrower Pro Forma Balance Sheet has been prepared
based on the best information available to the Borrower as of the date of
delivery thereof, and presents fairly in all material respects on a pro forma
basis the estimated financial position of the Borrower and its consolidated
Subsidiaries as at December 31, 2003, assuming that the events specified in the
preceding sentence had actually occurred on such date, prepared in accordance
with Regulation S-X under the Securities Act. The unaudited pro forma
consolidated statement of operations of the Borrower and its Subsidiaries for
the nine-month period ended December 31, 2003 (including the notes thereto) (the
"Borrower Pro Forma Income Statement"; collectively with the Borrower Pro Forma
Balance Sheet, the "Borrower Pro Forma Financial Statements"), copies of which
have heretofore been furnished to each Lender, has been prepared giving effect
(as if such events had occurred on the first day of such nine-month period) to
(i) the consummation of the Transactions, (ii) the Loans to be made on the
Closing Date and the use of proceeds thereof and (iii) the payment of fees and
expenses in connection with the foregoing. The Borrower Pro Forma Income
Statement has been prepared based on the best information available to the
Borrower as of the date of delivery thereof, and presents fairly in all material
respects on a pro forma basis the estimated consolidated financial condition of
the Borrower and its consolidated Subsidiaries as at December 31, 2003 and the
consolidated results of their operations for the nine-month period then ended
assuming that the events specified in the preceding sentence had actually
occurred on the first day of such nine-month period, prepared in accordance with
Regulation S-X under the Securities Act.

         (b) (i) The audited consolidated balance sheets of Holdings and its
consolidated Subsidiaries as at March 31, 2001, March 31, 2002 and March 31,
2003, and the related consolidated statements of income and of cash flows for
the fiscal years ended March 31, 2001, March 31, 2002 and March 31, 2003,
reported on by and accompanied by an unqualified report from Deloitte & Touche
LLP present fairly in all material respects the consolidated financial condition
of Holdings and its consolidated Subsidiaries as at such date, and the

<PAGE>
                                                                              55

consolidated results of its operations and its consolidated cash flows for the
respective fiscal years then ended. The unaudited consolidated balance sheet of
Holdings and its consolidated Subsidiaries as at December 31, 2003, and the
related unaudited consolidated statements of income and cash flows for the
nine-month period ended on such date, present fairly in all material respects
the consolidated financial condition of Holdings and its consolidated
Subsidiaries as at such date, and the consolidated results of its operations and
its consolidated cash flows for the nine-month period then ended (subject to
normal year-end audit adjustments). All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by the
aforementioned firms of accountants and disclosed therein). Holdings and its
Subsidiaries do not have any material Guarantee Obligations, material contingent
liabilities or material liabilities for taxes, or any long-term leases or
unusual forward or long-term commitments, including, without limitation, any
interest rate or foreign currency swap or exchange transaction or other
obligation in respect of derivatives, which are not reflected in the most recent
financial statements (including the notes thereto) referred to in this paragraph
(b)(i). During the period from March 31, 2003 to and including the date hereof,
there has been no Disposition by Holdings or any of its Subsidiaries of any
material part of its business or Property.

         (ii) The audited consolidated balance sheets of the Borrower and its
consolidated Subsidiaries as at March 31, 2001, March 31, 2002 and March 31,
2003, and the related consolidated statements of income and of cash flows for
the fiscal years ended March 31, 2001, March 31, 2002 and March 31, 2003
reported on by and accompanied by an unqualified report from Deloitte & Touche
LLP present fairly in all material respects the consolidated financial condition
of the Borrower and its consolidated Subsidiaries as at such date, and the
consolidated results of its operations and its consolidated cash flows for the
respective fiscal years then ended. The unaudited consolidated balance sheet of
the Borrower and its consolidated Subsidiaries as at December 31, 2003, and the
related unaudited consolidated statements of income and cash flows for the
nine-month period ended on such date, present fairly in all material respects
the consolidated financial condition of the Borrower and its consolidated
Subsidiaries as at such date, and the consolidated results of its operations and
its consolidated cash flows for the nine-month period then ended (subject to
normal year-end audit adjustments). All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants and disclosed therein). The Borrower and its
Subsidiaries do not have any material Guarantee Obligations, material contingent
liabilities or material liabilities for taxes, or any long-term leases or
unusual forward or long-term commitments, including, without limitation, any
interest rate or foreign currency swap or exchange transaction or other
obligation in respect of derivatives, which are not reflected in the most recent
financial statements (including the notes thereto) referred to in this paragraph
(b)(ii). During the period from March 31, 2003 to and including the date hereof,
there has been no Disposition by the Borrower or any of its Subsidiaries of any
material part of its business or Property.

         4.2 No Change. Since December 31, 2003 there has been no development or
event which has had or could reasonably be expected to have a Material Adverse
Effect.

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                                                                              56

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

         4.4 Corporate Power; Authorization; Enforceable Obligations. Each Loan
Party has the corporate power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party and, in the case
of the Borrower, to borrow hereunder. Each Loan Party has taken all necessary
corporate action to authorize the execution, delivery and performance of the
Loan Documents to which it is a party and, in the case of the Borrower, to
authorize the borrowings on the terms and conditions of this Agreement. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the Transactions and the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of this Agreement
or any of the Loan Documents, except (i) consents, authorizations, filings and
notices described in Schedule 4.4, which consents, authorizations, filings and
notices have been obtained or made and are in full force and effect and (ii) the
filings referred to in Section 4.19. Each Loan Document has been duly executed
and delivered on behalf of each Loan Party party thereto. This Agreement
constitutes, and each other Loan Document upon execution will constitute, a
legal, valid and binding obligation of each Loan Party party thereto,
enforceable against each such Loan Party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or conveyance or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).

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

         4.6 No Material Litigation. No litigation, investigation or proceeding
of or before any arbitrator or Governmental Authority is pending or, to the
knowledge of SuperHoldings, Holdings or the Borrower, threatened by or against
SuperHoldings, Holdings, the Borrower or any of their respective Subsidiaries or
against any of their respective properties or revenues (a) with respect to any
of the Loan Documents or any of the transactions

<PAGE>
                                                                              57

contemplated hereby or thereby, or (b) which could reasonably be expected to
have a Material Adverse Effect.

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

         4.8 Ownership of Property; Liens. Each of SuperHoldings, Holdings, the
Borrower and their respective Subsidiaries has title in fee simple to, or a
valid leasehold interest in, all its real property, and good title to, or a
valid leasehold interest in, all its other Property, and none of such Property
is subject to any Lien except as permitted by Section 7.3. Schedule 1.1B lists,
as of the Closing Date, each parcel of owned real property and each leasehold
interest in real property in respect of which aggregate annual rent payments in
excess of $250,000 are payable, in each case, located in the United States and
held by the Borrower or any of its Subsidiaries.

         4.9 Intellectual Property. Each of SuperHoldings, Holdings, the
Borrower and each of their respective Subsidiaries owns, or is licensed to use,
all Intellectual Property necessary for the conduct of its business as currently
conducted. Schedule 4.9 sets forth all of the applications for registration and
registered Intellectual Property owned or licensed by each of SuperHoldings,
Holdings, the Borrower and each of their respective Subsidiaries on the Closing
Date. No material claim has been asserted and is pending by any Person
challenging or questioning the use of any Intellectual Property or the validity
or effectiveness of any Intellectual Property, nor does SuperHoldings, Holdings
or Borrower know of any valid basis for any such claim. The use of Intellectual
Property by SuperHoldings, Holdings, the Borrower and their respective
Subsidiaries does not infringe on the rights of any Person in any material
respect.

         4.10 Taxes. Each of SuperHoldings, Holdings, the Borrower and each of
their respective Subsidiaries has filed or caused to be filed all Federal, state
and other material tax returns which are required to be filed and has paid all
taxes shown to be due and payable on said returns or on any assessments made
against it or any of its Property and all other taxes, fees or other charges
imposed on it or any of its Property by any Governmental Authority (other than
any the amount or validity of which are currently being contested in good faith
by appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of SuperHoldings, Holdings, the Borrower or
their respective Subsidiaries, as the case may be); no tax Lien has been filed,
and, to the knowledge of Holdings and the Borrower, no claim is being asserted,
with respect to any such tax, fee or other charge.

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

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                                                                              58

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

         4.13 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no Lien
in favor of the PBGC or a Plan has arisen, during such five-year period. The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits by a material amount. Neither the Borrower nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any Multiemployer Plan
which has resulted or could reasonably be expected to result in a material
liability under ERISA, and neither the Borrower nor any Commonly Controlled
Entity would become subject to any material liability under ERISA if the
Borrower or any such Commonly Controlled Entity were to withdraw completely from
all Multiemployer Plans as of the valuation date most closely preceding the date
on which this representation is made or deemed made. No such Multiemployer Plan
is in Reorganization or Insolvent.

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

         4.15 Subsidiaries. The Subsidiaries listed on Schedule 4.15 constitute
all the Subsidiaries of SuperHoldings at the date hereof.

         4.16 Use of Proceeds. The proceeds of the Term Loans shall be used to
finance the Transactions and to pay related fees and expenses; and any remaining
proceeds of the Term Loans shall be used to finance the general capital needs
and general corporate purposes of the Borrower. The proceeds of the Revolving
Extensions of Credit shall be used to finance the general capital needs and
general corporate purposes of the Borrower.

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                                                                              59

         4.17 Environmental Matters. (a) The facilities and properties owned,
leased or operated by SuperHoldings, Holdings, the Borrower or any of their
respective Subsidiaries (the "Properties") do not contain, and have not
previously contained, any Materials of Environmental Concern in amounts or
concentrations or under circumstances which (i) constitute or constituted a
violation of, or (ii) could give rise to liability under, any Environmental Law,
except in either case insofar as such violation or liability, or any aggregation
thereof, could not reasonably be expected to result in the payment of a Material
Environmental Amount.

         (b) The Properties and all operations at the Properties are in material
compliance, and have in the last five years been in material compliance, with
all applicable Environmental Laws, and there is no contamination at, under or
about the Properties or violation of any Environmental Law with respect to the
Properties or the business operated by SuperHoldings, Holdings, the Borrower or
any of their respective Subsidiaries (the "Business") which could materially
interfere with the continued operation of the Properties or impair the fair
saleable value thereof in an amount equaling or exceeding a Material
Environmental Amount. As of the Closing Date, neither SuperHoldings, Holdings,
the Borrower nor any of their respective Subsidiaries has assumed any liability
of any other Person under Environmental Laws.

         (c) Neither SuperHoldings, Holdings, the Borrower nor any of their
respective Subsidiaries has received or is aware of any notice of violation,
alleged violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard to any
of the Properties or the Business, nor does SuperHoldings, Holdings or the
Borrower have knowledge or reason to believe that any such notice will be
received or is being threatened, except insofar as such notice or threatened
notice, or any aggregation thereof, does not involve a matter or matters that
could reasonably be expected to result in the payment of a Material
Environmental Amount.

         (d) Materials of Environmental Concern have not been transported or
disposed of from the Properties in violation of, or in a manner or to a location
which could give rise to liability under, any Environmental Law, nor have any
Materials of Environmental Concern been generated, treated, stored or disposed
of at, on or under any of the Properties in violation of, or in a manner that
could give rise to liability under, any applicable Environmental Law, except
insofar as any such violation or liability referred to in this paragraph, or any
aggregation thereof, could not reasonably be expected to result in the payment
of a Material Environmental Amount.

         (e) No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of SuperHoldings, Holdings and the Borrower,
threatened, under any Environmental Law to which SuperHoldings, Holdings, the
Borrower or any of their respective Subsidiaries is or will be named as a party
with respect to the Properties or the Business, nor are there any consent
decrees or other decrees, consent orders, administrative orders or other orders,
or other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Properties or the Business, except insofar
as such proceeding, action, decree, order or other requirement, or any
aggregation thereof, could not reasonably be expected to result in the payment
of a Material Environmental Amount.

<PAGE>
                                                                              60

         (f) There has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or related to
the operations of SuperHoldings, Holdings, the Borrower or any of their
respective Subsidiaries in connection with the Properties or otherwise in
connection with the Business, in violation of or in amounts or in a manner that
could give rise to liability under Environmental Laws, except insofar as any
such violation or liability referred to in this paragraph, or any aggregation
thereof, could not reasonably be expected to result in the payment of a Material
Environmental Amount.

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

         4.19 Security Documents. (a) The Guarantee and Collateral Agreement is
effective to create in favor of the Administrative Agent, for the benefit of the
Lenders, a legal, valid and enforceable security interest in the Collateral
described therein and proceeds thereof. In the case of the Pledged Stock
described in the Guarantee and Collateral Agreement, when stock certificates
representing such Pledged Stock are delivered to the Administrative Agent, and
in the case of the other Collateral described in the Guarantee and Collateral
Agreement in which a security interest may be perfected by filing a financing
statement, when financing statements in appropriate form are filed in the
offices specified on Schedule 4.19(a), the Guarantee and Collateral Agreement
shall constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the Loan Parties in such Collateral and the proceeds
thereof, as security for the Obligations (as defined in the Guarantee and
Collateral Agreement), in each case prior and superior in right to any other
Person.

         (b) Each of the Mortgages is effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable Lien on the Mortgaged Properties described therein and proceeds
thereof, and when the amendments to the Mortgages referred to in Section 5.1(a)
are filed in the offices specified on Schedule 4.19(b), each such Mortgage shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the Loan Parties in the Mortgaged Properties and the proceeds
thereof, as security for

<PAGE>

                                                                              61

the Obligations (as defined in the relevant Mortgage), in each case prior and
superior in right to any other Person.

         4.20 Solvency. Each Loan Party is, and after giving effect to the
Transactions and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith will be and will continue to be,
Solvent.

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

         4.22 Regulation H. As of the Closing Date, no Mortgage encumbers
improved real property which is located in an area that has been identified by
the Secretary of Housing and Urban Development as an area having special flood
hazards and in which flood insurance has been made available under the National
Flood Insurance Act of 1968. If, after the Closing Date, any Mortgage encumbers
improved real property which is located in an area that has been identified by
the Secretary of Housing and Urban Development as an area having special flood
hazards, then flood insurance made available under the National Flood Insurance
Act of 1968 has been obtained, if such insurance is available.

                        SECTION 5. CONDITIONS PRECEDENT

         5.1 Conditions to Initial Extension of Credit. The agreement of each
Lender to make the initial extension of credit requested to be made by it is
subject to the satisfaction, prior to or concurrently with the making of such
extension of credit on the Closing Date, of the following conditions precedent
(except that the conditions set forth in clauses (a)(iii) and (p) below may be
satisfied at any time within 30 days following the Closing Date):

         (a) Loan Documents. The Administrative Agent shall have received (i)
     this Agreement, executed and delivered by a duly authorized officer of
     SuperHoldings, Holdings and the Borrower, (ii) the Guarantee and Collateral
     Agreement, executed and delivered by a duly authorized officer of
     SuperHoldings, Holdings, the Borrower and each Subsidiary Guarantor and
     (iii) an amendment (or an amendment and restatement), in form and substance
     satisfactory to the Administrative Agent, to each Mortgage existing on the
     Closing Date, executed and delivered by a duly authorized officer of each
     party thereto.

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

                  (i) the transactions required to be consummated on or prior to
         the Closing Date pursuant to the Merger Agreement shall have been
         consummated;

                  (ii) the Borrower shall have received at least $175,000,000 in
         gross cash proceeds from the issuance of the Senior Subordinated Notes;

<PAGE>
                                                                              62

                  (iii) Holdings shall have received at least $50,000,000 in
         gross cash proceeds from the issuance of the Holdings Discount Notes;
         and

                  (iv) the Administrative Agent shall have received satisfactory
         evidence that the fees and expenses to be incurred in connection with
         the Transactions and the financing thereof shall not exceed
         $25,000,000.

         (c) Ratable Holdings. The Lenders and the lenders under the Existing
     Credit Agreement shall have made such payments among themselves as directed
     by the Administrative Agent with the result that on the Closing Date the
     Revolving Credit Commitments are held ratably by the Revolving Credit
     Lenders and the Term Loans are held ratably by the Term Loan Lenders.

         (d) Pro Forma Financial Statements; Financial Statements. The Lenders
     shall have received (i) the Pro Forma Financial Statements, (ii) audited
     consolidated financial statements of each of Holdings and the Borrower
     referred to in the first sentence of each of subsections 4.1(b)(i) and
     4.1(b)(ii) and (iii) unaudited interim consolidated financial statements of
     each of Holdings and the Borrower for each fiscal month and quarterly
     period ended subsequent to the date of the latest applicable financial
     statements delivered pursuant to clause (ii) of this paragraph and, in the
     case of quarterly financial statements, such quarterly period ending at
     least 45 days prior to the Closing Date, and, in the case of monthly
     financial statements, such month ending at least 30 days prior to the
     Closing Date, and such financial statements shall be reasonably
     satisfactory to the Administrative Agent.

         (e) Approvals. All material governmental and third party approvals
     (including landlords' and other consents) necessary in connection with the
     Transactions, the continuing operations of SuperHoldings, Holdings, the
     Borrower and their respective Subsidiaries and the transactions
     contemplated hereby shall have been obtained and be in full force and
     effect, and all applicable waiting periods shall have expired without any
     action being taken or threatened by any competent authority which would
     restrain, prevent or otherwise impose adverse conditions on the
     Transactions or the financing contemplated hereby.

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

         (g) Fees. The Lenders, the Administrative Agent and the Arrangers shall
     have received all fees required to be paid, and all expenses for which
     invoices have been presented, on or before the Closing Date.

         (h) Projections. The Lenders shall have received satisfactory
     projections for fiscal years 2004 - 2011.

<PAGE>
                                                                              63

         (i) Solvency Analysis. The Lenders shall have received a reasonably
     satisfactory solvency opinion from an independent valuation firm
     satisfactory to the Administrative Agent which shall document the solvency
     of each of the Borrower and its subsidiaries and Holdings and its
     subsidiaries after giving effect to the Transactions.

         (j) Lien Searches. The Administrative Agent shall have received the
     results of a recent lien search in each of the jurisdictions of
     organization of the Loan Parties, and such search shall reveal no liens on
     any of the assets of SuperHoldings, Holdings or its Subsidiaries except for
     liens permitted by Section 7.3 or liens to be discharged on or prior to the
     Closing Date in a manner satisfactory to the Administrative Agent.

         (k) Consolidated EBITDA. The Administrative Agent and the Syndication
     Agent shall have received satisfactory evidence that the Consolidated
     EBITDA of the Borrower for the twelve-month period ended on January 31,
     2004 is equal to or greater than $58,000,000; provided that, the
     calculation of Consolidated EBITDA for purposes of this Section 5.1(k)
     shall include on a pro forma basis the Consolidated EBITDA of any Person or
     bookstore location acquired or disposed of by Holdings or its Subsidiaries
     during such period, including the effect of identified business synergies,
     for such period (assuming the consummation of each such acquisition and the
     incurrence or assumption of any Indebtedness in connection therewith
     occurred on the first day of such period).

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

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

                  (i) the legal opinion of Bingham McCutchen LLP, counsel to
         SuperHoldings, Holdings and the Borrower, substantially in the form of
         Exhibit F; and

                  (ii) the legal opinion of local counsel in Kansas.

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

         (n) Pledged Stock; Stock Power; Pledged Notes. The Administrative Agent
     shall have received (i) the certificates representing the shares of Capital
     Stock pledged pursuant to the Guarantee and Collateral Agreement, together
     with an undated stock power for each such certificate executed in blank by
     a duly authorized officer of the pledgor thereof and (ii) each promissory
     note pledged to the Administrative Agent pursuant to the Guarantee and
     Collateral Agreement endorsed (without recourse) in blank (or accompanied
     by an executed transfer form in blank satisfactory to the Administrative
     Agent) by the pledgor thereof.

         (o) Filings, Registrations and Recordings. Each document (including,
     without limitation, any Uniform Commercial Code financing statement)
     required by the Security

<PAGE>
                                                                              64

     Documents or under law or reasonably requested by the Administrative Agent
     to be filed, registered or recorded in order to create in favor of the
     Administrative Agent, for the benefit of the Lenders, a perfected Lien on
     the Collateral described therein, prior and superior in right to any other
     Person (other than with respect to Liens expressly permitted by Section
     7.3), shall be in proper form for filing, registration or recordation.

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

                  (ii) If requested by the Administrative Agent, the
     Administrative Agent shall have received (A) for each Mortgaged Property
     which is located in a designated flood zone, a policy of flood insurance
     which (1) covers any parcel of improved real property which is encumbered
     by any Mortgage (2) is written in an amount not less than the outstanding
     principal amount of the indebtedness secured by such Mortgage which is
     reasonably allocable to such real property or the maximum limit of coverage
     made available with respect to the particular type of property under the
     National Flood Insurance Act of 1968, whichever is less, and (3) has a term
     ending not later than the maturity of the Indebtedness secured by such
     Mortgage and (B) confirmation that the Borrower has received the notice
     required pursuant to Section 208(e)(3) of Regulation H of the Board.

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

         (q) Insurance. The Administrative Agent shall be satisfied with the
     insurance program to be maintained by Holdings and its Subsidiaries and
     shall have received satisfactory insurance certificates with respect
     thereto.

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

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                                                                              65

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

         (a) Representations and Warranties. Each of the representations and
     warranties made by any Loan Party in or pursuant to the Loan Documents
     shall be true and correct on and as of such date as if made on and as of
     such date.

         (b) No Default. No Default or Event of Default shall have occurred and
     be continuing on such date or after giving effect to the extensions of
     credit requested to be made on such date.

Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.

                        SECTION 6. AFFIRMATIVE COVENANTS

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

         6.1 Financial Statements. Furnish to the Administrative Agent and each
Lender:

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

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

         (b) (i) not later than 45 days after the end of each of the first three
     quarterly periods of each fiscal year of Holdings, the unaudited
     consolidated balance sheet of Holdings and its consolidated Subsidiaries as
     at the end of such quarter and the related unaudited consolidated
     statements of income and of cash flows for such quarter and the portion of
     the fiscal year through the end of such quarter, setting forth in each case
     in comparative form the figures for the previous year, certified by a
     Responsible Officer as

<PAGE>
                                                                              66

     being fairly stated in all material respects (subject to normal year-end
     audit adjustments); and

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

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

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

         (a) concurrently with the delivery of the financial statements referred
     to in Section 6.1(a), a certificate of the independent certified public
     accountants reporting on such financial statements stating that in making
     the examination necessary therefor no knowledge was obtained of any Default
     or Event of Default, except as specified in such certificate;

         (b) concurrently with the delivery of any financial statements pursuant
     to Section 6.1, (i) a certificate of a Responsible Officer stating that, to
     the best of each such Responsible Officer's knowledge, each Loan Party
     during such period has observed or performed all of its covenants and other
     agreements, and satisfied every condition, contained in this Agreement and
     the other Loan Documents to which it is a party to be observed, performed
     or satisfied by it, and that such Responsible Officer has obtained no
     knowledge of any Default or Event of Default except as specified in such
     certificate and (ii) in the case of quarterly or annual financial
     statements, (x) a Compliance Certificate containing all information
     necessary for determining compliance by SuperHoldings, Holdings, the
     Borrower and their respective Subsidiaries with the provisions of this
     Agreement referred to therein as of the last day of the fiscal quarter or
     fiscal year of the Borrower, as the case may be and (y) to the extent not
     previously disclosed to the Administrative Agent, a description of any
     change in the jurisdiction of organization of any Loan Party and a listing
     of any applications for registration and registered Intellectual Property
     acquired by any Loan Party since the date of the most recent list delivered
     pursuant to this clause (y) (or, in the case of the first such list so
     delivered, since the Closing Date);

         (c) (i) as soon as available, and in any event no later than 45 days
     after the end of each fiscal year of Holdings, a detailed consolidated
     budget for the following fiscal year (including a projected consolidated
     balance sheet of Holdings and its Subsidiaries as of

<PAGE>
                                                                              67

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

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

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

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

         (e) no later than 10 Business Days prior to the effectiveness thereof,
     copies of substantially final drafts of any proposed amendment, supplement,
     waiver or other modification with respect to the Senior Subordinated Note
     Indenture, the Holdings Discount Notes Indenture, the Existing Senior
     Subordinated Note Indenture or the Existing Holdings Discount Debentures
     Indenture;

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

<PAGE>
                                                                              68

     file with, the Securities and Exchange Commission or any successor or
     analogous Governmental Authority;

         (g) no later than 12 Business Days following each fiscal month of the
     Borrower, a completed Borrowing Base Certificate setting forth the
     Borrowing Base as of the close of business on the last day of such fiscal
     month, or, so long as the Total Revolving Extensions of Credit exceed
     $25,000,000, no later than 3 Business Days following each week, a completed
     Borrowing Base Certificate setting forth the Borrowing Base as of the close
     of business on the last day of such week, and at any other time requested
     by the Administrative Agent when the Administrative Agent reasonably
     believes that the most recently delivered Borrowing Base Certificate is
     materially inaccurate, as soon as reasonably available but in no event
     later than 5 Business Days after such request, a completed Borrowing Base
     Certificate setting forth the Borrowing Base as of the date so requested,
     and at any additional time at the option of the Borrower, a completed
     Borrowing Base Certificate setting forth the Borrowing Base as of the date
     so selected by the Borrower, in each case with supporting documentation and
     additional reports with respect to the Borrowing Base as the Administrative
     Agent may reasonably request; and

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

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

         6.4 Conduct of Business and Maintenance of Existence, etc. (a) (i)
Preserve, renew and keep in full force and effect its corporate existence and
(ii) take all reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its business, except,
in each case, as otherwise permitted by Section 7.4 and except, in the case of
clause (ii) above, to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect; and (b) comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.

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

         6.6 Inspection of Property; Books and Records; Discussions. (a) (i)
Keep proper books of records and account in which full, true and correct entries
in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to

<PAGE>
                                                                              69

its business and activities and (ii) permit representatives of any Lender upon
reasonable prior written notice to visit and inspect any of its properties and
examine and make abstracts from any of its books and records during the
Borrower's normal business hours and as often as may reasonably be desired and
to discuss the business, operations, properties and financial and other
condition of Holdings, the Borrower and their respective Subsidiaries with
officers and employees of Holdings, the Borrower and such Subsidiaries and with
their independent certified public accountants.

         (b) The Borrower will permit any representatives designated by the
Administrative Agent (including employees of the Administrative Agent or any
consultants, accountants, lawyers and appraisers retained by the Administrative
Agent) to conduct evaluations and appraisals of the Borrower's computation of
the Borrowing Base and the assets included in the Borrowing Base and such other
assets and other financial information and properties of the Borrower as the
Administrative Agent may require, as often as reasonably requested by the
Administrative Agent and with the consent of the Borrower, such consent not to
be unreasonably withheld; provided, however, that the Administrative Agent shall
not be entitled to conduct such evaluations and appraisals more frequently than
once per year unless (x) an Event of Default has occurred and is continuing or
(y) the Administrative Agent reasonably determines in consultation with the
Borrower that a material event or material change has occurred with respect to
the Loan Parties, their inventory practices or the performance of the Collateral
and that as a result of such event or change more frequent evaluations or
appraisals are required to effectively monitor the Borrowing Base, in which case
the Borrower will permit the Administrative Agent to conduct such evaluations
and appraisals at such reasonable times and as often as may be reasonably
requested, in each case so long as any Revolving Credit Loans or Letters of
Credit shall be outstanding or shall have been requested by the Borrower
hereunder. The Borrower shall pay all fees, including internally allocated fees
and expenses of employees of the Administrative Agent, and expenses as to which
invoices have been furnished of any such representatives retained by the
Administrative Agent to conduct any such evaluation or appraisal, including the
reasonable fees and expenses associated with collateral monitoring services
performed by the Collateral Agent Services Group of the Administrative Agent. To
the extent required by the Administrative Agent as a result of any such
evaluation, appraisal or monitoring, the Borrower also agrees to modify or
adjust the parameters for including Eligible Inventory and Eligible Accounts
Receivable in the Borrowing Base as the Administrative Agent shall reasonably
require based upon the results of such evaluation and appraisal, provided that
the Administrative Agent shall specify to the Borrower in writing the reasons
for any such additional adjustments.

         (c) In the event that historical accounting practices, systems or
reserves relating to the components of the Borrowing Base are modified in a
manner that is adverse to the Lenders in any material respect, the Borrower
agrees to maintain additional reserves (for purposes of computing the Borrowing
Base) in respect of the components of the Borrowing Base and make other
adjustments (which may include maintaining additional reserves, modifying the
advance rates or modifying the eligibility criteria for the components of the
Borrowing Base) to the computation of the Borrowing Base, in each case, as
reasonably requested by the Administrative Agent and with the consent of the
Borrower, which consent shall not be unreasonably withheld, to provide for such
modification.

<PAGE>
                                                                              70

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

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

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

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

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

         (e) any development or event which has had or could reasonably be
     expected to have a Material Adverse Effect;

         (f) as soon as possible after a Responsible Officer of the Borrower
     knows or reasonably should know thereof, the failure to make any rental
     payment when due and payable with respect to any property leased by the
     Borrower or any of its Domestic Subsidiaries at which Inventory of the
     Borrower or any of its Domestic Subsidiaries is located; and

         (g) any sale or other disposition by the Primary Investors of any
     Capital Stock having ordinary voting power in the election of directors of
     SuperHoldings or Holdings.

Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action SuperHoldings, Holdings, the Borrower or the
relevant Subsidiary proposes to take with respect thereto.

         6.8 Environmental Laws. (a) Comply in all material respects with, and
ensure compliance in all material respects by all tenants and subtenants, if
any, with, all applicable Environmental Laws, and obtain and comply in all
material respects with and maintain, and ensure that all tenants and subtenants
obtain and comply in all material respects with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws.

<PAGE>
                                                                              71

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

         6.9 Interest Rate Protection. In the case of the Borrower, within 90
days after the Closing Date, enter into Interest Rate Protection Agreements to
the extent necessary to provide that at least 50% of the aggregate principal
amount of the non-revolving long-term Indebtedness of Holdings and its
Subsidiaries is subject to either a fixed interest rate or interest rate
protection for a period of not less than two years, which Interest Rate
Protection Agreements shall have terms and conditions reasonably satisfactory to
the Administrative Agent.

         6.10 Additional Collateral, etc. (a) With respect to any Property
acquired after the Closing Date by SuperHoldings, Holdings, the Borrower or any
of their respective Subsidiaries (other than (x) any Property described in
paragraph (b), (c) or (d) below and (y) any Property subject to a Lien expressly
permitted by Section 7.3(g)) as to which the Administrative Agent, for the
benefit of the Lenders, does not have a perfected Lien, promptly (i) execute and
deliver to the Administrative Agent such amendments to the Guarantee and
Collateral Agreement or such other documents as the Administrative Agent deems
necessary or advisable in order to grant to the Administrative Agent, for the
benefit of the Lenders, a security interest in such Property and (ii) take all
actions necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a perfected first priority security interest in such
Property, including without limitation, the filing of Uniform Commercial Code
financing statements in such jurisdictions as may be required by the Guarantee
and Collateral Agreement or by law or as may be requested by the Administrative
Agent.

         (b) With respect to any interest in any real property having a value
(together with improvements thereof) of at least $1,000,000 acquired after the
Closing Date by SuperHoldings, Holdings, the Borrower or any of their respective
Subsidiaries (other than any such real property subject to a Lien expressly
permitted by Section 7.3(g)), promptly (i) execute and deliver a first priority
Mortgage in favor of the Administrative Agent, for the benefit of the Lenders,
covering such real property, (ii) if requested by the Administrative Agent,
provide the Lenders with (x) title and extended coverage insurance covering such
real property in an amount at least equal to the purchase price of such real
estate (or such other amount as shall be reasonably specified by the
Administrative Agent) as well as a current ALTA survey thereof, together with a
surveyor's certificate and (y) any consents or estoppels reasonably deemed
necessary or advisable by the Administrative Agent in connection with such
mortgage or deed of trust, each of the foregoing in form and substance
reasonably satisfactory to the Administrative Agent and (iii) if requested by
the Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.

         (c) With respect to any new Subsidiary (other than an Excluded Foreign
Subsidiary) created or acquired after the Closing Date (which, for the purposes
of this paragraph (c), shall include any existing Subsidiary that ceases to be
an Excluded Foreign Subsidiary) by SuperHoldings, Holdings, the Borrower or any
of its Subsidiaries, promptly (i) execute and deliver to the Administrative
Agent such amendments to the Guarantee and Collateral

<PAGE>
                                                                              72

Agreement as the Administrative Agent deems necessary or advisable in order to
grant to the Administrative Agent, for the benefit of the Lenders, a perfected
first priority security interest in the Capital Stock of such new Subsidiary
which is owned by SuperHoldings, Holdings, the Borrower or any of their
respective Subsidiaries, (ii) deliver to the Administrative Agent the
certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of
SuperHoldings, Holdings, the Borrower or such Subsidiary, as the case may be,
(iii) cause such new Subsidiary (A) to become a party to the Guarantee and
Collateral Agreement and (B) to take such actions necessary or advisable to
grant to the Administrative Agent for the benefit of the Lenders a perfected
first priority security interest in the Collateral described in the Guarantee
and Collateral Agreement with respect to such new Subsidiary (subject to any
existing liens on such Collateral securing Indebtedness existing at the time
such new Subsidiary is created or acquired, so long as such Indebtedness was not
incurred in anticipation of such creation or acquisition and such Lien is not
spread to encumber additional property of such Subsidiary), including, without
limitation, the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the Guarantee and Collateral Agreement or by
law or as may be requested by the Administrative Agent, and (iv) if requested by
the Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.

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

                         SECTION 7. NEGATIVE COVENANTS

         SuperHoldings, Holdings and the Borrower hereby jointly and severally
agree that, so long as the Commitments remain in effect, any Letter of Credit
remains outstanding or any Loan or other amount is owing to any Lender or the
Administrative Agent hereunder, each of SuperHoldings, Holdings and the Borrower
shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly:

         7.1 Financial Covenants.

<PAGE>
                                                                              73

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

<TABLE>
<CAPTION>
                                   Consolidated
Fiscal Quarter                    Leverage Ratio
--------------                    --------------
<S>                               <C>
June 30, 2004                       6.60 to 1.0
September 30, 2004                  6.60 to 1.0
December 31, 2004                   6.60 to 1.0
March 31, 2005                      6.50 to 1.0
June 30, 2005                       6.50 to 1.0
September 30, 2005                  6.25 to 1.0
December 31, 2005                   6.25 to 1.0
March 31, 2006                      6.00 to 1.0
June 30, 2006                       6.00 to 1.0
September 30, 2006                  5.65 to 1.0
December 31, 2006                   5.65 to 1.0
March 31, 2007                      5.25 to 1.0
June 30, 2007                       5.25 to 1.0
September 30, 2007                  4.85 to 1.0
December 31, 2007                   4.85 to 1.0
March 31, 2008                      4.50 to 1.0
June 30, 2008                       4.50 to 1.0
September 30, 2008                  4.25 to 1.0
December 31, 2008                   4.25 to 1.0
March 31, 2009                      4.00 to 1.0
June 30, 2009                       4.00 to 1.0
September 30, 2009                  3.75 to 1.0
December 31, 2009                   3.75 to 1.0
Thereafter                          3.50 to 1.0
</TABLE>

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

<TABLE>
<CAPTION>
                                           Consolidated Interest
Fiscal Quarter                                Coverage Ratio
--------------                             --------------------
<S>                                        <C>
June 30, 2004                                  2.00 to 1.0
September 30, 2004                             2.00 to 1.0
December 31, 2004                              2.00 to 1.0
March 31, 2005                                 2.25 to 1.0
June 30, 2005                                  2.25 to 1.0
September 30, 2005                             2.25 to 1.0
</TABLE>

<PAGE>
                                                                              74

<TABLE>
<CAPTION>
                                           Consolidated Interest
Fiscal Quarter                                Coverage Ratio
--------------                             --------------------
<S>                                        <C>
December 31, 2005                              2.25 to 1.0
March 31, 2006                                 2.50 to 1.0
June 30, 2006                                  2.50 to 1.0
September 30, 2006                             2.50 to 1.0
December 31, 2006                              2.50 to 1.0
March 31, 2007                                 2.50 to 1.0
June 30, 2007                                  2.50 to 1.0
September 30, 2007                             2.50 to 1.0
December 31, 2007                              2.50 to 1.0
March 31, 2008                                 2.50 to 1.0
June 30, 2008                                  2.50 to 1.0
September 30, 2008                             2.50 to 1.0
December 31, 2008                              2.50 to 1.0
March 31, 2009                                 2.50 to 1.0
June 30, 2009                                  2.75 to 1.0
September 30,2009                              2.75 to 1.0
December 31, 2009                              2.75 to 1.0
Thereafter                                     3.00 to 1.0
</TABLE>

; provided, that for the purposes of determining the Consolidated Interest
Coverage Ratio for the fiscal quarters of the Borrower ending June 30, 2004,
September 30, 2004 and December 31, 2004, Consolidated Interest Expense for the
relevant period shall be deemed to equal Consolidated Interest Expense for such
fiscal quarter (and, in the case of the latter two such determinations, all
fiscal quarters commencing after March 31, 2004) multiplied by 4, 2 and 4/3,
respectively.

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

<TABLE>
<CAPTION>
                                               Consolidated Fixed Charge
Fiscal Quarter                                       Coverage Ratio
--------------                                 -------------------------
<S>                                            <C>
June 30, 2004                                         1.15 to 1.0
September 30, 2004                                    1.15 to 1.0
December 31, 2004                                     1.15 to 1.0
March 31, 2005                                        1.15 to 1.0
June 30, 2005                                         1.15 to 1.0
September 30, 2005                                    1.20 to 1.0
December 31, 2005                                     1.20 to 1.0
March 31, 2006                                        1.20 to 1.0
June 30, 2006                                         1.20 to 1.0
September 30, 2006                                    1.25 to 1.0
</TABLE>

<PAGE>
                                                                              75

<TABLE>
<CAPTION>
                                               Consolidated Fixed Charge
Fiscal Quarter                                       Coverage Ratio
--------------                                 -------------------------
<S>                                            <C>
December 31, 2006                                     1.25 to 1.0
March 31, 2007                                        1.25 to 1.0
June 30, 2007                                         1.25 to 1.0
September 30, 2007                                    1.25 to 1.0
December 31, 2007                                     1.25 to 1.0
March 31, 2008                                        1.25 to 1.0
June 30, 2008                                         1.25 to 1.0
September 30, 2008                                    1.25 to 1.0
December 31, 2008                                     1.25 to 1.0
March 31, 2009                                        1.25 to 1.0
June 30, 2009                                         1.25 to 1.0
September 30, 2009                                    1.25 to 1.0
December 31, 2009                                     1.25 to 1.0
Thereafter                                            1.25 to 1.0
</TABLE>

; provided, that for the purposes of determining the Consolidated Fixed Charge
Coverage Ratio for the fiscal quarters of the Borrower ending June 30, 2004,
September 30, 2004 and December 31, 2004, Consolidated Interest Expense and
scheduled payments on account of principal of Indebtedness of the Borrower and
its Subsidiaries for the relevant period shall be deemed to equal Consolidated
Interest Expense and scheduled payments on account of principal of Indebtedness
of the Borrower and its Subsidiaries for such fiscal quarter (and, in the case
of the latter two such determinations, all fiscal quarters commencing after
March 31, 2004) multiplied by 4, 2 and 4/3, respectively.

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

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

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

         (c) Indebtedness secured by Liens permitted by Section 7.3(g) in an
     aggregate principal amount not to exceed $5,000,000 at any one time
     outstanding;

         (d) Capital Lease Obligations in an aggregate principal amount not to
     exceed $5,000,000 at any one time outstanding;

         (e) Indebtedness outstanding on the date hereof and listed on Schedule
     7.2(e) and any refinancings, refundings, renewals or extensions thereof
     (without any increase in the principal amount thereof);

         (f) guarantees made in the ordinary course of business by the Borrower
     or any of its Subsidiaries of obligations of any Wholly Owned Subsidiary
     Guarantor;

<PAGE>
                                                                              76

         (g) (i) Indebtedness of the Borrower in respect of the Senior
     Subordinated Notes in an aggregate principal amount not to exceed
     $175,000,000, (ii) any refinancing thereof with an issuance of debt
     securities of Holdings or the Borrower, provided that such securities
     (excluding the interest rate) are (x) taken as a whole, at least as
     favorable to Holdings, the Borrower and the Lenders as the Senior
     Subordinated Notes and (y) at least as subordinated to payment of the
     Obligations as the Senior Subordinated Notes and (iii) Guarantee
     Obligations of Holdings and of any Subsidiary Guarantor in respect of such
     Indebtedness of the Borrower; provided that such Guarantee Obligations are
     subordinated to the obligations of such Guarantor under the Loan Documents
     to the same extent as are the obligations of the Borrower in respect of the
     Senior Subordinated Notes or, if applicable, such refinancing securities;

         (h) (i) Indebtedness of Holdings in respect of the Holdings Discount
     Notes in an aggregate principal amount not to exceed $77,000,000, (ii) any
     refinancing thereof with (x) the proceeds of a substantially concurrent
     issuance of new common equity by Holdings or (y) an issuance of debt
     securities of the Borrower or Holdings, provided that such securities
     (excluding the interest rate) are (A) taken as a whole, at least as
     favorable to Holdings, the Borrower and the Lenders as the Holdings
     Discount Notes and (B) at least as subordinated to payment of the
     Obligations as the Holdings Discount Notes (in the case of a refinancing
     with an issuance of debt securities by Holdings) or the Senior Subordinated
     Notes (in the case of a refinancing with an issuance of debt securities by
     the Borrower), as applicable and (iii) Guarantee Obligations of Holdings
     and of any Subsidiary Guarantor in respect of such Indebtedness of the
     Borrower in the case of a refinancing with an issuance of debt securities
     of the Borrower; provided that such Guarantee Obligations are subordinated
     to the obligations of such Guarantor under the Loan Documents to the same
     extent as are the obligations of the Borrower in respect of the Senior
     Subordinated Notes or, if applicable, any refinancing securities permitted
     by Section 7.2(g)(ii);

         (i) additional Indebtedness of the Borrower or any of its Subsidiaries
     in an aggregate principal amount at any one time outstanding for the
     Borrower and all Subsidiaries) not to exceed $15,000,000 less the aggregate
     principal amount of Indebtedness incurred pursuant to clauses (c) and (d)
     above and (l) below at such time;

         (j) Indebtedness of the Borrower in respect of Interest Rate Protection
     Agreements;

         (k) (i) Indebtedness of the Borrower in respect of up to $22,000,000 of
     Existing Senior Subordinated Notes and subordinated Guarantee Obligation of
     any Subsidiary Guarantor in respect thereof; and (ii) Indebtedness of
     Holdings in respect of up to $15,500,000 of Existing Holdings Discount
     Debentures; and

         (l) Indebtedness consisting of the obligations of SuperHoldings or
     Holdings to pay the deferred portion of the purchase price of common stock
     or common stock options of Holdings or SuperHoldings from former officers
     or employees of SuperHoldings, Holdings, the Borrower or any of their
     respective Subsidiaries upon the termination of employment of such officer
     or employee in connection with purchases permitted by

<PAGE>
                                                                              77

     Section 7.6(d); provided that (i) interest thereon shall be a per annum
     market rate and shall not be payable more frequently than quarterly, (ii)
     except as permitted by Section 7.6(d), no principal or interest shall be
     paid with respect to each such obligation other than in-kind and (iii) each
     such obligation (x) is subordinated to the Obligations of the relevant Loan
     Party under the Loan Documents on terms satisfactory to the Administrative
     Agent, (y) has a maturity that extends beyond September 15, 2011 (it being
     understood that a portion of such obligations may have a shorter maturity
     date as long as the payments that will become due with respect to such
     obligations shall not exceed the amount permitted to be paid in cash
     pursuant to Section 7.6(d)(ii)) and (z) is evidenced by a promissory note
     having terms satisfactory to the Administrative Agent; provided further
     that any Indebtedness incurred pursuant to this Section 7.2(l) shall reduce
     the amount of Indebtedness permitted by Sections 7.2(i).

Notwithstanding the foregoing, no Subsidiary of Holdings will create, incur,
assume or suffer to exist any Guarantee Obligation in respect of any
Indebtedness of Holdings.

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

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

         (b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
     or other like Liens arising in the ordinary course of business which are
     not overdue for a period of more than 60 days or which are being contested
     in good faith by appropriate proceedings;

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

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

         (e) easements, rights-of-way, restrictions and other similar
     encumbrances incurred in the ordinary course of business which, in the
     aggregate, are not substantial in amount and which do not in any case
     materially detract from the value of the Property subject thereto or
     materially interfere with the ordinary conduct of the business of the
     Borrower or any of its Subsidiaries;

         (f) Liens in existence on the date hereof listed on Schedule 7.3(f),
     securing Indebtedness permitted by Section 7.2(e), provided that no such
     Lien is spread to cover any additional Property after the Closing Date and
     that the amount of Indebtedness secured thereby is not increased;

         (g) Liens securing Indebtedness of the Borrower or any other Subsidiary
     incurred pursuant to Section 7.2(c) to finance the acquisition of fixed or
     capital assets, provided

<PAGE>
                                                                              78

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

         (h) Liens created pursuant to the Security Documents;

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

         (j) Liens not otherwise permitted by this Section 7.3 so long as
     neither (i) the aggregate outstanding principal amount of the obligations
     secured thereby nor (ii) the aggregate fair market value (determined as of
     the date such Lien is incurred) of the assets subject thereto exceeds (as
     to the Borrower and all Subsidiaries) $1,000,000 at any one time;

         (k) any covenants, easements, restrictions, encumbrances and exceptions
     contained in any mortgagee's title insurance policy delivered in connection
     with the Existing Credit Agreement or referred to in Section 5.1(o)(i);

         (l) any existing leases or subleases of all or any portion of a
     Mortgaged Property and any renewals and extensions thereof, any leases or
     subleases entered into upon the expiration or termination of any such lease
     or sublease, and any leases or subleases hereafter entered into of all or
     any portion of a Mortgaged Property not required by the Borrower for the
     operation of its business; and

         (m) Liens, if any, consisting of amounts escrowed to redeem the
     Existing Senior Subordinated Notes or Existing Holdings Discount
     Debentures.

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

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

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

         (c) Holdings may consummate the Merger; and

         (d) SuperHoldings may merge with and into Holdings, with Holdings as
     the surviving corporation; provided that the first priority security
     interest in the Capital Stock

<PAGE>
                                                                              79

     of the Borrower in favor of the Administrative Agent for the ratable
     benefit of the Lenders is maintained.

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

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

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

         (c) Dispositions permitted by Section 7.4(b);

         (d) the sale or issuance of any Subsidiary's Capital Stock to the
     Borrower or any Wholly Owned Subsidiary Guarantor or the sale or issuance
     of the Borrower's Capital Stock to Holdings, in each case, so long as such
     Capital Stock is pledged to the Administrative Agent for the benefit of the
     Lenders to the extent required by the Guarantee and Collateral Agreement;
     and

         (e) the sale of other assets at fair market value provided that (i)
     such assets have a fair market value not to exceed $2,000,000 for any
     fiscal year of the Borrower and not exceeding $5,000,000 in the aggregate
     from the Closing Date and (ii) the consideration received by Holdings, the
     Borrower and their respective Subsidiaries for each such sale of assets
     shall not be less than 75% cash, provided, that the requirements of Section
     2.12(d) are complied with in connection therewith.

         7.6 Limitation on Dividends. Declare or pay any dividend (other than
dividends payable solely in common stock of the Person making such dividend) on,
or make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any shares of any class of Capital Stock of SuperHoldings,
Holdings, the Borrower or any of their respective Subsidiaries or any warrants
or options to purchase any such Capital Stock, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of Holdings, the
Borrower or any of their respective Subsidiaries (collectively, "Restricted
Payments"), except that:

         (a) any Subsidiary of the Borrower may make Restricted Payments to the
     Borrower or any Wholly Owned Subsidiary Guarantor (and if such Subsidiary
     is not a Wholly Owned Subsidiary of the Borrower, to its other holders of
     Capital Stock on a pro rata basis, provided that any such Restricted
     Payment to such other holders of Capital Stock be attributable only to cash
     flows of such Subsidiary);

         (b) so long as no Default or Event of Default shall have occurred and
     be continuing after giving effect to the payment of any such dividend or
     investment, the Borrower may pay dividends to Holdings or make investments
     in Holdings to permit Holdings to pay scheduled cash interest payments on
     the Holdings Discount Notes or any

<PAGE>
                                                                              80

     refinancing thereof permitted by Section 7.2(h)(ii) and, if still
     outstanding, on the Existing Holdings Discount Debentures) or to permit
     Holdings to make any payments permitted by Section 7.9(a)(ii) in an amount
     not to exceed the amount of interest required to be paid in cash by the
     terms of the Holdings Discount Notes Indenture or any refinancing thereof
     permitted by Section 7.2(h)(ii) or the amount of such payment made pursuant
     to Section 7.9(a)(ii), as applicable;

         (c) the Borrower may pay dividends to Holdings or make investments in
     Holdings to permit Holdings, and Holdings may pay dividends to
     SuperHoldings or make investments in SuperHoldings to permit SuperHoldings,
     to (i) pay corporate overhead expenses incurred in the ordinary course of
     business not to exceed $250,000 in any fiscal year and (ii) pay any taxes
     which are due and payable by SuperHoldings, Holdings and the Borrower as
     part of a consolidated group;

         (d) so long as no Default or Event of Default shall have occurred and
     be continuing, (i) the Borrower may pay dividends to Holdings or make
     investments in Holdings (and, if applicable, Holdings may use such proceeds
     to pay dividends to SuperHoldings or make investments in SuperHoldings) to
     permit Holdings to purchase Holdings' common stock (or, if applicable, to
     permit SuperHoldings to purchase SuperHolding's common stock) or common
     stock options from present or former officers or employees, or the estate,
     heirs or legatees of such former officers or employees, of Holdings, the
     Borrower or any of their respective Subsidiaries upon the death, disability
     or termination of employment of such officer or employee, and (ii)
     SuperHoldings and Holdings may pay principal and interest on the
     Indebtedness permitted by Section 7.2(l), and the Borrower may pay
     dividends to Holdings or make investments in Holdings (and, if applicable,
     Holdings may use such proceeds to pay dividends to SuperHoldings or make
     investments in SuperHoldings) to permit Holdings to (or, if applicable, to
     permit SuperHoldings to) pay principal and interest on the Indebtedness
     permitted by Section 7.2(l), provided, that the aggregate amount of
     payments under this paragraph (d) after the Closing Date shall not exceed
     $1,000,000 per annum and $2,000,000 in the aggregate, net of any cash
     proceeds received by Holdings (or, if applicable, SuperHoldings) and
     contributed to the Borrower in connection with resales of any common stock
     or common stock options so purchased;

         (e) SuperHoldings, Holdings, the Borrower or any Subsidiary of the
     foregoing may make any Restricted Payment required to be made on or prior
     to the Closing Date pursuant to the Merger Agreement; and

         (f) SuperHoldings or Holdings may make any Restricted Payment permitted
     by Section 7.2(l).

         7.7 Limitation on Capital Expenditures. Make or commit to make (by way
of the acquisition of securities of a Person or otherwise) any Capital
Expenditure, except:

         (a) in any fiscal year, Capital Expenditures of the Borrower and its
     Subsidiaries in the ordinary course of business not exceeding the amount
     set forth below opposite such fiscal year:

<PAGE>
                                                                              81

<TABLE>
<CAPTION>
Fiscal Year               Capital Expenditures
-----------               --------------------
<S>                       <C>
   2004                        $6,500,000
   2005                         8,500,000
   2006                         8,500,000
   2007                         9,500,000
   2008                        11,000,000
   2009                        13,000,000
   2010                        14,000,000
   2011                        16,000,000
</TABLE>

     ; provided, that (i) 100% of any such amount not so expended in the fiscal
     year for which it is permitted, may be carried over for expenditure in the
     next succeeding fiscal year and (ii) Capital Expenditures made pursuant to
     this clause (a) during any fiscal year shall be deemed made, first, in
     respect of amounts carried over from the prior fiscal year pursuant to
     subclause (i) above and, second, in respect of amounts permitted for such
     fiscal year as provided above;

         (b) in addition to the amounts permitted by clause (a) above, Capital
     Expenditures of the Borrower and its Subsidiaries in the ordinary course of
     business not exceeding an aggregate of $2,000,000 in the aggregate from the
     Closing Date; and

         (c) Capital Expenditures permitted pursuant to Section 7.8.

         7.8 Limitation on Investments, Loans and Advances. Make any advance,
loan, extension of credit (by way of guaranty or otherwise) or capital
contribution to, or purchase any stock, bonds, notes, debentures or other
securities of or any assets constituting all or a material part of a business
unit of, or make any other investment in, any Person, except:

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

         (b) investments in Cash Equivalents;

         (c) Guarantee Obligations permitted by Section 7.2;

         (d) loans and advances to employees of Holdings, the Borrower or its
     Subsidiaries in the ordinary course of business (including, without
     limitation, for travel, entertainment and relocation expenses) in an
     aggregate amount for Holdings, the Borrower and its Subsidiaries not to
     exceed $500,000 at any one time outstanding;

         (e) investments made by the Borrower or any of its Subsidiaries with
     the proceeds of any Reinvestment Deferred Amount;

         (f) investments by Holdings, the Borrower or any of its Subsidiaries in
     the Borrower or any Person that, prior to such investment, is a Wholly
     Owned Subsidiary Guarantor; and

<PAGE>
                                                                              82

         (g) acquisitions by the Borrower or any of its Subsidiaries of the
     Capital Stock of, or assets of, entities engaged in similar lines of
     business as the Borrower and its Subsidiaries on the Closing Date, provided
     that (i) the aggregate purchase price for all such acquisitions occurring
     after the Closing Date shall not exceed $65,000,000, (ii) the aggregate
     purchase price for all such acquisitions shall not exceed $15,000,000 in
     any fiscal year of the Borrower, (iii) no Default or Event of Default shall
     have occurred or be continuing after giving effect to any such acquisition,
     (iv) no Indebtedness shall be assumed by the Borrower or any of its
     Subsidiaries in connection with any such acquisition except to the extent
     otherwise permitted pursuant to this Agreement and (v) the Borrower shall
     be in pro forma compliance with the covenants set forth in Section 7.1
     after giving effect to any such acquisition;

         (h) investments existing on the Closing Date and listed on Schedule
     7.8;

         (i) investments and advances made by the Borrower in Holdings to the
     extent permitted by Section 7.6(b), (c) or (d); and

         (j) other investments in an aggregate amount not to exceed $5 million
     at any one time outstanding.

         7.9 Limitation on Optional Payments and Modifications of Debt
Instruments, etc. (a) Make or offer to make any payment, prepayment, repurchase,
redemption or defeasance of or otherwise defease or segregate funds with respect
to the Senior Subordinated Notes, the Holdings Discount Notes, the Existing
Senior Subordinated Notes or the Existing Holding Discount Debentures (other
than scheduled interest payments required to be made in cash), except (i) in
connection with the issuance of any refinancing Indebtedness permitted by
Section 7.2(g)(ii) or Section 7.2(h)(ii) or from the proceeds of a substantially
concurrent issuance of new common equity of Holdings and (ii) so long as (A) no
proceeds of Revolving Extensions of Credit are used to make such payment,
prepayment, repurchase, redemption, defeasance or segregation of funds, except
in aggregate amount not to exceed the portion of the Optional Payment Amount
which has been applied to the prepayment of Revolving Credit Loans pursuant to
Section 2.18(d) and (B) after giving pro forma effect to such payment,
prepayment, repurchase, redemption, defeasance or segregation of funds, (I) the
Consolidated Senior Leverage Ratio of the Borrower is less than 2.00 to 1, (II)
the Borrower is in pro forma compliance with the financial covenants set forth
in Section 7.1 and (III) no Default or Event of Default shall have occurred and
be continuing, in an aggregate amount since the Closing Date for the Senior
Subordinated Notes, the Holdings Discount Debentures and any refinancing
Indebtedness permitted by Section 7.2(g)(ii) and Section 7.2(h)(ii) not in
excess of the Optional Payment Amount;

         (b) amend, modify, waive or otherwise change, or consent or agree to
any amendment, modification, waiver or other change to, any of the terms of the
Senior Subordinated Notes, the Holdings Discount Notes, the Existing Senior
Subordinated Notes or the Existing Holdings Discount Debentures or any
refinancing Indebtedness permitted by Section 7.2(g)(ii) or Section 7.2(h)(ii)
(other than any such amendment, modification, waiver or other change which (i)
would extend the maturity or reduce the amount of any payment of principal
thereof or which

<PAGE>
                                                                              83

would reduce the rate or extend the date for payment of interest thereon and
(ii) does not involve the payment of a consent fee);

         (c) designate any Indebtedness other than the Obligations as
"Designated Senior Indebtedness" for the purposes of the Senior Subordinated
Note Indenture or any refinancing Indebtedness permitted by Section 7.2(g)(ii)
or Section 7.2(h)(ii) or the Existing Senior Subordinated Note Indenture; or

         (d) amend its certificate of incorporation in any manner determined by
the Administrative Agent to be adverse to the Lenders without the prior written
consent of the Required Lenders.

         Notwithstanding anything to the contrary contained in this Agreement,
prior to June 30, 2004, (i) the Borrower may optionally redeem the Existing
Senior Subordinated Notes in accordance with the terms thereof and (ii) Holdings
may optionally redeem the Existing Holdings Discount Debentures in accordance
with the terms thereof, and in each case, make all required payments to the
holders thereof in accordance with such redemption.

         7.10 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than Holdings,
the Borrower or any Wholly Owned Subsidiary Guarantor) unless such transaction
is (a) otherwise permitted under this Agreement, (b) in the ordinary course of
business of Holdings, the Borrower or such Subsidiary, as the case may be, and
(c) upon fair and reasonable terms no less favorable to Holdings, the Borrower
or such Subsidiary, as the case may be, than it would obtain in a comparable
arm's length transaction with a Person which is not an Affiliate; provided that
Holdings and its Subsidiaries may consummate the transactions required to be
consummated on the Closing Date pursuant to the Merger Agreement.

         7.11 Limitation on Sales and Leasebacks. Enter into any arrangement
with any Person providing for the leasing by SuperHoldings, Holdings, the
Borrower or any of their respective Subsidiaries of real or personal property
owned by Holdings, the Borrower or any of their respective Subsidiaries on the
Closing Date which has been or is to be sold or transferred by SuperHoldings,
Holdings, the Borrower or such Subsidiary to such Person or to any other Person
to whom funds have been or are to be advanced by such Person on the security of
such property or rental obligations of SuperHoldings, Holdings, the Borrower or
such Subsidiary. Notwithstanding the foregoing, the Borrower or any its
Subsidiaries may enter into any such arrangement described in the immediately
preceding sentence with respect to any property acquired by the Borrower or such
Subsidiary after the Closing Date to the extent otherwise permitted pursuant to
this Agreement, provided that such arrangement is entered into within 90 days
after such property is acquired by the Borrower or such Subsidiary.

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

<PAGE>
                                                                              84

         7.13 Limitation on Negative Pledge Clauses. Enter into or suffer to
exist or become effective any agreement which prohibits or limits the ability of
SuperHoldings, Holdings, the Borrower or any of their respective Subsidiaries to
create, incur, assume or suffer to exist any Lien upon any of its Property or
revenues, whether now owned or hereafter acquired, to secure the Obligations or,
in the case of any guarantor, its obligations under the Guarantee and Collateral
Agreement, other than (a) this Agreement and the other Loan Documents, (b) the
Holdings Discount Notes Indenture and the Senior Subordinated Note Indenture or
any refinancing thereof permitted by Section 7.2(g) or Section 7.2(h) and (c)
any agreements governing any purchase money Liens or Capital Lease Obligations
otherwise permitted hereby (in which case, any prohibition or limitation shall
only be effective against the assets financed thereby).

         7.14 Limitation on Restrictions on Subsidiary Distributions. Enter into
or suffer to exist or become effective any consensual encumbrance or restriction
on the ability of any Subsidiary of the Borrower to (a) pay dividends or make
any other distributions in respect of any Capital Stock of such Subsidiary held
by, or pay any Indebtedness owed to, the Borrower or any other Subsidiary of the
Borrower, (b) make loans or advances to the Borrower or any other Subsidiary of
the Borrower or (c) transfer any of its assets to the Borrower or any other
Subsidiary of the Borrower, except for such encumbrances or restrictions
existing under or by reason of (i) any restrictions existing under the Loan
Documents, the Holdings Discount Notes Indenture or the Senior Subordinated Note
Indenture or any refinancing thereof permitted by Section 7.2(g) or Section
7.2(h) and (ii) any restrictions with respect to a Subsidiary imposed pursuant
to an agreement which has been entered into in connection with the Disposition
of all or substantially all of the Capital Stock or assets of such Subsidiary.

         7.15 Limitation on Lines of Business. Enter into any business, either
directly or through any Subsidiary, except for those businesses in which the
Borrower and its Subsidiaries are engaged on the date of this Agreement or which
are related, ancillary or complementary thereto.

         7.16 Merger Agreement. Amend, modify, waive or supplement the Merger
Agreement in a manner which is materially adverse to the Lenders without the
consent of the Administrative Agent.

         7.17 Limitation on Activities of Holdings and SuperHoldings. (a) In the
case of Holdings, notwithstanding anything to the contrary in this Agreement or
any other Loan Document, (i) conduct, transact or otherwise engage in, or commit
to conduct, transact or otherwise engage in, any business or operations other
than those incidental to its ownership of the Capital Stock of the Borrower,
(ii) incur, create, assume or suffer to exist any Indebtedness or other
liabilities or financial obligations, except (A) nonconsensual obligations
imposed by operation of law, (B) pursuant to the Loan Documents to which it is a
party, (C) obligations with respect to its Capital Stock and (D) the Holdings
Discount Notes or any refinancing thereof permitted by Section 7.2(h)(ii) or the
Existing Holdings Discount Debentures, (iii) own, lease, manage or otherwise
operate any properties or assets (including cash (other than cash received from
the Borrower in accordance with Section 7.6 pending application in the manner
contemplated by said Section) and cash equivalents) other than the ownership of
shares of Capital Stock of the Borrower or (iv) own the Capital Stock of any
Subsidiary (other than the

<PAGE>
                                                                              85

Borrower and its Subsidiaries). Notwithstanding the foregoing, Holdings may
refinance the Holdings Discount Notes to the extent permitted by Sections 7.2
and 7.9.

         (b) In the case of SuperHoldings, notwithstanding anything to the
contrary in this Agreement or any other Loan Document, (i) conduct, transact or
otherwise engage in, or commit to conduct, transact or otherwise engage in, any
business or operations other than those incidental to its ownership of the
Capital Stock of Holdings, (ii) incur, create, assume or suffer to exist any
Indebtedness or other liabilities or financial obligations, except (A)
nonconsensual obligations imposed by operation of law, (B) pursuant to the Loan
Documents to which it is a party and (C) obligations with respect to its Capital
Stock and (iii) own, lease, manage or otherwise operate any properties or assets
(including cash (other than cash received from Holdings in accordance with
Section 7.6 pending application in the manner contemplated by said Section) and
cash equivalents) other than the ownership of shares of Capital Stock of
Holdings or (iv) own the Capital Stock of any Subsidiary (other than Holdings
and its Subsidiaries).

                          SECTION 8. EVENTS OF DEFAULT

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

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

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

         (c) Any Loan Party shall default in the observance or performance of
     any agreement contained in clause (i) or (ii) of Section 6.4(a) (with
     respect to Holdings and the Borrower only), Section 6.7(a) or Section 7; or

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

         (e) SuperHoldings, Holdings, the Borrower or any of their respective
     Subsidiaries shall (i) default in making any payment of any principal of
     any Indebtedness (including, without limitation, any Guarantee Obligation,
     but excluding the Loans) on the scheduled or original due date with respect
     thereto; or (ii) default in making any payment of any interest on any such
     Indebtedness beyond the period of grace, if any, provided in the instrument
     or agreement under which such Indebtedness was created; or (iii) default in
     the observance or performance of any other agreement or condition relating
     to any such Indebtedness or contained in any instrument or agreement
     evidencing, securing or

<PAGE>
                                                                              86

     relating thereto, or any other event shall occur or condition exist, the
     effect of which default or other event or condition is to cause, or to
     permit the holder or beneficiary of such Indebtedness (or a trustee or
     agent on behalf of such holder or beneficiary) to cause, with the giving of
     notice if required, such Indebtedness to become due prior to its stated
     maturity or (in the case of any such Indebtedness constituting a Guarantee
     Obligation) to become payable; provided, that a default, event or condition
     described in clause (i), (ii) or (iii) of this paragraph (e) shall not at
     any time constitute an Event of Default unless, at such time, one or more
     defaults, events or conditions of the type described in clauses (i), (ii)
     and (iii) of this paragraph (e) shall have occurred and be continuing with
     respect to Indebtedness the outstanding principal amount of which exceeds
     in the aggregate $2,500,000; or

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

         (g) (i) Any Person shall engage in any "prohibited transaction" (as
     defined in Section 406 of ERISA or Section 4975 of the Code) involving any
     Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
     of ERISA), whether or not waived, shall exist with respect to any Plan or
     any Lien in favor of the PBGC or a Plan shall arise on the assets of the
     Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
     occur with respect to, or proceedings shall commence to have a trustee
     appointed, or a trustee shall be appointed, to administer or to terminate,
     any Single Employer Plan, which Reportable Event or commencement of
     proceedings or appointment of a trustee is, in the reasonable opinion of
     the Required Lenders, likely to

<PAGE>
                                                                              87

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

         (h) One or more judgments or decrees shall be entered against
     SuperHoldings, Holdings, the Borrower or any of their respective
     Subsidiaries involving in the aggregate a liability (not paid or fully
     covered by insurance as to which the relevant insurance company has
     acknowledged coverage) of $2,500,000 or more, and all such judgments or
     decrees shall not have been vacated, discharged, stayed or bonded pending
     appeal within 30 days from the entry thereof; or

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

         (j) (i) Any Person or "group" (within the meaning of Section 13(d) or
     14(d) of the Securities Exchange Act of 1934, as amended) other than the
     Primary Investors (A) shall have acquired beneficial ownership of a greater
     percentage of SuperHoldings' voting common stock than is then held by the
     Primary Investors or (B) shall obtain the power (whether or not exercised)
     to elect a majority of the Borrower's, Holding's or SuperHoldings's
     directors (for purposes of this clause (i), and clause (ii)(B) below, any
     shares of voting stock that are required to be voted for a nominee of any
     Primary Investor shall be deemed to be held by such Primary Investor for
     purposes of determining the voting power held by any Person); or (ii) (A)
     the board of directors of the Borrower, Holdings or SuperHoldings shall not
     consist of a majority of Continuing Directors; as used in this paragraph
     "Continuing Directors" shall mean the directors the Borrower, Holdings or
     SuperHoldings, as the case may be, on the Closing Date and each other
     director, if such other director's nomination for election to the board of
     directors of the Borrower, Holdings or SuperHoldings is recommended by a
     majority of the then Continuing Directors or (B) the Primary Investors
     shall cease to be able to elect a majority of the board of directors of (x)
     SuperHoldings, (y) through SuperHoldings, Holdings, or (z) through
     Holdings, the Borrower; or (iii) the Primary Investors shall cease to own
     legally and beneficially at least 51% of each outstanding class of Capital
     Stock having ordinary voting power in the election of directors of
     SuperHoldings; or (iv) prior to the merger contemplated by Section 7.4(d),
     SuperHoldings shall cease to own legally and beneficially 90% of each class
     of Capital Stock of Holdings, free of Liens (other than Liens created by
     the Security Documents); or (v) Holdings shall cease to own legally and
     beneficially 100% of each class of Capital Stock of the Borrower, free of
     Liens (other than Liens created by the Security Documents); or (vi) a
     "change of control" as defined

<PAGE>
                                                                              88

     in the Senior Subordinated Note Indenture or the Holdings Discount Notes
     Indenture shall occur; or

         (k) The Senior Subordinated Notes, any refinancing thereof pursuant to
     Section 7.2(g)(ii) or the guarantees thereof shall cease, for any reason,
     to be validly subordinated to the Obligations or the obligations of the
     Guarantors under the Loan Documents, as the case may be, as provided in the
     Senior Subordinated Note Indenture or any other applicable documentation,
     or any Loan Party shall so assert;

then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
Holdings or SuperHoldings, automatically the Commitments shall immediately
terminate and the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents (including,
without limitation, all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder) shall immediately become due and payable, and (B)
if such event is any other Event of Default, either or both of the following
actions may be taken: (i) with the consent of the Majority Revolving Credit
Facility Lenders, the Administrative Agent may, or upon the request of the
Majority Revolving Credit Facility Lenders, the Administrative Agent shall, by
notice to the Borrower declare the Revolving Credit Commitments to be terminated
forthwith, whereupon the Revolving Credit Commitments shall immediately
terminate; and (ii) with the consent of the Required Lenders, the Administrative
Agent may, or upon the request of the Required Lenders, the Administrative Agent
shall, by notice to the Borrower, declare the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement and the other
Loan Documents (including, without limitation, all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder) to be due and payable
forthwith, whereupon the same shall immediately become due and payable. With
respect to all Letters of Credit with respect to which presentment for honor
shall not have occurred at the time of an acceleration pursuant to this
paragraph, the Borrower shall at such time deposit in a cash collateral account
opened by the Administrative Agent an amount equal to the aggregate then undrawn
and unexpired amount of such Letters of Credit. Amounts held in such cash
collateral account shall be applied by the Administrative Agent to the payment
of drafts drawn under such Letters of Credit, and the unused portion thereof
after all such Letters of Credit shall have expired or been fully drawn upon, if
any, shall be applied to repay other obligations of the Borrower hereunder and
under the other Loan Documents. After all such Letters of Credit shall have
expired or been fully drawn upon, all Reimbursement Obligations shall have been
satisfied and all other obligations of the Borrower hereunder and under the
other Loan Documents shall have been paid in full, the balance, if any, in such
cash collateral account shall be returned to the Borrower (or such other Person
as may be lawfully entitled thereto). Except as expressly provided above in this
Section, presentment, demand, protest and all other notices of any kind are
hereby expressly waived by SuperHoldings, Holdings and the Borrower.

                             SECTION 9. THE AGENTS

         9.1 Appointment. Each Lender hereby irrevocably designates and appoints
the Administrative Agent as the agent of such Lender under this Agreement and
the other Loan

<PAGE>
                                                                              89

Documents, and each such Lender irrevocably authorizes the Administrative Agent,
in such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Administrative Agent by the terms
of this Agreement and the other Loan Documents, together with such other powers
as are reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement, the Administrative Agent shall have no
duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.

         9.2 Delegation of Duties. The Administrative Agent may execute any of
its duties under this Agreement and the other Loan Documents by or through
agents or attorneys in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.

         9.3 Exculpatory Provisions. Neither any Agent nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of any Loan Party a party thereto to perform its obligations
hereunder or thereunder. The Agents shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.

         9.4 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any instrument,
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Loan Parties), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, if so specified
by this Agreement, all Lenders) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any

<PAGE>
                                                                              90

and all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
and the other Loan Documents in accordance with a request of the Required
Lenders (or, if so specified by this Agreement, all Lenders), and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Loans.

         9.5 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender,
Holdings or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders (or, if so specified by this
Agreement, all Lenders); provided that unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.

         9.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that neither the Agents nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or affiliates have made any
representations or warranties to it and that no act by any Agent hereinafter
taken, including any review of the affairs of a Loan Party or any affiliate of a
Loan Party, shall be deemed to constitute any representation or warranty by any
Agent to any Lender. Each Lender represents to the Agents that it has,
independently and without reliance upon any Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon any Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall have no duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party which may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.

         9.7 Indemnification. The Lenders agree to indemnify each Agent in its
capacity as such (to the extent not reimbursed by Holdings or the Borrower and
without limiting the obligation of Holdings or the Borrower to do so), ratably
according to their respective Aggregate Exposure Percentages in effect on the
date on which indemnification is sought under

<PAGE>
                                                                              91

this Section 9.7 (or, if indemnification is sought after the date upon which the
Commitments shall have terminated and the Loans shall have been paid in full,
ratably in accordance with such Aggregate Exposure Percentages immediately prior
to such date), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including, without limitation, at
any time following the payment of the Loans) be imposed on, incurred by or
asserted against such Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements which are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from such Agent's
gross negligence or willful misconduct. The agreements in this Section 9.7 shall
survive the payment of the Loans and all other amounts payable hereunder.

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

         9.9 Successor Administrative Agent. The Administrative Agent may resign
as Administrative Agent upon 10 days' notice to the Lenders and the Borrower. If
the Administrative Agent shall resign as Administrative Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, which successor agent
shall (unless an Event of Default under Section 8(a) or Section 8(f) with
respect to the Borrower shall have occurred and be continuing) be subject to
approval by the Borrower (which approval shall not be unreasonably withheld or
delayed), whereupon such successor agent shall succeed to the rights, powers and
duties of the Administrative Agent, and the term "Administrative Agent" shall
mean such successor agent effective upon such appointment and approval, and the
former Administrative Agent's rights, powers and duties as Administrative Agent
shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. If no successor agent has accepted appointment as
Administrative Agent by the date that is 10 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective, and the
Lenders shall assume and perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above. After any retiring Agent's resignation as Agent,
the provisions of this Section 9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement and
the other Loan Documents.

         9.10 Authorization to Release Liens. The Administrative Agent is hereby
irrevocably authorized by each of the Lenders to release any Lien covering any
Property of the

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                                                                              92

Borrower or any of its Subsidiaries that is the subject of a Disposition which
is permitted by this Agreement or which has been consented to in accordance with
Section 10.1.

         9.11 Co-Documentation Agents and Syndication Agent. Neither the
Co-Documentation Agents nor the Syndication Agent shall have any duties or
responsibilities hereunder in its capacity as such.

                           SECTION 10. MISCELLANEOUS

         10.1 Amendments and Waivers. Neither this Agreement, any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 10.1. The
Required Lenders and each Loan Party party to the relevant Loan Document may, or
(with the written consent of the Required Lenders) the Administrative Agent and
each Loan Party party to the relevant Loan Document may, from time to time, (a)
enter into written amendments, supplements or modifications hereto and to the
other Loan Documents for the purpose of adding any provisions to this Agreement
or the other Loan Documents or changing in any manner the rights of the Lenders
or of the Loan Parties hereunder or thereunder or (b) waive, on such terms and
conditions as the Required Lenders, or the Administrative Agent, as the case may
be, may specify in such instrument, any of the requirements of this Agreement or
the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall (i) forgive the principal amount or extend the
final scheduled date of maturity of any Loan, extend the scheduled date of any
amortization payment in respect of any Term Loan, reduce the stated rate of any
interest, fee or letter of credit commission payable hereunder or extend the
scheduled date of any payment thereof, extend the duration of any Interest
Period beyond six months, or increase the amount or extend the expiration date
of any Lender's Revolving Credit Commitment, in each case without the consent of
each Lender directly affected thereby; (ii) amend, modify or waive any provision
of this Section 10.1 or reduce any percentage specified in the definition of
Required Lenders or Required Prepayment Lenders, consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement and the other Loan Documents, release all or substantially all of the
Collateral or release Holdings or, while SuperHoldings remains in existence,
SuperHoldings or all or substantially all of the Subsidiary Guarantors from
their obligations under the Guarantee and Collateral Agreement, in each case
without the written consent of all Lenders; (iii) reduce the percentage
specified in the definition of Majority Facility Lenders without the written
consent of all Lenders under each affected Facility; (iv) amend, modify or waive
any provision of Section 9 without the written consent of the Administrative
Agent; (v) amend, modify or waive any provision of Section 3 without the written
consent of the Issuing Lender; (vii) amend, modify or waive any provision of
Section 2.6 or 2.7 or increase or decrease the amount of Swing Line Commitment
without the written consent of the Swing Line Lender; (viii) amend or modify the
definition of "Borrowing Base", "Eligible Accounts Receivable", "Eligible
Inventory" or "Over Advance Amount", in each case without the consent of the
Majority Revolving Credit Lenders, or (ix) amend, modify or waive any provision
of Sections 2.18(a), (b), (c) or (d) without the written consent of each Lender
adversely affected thereby or, with respect to Sections 2.18(e), (f) or (g)
without the written consent of the Majority Facility Lenders in respect of each
Facility adversely affected thereby. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and shall
be

<PAGE>
                                                                              93

binding upon the Loan Parties, the Lenders, the Administrative Agent and all
future holders of the Loans. In the case of any waiver, the Loan Parties, the
Lenders and the Administrative Agent shall be restored to their former position
and rights hereunder and under the other Loan Documents, and any Default or
Event of Default waived shall be deemed to be cured and not continuing; but no
such waiver shall extend to any subsequent or other Default or Event of Default,
or impair any right consequent thereon.

         10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received by a responsible officer of the addressee, addressed as follows in the
case of SuperHoldings, Holdings, the Borrower and the Administrative Agent, and
as set forth in an administrative questionnaire delivered to the Administrative
Agent in the case of the Lenders, or to such other address as may be hereafter
notified by the respective parties hereto:

            SuperHoldings and              NBC Acquisition Corp.
               Holdings:                   4700 South 19th Street
                                           Lincoln, Nebraska 68501
                                           Attention:  Chief Financial Officer
                                           Facsimile:  402-421-0507

            The Borrower:                  Nebraska Book Company, Inc.
                                           4700 South 19th Street
                                           Lincoln, Nebraska 68501
                                           Attention:  Chief Financial Officer
                                           Facsimile:  402-421-0507

            The Administrative Agent:      JPMorgan Chase Bank
                                           Bank Loans and Agency Services
                                           1111 Fannin Street, 10th Floor
                                           Houston, TX 77002
                                           Attention:  Shaji Easo
                                           Facsimile:  713-750-2599

                          with a copy to:  JPMorgan Chase Bank
                                           270 Park Avenue
                                           New York, New York 10017
                                           Attention:  Neil Boylan
                                           Facsimile:  212-270-6637

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

         Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices pursuant to Section 2 unless

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                                                                              94

otherwise agreed by the Administrative Agent and the applicable Lender. The
Administrative Agent or the Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it; provided that approval of such procedures
may be limited to particular notices or communications.

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

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

         10.5 Payment of Expenses. The Borrower agrees (a) to pay or reimburse
the Administrative Agent for all its reasonable documented out-of-pocket costs
and expenses incurred in connection with the preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable fees, disbursements
and other charges of counsel to the Administrative Agent (with such counsel to
include no more than one local counsel in each applicable jurisdiction so long
as such counsel are engaged with the Borrower's prior written consent), (b) to
pay or reimburse each Lender and the Administrative Agent for all its reasonable
out-of-pocket costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents and
any such other documents, including, without limitation, the reasonable fees,
disbursements and other charges of one counsel (and the allocated fees and
expenses of in-house counsel) to each Lender and of counsel to the
Administrative Agent, (c) to pay, indemnify, and hold each Lender and the
Administrative Agent harmless from, any and all recording and filing fees or any
amendment, supplement or modification of, or any waiver or consent under or in
respect of, this Agreement, the other Loan Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender and the
Administrative Agent and their respective officers, directors, employees,
affiliates, agents and controlling persons (each, an "indemnitee") harmless from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Loan Documents and
any such other documents, including, without limitation, any of the foregoing
relating to the use of proceeds of the Loans or the violation of, noncompliance
with or liability under, any Environmental Law applicable to the operations of
Holdings, the Borrower any of their respective Subsidiaries or any of the
Properties and the reasonable fees, disbursements and other charges of one
counsel (and the allocated fees and expenses of in-house counsel) to each Lender
and of counsel to the Administrative Agent (all the foregoing in this clause
(d), collectively, the "indemnified liabilities"), provided, that the

<PAGE>
                                                                              95

Borrower shall have no obligation hereunder to any indemnitee with respect to
indemnified liabilities (i) to the extent such indemnified liabilities are found
by a final and nonappealable decision of a court of competent jurisdiction to
have resulted from the gross negligence or willful misconduct of such indemnitee
or (ii) arising from a lawsuit or administrative proceeding against such
indemnitee if the Borrower was not given notice of such lawsuit or
administrative proceeding and an opportunity to participate in the defense
thereof at its own expense. Without limiting the foregoing, and to the extent
permitted by applicable law, the Borrower agrees not to assert and to cause its
Subsidiaries not to assert, and hereby waives and agrees to cause its
Subsidiaries to so waive, all rights for contribution or any other rights of
recovery with respect to all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, under or
related to Environmental Laws, that any of them might have by statute or
otherwise against any indemnitee. The agreements in this Section shall survive
repayment of the Loans and all other amounts payable hereunder.

         10.6 Successors and Assigns; Participations and Assignments. (a) The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby
(including any Affiliate of the Issuing Lender that issues any Letter of
Credit), except that (i) the Borrower may not assign or otherwise transfer any
of its rights or obligations hereunder without the prior written consent of each
Lender (and any attempted assignment or transfer by the Borrower without such
consent shall be null and void) and (ii) no Lender may assign or otherwise
transfer its rights or obligations hereunder except in accordance with this
Section.

         (b) (i) Subject to the conditions set forth in paragraph (b)(ii) below,
any Lender may assign to one or more assignees (each, an "Assignee") all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitments and the Loans at the time owing to it) with the prior
written consent (such consent not to be unreasonably delayed or withheld) of:

             (A) the Borrower, provided that no consent of the Borrower shall be
     required for an assignment to a Lender, an Affiliate of a Lender, an
     Approved Fund (as defined below) or, if an Event of Default has occurred
     and is continuing, any other Person; and

             (B) the Administrative Agent, provided that no consent of the
     Administrative Agent shall be required for an assignment of all or any
     portion of a Term Loan to a Lender, an Affiliate of a Lender or an Approved
     Fund.

         (ii) Assignments shall be subject to the following additional
     conditions:

             (A) except in the case of an assignment to a Lender, an Affiliate
     of a Lender or an Approved Fund or an assignment of the entire remaining
     amount of the assigning Lender's Commitments or Loans under any Facility,
     the amount of the Commitments or Loans of the assigning Lender subject to
     each such assignment (determined as of the date the Assignment and
     Assumption with respect to such assignment is delivered to the
     Administrative Agent) shall not be less than $5,000,000 (or, in the case of
     Term Facility, $1,000,000) unless each of the Borrower and the

<PAGE>
                                                                              96

     Administrative Agent otherwise consent, provided that (1) no such
     consent of the Borrower shall be required if an Event of Default under
     Section 8(a) or (f) has occurred and is continuing and (2) such amounts
     shall be aggregated in respect of each prospective Lender and its
     Affiliates or Approved Funds, if any;

             (B) the parties to each assignment shall execute and deliver to the
     Administrative Agent an Assignment and Assumption, together with a
     processing and recordation fee of $3,500 (treating multiple or simultaneous
     assignments by or to two or more Approved Funds or two or more funds that
     are engaged in making, purchasing, holding or investing in bank loans and
     similar extensions of credit in the ordinary course of business that are
     managed by the same investment advisor or Affiliated advisors as a single
     assignment); and

             (C) the Assignee, if it shall not be a Lender, shall deliver to the
     Administrative Agent an administrative questionnaire.

         For the purposes of this Section 10.6, "Approved Fund" means any Person
(other than a natural person) that is engaged in making, purchasing, holding or
investing in bank loans and similar extensions of credit in the ordinary course
of its business and that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender; provided that, for purposes of proviso (2) of
clause (b)(ii)(A) above, in connection with an assignment to a prospective
Lender not previously a Lender, the term "Lender" as it is used in clauses (a),
(b) and (c) of this paragraph shall mean such prospective Lender.

         (iii) Subject to acceptance and recording thereof pursuant to paragraph
(b)(iv) below, from and after the effective date specified in each Assignment
and Assumption the Assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.19, 2.20, 2.21 and 10.5). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 10.6
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.

         (iv) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitments of, and principal amount of the
Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof
from time to time (the "Register"). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent, the Issuing Lender and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the

<PAGE>
                                                                              97

contrary. The Register shall be available for inspection by the Borrower, the
Issuing Lender and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.

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

         (c) (i) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
(a "Participant") in all or a portion of such Lender's rights and obligations
under this Agreement (including all or a portion of its Commitments and the
Loans owing to it); provided that (A) such Lender's obligations under this
Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrower, the Administrative Agent, the Issuing Lender and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement may provide that such Lender will not,
without the consent of the Participant, agree to any amendment, modification or
waiver that (1) requires the consent of each Lender directly affected thereby
pursuant to the proviso to the second sentence of Section 10.1 and (2) directly
affects such Participant. Subject to paragraph (c)(ii) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.19, 2.20 and 2.21 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 10.7(b) as though it were a Lender, provided such
Participant shall be subject to Section 10.7(a) as though it were a Lender.

         (i) A Participant shall not be entitled to receive any greater payment
under Section 2.19 or 2.20 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower's
prior written consent. Any Participant that is a Non-U.S. Lender shall not be
entitled to the benefits of Section 2.20 unless such Participant complies with
Section 2.20(d).

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

<PAGE>
                                                                              98

         (e) The Borrower, upon receipt of written notice from the relevant
Lender, agrees to issue Notes to any Lender requiring Notes to facilitate
transactions of the type described in paragraph (d) above.

         (f) Notwithstanding the foregoing, any Conduit Lender may assign any or
all of the Loans it may have funded hereunder to its designating Lender without
the consent of the Borrower or the Administrative Agent and without regard to
the limitations set forth in Section 10.6(b). Each of Holdings, the Borrower,
each Lender and the Administrative Agent hereby confirms that it will not
institute against a Conduit Lender or join any other Person in instituting
against a Conduit Lender any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceeding under any state bankruptcy or similar law, for one
year and one day after the payment in full of the latest maturing commercial
paper note issued by such Conduit Lender; provided, however, that each Lender
designating any Conduit Lender hereby agrees to indemnify, save and hold
harmless each other party hereto for any loss, cost, damage or expense arising
out of its inability to institute such a proceeding against such Conduit Lender
during such period of forbearance.

         10.7 Adjustments; Set-off. (a) Except to the extent that this Agreement
provides for payments to be allocated to the Lenders under a particular
Facility, if any Lender (a "Benefitted Lender") shall at any time receive any
payment of all or part of its Loans or the Reimbursement Obligations owing to
it, or interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in Section 8(f), or otherwise), in a greater proportion
than any such payment to or collateral received by any other Lender, if any, in
respect of such other Lender's Loans or the Reimbursement Obligations owing to
such other Lender, or interest thereon, such Benefitted Lender shall purchase
for cash from the other Lenders a participating interest in such portion of each
such other Lender's Loan and/or of the Reimbursement Obligations owing to each
such other Lender, or shall provide such other Lenders with the benefits of any
such collateral, or the proceeds thereof, as shall be necessary to cause such
Benefitted Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Lenders; provided, however, that if all or any
portion of such excess payment or benefits is thereafter recovered from such
Benefitted Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest.

         (b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to SuperHoldings,
Holdings or the Borrower, any such notice being expressly waived by
SuperHoldings, Holdings and the Borrower to the extent permitted by applicable
law, upon any amount becoming due and payable by SuperHoldings, Holdings or the
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise) to set off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender, any Affiliate thereof or
any branch or agency thereof to or for the credit or the account of
SuperHoldings, Holdings or the Borrower. Each Lender agrees promptly to notify
SuperHoldings, Holdings, the Borrower and the Administrative Agent after any
such setoff and application made by such

<PAGE>
                                                                              99

Lender, provided that the failure to give such notice shall not affect the
validity of such setoff and application.

         10.8 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.

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

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

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

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

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

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

         (c) agrees that service of process in any such action or proceeding may
     be effected by mailing a copy thereof by registered or certified mail (or
     any substantially similar form of mail), postage prepaid, to SuperHoldings,
     Holdings or the Borrower, as the case may be at its address set forth in
     Section 10.2 or at such other address of which the Administrative Agent
     shall have been notified pursuant thereto;

<PAGE>
                                                                             100

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

         (e) waives, to the maximum extent not prohibited by law, any right it
     may have to claim or recover in any legal action or proceeding referred to
     in this Section 10.12 any special, exemplary, punitive or consequential
     damages.

         10.13 Acknowledgements. Each of SuperHoldings, Holdings and the
Borrower hereby acknowledges that:

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

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

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

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

         10.15 Confidentiality. The Administrative Agent and each Lender agrees
to keep confidential all non-public information provided to it by any Loan Party
pursuant to this Agreement that is designated by such Loan Party as
confidential; provided that nothing herein shall prevent the Administrative
Agent or any Lender from disclosing any such information (a) to the
Administrative Agent, any other Lender or any affiliate of any Lender, (b) to
any Participant or Assignee (each, a "Transferee") or prospective Transferee
which agrees to comply with the provisions of this Section, (c) to the
employees, directors, agents, attorneys, accountants and other professional
advisors of such Lender or its affiliates, (d) upon the request or demand of any
Governmental Authority having jurisdiction over the Administrative Agent or such
Lender, (e) in response to any order of any court or other Governmental
Authority or as may otherwise be required pursuant to any Requirement of Law,
(f) if requested or required to do so in connection with any litigation or
similar proceeding, (g) which has been publicly disclosed other than in breach
of this Section 10.15, (h) to the National Association of Insurance
Commissioners or any similar organization or any nationally recognized rating
agency that requires access to information about a Lender's investment portfolio
in connection with ratings issued with respect to such Lender, (i) in connection
with the exercise of any remedy hereunder or under any other

<PAGE>
                                                                             101

Loan Document or (j) to any direct or indirect contractual counterparty in swap
agreements or such contractual counterparty's professional advisor (so long as
such contractual counterparty or professional advisor to such contractual
counterparty agrees to be bound by the provisions of this Section).

         10.16 Effect of Amendment and Restatement of the Existing Credit
Agreement. (a) This Agreement shall be deemed to be an amendment to and
restatement of the Existing Credit Agreement and the Existing Credit Agreement
as amended and restated hereby shall remain in full force and effect and is
hereby ratified and confirmed in all respects. All extensions of credit under
the Existing Credit Agreement on the Closing Date shall remain outstanding
following the Closing Date and shall be continued under this Agreement, as
amended in the manner set forth herein. All references to the Existing Credit
Agreement in any other agreement or document shall, on and after the Closing
Date, be deemed to refer to the Existing Credit Agreement as amended and
restated hereby. The Borrower agrees, acknowledges and affirms that (i) each of
the Security Documents to which it is a party shall remain in full force and
effect and shall constitute security for all extensions of credit pursuant to
the Existing Credit Agreement as amended and restated hereby and (ii) any
reference to the Existing Credit Agreement appearing in any such Security
Document shall on and after the Closing Date be deemed to refer to the Existing
Credit Agreement as amended and restated hereby.

         (b) On the Closing Date, each Exiting Lender shall cease to be a party
to this Agreement.

<PAGE>

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

                                   NBC HOLDINGS CORP.

                                   By:  ______________________________
                                   Name:
                                   Title:

                                   NBC ACQUISITION CORP.

                                   By:  ______________________________
                                   Name:
                                   Title:

                                   NEBRASKA BOOK COMPANY, INC.

                                   By:  ______________________________
                                   Name:
                                   Title:

                                   JPMORGAN CHASE BANK,
                                    as Administrative Agent and as a Lender

                                   By:  ______________________________
                                   Name:
                                   Title:

<PAGE>

                                   CITBANK, N.A., as a Lender

                                   By:  ______________________________
                                   Name:
                                   Title:

<PAGE>

                                   FLEET NATIONAL BANK, as Co-Documentation
                                   Agent and as a Lender

                                   By:  ______________________________
                                   Name:
                                   Title:

<PAGE>

                                   WELLS FARGO BANK, N.A., as Co-Documentation
                                   Agent and as a Lender

                                   By:  ______________________________
                                   Name:
                                   Title:

<PAGE>

                                                                         ANNEX A

          PRICING GRID FOR REVOLVING CREDIT LOANS AND SWING LINE LOANS

<TABLE>
<CAPTION>
  Consolidated
    Leverage                         Applicable Margin for      Applicable Margin
      Ratio                             Eurodollar Loans       for Base Rate Loans
-----------------                    ---------------------     -------------------
<S>                                  <C>                       <C>
     > 4.0 to 1.0                           2.75%                     1.75%

< or = 4.0 to 1.0 but                       2.50%                     1.50%
     > 3.5 to 1.0

< or = 3.5 to 1.0 but                       2.25%                     1.25%
     > 3.0 to 1.0

< or = 3.0 to 1.0                           2.00%                     1.00%
</TABLE>

Changes in the Applicable Margin with respect to Revolving Credit Loans and
Swing Line Loans resulting from changes in the Consolidated Leverage Ratio shall
become effective on the date (the "Adjustment Date") on which financial
statements are delivered to the Lenders pursuant to Section 6.1 (but in any
event not later than the 45th day after the end of each of the first three
quarterly periods of each fiscal year or the 90th day after the end of each
fiscal year, as the case may be) and shall remain in effect until the next
change to be effected pursuant to this paragraph. If any financial statements
referred to above are not delivered within the time periods specified above,
then, until such financial statements are delivered, the Consolidated Leverage
Ratio as at the end of the fiscal period that would have been covered thereby
shall for the purposes of this definition be deemed to be greater than 4.0 to 1.
In addition, at all times while an Event of Default shall have occurred and be
continuing, the Consolidated Leverage Ratio shall for the purposes of this
definition be deemed to be greater than 4.0 to 1. Each determination of the
Consolidated Leverage Ratio pursuant to this definition shall be made with
respect to the period of four consecutive fiscal quarters of the Borrower ending
at the end of the period covered by the relevant financial statements.
<PAGE>

                                                                   SCHEDULE 1.1A

                                   COMMITMENTS

                             COMMITMENTS IN DOLLARS

<TABLE>
<CAPTION>
            NAME OF LENDER                                REVOLVING CREDIT                       TERM LOAN B
--------------------------------------------------------------------------------------------------------------
<S>                                                       <C>                                  <C>
         JPMorgan Chase Bank                               $18,000,000.00                      $163,000,000.00
     Citicorp North America, Inc.                           15,000,000.00                                    0
        Wells Fargo Bank, N.A.                               7,500,000.00                         7,500,000.00
         Fleet National Bank                                 5,000,000.00                                    0
 General Electric Capital Corporation                        4,500,000.00                                    0
Eaton Vance Senior Floating-Rate Trust                                  0                         2,000,000.00
             Grayson & Co                                               0                         2,000,000.00
           KZH Soleil-2 LLC                                                                       1,250,000.00
         Avery Point CLO, Ltd                                           0                         1,000,000.00
        Senior Debt Portfolio                                           0                         1,000,000.00
            KZH Soleil LLC                                                                          750,000.00
      Castle Hill I - Ingots Ltd                                        0                           300,000.00
     Castle Hill II - Ignots, Ltd                                       0                           300,000.00
     Great Point CLO 1999-1 Ltd.                                        0                           300,000.00
       Race Point CLO, Limited                                          0                           300,000.00
Sankaty High Yield Partners III, L.P.                                   0                           300,000.00
                TOTAL                                      $   50,000,000                      $180,000,000.00
</TABLE>

<PAGE>

                                                                   SCHEDULE 1.1B

                               MORTGAGED PROPERTY

<TABLE>
<S>                                          <C>                        <C>                 <C>
 1.          Nebraska Bookstore              1300 Q Street              Lincoln             NE
-------------------------------------------------------------------------------------------------
 2.          Administrative Offices and      4700 S. 19th Street        Lincoln             NE
             Warehouse
-------------------------------------------------------------------------------------------------
 3.          Auxiliary Warehouse             5240 S. 19th Street        Lincoln             NE
-------------------------------------------------------------------------------------------------
 4.          Voertman's (college             1314 W. Hickory            Denton              TX
             bookstore)
-------------------------------------------------------------------------------------------------
 5.          University Bookstore            3003 Forest Avenue         Des Moines          IA
</TABLE>

                               OWNED REAL PROPERTY

<TABLE>
<S>                                       <C>                        <C>                <C>
 1.       Nebraska Bookstore              1300 Q Street              Lincoln            NE
-----------------------------------------------------------------------------------------------
 2.       Administrative Offices and      4700 S. 19th Street        Lincoln            NE
          Warehouse
-----------------------------------------------------------------------------------------------
 3.       Auxiliary Warehouse             5240 S. 19th Street        Lincoln            NE
-----------------------------------------------------------------------------------------------
 4.       Voertman's (college             1314 W. Hickory            Denton             TX
          bookstore)
-----------------------------------------------------------------------------------------------
 5.       University Bookstore            3003 Forest Avenue         Des Moines         IA
-----------------------------------------------------------------------------------------------
 6.       Maverick Bookstore              230 Stadium Road           Mankato            MN
-----------------------------------------------------------------------------------------------
 7.       Specialty Books Distribution    5833 Industrial Drive      Athens             OH
          Center
-----------------------------------------------------------------------------------------------
 8.       NBC Graphics                    360 Graham Road            College            TX
                                                                     Station
-----------------------------------------------------------------------------------------------
 9.       College Bookstore               2370 W W Thorne            Houston            TX
                                          Drive
-----------------------------------------------------------------------------------------------
10.       Rocky Top East                  1649 W. Cumberland         Knoxville          TN
                                          Avenue
</TABLE>

<PAGE>

            LEASEHOLD INTERESTS IN REAL PROPERTY IN RESPECT OF WHICH
                 AGGREGATE ANNUAL RENT PAYMENTS EXCEED $250,000

<TABLE>
<S>                                                                   <C>                 <C>
 1.        6590 Darin Way                                             Cypress             CA
--------------------------------------------------------------------------------------------------
 2.        9555 Haggerty Road                                         Belleville          MI
--------------------------------------------------------------------------------------------------
 3.        1770 North High Street                                     Columbus            OH
--------------------------------------------------------------------------------------------------
 4.        Hannah Shopping Plaza, 4790 S. Hagadom Road,               East Lansing        MI
           Suite 138
--------------------------------------------------------------------------------------------------
 5.        317 South State Street                                     Ann Arbor           MI
--------------------------------------------------------------------------------------------------
 6.        1716 North Main                                            San Antonio         TX
--------------------------------------------------------------------------------------------------
 7.        15503 Babcock                                              San Antonio         TX
--------------------------------------------------------------------------------------------------
 8.        301 Largo Road                                             Largo               MD
--------------------------------------------------------------------------------------------------
 9.        1090 Lancaster Road                                        Richmond            KY
--------------------------------------------------------------------------------------------------
10.        1840 West Southern Avenue, # 1                             Mesa                AZ
--------------------------------------------------------------------------------------------------
11.        Michigan State University - International Center           East Lansing        MI
</TABLE>

<PAGE>

                                                                    SCHEDULE 4.4

                  CONSENTS, AUTHORIZATIONS, FILINGS AND NOTICES

None.

<PAGE>

                                                                    SCHEDULE 4.9

                             INTELLECTUAL PROPERTY

TRADEMARKS

<TABLE>
<CAPTION>
      Trademark                    Serial No.    Registration No.       Jurisdiction      Owned by
---------------------------------------------------------------------------------------------------------
<S>                                <C>           <C>                    <C>              <C>
GOT USED                           76/294619        2633247             U.S. Federal     Nebraska Book
                                                                                         Company, Inc.
---------------------------------------------------------------------------------------------------------
CONNECT2ONE                        76/119855        2480012             U.S. Federal     Nebraska Book
                                                                                         Company, Inc.
---------------------------------------------------------------------------------------------------------
WEBPRISM                           75/925323        N/A                 U.S. Federal     Nebraska Book
                                                                                         Company, Inc.
---------------------------------------------------------------------------------------------------------
NBCPRISM                           75/925321        2568157             U.S. Federal     Nebraska Book
                                                                                         Company, Inc.
---------------------------------------------------------------------------------------------------------
NBC GRAPHICS COLLEGIATE            75/820627        2530469             U.S. Federal     Nebraska Book
WEAR "NO BETTER CHOICE"                                                                  Company, Inc.
and Design
---------------------------------------------------------------------------------------------------------
NBC and Design                     73/457327        1312759             U.S. Federal     Nebraska Book
                                                                                         Company, Inc.
---------------------------------------------------------------------------------------------------------
CAMPUSHUB                          75/925306        N/A                 U.S. Federal     Nebraska Book
                                                                                         Company, Inc.
---------------------------------------------------------------------------------------------------------
SPECIALTY BOOKS                    75/204128        2222166             U.S. Federal     Specialty
                                                                                         Books, Inc.
---------------------------------------------------------------------------------------------------------
TRADITIONS                         78/344625        N/A                 U.S. Federal     Nebraska Book
                                                                                         Company, Inc.
---------------------------------------------------------------------------------------------------------
GIVE US THE FINGER                 76/082301        N/A                 U.S. Federal     Nebraska Book
                                                                                         Company, Inc.
---------------------------------------------------------------------------------------------------------
GIVE US A CLICK                    76/082507        2759396             U.S. Federal     Nebraska Book
                                                                                         Company, Inc.
</TABLE>

<PAGE>

COPYRIGHTS

<TABLE>
<CAPTION>

        Title                  Registration No.      Jurisdiction               Owned By
--------------------------------------------------------------------------------------------
<S>                            <C>                   <C>                      <C>
Nebraska Book Company's           TX757441            U.S. Federal            Nebraska Book
buyer's guide                                                                 Company, Inc.
--------------------------------------------------------------------------------------------
Textbook buyers guide             TM53450 I           U.S. Federal            Nebraska Book
                                                                              Company, Inc.
</TABLE>

<PAGE>

                                                                   SCHEDULE 4.15

                                  SUBSIDIARIES

NBC Acquisition Corp., a Delaware corporation

Nebraska Book Company, Inc., a Kansas corporation

Specialty Books, Inc., a Delaware corporation

<PAGE>

                                                                SCHEDULE 4.19(a)

                    FINANCING STATEMENT FILING JURISDICTIONS

<TABLE>
<CAPTION>
       Grantor                         State                       Jurisdiction
------------------------------------------------------------------------------------
<S>                                    <C>                      <C>
NBC Acquisition Corp.                   DE                      Secretary of State

Nebraska Book Company, Inc.             KS                      Secretary of State

Specialty Books, Inc.                   DE                      Secretary of State

NBC Holdings Corp.                      DE                      Secretary of State
</TABLE>

<PAGE>

                                                                SCHEDULE 4.19(b)

MORTGAGE FILING JURISDICTIONS

<TABLE>
<CAPTION>

         State      Jurisdiction
-----------------------------------------------------------------
<S>      <C>        <C>
 1.      NE         Office of Deeds, Lancaster County, Nebraska
-----------------------------------------------------------------
 2.      TX         Real Property Records, Denton County, Texas
-----------------------------------------------------------------
 3.      IA         Office of Recorder of Polk County, Iowa
</TABLE>

<PAGE>

                                                                 SCHEDULE 7.2(e)

OTHER INDEBTEDNESS:

Jefferson-Pilot Mortgage Loan #088006 - Rocky Top East                 $466,150

Jefferson-Pilot Life Insurance
P.O. Box 20407
Greensboro, NC 27420-0407

<PAGE>

                                                                 SCHEDULE 7.3(f)

                                EXISTING LIENS (1)

1.       General Electric Capital Corporation has a lien on the described
         equipment and all additions and replacement thereto.(2)

2.       BCL Capital has a lien on the listed equipment.(3)

3.       West Group has a lien on certain inventory sold on consignment.(4)

4.       NBD Equipment Finance, Inc. has a lien on listed equipment.(5)

5.       Toyota Motor Credit Corp. has a lien on a forklift.(6)

6.       Mitel Capital Corporation has a lien on stated hardware and related
         software and accessories.(7)

7.       Bane One Leasing Corporation has a lien on listed equipment.(8)

8.       US Bancorp has a lien on listed equipment.(9)

9.       IKON Office Solutions has a lien on listed equipment.(10)

10.      ISI Commercial Refrigeration, L.P. has a lien on listed equipment.(11)

--------------------
(1)  Certain liens in favor of JP Morgan Chase Bank and Chemical Bank, which
     have been previously disclosed to Administrative Agent's counsel, remain
     filed in their respective filing jurisdictions.

(2)  Filed with the Nebraska Secretary of State. Filing states that financing
     statement is filed for notice purposes only.

(3)  Filed with Nebraska Secretary of State. Filing states that financing
     statement is for informational purposes only.

(4)  Filed with Nebraska Secretary of State.

(5)  Filed with Nebraska Secretary of State. Filing states "No Security Interest
     - True Lease Transaction - Precautionary Only".

(6)  Filed with Nebraska Secretary of State. Filing states "This financing
     statement is for information purposes only. The transaction referenced in
     this financing statement is a lease."

(7)  Filed with Nebraska Secretary of State.

(8)  Filed with Nebraska Secretary of State.

(9)  Filed with Nebraska Secretary of State. Filing states that "filing is for
     informational purposes only".

(10) Filed with Texas Secretary of State.

(11) Filed with Texas Secretary of State.

<PAGE>

11.      The following parcel of real property is subject to a mortgage held by
         Jefferson-Pilot Life Insurance Company, with its administrative offices
         located in Greensboro, NC: Campus Bookstore

              1649 W. Cumberland Avenue
              Knoxville, TN

<PAGE>

                                                                    SCHEDULE 7.8

                              EXISTING INVESTMENTS

None.<PAGE>

                                                                   EXHIBIT 10.11

                                                                  Execution Copy

================================================================================

                              AMENDED AND RESTATED
                       GUARANTEE AND COLLATERAL AGREEMENT

                                     made by

                               NBC HOLDINGS CORP.,

                             NBC ACQUISITION CORP.,

                           NEBRASKA BOOK COMPANY, INC.

                                       and

                              SPECIALTY BOOKS, INC.

                                   in favor of

                              JPMORGAN CHASE BANK,
                             as Administrative Agent

                         Dated as of February 13, 1998,
     as amended and restated as of December 10, 2003 and as further amended
                        and restated as of March 4, 2004

================================================================================

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                       Page
<S>                                                                                                                    <C>
SECTION 1.   DEFINED TERMS.......................................................................................       2
         1.1   Definitions.......................................................................................       2
         1.2   Other Definitional Provisions.....................................................................       5

SECTION 2.   GUARANTEE...........................................................................................       5
         2.1   Guarantee.........................................................................................       5
         2.2   Right of Contribution.............................................................................       6
         2.3   No Subrogation....................................................................................       6
         2.4   Amendments, etc. with respect to the Borrower Obligations.........................................       6
         2.5   Guarantee Absolute and Unconditional..............................................................       7
         2.6   Reinstatement.....................................................................................       8
         2.7   Payments..........................................................................................       8

SECTION 3.   GRANT OF SECURITY INTEREST..........................................................................       8

SECTION 4.   REPRESENTATIONS AND WARRANTIES......................................................................       9
         4.1   Representations in Credit Agreement...............................................................       9
         4.2   Title; No Other Liens.............................................................................       9
         4.3   Perfected First Priority Liens....................................................................      10
         4.4   Jurisdiction of Organization; Chief Executive Office..............................................      10
         4.5   Inventory and Equipment...........................................................................      10
         4.6   Farm Products.....................................................................................      10
         4.7   Investment Property...............................................................................      10
         4.8   Receivables.......................................................................................      11
         4.9   Intellectual Property.............................................................................      11

SECTION 5.   COVENANTS...........................................................................................      11
         5.1   Covenants in Credit Agreement.....................................................................      11
         5.2   Delivery of Instruments, Certificated Securities and Chattel Paper................................      11
         5.3   Maintenance of Perfected Security Interest; Further Documentation.................................      12
         5.4   Changes in Locations, Name, etc...................................................................      12
         5.5   Notices...........................................................................................      12
         5.6   Investment Property...............................................................................      13
         5.7   Receivables.......................................................................................      14
         5.8   Intellectual Property.............................................................................      14

SECTION 6.   REMEDIAL PROVISIONS.................................................................................      15
         6.1   Certain Matters Relating to Receivables...........................................................      15
         6.2   Communications with Obligors; Grantors Remain Liable..............................................      16
         6.3   Pledged Stock.....................................................................................      16
         6.4   Proceeds to be Turned Over To Administrative Agent................................................      17
         6.5   Application of Proceeds...........................................................................      18
         6.6   Code and Other Remedies...........................................................................      18
</TABLE>

<PAGE>

                                                                              ii

<TABLE>
<S>                                                                                                                    <C>
         6.7   Registration Rights...............................................................................      19
         6.8   Deficiency........................................................................................      20

SECTION 7.   THE ADMINISTRATIVE AGENT............................................................................      20
         7.1   Administrative Agent's Appointment as Attorney-in-Fact, etc.......................................      20
         7.2   Duty of Administrative Agent......................................................................      22
         7.3   Execution of Financing Statements.................................................................      22
         7.4   Authority of Administrative Agent.................................................................      22

SECTION 8.   MISCELLANEOUS.......................................................................................      22
         8.1   Amendments in Writing.............................................................................      22
         8.2   Notices...........................................................................................      23
         8.3   No Waiver by Course of Conduct; Cumulative Remedies...............................................      23
         8.4   Enforcement Expenses; Indemnification.............................................................      23
         8.5   Successors and Assigns............................................................................      23
         8.6   Set-Off...........................................................................................      24
         8.7   Counterparts......................................................................................      24
         8.8   Severability......................................................................................      24
         8.9   Section Headings..................................................................................      24
         8.10   Integration......................................................................................      24
         8.11   GOVERNING LAW....................................................................................      25
         8.12   Submission To Jurisdiction; Waivers..............................................................      25
         8.13   Acknowledgements.................................................................................      25
         8.14   WAIVER OF JURY TRIAL.............................................................................      26
         8.15   Additional Grantors..............................................................................      26
         8.16   Releases.........................................................................................      26
         8.17   Effect of Amendment and Restatement of the Existing Guarantee and Collateral Agreement...........      26
</TABLE>

<PAGE>

SCHEDULES

Schedule 1         Notice Addresses
Schedule 2         Investment Property
Schedule 3         Perfection Matters
Schedule 4         Jurisdictions of Organization and Chief Executive Offices
Schedule 5         Inventory and Equipment Locations
Schedule 6         Intellectual Property
Schedule 7         Existing Prior Liens

ANNEXES

Annex 1            Assumption Agreement

<PAGE>

             AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT

                  AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT, dated
as of February 13, 1998, as amended and restated as of December 10, 2003, and as
further amended and restated as of March 4, 2004, made by each of the
signatories hereto (together with any other entity that may become a party
hereto as provided herein, the "Grantors"), in favor of JPMORGAN CHASE BANK, as
collateral agent and administrative agent (in such capacity, the "Administrative
Agent") for the banks and other financial institutions (the "Lenders") from time
to time parties to the Credit Agreement, dated as of February 13, 1998, as
amended and restated as of December 10, 2003, and as further amended and
restated as of March 4, 2004 (as further amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among NBC Holdings Corp.
("SuperHoldings"), NBC Acquisition Corp. ("Holdings"), Nebraska Book Company,
Inc. (the "Borrower"), the Lenders, the Administrative Agent and the other
agents party thereto.

                              W I T N E S S E T H:

                  WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Borrower upon the terms and
subject to the conditions set forth therein;

                  WHEREAS, the Borrower is a member of an affiliated group of
companies that includes each other Grantor;

                  WHEREAS, the proceeds of the extensions of credit under the
Credit Agreement will be used in part to enable the Borrower to make valuable
transfers to one or more of the other Grantors in connection with the operation
of their respective businesses;

                  WHEREAS, the Borrower and the other Grantors are engaged in
related businesses, and each Grantor will derive substantial direct and indirect
benefit from the making of the extensions of credit under the Credit Agreement;

                  WHEREAS, the Borrower and certain of the other Grantors and
the Administrative Agent are parties to the Guarantee and Collateral Agreement,
dated as of February 13, 1998, as amended and restated as of December 10, 2003
(the "Existing Guarantee and Collateral Agreement"), and executed in connection
with the Existing Credit Agreement (as such term is defined in the Credit
Agreement); and

                  WHEREAS, it is a condition precedent to the effectiveness of
the amendment and restatement of the Existing Credit Agreement and the
obligation of the Lenders to make their respective extensions of credit to the
Borrower under the Credit Agreement that the Grantors shall have executed and
delivered this Agreement to the Administrative Agent for the ratable benefit of
the Secured Parties;

                  NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and certain of the other Secured Parties to enter into
the amendment and restatement of the Existing Credit Agreement and to induce the
Lenders to make their respective extensions of credit to the Borrower under the
Credit Agreement, each Grantor hereby agrees

<PAGE>
                                                                               2

with the Administrative Agent, for the ratable benefit of the Secured Parties,
that, upon the effectiveness of this Agreement, the Existing Guarantee and
Collateral Agreement is hereby amended and restated in its entirety as follows:

                            SECTION 1. DEFINED TERMS

                  1.1 Definitions. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement, and the following terms which are defined in the
Uniform Commercial Code in effect in the State of New York from time to time are
used herein as so defined: Accounts, Certificated Security, Chattel Paper,
Commercial Tort Claims, Deposit Account, Documents, Equipment, Farm Products,
General Intangibles, Instruments, Inventory, Letter-of-Credit Rights and
Supporting Obligations.

                  (b) The following terms shall have the following meanings:

                  "Agreement": this Guarantee and Collateral Agreement, as the
         same may be amended, supplemented or otherwise modified from time to
         time.

                  "Borrower Obligations": the collective reference to (i) the
         unpaid principal of and interest on the Loans and Reimbursement
         Obligations, (ii) all other obligations and liabilities of the Borrower
         (including, without limitation, interest accruing at the then
         applicable rate provided in the Credit Agreement after the maturity of
         the Loans and Reimbursement Obligations and interest accruing at the
         then applicable rate provided in the Credit Agreement after the filing
         of any petition in bankruptcy, or the commencement of any insolvency,
         reorganization or like proceeding, relating to the Borrower, whether or
         not a claim for post-filing or post-petition interest is allowed in
         such proceeding) to the Administrative Agent or any Lender (or, in the
         case of any Hedge Agreement referred to below, any Affiliate of any
         Lender), whether direct or indirect, absolute or contingent, due or to
         become due, or now existing or hereafter incurred, which may arise
         under, out of, or in connection with, the Credit Agreement, this
         Agreement, the other Loan Documents, any Letter of Credit or any Hedge
         Agreement entered into by the Borrower with any Lender (or any
         Affiliate of any Lender) or any other document made, delivered or given
         in connection therewith and (iii) if agreed upon by the Borrower, the
         Administrative Agent and any applicable Lender, the obligations of the
         Borrower in respect of cash management services provided by such Lender
         (or any Affiliate of such Lender), in each case whether on account of
         principal, interest, reimbursement obligations, fees, indemnities,
         costs, expenses or otherwise (including, without limitation, all fees
         and disbursements of counsel to the Administrative Agent or to the
         Lenders that are required to be paid by the Borrower pursuant to the
         terms of any of the foregoing agreements).

                  "Collateral": as defined in Section 3.

                  "Collateral Account": any collateral account established by
         the Administrative Agent as provided in Section 6.1 or 6.4.

<PAGE>
                                                                               3

                  "Copyrights": (i) all copyrights arising under the laws of the
         United States, any other country or any political subdivision thereof,
         whether registered or unregistered and whether published or unpublished
         (including, without limitation, those listed in Schedule 6), all
         registrations and recordings thereof, and all applications in
         connection therewith, including, without limitation, all registrations,
         recordings and applications in the United States Copyright Office, and
         (ii) the right to obtain all renewals thereof.

                  "Copyright Licenses": any written agreement naming any Grantor
         as licensor or licensee (including, without limitation, those listed in
         Schedule 6), granting any right under any Copyright, including, without
         limitation, the grant of rights to manufacture, distribute, exploit and
         sell materials derived from any Copyright.

                  "Guarantor Obligations": with respect to any Guarantor, the
         collective reference to (i) the Borrower Obligations, (ii) all
         obligations and liabilities of such Guarantor which may arise under or
         in connection with this Agreement or any other Loan Document to which
         such Guarantor is a party and (iii) if agreed upon by the applicable
         Guarantor, the Administrative Agent and any applicable Lender, the
         obligations of such Guarantor in respect of cash management services
         provided by such Lender (or any Affiliate of such Lender), in each case
         whether on account of guarantee obligations, reimbursement obligations,
         fees, indemnities, costs, expenses or otherwise (including, without
         limitation, all fees and disbursements of counsel to the Administrative
         Agent or to the Lenders that are required to be paid by such Guarantor
         pursuant to the terms of this Agreement or any other Loan Document).

                  "Guarantors": the collective reference to each Grantor other
         than the Borrower.

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

                  "Intellectual Property": the collective reference to all
         rights, priorities and privileges relating to intellectual property,
         whether arising under United States, multinational or foreign laws or
         otherwise, including, without limitation, the Copyrights, the Copyright
         Licenses, the Patents, the Patent Licenses, the Trademarks and the
         Trademark Licenses, and all rights to sue at law or in equity for any
         infringement or other impairment thereof, including the right to
         receive all proceeds and damages therefrom.

                  "Intercompany Note": any promissory note evidencing loans made
         by any Grantor to SuperHoldings or any of its Subsidiaries.

                  "Investment Property": the collective reference to (i) all
         "investment property" as such term is defined in Section 9-102(a)(49)
         of the New York UCC and (ii) whether or not constituting "investment
         property" as so defined, all Pledged Notes and all Pledged Stock.

                  "Issuers": the collective reference to each issuer of a
         Pledged Stock.

<PAGE>
                                                                               4

                  "New York UCC": the Uniform Commercial Code as from time to
         time in effect in the State of New York.

                  "Obligations": (i) in the case of the Borrower, the Borrower
         Obligations, and (ii) in the case of each Guarantor, its Guarantor
         Obligations.

                  "Patents": (i) all letters patent of the United States, any
         other country or any political subdivision thereof, all reissues and
         extensions thereof and all goodwill associated therewith, including,
         without limitation, any of the foregoing referred to in Schedule 6,
         (ii) all applications for letters patent of the United States or any
         other country and all divisions, continuations and
         continuations-in-part thereof, including, without limitation, any of
         the foregoing referred to in Schedule 6, and (iii) all rights to obtain
         any reissues or extensions of the foregoing.

                  "Patent License": all agreements, whether written or oral,
         providing for the grant by or to any Grantor of any right to
         manufacture, use or sell any invention covered in whole or in part by a
         Patent, including, without limitation, any of the foregoing referred to
         in Schedule 6.

                  "Pledged Notes": all promissory notes listed on Schedule 2,
         all Intercompany Notes at any time issued to any Grantor and all other
         promissory notes issued to or held by any Grantor (other than
         promissory notes issued in connection with extensions of trade credit
         by any Grantor in the ordinary course of business).

                  "Pledged Stock": the shares of Capital Stock listed on
         Schedule 2, together with any other shares, stock certificates, options
         or rights of any nature whatsoever in respect of the Capital Stock of
         any Person that may be issued or granted to, or held by, any Grantor
         while this Agreement is in effect.

                  "Proceeds": all "proceeds" as such term is defined in Section
         9-102(a)(64) of the Uniform Commercial Code in effect in the State of
         New York on the date hereof and, in any event, shall include, without
         limitation, all dividends or other income from the Investment Property,
         collections thereon or distributions or payments with respect thereto.

                  "Receivable": any right to payment for goods sold or leased or
         for services rendered, whether or not such right is evidenced by an
         Instrument or Chattel Paper and whether or not it has been earned by
         performance (including, without limitation, any Account).

                  "Secured Parties": the collective reference to (i) the
         Administrative Agent, (ii) the Lenders (including, without limitation,
         any Issuing Lender and any Swing Line Lender), (iii) any other holder
         from time to time of any of the Obligations and (iv) the permitted
         successors and assigns of any of the foregoing.

                  "Securities Act": the Securities Act of 1933, as amended.

<PAGE>
                                                                               5

                  "Trademarks": (i) all trademarks, trade names, corporate
         names, company names, business names, fictitious business names, trade
         styles, service marks, logos and other source or business identifiers,
         and all goodwill associated therewith, now existing or hereafter
         adopted or acquired, all registrations and recordings thereof, and all
         applications in connection therewith, whether in the United States
         Patent and Trademark Office or in any similar office or agency of the
         United States, any State thereof or any other country or any political
         subdivision thereof, or otherwise, and all common-law rights related
         thereto, including, without limitation, any of the foregoing referred
         to in Schedule 6, and (ii) the right to obtain all renewals thereof.

                  "Trademark License": any agreement, whether written or oral,
         providing for the grant by or to any Grantor of any right to use any
         Trademark, including, without limitation, any of the foregoing referred
         to in Schedule 6.

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

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

                  (c) Where the context requires, terms relating to the
Collateral or any part thereof, when used in relation to a Grantor, shall refer
to such Grantor's Collateral or the relevant part thereof.

                              SECTION 2. GUARANTEE

                  2.1 Guarantee. (a). Each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantees to the Administrative
Agent, for the ratable benefit of the Secured Parties and their respective
successors, indorsees, transferees and assigns, the prompt and complete payment
and performance by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Borrower Obligations.

                  (b) Anything herein or in any other Loan Document to the
contrary notwithstanding, the maximum liability of each Guarantor hereunder and
under the other Loan Documents shall in no event exceed the amount which can be
guaranteed by such Guarantor under applicable federal and state laws relating to
the insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).

                  (c) Each Guarantor agrees that the Borrower Obligations may at
any time and from time to time exceed the amount of the liability of such
Guarantor hereunder without impairing the guarantee contained in this Section 2
or affecting the rights and remedies of the Administrative Agent or any other
Secured Party hereunder.

                  (d) The guarantee contained in this Section 2 shall remain in
full force and effect until all the Borrower Obligations and the obligations of
each Guarantor under the guarantee contained in this Section 2 shall have been
satisfied by payment in full, no Letter of Credit shall

<PAGE>

                                                                               6

be outstanding and the Commitments shall be terminated, notwithstanding that
from time to time during the term of the Credit Agreement the Borrower may be
free from any Borrower Obligations.

                  (e) No payment made by the Borrower, any of the Guarantors,
any other guarantor or any other Person or received or collected by the
Administrative Agent or any other Secured Party from the Borrower, any of the
Guarantors, any other guarantor or any other Person by virtue of any action or
proceeding or any set-off or appropriation or application at any time or from
time to time in reduction of or in payment of the Borrower Obligations shall be
deemed to modify, reduce, release or otherwise affect the liability of any
Guarantor hereunder which shall, notwithstanding any such payment (other than
any payment made by such Guarantor in respect of the Borrower Obligations or any
payment received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Guarantor hereunder until the Borrower Obligations are paid in
full, no Letter of Credit shall be outstanding and the Commitments are
terminated.

                  2.2 Right of Contribution. Each Guarantor hereby agrees that
to the extent that a Guarantor shall have paid more than its proportionate share
of any payment made hereunder, such Guarantor shall be entitled to seek and
receive contribution from and against any other Guarantor hereunder which has
not paid its proportionate share of such payment. Each Guarantor's right of
contribution shall be subject to the terms and conditions of Section 2.3. The
provisions of this Section 2.2 shall in no respect limit the obligations and
liabilities of any Guarantor to the Administrative Agent and the other Secured
Parties, and each Guarantor shall remain liable to the Administrative Agent and
other Secured Parties for the full amount guaranteed by such Guarantor
hereunder.

                  2.3 No Subrogation. Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor by
the Administrative Agent or any other Secured Party, no Guarantor shall be
entitled to be subrogated to any of the rights of the Administrative Agent or
any other Secured Party against the Borrower or any other Guarantor or any
collateral security or guarantee or right of offset held by the Administrative
Agent or any other Secured Party for the payment of the Borrower Obligations,
nor shall any Guarantor seek or be entitled to seek any contribution or
reimbursement from the Borrower or any other Guarantor in respect of payments
made by such Guarantor hereunder, until all amounts owing to the Administrative
Agent and the other Secured Parties by the Borrower on account of the Borrower
Obligations are paid in full, no Letter of Credit shall be outstanding and the
Commitments are terminated. If any amount shall be paid to any Guarantor on
account of such subrogation rights at any time when all of the Borrower
Obligations shall not have been paid in full, such amount shall be held by such
Guarantor in trust for the Administrative Agent and the other Secured Parties,
segregated from other funds of such Guarantor, and shall, forthwith upon receipt
by such Guarantor, be turned over to the Administrative Agent in the exact form
received by such Guarantor (duly indorsed by such Guarantor to the
Administrative Agent, if required), to be applied against the Borrower
Obligations, whether matured or unmatured, in such order as the Administrative
Agent may determine.

                  2.4 Amendments, etc. with respect to the Borrower Obligations.
Each Guarantor shall remain obligated hereunder notwithstanding that, without
any reservation of rights against

<PAGE>
                                                                               7

any Guarantor and without notice to or further assent by any Guarantor, any
demand for payment of any of the Borrower Obligations made by the Administrative
Agent or any other Secured Party may be rescinded by the Administrative Agent or
such other Secured Party and any of the Borrower Obligations continued, and the
Borrower Obligations, or the liability of any other Person upon or for any part
thereof, or any collateral security or guarantee therefor or right of offset
with respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered or
released by the Administrative Agent or any other Secured Party, and the Credit
Agreement and the other Loan Documents and any other documents executed and
delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent (or the Required
Lenders or all Lenders, as the case may be) may deem advisable from time to
time, and any collateral security, guarantee or right of offset at any time held
by the Administrative Agent or any other Secured Party for the payment of the
Borrower Obligations may be sold, exchanged, waived, surrendered or released.
Neither the Administrative Agent nor any other Secured Party shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for the Borrower Obligations or for the guarantee contained in this
Section 2 or any property subject thereto.

                  2.5 Guarantee Absolute and Unconditional. Each Guarantor
waives any and all notice of the creation, renewal, extension or accrual of any
of the Borrower Obligations and notice of or proof of reliance by the
Administrative Agent or any other Secured Party upon the guarantee contained in
this Section 2 or acceptance of the guarantee contained in this Section 2; the
Borrower Obligations, and any of them, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon the guarantee contained in this Section 2; and all dealings
between the Borrower and any of the Guarantors, on the one hand, and the
Administrative Agent and the other Secured Parties, on the other hand, likewise
shall be conclusively presumed to have been had or consummated in reliance upon
the guarantee contained in this Section 2. Each Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrower or any of the Guarantors with respect to the Borrower
Obligations. Each Guarantor understands and agrees that the guarantee contained
in this Section 2 shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity or enforceability of the
Credit Agreement or any other Loan Document, any of the Borrower Obligations or
any other collateral security therefor or guarantee or right of offset with
respect thereto at any time or from time to time held by the Administrative
Agent or any other Secured Party, (b) any defense, set-off or counterclaim
(other than a defense of payment or performance) which may at any time be
available to or be asserted by the Borrower or any other Person against the
Administrative Agent or any other Secured Party, or (c) any other circumstance
whatsoever (with or without notice to or knowledge of the Borrower or such
Guarantor) which constitutes, or might be construed to constitute, an equitable
or legal discharge of the Borrower for the Borrower Obligations, or of such
Guarantor under the guarantee contained in this Section 2, in bankruptcy or in
any other instance. When making any demand hereunder or otherwise pursuing its
rights and remedies hereunder against any Guarantor, the Administrative Agent or
any other Secured Party may, but shall be under no obligation to, make a similar
demand on or otherwise pursue such rights and remedies as it may have against
the Borrower, any other Guarantor or any other Person or against any collateral
security or guarantee for the Borrower Obligations or any right of offset with
respect thereto, and any failure by the Administrative Agent or any other
Secured Party to

<PAGE>
                                                                               8

make any such demand, to pursue such other rights or remedies or to collect any
payments from the Borrower, any other Guarantor or any other Person or to
realize upon any such collateral security or guarantee or to exercise any such
right of offset, or any release of the Borrower, any other Guarantor or any
other Person or any such collateral security, guarantee or right of offset,
shall not relieve any Guarantor of any obligation or liability hereunder, and
shall not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Administrative Agent or any other Secured
Party against any Guarantor. For the purposes hereof "demand" shall include the
commencement and continuance of any legal proceedings.

                  2.6 Reinstatement. The guarantee contained in this Section 2
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Borrower Obligations is
rescinded or must otherwise be restored or returned by the Administrative Agent
or any other Secured Party upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Borrower or any Guarantor, or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Borrower or any Guarantor or any substantial
part of its property, or otherwise, all as though such payments had not been
made.

                  2.7 Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars at the office of the Administrative Agent located at 270
Park Avenue, New York, New York 10017.

                      SECTION 3. GRANT OF SECURITY INTEREST

                  Each Grantor hereby assigns and transfers to the
Administrative Agent, and hereby grants to the Administrative Agent, for the
ratable benefit of the Secured Parties, a security interest in, all of the
following property now owned or at any time hereafter acquired by such Grantor
or in which such Grantor now has or at any time in the future may acquire any
right, title or interest (collectively, the "Collateral"), as collateral
security for the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of such Grantor's
Obligations,:

                  (a) all Accounts;

                  (b) all Chattel Paper;

                  (c) all Deposit Accounts;

                  (d) all Documents;

                  (e) all Equipment;

                  (f) all General Intangibles;

                  (g) all Instruments;

                  (h) all Intellectual Property;

<PAGE>
                                                                               9

                  (i) all Inventory;

                  (j) all Investment Property;

                  (k) all other property not otherwise described above;

                  (l) all books and records pertaining to the Collateral; and

                  (m) to the extent not otherwise included, all Proceeds,
         Supporting Obligations and products of any and all of the foregoing and
         all collateral security and guarantees given by any Person with respect
         to any of the foregoing;

                  provided, however, that notwithstanding any of the other
provisions set forth in this Section 3, this Agreement shall not constitute a
grant of a security interest in any property to the extent that such grant of a
security interest is prohibited by any Requirements of Law of a Governmental
Authority, requires a consent not obtained of any Governmental Authority
pursuant to such Requirement of Law or is prohibited by, or constitutes a breach
or default under or results in the termination of or requires any consent not
obtained under, any contract, license, agreement, instrument or other document
evidencing or giving rise to such property or, in the case of any Investment
Property, Pledged Stock or Pledged Note, any applicable shareholder or similar
agreement, except to the extent that such Requirement of Law or the term in such
contract, license, agreement, instrument or other document or shareholder or
similar agreement providing for such prohibition, breach, default or termination
or requiring such consent is ineffective under applicable law.

                    SECTION 4. REPRESENTATIONS AND WARRANTIES

                  To induce the Administrative Agent and certain of the other
Secured Parties to enter into the Credit Agreement and to induce the Lenders to
make their respective extensions of credit to the Borrower thereunder, each
Grantor hereby represents and warrants to the Administrative Agent and each
other Secured Party that:

                  4.1 Representations in Credit Agreement. In the case of each
Guarantor, the representations and warranties set forth in Section 4 of the
Credit Agreement as they relate to such Guarantor or to the Loan Documents to
which such Guarantor is a party, each of which is hereby incorporated herein by
reference, are true and correct, and the Administrative Agent and each other
Secured Party shall be entitled to rely on each of them as if they were fully
set forth herein, provided that each reference in each such representation and
warranty to the Borrower's knowledge shall, for the purposes of this Section
4.1, be deemed to be a reference to such Guarantor's knowledge.

                  4.2 Title; No Other Liens. Except for the security interest
granted to the Administrative Agent for the ratable benefit of the Secured
Parties pursuant to this Agreement and the other Liens permitted to exist on the
Collateral by the Credit Agreement, such Grantor owns each item of the
Collateral free and clear of any and all Liens or claims of others. No financing
statement or other public notice with respect to all or any part of the
Collateral is on file or of record in any public office, except such as have
been filed in favor of the

<PAGE>
                                                                              10

Administrative Agent, for the ratable benefit of the Secured Parties, pursuant
to this Agreement or as are permitted by the Credit Agreement.

                  4.3 Perfected First Priority Liens. The security interests
granted pursuant to this Agreement upon completion of the filings and other
actions specified on Schedule 3 (which, in the case of all filings and other
documents referred to on said schedule, have been delivered to the
Administrative Agent in completed and, where applicable, duly executed form)
constitute valid perfected security interests in all of the Collateral
(excluding items 3(c) and 3(k)) in favor of the Administrative Agent, for the
ratable benefit of the Secured Parties, as collateral security for such
Grantor's Obligations, enforceable in accordance with the terms hereof against
all creditors of such Grantor and any Persons purporting to purchase any
Collateral from such Grantor and are prior to all other Liens on the Collateral
in existence on the date hereof except for (i) unrecorded Liens permitted by the
Credit Agreement which have priority over the Liens on the Collateral by
operation of law and (ii) Liens described on Schedule 7.

                  4.4 Jurisdiction of Organization; Chief Executive Office. On
the date hereof, such Grantor's jurisdiction of organization, identification
number from the jurisdiction of organization (if any), and the location of such
Grantor's chief executive office or sole place of business or principal
residence, as the case may be, are specified on Schedule 4. Such Grantor has
furnished to the Administrative Agent a certified charter, certificate of
incorporation or other organization document and long-form good standing
certificate as of a date which is recent to the date hereof.

                  4.5 Inventory and Equipment. On the date hereof, the Inventory
and the Equipment (other than mobile goods) are kept at the locations listed on
Schedule 5.

                  4.6 Farm Products. None of the Collateral constitutes, or is
the Proceeds of, Farm Products.

                  4.7 Investment Property. (a) The shares of Pledged Stock
pledged by such Grantor hereunder constitute all the issued and outstanding
shares of all classes of the Capital Stock of each Issuer owned by such Grantor.

                  (b) All the shares of the Pledged Stock have been duly and
validly issued and are fully paid and nonassessable.

                  (c) Each of the Pledged Notes constitutes the legal, valid and
binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.

                  (d) Such Grantor is the record and beneficial owner of, and
has good and marketable title to, the Investment Property pledged by it
hereunder, free of any and all Liens or options in favor of, or claims of, any
other Person, except the security interest created by this Agreement.

<PAGE>
                                                                              11

                  4.8 Receivables. (a) No amount payable to such Grantor under
or in connection with any Receivable is evidenced by any Instrument or Chattel
Paper which has not been delivered to the Administrative Agent.

                  (b) None of the obligors on any Receivables is a Governmental
Authority.

                  (c) The amounts represented by such Grantor to the Secured
Parties from time to time as owing to such Grantor in respect of the Receivables
will at such times be accurate.

                  4.9 Intellectual Property. (a) Schedule 6 lists all
applications for registration and registered Intellectual Property owned by such
Grantor in its own name on the date hereof.

                  (b) On the date hereof, all material Intellectual Property is
valid, subsisting, unexpired and enforceable, has not been abandoned and does
not infringe the intellectual property rights of any other Person.

                  (c) Except as set forth in Schedule 6, on the date hereof,
none of the Intellectual Property is the subject of any licensing or franchise
agreement pursuant to which such Grantor is the licensor or franchisor.

                  (d) No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity of, or
such Grantor's rights in, any Intellectual Property in any respect that could
reasonably be expected to have a Material Adverse Effect.

                  (e) No action or proceeding is pending, or, to the knowledge
of such Grantor, threatened, on the date hereof (i) seeking to limit, cancel or
question the validity of any Intellectual Property or such Grantor's ownership
interest therein, or (ii) which, if adversely determined, would have a material
adverse effect on the value of any Intellectual Property.

                              SECTION 5. COVENANTS

                  Each Grantor covenants and agrees with the Administrative
Agent and the other Secured Parties that, from and after the date of this
Agreement until the Obligations shall have been paid in full, no Letter of
Credit shall be outstanding and the Commitments shall have terminated:

                  5.1 Covenants in Credit Agreement. In the case of each
Guarantor, such Guarantor shall take, or shall refrain from taking, as the case
may be, each action that is necessary to be taken or not taken, as the case may
be, so that no Default or Event of Default is caused by the failure to take such
action or to refrain from taking such action by such Guarantor or any of its
Subsidiaries.

                  5.2 Delivery of Instruments, Certificated Securities and
Chattel Paper. If any amount payable under or in connection with any of the
Collateral shall be or become evidenced by any Instrument, Certificated Security
or Chattel Paper, such Instrument, Certificated Security or Chattel Paper shall
be immediately delivered to the Administrative Agent, duly indorsed in a

<PAGE>
                                                                              12

manner satisfactory to the Administrative Agent, to be held as Collateral
pursuant to this Agreement.

                  5.3 Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Grantor shall maintain the security interest created by
this Agreement as a perfected security interest having at least the priority
described in Section 4.3 and shall defend such security interest against the
claims and demands of all Persons whomsoever.

                  (b) Such Grantor will furnish to the Administrative Agent and
the other Secured Parties from time to time statements and schedules further
identifying and describing the Collateral and such other reports in connection
therewith as the Administrative Agent may reasonably request, all in reasonable
detail.

                  (c) At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of such Grantor,
such Grantor will promptly and duly execute and deliver, and have recorded, such
further instruments and documents and take such further actions as the
Administrative Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, (i) filing any financing or
continuation statements under the Uniform Commercial Code (or other similar
laws) in effect in any jurisdiction with respect to the security interests
created hereby and (ii) in the case of Investment Property, Letter-of-Credit
Rights and any other relevant Collateral, taking any actions necessary to enable
the Administrative Agent to obtain "control" (within the meaning of the
applicable Uniform Commercial Code) with respect thereto.

                  5.4 Changes in Locations, Name, etc. Such Grantor will not,
except upon 15 days' prior written notice to the Administrative Agent and
delivery to the Administrative Agent of all additional financing statements and
other documents reasonably requested by the Administrative Agent, if any,
necessary to maintain the validity, perfection and priority of the security
interests provided for herein:

                  (i) change its jurisdiction of organization or the location of
         its chief executive office or sole place of business or principal
         residence, as the case may be, from that referred to in Section 4.4; or

                  (ii) change its name.

                  5.5 Notices. Such Grantor will advise the Administrative Agent
and the other Secured Parties promptly, in reasonable detail, of:

                  (a) any Lien (other than security interests created hereby or
         Liens permitted under the Credit Agreement) on any of the Collateral
         which would adversely affect the ability of the Administrative Agent to
         exercise any of its remedies hereunder; and

                  (b) of the occurrence of any other event which could
         reasonably be expected to have a material adverse effect on the
         aggregate value of the Collateral or on the security interests created
         hereby.

<PAGE>
                                                                              13

                  5.6 Investment Property. (a) If such Grantor shall become
entitled to receive or shall receive any certificate (including, without
limitation, any certificate representing a dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in
respect of the Capital Stock of any Issuer, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the
same as the agent of the Administrative Agent and the other Secured Parties,
hold the same in trust for the Administrative Agent and the other Secured
Parties and deliver the same forthwith to the Administrative Agent in the exact
form received, duly indorsed by such Grantor to the Administrative Agent, if
required, together with an undated stock power covering such certificate duly
executed in blank by such Grantor and with, if the Administrative Agent so
requests, signature guaranteed, to be held by the Administrative Agent, subject
to the terms hereof, as additional collateral security for the Obligations. Any
sums paid upon or in respect of the Investment Property upon the liquidation or
dissolution of any Issuer shall be paid over to the Administrative Agent to be
held by it hereunder as additional collateral security for the Obligations, and
in case any distribution of capital shall be made on or in respect of the
Investment Property or any property shall be distributed upon or with respect to
the Investment Property pursuant to the recapitalization or reclassification of
the capital of any Issuer or pursuant to the reorganization thereof, the
property so distributed shall, unless otherwise subject to a perfected security
interest in favor of the Administrative Agent, be delivered to the
Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations. If any sums of money or property so paid or
distributed in respect of the Investment Property shall be received by such
Grantor, such Grantor shall, until such money or property is paid or delivered
to the Administrative Agent, hold such money or property in trust for the
Administrative Agent and the other Secured Parties, segregated from other funds
of such Grantor, as additional collateral security for the Obligations.

                  (b) Without the prior written consent of the Administrative
Agent (except pursuant to a transaction expressly permitted by the Credit
Agreement), such Grantor will not (i) vote to enable, or take any other action
to permit, any Issuer to issue any Capital Stock of any nature or to issue any
other securities convertible into or granting the right to purchase or exchange
for any Capital Stock of any nature of any Issuer, (ii) sell, assign, transfer,
exchange, or otherwise dispose of, or grant any option with respect to, the
Investment Property or Proceeds thereof, (iii) create, incur or permit to exist
any Lien or option in favor of, or any claim of any Person with respect to, any
of the Investment Property or Proceeds thereof, or any interest therein, except
for the security interests created by this Agreement or (iv) enter into any
agreement or undertaking restricting the right or ability of such Grantor or the
Administrative Agent to sell, assign or transfer any of the Investment Property
or Proceeds thereof.

                  (c) In the case of each Grantor which is an Issuer, such
Issuer agrees that (i) it will be bound by the terms of this Agreement relating
to the Investment Property issued by it and will comply with such terms insofar
as such terms are applicable to it, (ii) it will notify the Administrative Agent
promptly in writing of the occurrence of any of the events described in Section
5.8(a) with respect to the Investment Property issued by it and (iii) the terms
of Sections 6.3(c) and 6.7 shall apply to it, mutatis mutandis, with respect to
all actions that may be required of it pursuant to Section 6.3(c) or 6.7 with
respect to the Investment Property issued by it.

<PAGE>
                                                                              14

                  5.7 Receivables. (a) Other than in the ordinary course of
business consistent with its past practice, such Grantor will not (i) grant any
extension of the time of payment of any Receivable, (ii) compromise or settle
any Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Receivable, (iv) allow any
credit or discount whatsoever on any Receivable or (v) amend, supplement or
modify any Receivable in any manner that could adversely affect the value
thereof.

                  (b) Such Grantor will deliver to the Administrative Agent a
copy of each material demand, notice or document received by it that questions
or calls into doubt the validity or enforceability of more than 5% of the
aggregate amount of the then outstanding Receivables.

                  5.8 Intellectual Property. (a) Such Grantor (either itself or
through licensees) will (i) continue to use each material Trademark on each and
every trademark class of goods applicable to its current line as reflected in
its current catalogs, brochures and price lists in order to maintain such
Trademark in full force free from any claim of abandonment for non-use, (ii)
maintain as in the past the quality of products and services offered under such
Trademark, (iii) use such Trademark with the appropriate notice of registration
and all other notices and legends required by applicable Requirements of Law,
(iv) not adopt or use any mark which is confusingly similar or a colorable
imitation of such Trademark unless the Administrative Agent, for the ratable
benefit of the Secured Parties, shall obtain a perfected security interest in
such mark pursuant to this Agreement, and (v) not (and not permit any licensee
or sublicensee thereof to) do any act or knowingly omit to do any act whereby
such Trademark may become invalidated or impaired in any way.

                  (b) Such Grantor (either itself or through licensees) will not
do any act, or omit to do any act, whereby any material Patent may become
forfeited, abandoned or dedicated to the public.

                  (c) Such Grantor (either itself or through licensees) (i) will
employ each material Copyright and (ii) will not (and will not permit any
licensee or sublicensee thereof to) do any act or knowingly omit to do any act
whereby any material portion of the Copyrights may become invalidated or
otherwise impaired. Such Grantor will not (either itself or through licensees)
do any act whereby any material portion of the Copyrights may fall into the
public domain.

                  (d) Such Grantor (either itself or through licensees) will not
do any act that knowingly uses any material Intellectual Property to infringe
the intellectual property rights of any other Person.

                  (e) Such Grantor will notify the Administrative Agent and the
other Secured Parties immediately if it knows, or has reason to know, that any
application or registration relating to any material Intellectual Property may
become forfeited, abandoned or dedicated to the public, or of any adverse
determination or development (including, without limitation, the institution of,
or any such determination or development in, any proceeding in the United States
Patent and Trademark Office, the United States Copyright Office or any court or
tribunal in any country) regarding such Grantor's ownership of, or the validity
of, any material Intellectual Property or such Grantor's right to register the
same or to own and maintain the same.

<PAGE>
                                                                              15

                  (f) Whenever such Grantor, either by itself or through any
agent, employee, licensee or designee, shall file an application for the
registration of any Intellectual Property with the United States Patent and
Trademark Office, the United States Copyright Office or any similar office or
agency in any other country or any political subdivision thereof, such Grantor
shall report such filing to the Administrative Agent within five Business Days
after the last day of the fiscal quarter in which such filing occurs. Upon
request of the Administrative Agent, such Grantor shall execute and deliver, and
have recorded, any and all agreements, instruments, documents, and papers as the
Administrative Agent may request to evidence the Administrative Agent's and the
other Secured Parties' security interest in any Copyright, Patent or Trademark
and the goodwill and general intangibles of such Grantor relating thereto or
represented thereby.

                  (g) Such Grantor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency in any other country or any political subdivision thereof, to maintain
and pursue each application (and to obtain the relevant registration) and to
maintain each registration of the material Intellectual Property, including,
without limitation, filing of applications for renewal, affidavits of use and
affidavits of incontestability.

                  (h) In the event that any material Intellectual Property is
infringed, misappropriated or diluted by a third party, such Grantor shall (i)
take such actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the
Administrative Agent after it learns thereof and sue for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and to
recover any and all damages for such infringement, misappropriation or dilution.

                         SECTION 6. REMEDIAL PROVISIONS

                  6.1 Certain Matters Relating to Receivables. (a) The
Administrative Agent shall have the right to make test verifications of the
Receivables in any manner and through any medium that it reasonably considers
advisable, and each Grantor shall furnish all such assistance and information as
the Administrative Agent may require in connection with such test verifications.
At any time and from time to time, upon the Administrative Agent's request and
at the expense of the relevant Grantor, such Grantor shall cause independent
public accountants or others satisfactory to the Administrative Agent to furnish
to the Administrative Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Receivables.

                  (b) The Administrative Agent hereby authorizes each Grantor to
collect such Grantor's Receivables, subject to the Administrative Agent's
direction and control, and the Administrative Agent may curtail or terminate
said authority at any time after the occurrence and during the continuance of an
Event of Default. If required by the Administrative Agent at any time after the
occurrence and during the continuance of an Event of Default, any payments of
Receivables, when collected by any Grantor, (i) shall be forthwith (and, in any
`event, within two Business Days) deposited by such Grantor in the exact form
received, duly indorsed by such Grantor to the Administrative Agent if required,
in a Collateral Account maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the

<PAGE>
                                                                              16

Administrative Agent for the account of the Secured Parties only as provided in
Section 6.5, and (ii) until so turned over, shall be held by such Grantor in
trust for the Administrative Agent and the other Secured Parties, segregated
from other funds of such Grantor. Each such deposit of Proceeds of Receivables
shall be accompanied by a report identifying in reasonable detail the nature and
source of the payments included in the deposit.

                  (c) At the Administrative Agent's request, each Grantor shall
deliver to the Administrative Agent all original and other documents evidencing,
and relating to, the agreements and transactions which gave rise to the
Receivables, including, without limitation, all original orders, invoices and
shipping receipts.

                  6.2 Communications with Obligors; Grantors Remain Liable. (a)
The Administrative Agent in its own name or in the name of others may at any
time after the occurrence and during the continuance of an Event of Default
communicate with obligors under the Receivables to verify with them to the
Administrative Agent's satisfaction the existence, amount and terms of any
Receivables.

                  (b) Upon the request of the Administrative Agent at any time
after the occurrence and during the continuance of an Event of Default, each
Grantor shall notify obligors on the Receivables that the Receivables have been
assigned to the Administrative Agent for the ratable benefit of the Secured
Parties and that payments in respect thereof shall be made directly to the
Administrative Agent.

                  (c) Anything herein to the contrary notwithstanding, each
Grantor shall remain liable under each of the Receivables to observe and perform
all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise
thereto. Neither the Administrative Agent nor any other Secured Party shall have
any obligation or liability under any Receivable (or any agreement giving rise
thereto) by reason of or arising out of this Agreement or the receipt by the
Administrative Agent or any other Secured Party of any payment relating thereto,
nor shall the Administrative Agent or any other Secured Party be obligated in
any manner to perform any of the obligations of any Grantor under or pursuant to
any Receivable (or any agreement giving rise thereto), to make any payment, to
make any inquiry as to the nature or the sufficiency of any payment received by
it or as to the sufficiency of any performance by any party thereunder, to
present or file any claim, to take any action to enforce any performance or to
collect the payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times.

                  6.3 Pledged Stock. (a) Unless an Event of Default shall have
occurred and be continuing and the Administrative Agent shall have given notice
to the relevant Grantor of the Administrative Agent's intent to exercise its
corresponding rights pursuant to Section 6.3(b), each Grantor shall be permitted
to receive all cash dividends paid in respect of the Pledged Stock and all
payments made in respect of the Pledged Notes, in each case paid in the normal
course of business of the relevant Issuer and consistent with past practice, to
the extent permitted in the Credit Agreement, and to exercise all voting and
corporate or other organizational rights with respect to the Investment
Property; provided, however, that no vote shall be cast or corporate or other
organizational right exercised or other action taken which, in the
Administrative Agent's reasonable judgment, would impair the Collateral or which
would be inconsistent with or result

<PAGE>
                                                                              17

in any violation of any provision of the Credit Agreement, this Agreement or any
other Loan Document.

                  (b) If an Event of Default shall occur and be continuing and
the Administrative Agent shall give notice of its intent to exercise such rights
to the relevant Grantor or Grantors, (i) the Administrative Agent shall have the
right to receive any and all cash dividends, payments or other Proceeds paid in
respect of the Investment Property and make application thereof to the
Obligations in the order set forth in Section 6.5, and (ii) any or all of the
Investment Property shall be registered in the name of the Administrative Agent
or its nominee, and the Administrative Agent or its nominee may thereafter
exercise (x) all voting, corporate and other rights pertaining to such
Investment Property at any meeting of shareholders of the relevant Issuer or
Issuers or otherwise and (y) any and all rights of conversion, exchange and
subscription and any other rights, privileges or options pertaining to such
Investment Property as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the
Investment Property upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate or other
organizational structure of any Issuer, or upon the exercise by any Grantor or
the Administrative Agent of any right, privilege or option pertaining to such
Investment Property, and in connection therewith, the right to deposit and
deliver any and all of the Investment Property with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Administrative Agent may determine), all without liability
except to account for property actually received by it, but the Administrative
Agent shall have no duty to any Grantor to exercise any such right, privilege or
option and shall not be responsible for any failure to do so or delay in so
doing.

                  (c) Each Grantor hereby authorizes and instructs each Issuer
of any Investment Property pledged by such Grantor hereunder to (i) comply with
any instruction received by it from the Administrative Agent in writing that (x)
states that an Event of Default has occurred and is continuing and (y) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees that each Issuer
shall be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Investment Property directly to the Administrative Agent.

                  6.4 Proceeds to be Turned Over To Administrative Agent. In
addition to the rights of the Administrative Agent and the other Secured Parties
specified in Section 6.1 with respect to payments of Receivables, if an Event of
Default shall occur and be continuing, all Proceeds received by any Grantor
consisting of cash, checks and other near-cash items shall be held by such
Grantor in trust for the Administrative Agent and the other Secured Parties,
segregated from other funds of such Grantor, and shall, forthwith upon receipt
by such Grantor, be turned over to the Administrative Agent in the exact form
received by such Grantor (duly indorsed by such Grantor to the Administrative
Agent, if required). All Proceeds received by the Administrative Agent hereunder
shall be held by the Administrative Agent in a Collateral Account maintained
under its sole dominion and control. All Proceeds while held by the
Administrative Agent in a Collateral Account (or by such Grantor in trust for
the Administrative Agent and the other Secured Parties) shall continue to be
held as collateral security for all the Obligations and shall not constitute
payment thereof until applied as provided in Section 6.5.

<PAGE>
                                                                              18

                  6.5 Application of Proceeds. At such intervals as may be
agreed upon by the Borrower and the Administrative Agent, or, if an Event of
Default shall have occurred and be continuing, at any time at the Administrative
Agent's election, the Administrative Agent may apply all or any part of Proceeds
constituting Collateral, whether or not held in any Collateral Account, and any
proceeds of the guarantee set forth in Section 2, in payment of the Obligations
in the following order:

                  First, to pay incurred and unpaid fees and expenses of the
         Administrative Agent under the Loan Documents;

                  Second, to the Administrative Agent, for application by it
         towards payment of amounts then due and owing and remaining unpaid in
         respect of the Obligations, pro rata among the Secured Parties
         according to the amounts of the Obligations then due and owing and
         remaining unpaid to the Secured Parties;

                  Third, to the Administrative Agent, for application by it
         towards prepayment of the Obligations, pro rata among the Secured
         Parties according to the amounts of the Obligations then held by the
         Secured Parties; and

                  Fourth, any balance of such Proceeds remaining after the
         Obligations shall have been paid in full, no Letters of Credit shall be
         outstanding and the Commitments shall have terminated shall be paid
         over to the Borrower or to whomsoever may be lawfully entitled to
         receive the same.

                  6.6 Code and Other Remedies. If an Event of Default shall
occur and be continuing, the Administrative Agent, on behalf of the Secured
Parties, may exercise, in addition to all other rights and remedies granted to
them in this Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights and remedies of a secured
party under the New York UCC or any other applicable law. Without limiting the
generality of the foregoing, the Administrative Agent, without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon any
Grantor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, lease, assign, give option or options
to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broker's board or office of
the Administrative Agent or any other Secured Party or elsewhere upon such terms
and conditions as it may deem advisable and at such prices as it may deem best,
for cash or on credit or for future delivery without assumption of any credit
risk. The Administrative Agent or any other Secured Party shall have the right
upon any such public sale or sales, and, to the extent permitted by law, upon
any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in any Grantor,
which right or equity is hereby waived and released. Each Grantor further
agrees, at the Administrative Agent's request, to assemble the Collateral and
make it available to the Administrative Agent at places which the Administrative
Agent shall reasonably select, whether at such Grantor's premises or elsewhere.
The Administrative Agent shall apply the net proceeds of any action taken by it
pursuant to this

<PAGE>
                                                                              19

Section 6.6, after deducting all reasonable costs and expenses of every kind
incurred in connection therewith or incidental to the care or safekeeping of any
of the Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and the other Secured Parties hereunder, including, without
limitation, reasonable attorneys' fees and disbursements, to the payment in
whole or in part of the Obligations, in such order as the Administrative Agent
may elect, and only after such application and after the payment by the
Administrative Agent of any other amount required by any provision of law,
including, without limitation, Section 9-615(a)(3) of the New York UCC, need the
Administrative Agent account for the surplus, if any, to any Grantor. To the
extent permitted by applicable law, each Grantor waives all claims, damages and
demands it may acquire against the Administrative Agent or any other Secured
Party arising out of the exercise by them of any rights hereunder. If any notice
of a proposed sale or other disposition of Collateral shall be required by law,
such notice shall be deemed reasonable and proper if given at least 10 days
before such sale or other disposition.

                  6.7 Registration Rights. (a) If the Administrative Agent shall
determine to exercise its right to sell any or all of the Pledged Stock pursuant
to Section 6.6, and if in the opinion of the Administrative Agent it is
necessary or advisable to have the Pledged Stock, or that portion thereof to be
sold, registered under the provisions of the Securities Act, the relevant
Grantor will cause the Issuer thereof to (i) execute and deliver, and cause the
directors and officers of such Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the opinion of the Administrative Agent, necessary or advisable to
register the Pledged Stock, or that portion thereof to be sold, under the
provisions of the Securities Act, (ii) use its best efforts to cause the
registration statement relating thereto to become effective and to remain
effective for a period of one year from the date of the first public offering of
the Pledged Stock, or that portion thereof to be sold, and (iii) make all
amendments thereto and/or to the related prospectus which, in the opinion of the
Administrative Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto. Each Grantor agrees to
cause such Issuer to comply with the provisions of the securities or "Blue Sky"
laws of any and all jurisdictions which the Administrative Agent shall designate
and to make available to its security holders, as soon as practicable, an
earnings statement (which need not be audited) which will satisfy the provisions
of Section 11(a) of the Securities Act.

                  (b) Each Grantor recognizes that the Administrative Agent may
be unable to effect a public sale of any or all the Pledged Stock, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that no such private sale shall be
deemed to have been made in a commercially unreasonable manner solely because it
has had such a result. The Administrative Agent shall be under no obligation to
delay a sale of any of the Pledged Stock for the period of time necessary to
permit the Issuer thereof to register such securities for public sale under the
Securities Act, or under applicable state securities laws, even if such Issuer
would agree to do so.

<PAGE>
                                                                              20

                  (c) Each Grantor agrees to use its best efforts to do or cause
to be done all such other acts as may be necessary to make such sale or sales of
all or any portion of the Pledged Stock pursuant to this Section 6.7 valid and
binding and in compliance with any and all other applicable Requirements of Law.
Each Grantor further agrees that a breach of any of the covenants contained in
this Section 6.7 will cause irreparable injury to the Administrative Agent and
the other Secured Parties, that the Administrative Agent and the other Secured
Parties have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 6.7 shall be
specifically enforceable against such Grantor, and such Grantor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants except for a defense that no Event of Default has occurred
under the Credit Agreement.

                  6.8 Deficiency. Each Grantor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay its Obligations and the fees and disbursements of any
attorneys employed by the Administrative Agent or any other Secured Party to
collect such deficiency.

                       SECTION 7. THE ADMINISTRATIVE AGENT

                  7.1 Administrative Agent's Appointment as Attorney-in-Fact,
etc. (a) Each Grantor hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute any and
all documents and instruments which may be necessary or desirable to accomplish
the purposes of this Agreement, and, without limiting the generality of the
foregoing, each Grantor hereby gives the Administrative Agent the power and
right, on behalf of such Grantor, without notice to or assent by such Grantor,
to do any or all of the following:

                  (i) in the name of such Grantor or its own name, or otherwise,
         take possession of and indorse and collect any checks, drafts, notes,
         acceptances or other instruments for the payment of moneys due under
         any Receivable with respect to any other Collateral and file any claim
         or take any other action or proceeding in any court of law or equity or
         otherwise deemed appropriate by the Administrative Agent for the
         purpose of collecting any and all such moneys due under any Receivable
         or with respect to any other Collateral whenever payable;

                  (ii) in the case of any Intellectual Property, execute and
         deliver, and have recorded, any and all agreements, instruments,
         documents and papers as the Administrative Agent may request to
         evidence the Administrative Agent's and the other Secured Parties'
         security interest in such Intellectual Property and the goodwill and
         general intangibles of such Grantor relating thereto or represented
         thereby;

                  (iii) pay or discharge taxes and Liens levied or placed on or
         threatened against the Collateral, effect any repairs or any insurance
         called for by the terms of this Agreement and pay all or any part of
         the premiums therefor and the costs thereof;

<PAGE>
                                                                              21

                  (iv) execute, in connection with any sale provided for in
         Section 6.6 or 6.7, any indorsements, assignments or other instruments
         of conveyance or transfer with respect to the Collateral; and

                  (v) direct any party liable for any payment under any of the
         Collateral to make payment of any and all moneys due or to become due
         thereunder directly to the Administrative Agent or as the
         Administrative Agent shall direct; ask or demand for, collect, and
         receive payment of and receipt for, any and all moneys, claims and
         other amounts due or to become due at any time in respect of or arising
         out of any Collateral; sign and indorse any invoices, freight or
         express bills, bills of lading, storage or warehouse receipts, drafts
         against debtors, assignments, verifications, notices and other
         documents in connection with any of the Collateral; commence and
         prosecute any suits, actions or proceedings at law or in equity in any
         court of competent jurisdiction to collect the Collateral or any
         portion thereof and to enforce any other right in respect of any
         Collateral; defend any suit, action or proceeding brought against such
         Grantor with respect to any Collateral; settle, compromise or adjust
         any such suit, action or proceeding and, in connection therewith, give
         such discharges or releases as the Administrative Agent may deem
         appropriate; assign any Copyright, Patent or Trademark (along with the
         goodwill of the business to which any such Copyright, Patent or
         Trademark pertains), throughout the world for such term or terms, on
         such conditions, and in such manner, as the Administrative Agent shall
         in its sole discretion determine; and generally, sell, transfer, pledge
         and make any agreement with respect to or otherwise deal with any of
         the Collateral as fully and completely as though the Administrative
         Agent were the absolute owner thereof for all purposes, and do, at the
         Administrative Agent's option and such Grantor's expense, at any time,
         or from time to time, all acts and things which the Administrative
         Agent deems necessary to protect, preserve or realize upon the
         Collateral and the Administrative Agent's and the other Secured
         Parties' security interests therein and to effect the intent of this
         Agreement, all as fully and effectively as such Grantor might do.

         Anything in this Section 7.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.

                  (b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.

                  (c) The expenses of the Administrative Agent incurred in
connection with actions undertaken as provided in this Section 7.1, together
with interest thereon at a rate per annum equal to the rate per annum at which
interest would then be payable on past due Revolving Credit Loans that are Base
Rate Loans under the Credit Agreement, from the date of payment by the
Administrative Agent to the date reimbursed by the relevant Grantor, shall be
payable by such Grantor to the Administrative Agent on demand.

                  (d) Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. All powers, authorizations and
agencies contained in this

<PAGE>
                                                                              22

Agreement are coupled with an interest and are irrevocable until this Agreement
is terminated and the security interests created hereby are released.

                  7.2 Duty of Administrative Agent. The Administrative Agent's
sole duty with respect to the custody, safekeeping and physical preservation of
the Collateral in its possession, under Section 9-207 of the New York UCC or
otherwise, shall be to deal with it in the same manner as the Administrative
Agent deals with similar property for its own account. Neither the
Administrative Agent, any other Secured Party nor any of their respective
officers, directors, employees or agents shall be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Administrative Agent and the other Secured Parties hereunder
are solely to protect the Administrative Agent's and the other Secured Parties'
interests in the Collateral and shall not impose any duty upon the
Administrative Agent or any other Secured Party to exercise any such powers. The
Administrative Agent and the other Secured Parties shall be accountable only for
amounts that they actually receive as a result of the exercise of such powers,
and neither they nor any of their officers, directors, employees or agents shall
be responsible to any Grantor for any act or failure to act hereunder, except
for their own gross negligence or willful misconduct.

                  7.3 Execution of Financing Statements. Pursuant to any
applicable law, each Grantor authorizes the Administrative Agent to file or
record financing statements and other filing or recording documents or
instruments with respect to the Collateral without the signature of such Grantor
in such form and in such offices as the Administrative Agent reasonably
determines appropriate to perfect the security interests of the Administrative
Agent under this Agreement. Each Grantor authorizes the Administrative Agent to
use the collateral description "all personal property" in any such financing
statements. Each Grantor hereby ratifies and authorizes the filing by the
Administrative Agent of any financing statement with respect to the Collateral
made prior to the date hereof.

                  7.4 Authority of Administrative Agent. Each Grantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Agreement with respect to any action taken by the Administrative
Agent or the exercise or non-exercise by the Administrative Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Administrative
Agent and the other Secured Parties, be governed by the Credit Agreement and by
such other agreements with respect thereto as may exist from time to time among
them, but, as between the Administrative Agent and the Grantors, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Secured Parties with full and valid authority so to act or refrain from
acting, and no Grantor shall be under any obligation, or entitlement, to make
any inquiry respecting such authority.

                            SECTION 8. MISCELLANEOUS

                  8.1 Amendments in Writing. None of the terms or provisions of
this Agreement may be waived, amended, supplemented or otherwise modified except
in accordance with subsection 10.1 of the Credit Agreement.

<PAGE>
                                                                              23

                  8.2 Notices. All notices, requests and demands to or upon the
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in subsection 10.2 of the Credit Agreement; provided that any such
notice, request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on Schedule 1.

                  8.3 No Waiver by Course of Conduct; Cumulative Remedies.
Neither the Administrative Agent nor any other Secured Party shall by any act
(except by a written instrument pursuant to Section 8.1), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any Default or Event of Default. No failure to exercise,
nor any delay in exercising, on the part of the Administrative Agent or any
other Secured Party, any right, power or privilege hereunder shall operate as a
waiver thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Administrative Agent or
any other Secured Party of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy which the Administrative
Agent or such other Secured Party would otherwise have on any future occasion.
The rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any other rights or remedies provided
by law.

                  8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor
agrees to pay or reimburse each Secured Party, including the Administrative
Agent, for all its reasonable out-of-pocket costs and expenses incurred in
collecting against such Guarantor under the guarantee contained in Section 2 or
otherwise enforcing or preserving any rights under this Agreement and the other
Loan Documents to which such Guarantor is a party, including, without
limitation, the reasonable fees and disbursements of one counsel (including the
allocated fees and expenses of in-house counsel) to each Secured Party (other
than the Administrative Agent) and of counsel to the Administrative Agent.

                  (b) Each Guarantor agrees to pay, and to save the
Administrative Agent and the other Secured Parties harmless from, any and all
liabilities with respect to, or resulting from any delay in paying, any and all
stamp, excise, sales or other taxes which may be payable or determined to be
payable with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Agreement.

                  (c) Each Guarantor agrees to pay, and to save the
Administrative Agent and the other Secured Parties harmless from, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement to the extent the Borrower would be required to do so pursuant to
subsection 10.5 of the Credit Agreement.

                  (d) The agreements in this Section 8.4 shall survive repayment
of the Obligations and all other amounts payable under the Credit Agreement and
the other Loan Documents.

                  8.5 Successors and Assigns. This Agreement shall be binding
upon the successors and assigns of each Grantor and shall inure to the benefit
of the Administrative Agent and the other Secured Parties and their successors
and assigns; provided that no Grantor may

<PAGE>
                                                                              24

assign, transfer or delegate any of its rights or obligations under this
Agreement without the prior written consent of the Administrative Agent.

                  8.6 Set-Off. Each Grantor hereby irrevocably authorizes the
Administrative Agent and each other Secured Party at any time and from time to
time while an Event of Default shall have occurred and be continuing, without
notice to such Grantor or any other Grantor, any such notice being expressly
waived by each Grantor, to set-off and appropriate and apply any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Administrative Agent or such other
Secured Party to or for the credit or the account of such Grantor, or any part
thereof in such amounts as the Administrative Agent or such other Secured Party
may elect, against and on account of the obligations and liabilities of such
Grantor to the Administrative Agent or such other Secured Party hereunder and
claims of every nature and description of the Administrative Agent or such other
Secured Party against such Grantor, in any currency, whether arising hereunder,
under the Credit Agreement, any other Loan Document or otherwise, as the
Administrative Agent or such other Secured Party may elect, whether or not the
Administrative Agent or any other Secured Party has made any demand for payment
and although such obligations, liabilities and claims may be contingent or
unmatured. The Administrative Agent and each other Secured Party shall notify
such Grantor promptly of any such set-off and the application made by the
Administrative Agent or such other Secured Party of the proceeds thereof,
provided that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of the Administrative Agent and each
other Secured Party under this Section 8.6 are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which the
Administrative Agent or such other Secured Party may have.

                  8.7 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.

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

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

                  8.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Grantors, the Administrative Agent and the other
Secured Parties with respect to the subject matter hereof and thereof, and there
are no promises, undertakings, representations or warranties by the
Administrative Agent or any other Secured Party relative to subject matter
hereof and thereof not expressly set forth or referred to herein or in the other
Loan Documents.

<PAGE>
                                                                              25

                  8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

                  8.12 Submission To Jurisdiction; Waivers. Each Grantor hereby
irrevocably and unconditionally:

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

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

                  (c) agrees that service of process in any such action or
         proceeding may be effected by mailing a copy thereof by registered or
         certified mail (or any substantially similar form of mail), postage
         prepaid, to such Grantor at its address referred to in Section 8.2 or
         at such other address of which the Administrative Agent shall have been
         notified pursuant thereto;

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

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

                  8.13 Acknowledgements. Each Grantor hereby acknowledges that:

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

                  (b) neither the Administrative Agent nor any other Secured
         Party has any fiduciary relationship with or duty to any Grantor
         arising out of or in connection with this Agreement or any of the other
         Loan Documents, and the relationship between the Grantors, on the one
         hand, and the Administrative Agent and other Secured Parties, on the
         other hand, in connection herewith or therewith is solely that of
         debtor and creditor; and

                  (c) no joint venture is created hereby or by the other Loan
         Documents or otherwise exists by virtue of the transactions
         contemplated hereby among the Secured Parties or among the Grantors and
         the Secured Parties.

<PAGE>
                                                                              26

                  8.14 WAIVER OF JURY TRIAL. EACH OF THE GRANTORS AND THE
ADMINISTRATIVE AGENT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

                  8.15 Additional Grantors. Each Subsidiary of the Borrower,
Holdings and SuperHoldings that is required to become a party to this Agreement
pursuant to subsection 6.10(c) of the Credit Agreement shall become a Grantor
for all purposes of this Agreement upon execution and delivery by such
Subsidiary of an Assumption Agreement in the form of Annex 1 hereto.

                  8.16 Releases. (a) At such time as the Loans, the
Reimbursement Obligations and the other Obligations shall have been paid in
full, the Commitments have been terminated and no Letters of Credit shall be
outstanding, the Collateral shall be released from the Liens created hereby, and
this Agreement and all obligations (other than those expressly stated to survive
such termination) of the Administrative Agent and each Grantor hereunder shall
terminate, all without delivery of any instrument or performance of any act by
any party, and all rights to the Collateral shall revert to the Grantors. At the
request and sole expense of any Grantor following any such termination, the
Administrative Agent shall deliver to such Grantor any Collateral held by the
Administrative Agent hereunder, and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such termination.

                  (b) If any of the Collateral shall be sold, transferred or
otherwise disposed of by any Grantor in a transaction permitted by the Credit
Agreement, then the Administrative Agent, at the request and sole expense of
such Grantor, shall execute and deliver to such Grantor all releases or other
documents reasonably necessary or desirable for the release of the Liens created
hereby on such Collateral. At the request and sole expense of the Borrower, a
Subsidiary Guarantor shall be released from its obligations hereunder in the
event that all the Capital Stock of such Subsidiary Guarantor shall be sold,
transferred or otherwise disposed of in a transaction permitted by the Credit
Agreement; provided that the Borrower shall have delivered to the Administrative
Agent, at least ten Business Days prior to the date of the proposed release, a
written request for release identifying the relevant Subsidiary Guarantor and
the terms of the sale or other disposition in reasonable detail, including the
price thereof and any expenses in connection therewith, together with a
certification by the Borrower stating that such transaction is in compliance
with the Credit Agreement and the other Loan Documents.

                  8.17 Effect of Amendment and Restatement of the Existing
Guarantee and Collateral Agreement.

This Agreement shall be deemed to be an amendment to and restatement of the
Existing Guarantee and Collateral Agreement and the Existing Guarantee and
Collateral Agreement as amended and restated hereby shall remain in full force
and effect and is hereby ratified and confirmed in all respects. All references
to the Existing Guarantee and Collateral Agreement in any other agreement or
document shall, on and after the Closing Date, be deemed to refer to the
Existing Guarantee and Collateral Agreement as amended and restated hereby. Each
Grantor agrees, acknowledges and affirms that:

<PAGE>
                                                                              27

                  (i) each of this Agreement and the other Security Documents to
         which it is a party shall remain in full force and effect and shall
         constitute security for all extensions of credit pursuant to the
         Existing Credit Agreement as amended and restated by the Credit
         Agreement;

                  (ii) all of its obligations, liabilities and indebtedness
         under this Agreement and the other Security Documents to which it is a
         party remain in full force and effect on a continuous basis, unpaid,
         unimpaired, uninterrupted and undischarged, after giving effect to the
         amendment and restatement of the Existing Credit Agreement pursuant to
         the Credit Agreement and the amendment and restatement of the Existing
         Guarantee and Collateral Agreement pursuant to this Agreement;

                  (iii) all of the Liens and security interests created and
         arising under this Agreement and the other Security Documents to which
         it is a party remain in full force and effect on a continuous basis,
         unpaid, unimpaired, uninterrupted and undischarged, and having the same
         perfected status and priority, after giving effect to the amendment and
         restatement of the Existing Credit Agreement pursuant to the Credit
         Agreement and the amendment and restatement of the Existing Guarantee
         and Collateral Agreement pursuant to this Agreement, as collateral
         security for the Obligations; and

                  (iv) any reference to the Existing Guarantee and Collateral
         Agreement appearing in any Loan Document shall on and after the Closing
         Date be deemed to refer to the Existing Guarantee and Collateral
         Agreement as amended and restated hereby.

<PAGE>

                  IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee and Collateral Agreement to be duly executed and delivered as of the
date first above written.

                                     NBC HOLDINGS CORP.

                                     By: /s/ MARK L. BONO
                                         ---------------------------------------
                                         Name: MARK L. BONO
                                         Title: PRESIDENT, SECRETARY & TREASURER

                                     NBC ACQUISITION CORP.

                                     By: /s/ ALAN G. SIEMEK
                                         ---------------------------------------
                                         Name: ALAN G. SIEMEK
                                         Title: TREASURER

                                     NEBRASKA BOOK COMPANY, INC.

                                     By: /s/ ALAN G. SIEMEK
                                         ---------------------------------------
                                         Name: ALAN G. SIEMEK
                                         Title: CHIEF FINANCIAL OFFICER,
                                                TREASURER & ASSISTANT SECRETARY

                                     SPECIALTY BOOKS, INC.

                                     By: /s/ ALAN G. SIEMEK
                                         ---------------------------------------
                                         Name: ALAN G. SIEMEK
                                         Title: TREASURER

                                     JPMORGAN CHASE BANK,
                                     as Administrative Agent

                                     By: /s/ NEIL R. BOYLAN
                                         ---------------------------------------
                                         Name: NEIL R. BOYLAN
                                         Title: MANAGING DIRECTOR
<PAGE>

                                                                      Schedule 1

                         NOTICE ADDRESSES OF GUARANTORS

SuperHoldings:             NBC Holdings Corp.
                           c/o Weston Presidio Capital
                           200 Clarendon Street, John Hancock
                           Tower, 50th Fl
                           Boston, MA 02116
                           Attention: Mark L. Bono
                           Fax: 617- 988-2515

Holdings:                  NBC Acquisition Corp.
                           4700 South 19th Street
                           Lincoln, Nebraska 68501
                           Attention: Chief Financial Officer
                           Fax: 402-421-0507

Specialty Books, Inc.:     Specialty Books, Inc.
                           4700 South 19th Street
                           Lincoln, Nebraska 68501
                           Attention: Chief Financial Officer
                           Fax: 402-421-0507

<PAGE>

                                                                      Schedule 2

                       DESCRIPTION OF INVESTMENT PROPERTY

PLEDGED STOCK:

<TABLE>
<CAPTION>
                                               Class of                                   No. of
            Issuer                              Stock         Stock Certificate No.       Shares
<S>                                            <C>            <C>                        <C>
Nebraska Book Company, Inc.                    Common                  1                       100

Specialty Books, Inc.                          Common                  1                       100

NBC Acquisition Corp.                          Common                209                 512799.23
</TABLE>

PLEDGED NOTES:

         Issuer            Payee               Principal Amount

None.

                                        2

<PAGE>

                                                                      Schedule 3

                       FILINGS AND OTHER ACTIONS REQUIRED
                          TO PERFECT SECURITY INTERESTS

                         Uniform Commercial Code Filings

<TABLE>
<CAPTION>
      Grantor                        State                                   Jurisdiction
      -------                        -----                                   ------------
<S>                                  <C>                                  <C>
Holdings                              DE                                  Secretary of State

Borrower                              KS                                  Secretary of State

Specialty Books, Inc.                 DE                                  Secretary of State

SuperHoldings                         DE                                  Secretary of State
</TABLE>

                     Patent, Trademark and Copyright Filings

U.S. Patent and Trademark Office filing in respect of the following trademarks:
TRADITIONS, GIVE US THE FINGER and GIVE US A CLICK as set forth on Schedule 6.
Filings with the U.S. Patent and Trademark Office have been previously made by
Administrative Agent in respect of each other trademark listed on Schedule 6.

Filings with the Copyright Office of the United States Library of Congress have
been previously made by Administrative Agent in respect of each of the
copyrights listed on Schedule 6.

                     Actions with respect to Pledged; Stock

Certificates representing shares of Pledged Stock of the Borrower and Specialty
Books, Inc. have previously been delivered to Administrative Agent with undated
stock powers executed in blank attached thereto. Administrative Agent to
maintain possession of the certificates representing the Pledged Stock in the
State of New York. A certificate representing shares of Pledged Stock of
Holdings shall be delivered to Administrative Agent at closing together with an
undated stock power executed in blank attached thereto.

                                  Other Actions

File continuation statements as required by Article 9 of the New York UCC.

                                        3

<PAGE>

                                                                      Schedule 4

                    LOCATION OF JURISDICTION OF ORGANIZATION
                           AND CHIEF EXECUTIVE OFFICE

<TABLE>
<CAPTION>
Grantor's Name and                         Location of Chief         Organizational ID
Jurisdiction of Organization               Executive Office          Number
----------------------------               ----------------          -----------------
<S>                                        <C>                       <C>
NBC Acquisition Corp., a Delaware          Lincoln, Nebraska              2512222
corporation

Nebraska Book Co., Inc., a Kansas          Lincoln, Nebraska              0326793
corporation

Specialty Books, Inc., a Delaware          Lincoln, Nebraska              3512386
corporation

NBC Holdings Corp., a Delaware             Lincoln, Nebraska              3757739
corporation
</TABLE>

                                        4

<PAGE>

                                                                      Schedule 5

                       LOCATION OF INVENTORY AND EQUIPMENT

NBC Acquisition Corp.:  None.

Nebraska Book Company, Inc. has collateral at the following locations:

<TABLE>
<CAPTION>
LOCATION                ENTITY NAME /
NUMBER                  LOCATION ADDRESS
---------               ------------------------
<S>                     <C>
080                     Nebraska Book Company, Inc.
                        4700 So. 19th Street
                        Lincoln, NE  68512

080-2                   Nebraska Book Company, Inc.,
                        5240 So. 19th Street
                        Lincoln, NE  68512

080-3                   Nebraska Book Company, Inc.
                        5001 So. 19th Street
                        Lincoln, NE  68512

080-4                   South Carolina Book Co.
                        523 Jasper St.
                        West Columbia, SC  29169

081                     College Book Company
                        6590 Darin Way
                        Cypress, CA  90630

101                     Lemox Book Co.
                        1240 Center St.
                        Bowling Green, KY  42101-3427

101-2                   Hilltopper College Book Depot
                        111 Old Morgantown Rd.
                        Bowling Green, KY  42101

102                     The Book Stop
                        931 16th St.
                        Greeley, CO  80631-5511

103                     the College Store
                        320 36th Street
                        Bellingham, WA  98225
</TABLE>

                                       5
<PAGE>

<TABLE>
<CAPTION>
LOCATION                ENTITY NAME /
NUMBER                  LOCATION ADDRESS
---------               ------------------------
<S>                     <C>
104                     Boomer Book Company
                        1337 W. Lindsey
                        Norman, OK 73069

104-2                   Sooner Textbooks
                        1305 South Jenkins
                        Norman, OK 73072-6502

105                     Rocky Top Books
                        2116 W. Cumberland Ave.
                        Knoxville, TN  37516

105-2                   Rocky Top East
                        1649 West Cumberland Ave.
                        Knoxville, TN  37916

106                     Ned's Bookstore
                        135 East Grand River Ave.
                        East Lansing, MI  48823

106-2                   Ned's Bookstore
                        125-133 East Grand River Ave.
                        East Lansing, MI 48823

107                     Ned's Bookstore
                        707 W. Cross St.
                        Ypsilanti, MI 48197

107-2                   Ned's COB Bookstore
                        4 North Adams
                        Ypsilanti, MI  48197

107-3                   Ned's Warehouse
                        306 W. Cross St.
                        Ypsilanti, MI  48197

107-4                   Concordia College Bookstore
                        4090 Geddes Road
                        Ann Arbor, MI  48105
</TABLE>

                                       6
<PAGE>

<TABLE>
<CAPTION>
LOCATION                ENTITY NAME /
NUMBER                  LOCATION ADDRESS
---------               ------------------------
<S>                     <C>
109                     Wayne County College Bookstore
                        9555 Haggerty Road
                        Belleville, MI  48111

109-1                   Wayne County College Bookstore
                        21000 Northline
                        Taylor, MI  48180

109-2                   Wayne County College Bookstore
                        1001 West Fort St.
                        Detroit, MI  48226

109-3                   Wayne County College Bookstore
                        5901 Connor
                        Detroit, MI  48213

109-4                   Wayne County College Bookstore
                        8551 Greenfield
                        Detroit, MI  48228

110                     Ned's Berkeley Bookstore
                        2480 Bancroft Way
                        Berkeley, CA  94704

110-2                   Ned's Berkeley Bookstore
                        2470 Bancroft Way
                        Berkeley, CA  94704

110-3                   Ned's Berkeley Warehouse
                        2035 Blake St.
                        Berkeley, CA  94704

110-4                   Ned's Berkeley Book Store - Boalt Hall
                        University of California Berkeley School of Law
                        Berkeley, CA  94720

112                     College Book Rack
                        1456 W. International Speedway Blvd.
                        Daytona Beach, FL  32114
</TABLE>

                                       7
<PAGE>

<TABLE>
<CAPTION>
LOCATION                ENTITY NAME /
NUMBER                  LOCATION ADDRESS
---------               ------------------------
<S>                     <C>
114                     Lemox College Book & Supply
                        10872 SW 104th St.
                        Miami, FL  33176

116                     the College Store
                        824 W. Walnut St.
                        Johnson City, TN  37604

117                     College Book Warehouse
                        1819 S. Brook St.
                        Louisville, KY  40208

118                     the College Store
                        12002 College Blvd.
                        Overland Park, KS  66210

119                     University Book Shop
                        1116 West 23rd Street
                        Lawrence, KS  66046

120                     South Carolina Book Store
                        801 Main St.
                        Columbia, SC  29202

120-2                   Carolina Spirit Shop
                        633 Main St.
                        Columbia, SC  29201

121                     University Books of Charleston
                        360 King St.
                        Charleston, SC  29401

123                     The Antelope Bookstore
                        1015 West 27th Street
                        Kearney, NE  68849-5320

124                     University Book & Supply
                        1090 Lancaster Road
                        Richmond, KY  40475
</TABLE>

                                       8
<PAGE>

<TABLE>
<CAPTION>
LOCATION                ENTITY NAME /
NUMBER                  LOCATION ADDRESS
---------               ------------------------
<S>                     <C>
125                     Saluki Bookstores
                        701 E. Grand
                        Carbondale, IL  62901

125-2                   Saluki Bookstore
                        509 S. Illinois
                        Carbondale, IL  62901

126                     Eagle Pride Bookstore
                        1110 Shelton St.
                        Chadron, NE  69337

127                     Big Red Shop
                        Westfield Shopping Center
                        Lincoln, NE  68505

130                     Prairie Wolves Bookstore
                        Nebraska Wesleyan Univ.
                        Lincoln, NE  68504

131                     Rebelbooks
                        4702 S. Maryland Parkway
                        Las Vegas, NV  89119

132                     Wayne State College Bookstore
                        1111 Main Street
                        Wayne, NE  68787

133                     GotUsed Bookstore
                        3601 Forbes Ave.
                        Pittsburgh, PA  15213

134                     the College Store
                        744 Locust Ave.
                        Indiana, PA  15701-2987

135                     Nebraska Bookstore
                        1300 "Q" Street
                        Lincoln, NE 68508
</TABLE>

                                       9
<PAGE>

<TABLE>
<CAPTION>
LOCATION                ENTITY NAME /
NUMBER                  LOCATION ADDRESS
---------               ------------------------
<S>                     <C>
136                     the College Store
                        1015 S. Rural Road
                        Tempe, AZ 85281

137                     the College Store
                        600 Riordan Rd.
                        Flagstaff, AZ 86001

137-2                   University Text & Tools
                        1405 So. Plaza Way
                        Flagstaff, AZ 86001

138                     University Book Centre
                        206 East College Ave.
                        State College, PA 16801

139                     Arizona Book Store
                        815 North Park Avenue
                        Tucson, AZ 85719

139-2                   Rother's Bookstore
                        501 North Park Ave, Unit 110
                        Tucson, AZ  85719

140                     Tech Bookstore
                        118 South Main
                        Blacksburg, VA  24060

141                     Collegiate Book Exchange
                        504 N. McKinley Avenue
                        Muncie, IN 47303

142                     The College Store
                        282 E. Exchange St.
                        Akron, OH 44308

143                     the College Store
                        2812 Colonel Glenn Highway
                        Fairborn, OH 45324
</TABLE>

                                       10
<PAGE>

<TABLE>
<CAPTION>
LOCATION                ENTITY NAME /
NUMBER                  LOCATION ADDRESS
---------               ------------------------
<S>                     <C>
144                     College Town
                        1770-1778 North High St.
                        Columbus, OH 43201

146                     Georgia Bookstore
                        124 Edgewood Ave., NE
                        Atlanta, GA 30303-3015

147                     the College Store
                        807 Paul W. Bryant Dr.
                        Tuscaloosa, AL  35401-1215

148                     University Book Center
                        1109 Union Street
                        Valparaiso, IN  46383-6493

149                     Specialty Books
                        5 North Court St.
                        Athens, OH 45701

150                     the College Store
                        4790 S. Hagadom Rd., Ste. 138
                        East Lansing, MI  48823

151                     Ulrich's Bookstore
                        549 East University Avenue
                        Ann Arbor, MI  48107

152                     Textbook Outlet
                        2604 N. Squirrel Road
                        Auburn Hills, MI  48326

153                     Michigan Book & Supply
                        317 South State St.
                        Ann Arbor, MI  48104

154                     Campus Book & Supply
                        1078 Huron River Road
                        Ypsilanti, MI  48197
</TABLE>

                                       11
<PAGE>

<TABLE>
<CAPTION>
LOCATION                ENTITY NAME /
NUMBER                  LOCATION ADDRESS
---------               ------------------------
<S>                     <C>
156                     The Campus Store
                        1700 W. Third Ave.
                        Flint, MI 48504

157                     Dominion Bookstore
                        1074 W. 47th St.
                        Norfolk, VA  23508-1910

159                     the College Store
                        60 Maple Road
                        Amherst, NY  14221

161                     L & M Bookstore
                        1716 N. Main Ave.
                        San Antonio, TX  78212-3938

162                     L & M UTSA Bookstore
                        15503 Babock Rd.
                        San Antonio, TX  78255-1160

163                     Campus Bookstore
                        3006 S. University Ave., #112
                        Little Rock, AR  72204

164                     Cowboy Book
                        520 West Elm
                        Stillwater, OK  74074-3013

165                     Voertman's
                        1314 W. Hickory
                        Denton, TX  76201

166                     Colloquim Books
                        320 University Drive
                        San Marcos, TX  78666

                        Colloquim Too!
                        700 N. LBJ
                        San Marcos, TX  78666
</TABLE>

                                       12
<PAGE>

<TABLE>
<CAPTION>
LOCATION                ENTITY NAME /
NUMBER                  LOCATION ADDRESS
---------               ------------------------
<S>                     <C>
167                     South Texas Book & Supply
                        1516 W. University Dr.
                        Edinburg, TX  78539

                        South Texas Book & Supply, Too!
                        2601 W. Pecan
                        McAllen, TX  78501

168                     Double T Bookstore
                        3204 4th St.
                        Lubbock, TX  79415

                        Double T Bookstore II
                        414019th St.
                        Lubbock, TX  79415

                        Double T Bookstore III
                        1103 University Ave.
                        Lubbock, TX  79401

169                     Prince George's Community College Bookstore
                        301 Largo Road
                        Largo, MD  20774-2199

170                     Maryland Book Exchange
                        4500 College Avenue
                        College Park, MD  20740

171                     University Book Store
                        3003 Forest Avenue
                        Des Moines, IA  50311

171-2                   D-Shoppe
                        Olmstead Center Bldg.
                        Des Moines, IA  50311

172                     The Bookbridge
                        3951 Vestal Parkway East
                        Vestal, NY  13850
</TABLE>

                                       13
<PAGE>

<TABLE>
<CAPTION>
LOCATION                ENTITY NAME /
NUMBER                  LOCATION ADDRESS
---------               ------------------------
<S>                     <C>
173                     Maverick Bookstore
                        230 Stadium Road
                        Mankato, MN  56001

175                     College Bookstore
                        2370 W. W. Thorne Dr.
                        Houston, TX  77073

175-2                   College Bookstore
                        20127 Aldine Westfield Road
                        Humble, TX  77338

176                     the College Store
                        620 W. Park Row
                        Arlington, TX  76010

177                     Varsity Book Store
                        6413 Hillcrest Ave.
                        Dallas, TX  75202

178                     Spirit Shop
                        2424 Broadway
                        Lubbock, TX  79401

191                     East Tenn State University Bookstore
                        J.L. Seehorn Jr., Drive
                        Johnson City, TN  37604

192                     Western Int'l University Bookstore
                        Main Campus
                        9215 N. Black Canyon Highway
                        Phoenix, AZ  85021

193                     The Textbook Company
                        1840 W. Southern Ave. #1
                        Mesa, AZ  85202

194                     Spartan Bookstore
                        Michigan State University
                        International Center
                        East Lansing, MI  48824-1035
</TABLE>

                                       14
<PAGE>

<TABLE>
<CAPTION>
LOCATION                ENTITY NAME /
NUMBER                  LOCATION ADDRESS
---------               ------------------------
<S>                     <C>
195                     Stadium Bookstore
                        1949 Fifth Avenue
                        Huntington, WV  25703

196                     Packbackers Student Bookstore
                        2900 Hillsborough
                        Raleigh, NC  27607

198                     Radford Book Exchange
                        214 Tyler Ave.
                        Radford, VA  24141

199                     College Book & Supply
                        12140 Collegiate Way, Ste. 140
                        Orlando, FL  32817

199-2                   Knight's Corner
                        12209 University Blvd.
                        Orlando, FL  32817

200                     Florida Book Store
                        1614 W. University Ave.
                        Gainesville, FL  32603

200-2                   Florida Book Store Volume II
                        2010 SW 34th St.
                        Gainesville, FL  32607

201                     Rother's Bookstore (Northgate)
                        303 College Ave.
                        College Station, TX  77840

201-1                   Rother's Bookstore (Geo Bush)
                        340 George Bush Drive
                        College Station, TX  77840

201-2                   Rother's Bookstore (Woodstone)
                        907C Harvey Road
                        College Station, TX  77840
</TABLE>

                                       15
<PAGE>

<TABLE>
<CAPTION>
LOCATION                ENTITY NAME /
NUMBER                  LOCATION ADDRESS
---------               ------------------------
<S>                     <C>
202                     Bevo's Bookstore
                        11900 Metric Blvd., Suite B
                        Austin, TX  78758

206                     Rother's Bookstore
                        425 North LBJ
                        San Marcos, TX  78666

207                     Rother's Bookstore
                        3503 Elgin
                        Houston, TX  77004

208                     Bevo's ACC Bookstore
                        1202 West Ave.
                        Austin, TX  78701

214                     Rother's Bookstore
                        525 Dutton Ave.
                        Waco, TX  76706

214-2                   University Bookstore & Sprit Shop
                        1205 So. 8th Street
                        Waco, TX 76706

215                     Rother's Bookstore
                        2008 E. 29th St.
                        Bryan, TX 77802

216                     Varsity Book Store
                        315 East College Street
                        Nacogdoches, TX  75963

217                     Rother's Bookstore
                        1603 W. Washington
                        Stephenville, TX  76401

218                     Rother's Bookstore
                        2301 Midwestern Parkway, Suite 106
                        Wichita Falls, TX  76308
</TABLE>

                                       16
<PAGE>

<TABLE>
<CAPTION>
LOCATION                ENTITY NAME /
NUMBER                  LOCATION ADDRESS
---------               ------------------------
<S>                     <C>
376                     NBC Graphics
                        360 Graham Road
                        College Station, TX  77845

677                     College Store Design
                        3701 Union Drive, Ste 100
                        Lincoln, NE  68516

690                     TheCampusHub.com
                        3701 Union Drive, Ste 100
                        Lincoln, NE  68516

684                     Connect2One
                        5412 Courseview Dr., Ste. 250
                        Mason, OH  45040-2364
</TABLE>

Specialty Books, Inc. has collateral at the following locations:

682-2                   Specialty Books, Inc.
                        6000 Poston Road
                        Athens, OH 45701

                                       17
<PAGE>

                                                                      Schedule 6

                              INTELLECTUAL PROPERTY

TRADEMARKS

<TABLE>
<CAPTION>
      Trademark           Serial No.   Registration No.          Jurisdiction              Owned by
      ---------           ----------   ----------------          ------------              --------
<S>                       <C>          <C>                       <C>                 <C>
GOT USED                  76/294619        2633247               U.S. Federal        Nebraska Book Company,
                                                                                     Inc.

CONNECT2ONE               76/119855        2480012               U.S. Federal        Nebraska Book Company,
                                                                                     Inc.

WEBPRISM                  75/925323        N/A                   U.S. Federal        Nebraska Book Company,
                                                                                     Inc.

NBCPRISM                  75/925321        2568157               U.S. Federal        Nebraska Book Company,
                                                                                     Inc.

NBC GRAPHICS COLLEGIATE   75/820627        2530469               U.S. Federal        Nebraska Book Company,
WEAR "NO BETTER CHOICE"                                                              Inc.
and Design

NBC and Design            73/457327        1312759               U.S. Federal        Nebraska Book Company,
                                                                                     Inc.

CAMPUSHUB                 75/925306        N/A                   U.S. Federal        Nebraska Book Company,
                                                                                     Inc.

SPECIALTY BOOKS           75/204128        2222166               U.S. Federal        Specialty Books, Inc

TRADITIONS                78/344625        N/A                   U.S. Federal        Nebraska Book Company,
                                                                                     Inc.

GIVE US THE FINGER        76/082301        N/A                   U.S. Federal        Nebraska Book Company,
                                                                                     Inc.

GIVE US A CLICK           76/082507        2759396               U.S. Federal        Nebraska Book Company,
                                                                                     Inc.
</TABLE>

                                       18
<PAGE>

COPYRIGHTS

<TABLE>
<CAPTION>
              Title              Registration No.            Jurisdiction                  Owned By
              -----              ----------------            ------------                  --------
<S>                              <C>                         <C>                   <C>
Nebraska Book Company's buyer's    TX757441                  U.S. Federal          Nebraska Book Company,
guide                                                                              Inc.

Textbook buyers guide              TX653450                  U.S. Federal          Nebraska Book Company,
                                                                                   Inc.
</TABLE>

                                       19

<PAGE>

                                                                      Schedule 7

                               EXISTING LIENS (1)

1.       General Electric Capital Corporation has a lien on the described
         equipment and all additions and replacement thereto. (2)

2.       BCL Capital has a lien on the listed equipment. (3)

3.       West Group has a lien on certain inventory sold on consignment. (4)

4.       NBD Equipment Finance, Inc. has a lien on listed equipment. (5)

5.       Toyota Motor Credit Corp. has a lien on a forklift. (6)

6.       Mitel Capital Corporation has a lien on stated hardware and related
         software and accessories. (7)

7.       Bane One Leasing Corporation has a lien on listed equipment. (8)

8.       US Bancorp has a lien on listed equipment. (9)

9.       IKON Office Solutions has a lien on listed equipment. (10)

-----------------

(1) Certain liens in favor of JP Morgan Chase Bank and Chemical Bank, which have
been previously disclosed to Administrative Agent's counsel, remain filed in
their respective filing jurisdictions.

(2) Filed with the Nebraska Secretary of State. Filing states that financing
statement is filed for notice purposes only.

(3) Filed with Nebraska Secretary of State. Filing states that financing
statement is for informational purposes only.

(4) Filed with Nebraska Secretary of State.

(5) Filed with Nebraska Secretary of State. Filing states "No Security Interest
- True Lease Transaction - Precautionary Only".

(6) Filed with Nebraska Secretary of State. Filing states "This financing
statement is for information purposes only. The transaction referenced in this
financing statement is a lease."

(7) Filed with Nebraska Secretary of State.

(8) Filed with Nebraska Secretary of State.

(9) Filed with Nebraska Secretary of State. Filing states that "filing is for
informational purposes only".

(10) Filed with Texas Secretary of State.

                                       20
<PAGE>

10.      ISI Commercial Refrigeration, L.P. has a lien on listed equipment. (11)

11.      The following parcel of real property is subject to a mortgage held by
         JeffersonPilot Life Insurance Company, with its administrative offices
         located in Greensboro, NC: Campus Bookstore

                  1649 W. Cumberland Avenue
                  Knoxville, TN

---------------------

(11) Filed with Texas Secretary of State.

                                       21
<PAGE>

                         ACKNOWLEDGEMENT AND CONSENT(1)

         The undersigned hereby acknowledges receipt of a copy of the Guarantee
and Collateral Agreement, dated as of February 13, 1998, as amended and restated
as of December 10, 2003, and as further amended and restated as of March 4, 2004
(the "Agreement"), made by the Grantors parties thereto for the benefit of
JPMORGAN CHASE BANK, as Administrative Agent. The undersigned agrees for the
benefit of the Administrative Agent and the other Secured Parties as follows:

         1. The undersigned will be bound by the terms of the Agreement and will
comply with such terms insofar as such terms are applicable to the undersigned.

         2. The undersigned will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5.6(a) of
the Agreement.

         3. The terms of Sections 6.3(a) and 6.7 of the Agreement shall apply to
it, mutatis mutandis, with respect to all actions that may be required of it
pursuant to Section 6.3(a) or 6.7 of the Agreement.

                                        [NAME OF ISSUER]

                                        By:_____________________________________
                                           Title:

                                        Address for Notices:

                                        Attention:
                                        Fax:

SECTION 1. ________________________________

(1)      This consent is necessary only with respect to any Issuer which is not
also a Grantor. This consent may be modified or eliminated with respect to any
Issuer that is not controlled by a Grantor. If a consent is required, its
execution and delivery should be included among the conditions to the initial
borrowing specified in the Credit Agreement.

<PAGE>

                                                                      Annex 1 to
                                              Guarantee and Collateral Agreement

         ASSUMPTION AGREEMENT, dated as of ________________________, 200_, made
by ______________________________, a ______________ corporation (the "Additional
Grantor"), in favor of JPMORGAN CHASE BANK, as administrative agent (in such
capacity, the "Administrative Agent") for the banks and other financial
institutions (the "Lenders") parties to the Credit Agreement referred to below.
All capitalized terms not defined herein shall have the meaning ascribed to them
in such Credit Agreement.

                                   WITNESSETH:

         WHEREAS, NBC Holdings Corp. ("SuperHoldings"). NBC Acquisition Corp.
("Holdings"), Nebraska Book Company, Inc. (the "Borrower"), the Lenders and the
Administrative Agent have entered into a Credit Agreement, dated as of February
13, 1998, as amended and restated as of December 10, 2003, and as further
amended and restated as of March 4, 2004 (as further amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"):

         WHEREAS, in connection with the Credit Agreement, SuperHoldings,
Holdings, the Borrower and certain of their Affiliates (other than the
Additional Grantor) have entered into the Amended and Restated Guarantee and
Collateral Agreement, dated as of February 13, 1998, as amended and restated as
of December 10, 2003, and as further amended and restated as of March 4, 2004
(as further amended, supplemented or otherwise modified from time to time, the
"Guarantee and Collateral Agreement") in favor of the Administrative Agent for
the benefit of the Secured Parties;

         WHEREAS, the Credit Agreement requires the Additional Grantor to become
a party to the Guarantee and Collateral Agreement; and

         WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Guarantee and Collateral
Agreement;

         NOW, THEREFORE, IT IS AGREED:

         1. Guarantee and Collateral Agreement. By executing and delivering this
Assumption Agreement, the Additional Grantor, as provided in Section 8.15 of the
Guarantee and Collateral Agreement, hereby becomes a party to the Guarantee and
Collateral Agreement as a Grantor thereunder with the same force and effect as
if originally named therein as a Grantor and, without limiting the generality of
the foregoing, hereby expressly assumes all obligations and liabilities of a
Grantor thereunder. The information set forth in Annex 1-A hereto is hereby
added to the information set forth in Schedules______________________(1) to the
Guarantee and Collateral Agreement. The Additional Grantor hereby represents and
warrants that each of the representations and warranties contained in Section 4
of the Guarantee and Collateral Agreement

SECTION 1. ___________________________

(1)      Refer to each Schedule which needs to be supplemented.

<PAGE>

                                                                              38

is true and correct on and as the date hereof (after giving effect to this
Assumption Agreement) as if made on and as of such date.

         2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

         IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.

                                       [ADDITIONAL GRANTOR]

                                       By:______________________________________
                                          Name:
                                          Title:

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