Document:

Exhibit 10.37
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                                  $385,000,000
                    AMENDED AND RESTATED TERM LOAN AGREEMENT

                            Dated as of May 24, 2004

                                      among

                      THE READER'S DIGEST ASSOCIATION, INC.
                            as Borrower and Guarantor

                               BOOKS ARE FUN, LTD.
                                    QSP, INC.

                                       and

                            REIMAN MEDIA GROUP, INC.
                            as Borrowing Subsidiaries

                            The Lenders Party Hereto

                              JPMORGAN CHASE BANK,
                             as Administrative Agent
                              and Collateral Agent

                                       and

                               ABN AMRO BANK N.V.

                                       and

                         NATIONAL AUSTRALIA BANK LIMITED

                                      and,

                         THE ROYAL BANK OF SCOTLAND plc
                           as Co-Documentation Agents

                                       and

                          J.P. MORGAN SECURITIES INC.,
                         as Sole Arranger and Bookrunner

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

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                                TABLE OF CONTENTS

                                                                           Page

                                    ARTICLE I

                                   Definitions

SECTION 1.01.         Definitions..............................................1
SECTION 1.02.         Classification of Loans and Borrowings..................27
SECTION 1.03.         Terms Generally.........................................27
SECTION 1.04.         Accounting Terms and Determinations.....................27

                                   ARTICLE II

                                    The Loans

SECTION 2.01.         Tranche A Commitments; Continuation of Tranche B
                      Term Loans..............................................28
SECTION 2.02.         Loans...................................................28
SECTION 2.03.         Requests for Borrowings............ ....................29
SECTION 2.04.         Funding of Borrowings...................................29
SECTION 2.05.         Evidence of Debt........................................30
SECTION 2.06.         Interest Elections......................................31
SECTION 2.07.         Interest on Loans.......................................32
SECTION 2.08.         Default Interest........................................32
SECTION 2.09.         Alternate Rate of Interest..............................33
SECTION 2.10.         Termination of Tranche A Commitments....................33
SECTION 2.11.         Amortization of Term Loans..............................33
SECTION 2.12.         Prepayment..............................................34
SECTION 2.13.         Reserve Requirements; Change in Circumstances...........37
SECTION 2.14.         Change in Legality......................................38
SECTION 2.15.         Indemnity...............................................39
SECTION 2.16.         Pro Rata Treatment......................................39
SECTION 2.17.         Sharing of Setoffs......................................40
SECTION 2.18.         Payments................................................40
SECTION 2.19.         Taxes...................................................40
SECTION 2.20.         Duty to Mitigate; Assignment of Rights Under Certain
                      Circumstances...........................................42

                                   ARTICLE III

                                   Conditions

SECTION 3.01.         Effectiveness...........................................43

<PAGE>

                                   ARTICLE IV

                         Representations and Warranties

SECTION 4.01.         Organization; Powers....................................43
SECTION 4.02.         Authorization; Enforceability...........................43
SECTION 4.03.         Governmental Approvals; No Conflicts....................43
SECTION 4.04.         Financial Condition; No Material Adverse Change.........44
SECTION 4.05.         Properties..............................................44
SECTION 4.06.         Litigation and Environmental Matters....................44
SECTION 4.07.         Compliance with Laws and Agreements.....................45
SECTION 4.08.         Not an Investment Company or Holding Company............45
SECTION 4.09.         Taxes...................................................45
SECTION 4.10.         ERISA...................................................45
SECTION 4.11.         Disclosure..............................................45
SECTION 4.12.         Federal Reserve Regulations.............................46
SECTION 4.13.         Subsidiaries............................................46
SECTION 4.14.         Security Documents......................................46

                                    ARTICLE V

                              Affirmative Covenants

SECTION 5.01.         Financial Statements and Other Information..............47
SECTION 5.02.         Notices of Material Events..............................48
SECTION 5.03.         Existence; Conduct of Business..........................49
SECTION 5.04.         Payment of Obligations..................................49
SECTION 5.05.         Maintenance of Properties; Insurance....................49
SECTION 5.06.         Books and Records; Inspection Rights....................49
SECTION 5.07.         Compliance with Laws....................................49
SECTION 5.08.         Use of Proceeds.........................................50
SECTION 5.09.         Information Regarding Collateral........................50
SECTION 5.10.         Casualty and Condemnation...............................51
SECTION 5.11.         Additional Subsidiaries.................................51
SECTION 5.12.         Further Assurances......................................51
SECTION 5.13.         Interest Rate Protection................................51
SECTION 5.14.         Compliance with Federal Reserve Regulations.............51

                                   ARTICLE VI

                               Negative Covenants

SECTION 6.01.         Debt and Preferred Stock of Subsidiaries................52
SECTION 6.02.         Liens...................................................53
SECTION 6.03.         Sale and Leaseback Transactions.........................54
SECTION 6.04.         Fundamental Changes.....................................55
SECTION 6.05.         Asset Sales.............................................55

                                       2
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SECTION 6.06.         Investments, Loans, Advances, Guarantees and
                      Acquisitions............................................56
SECTION 6.07.         Transactions with Affiliates............................57
SECTION 6.08.         Restrictive Agreements..................................58
SECTION 6.09.         Swap Agreements.........................................58
SECTION 6.10.         Restricted Payments; Certain Payments of Indebtedness...58
SECTION 6.11.         Amendment of Material Documents.........................60
SECTION 6.12.         Consolidated Interest Coverage Ratio....................60
SECTION 6.13.         Consolidated Leverage Ratio.............................60
SECTION 6.14.         Consolidated Fixed Charge Coverage Ratio................60
SECTION 6.15.         Capital Expenditures....................................60

                                   ARTICLE VII

                                Events Of Default

                                  ARTICLE VIII

                                   The Agents

                                   ARTICLE IX

               Joint And Several Liability Of Borrowers; Guarantee

SECTION 9.01.         Joint and Several Liability of Borrowers................65
SECTION 9.02.         Guarantee...............................................65

                                    ARTICLE X

                                  Miscellaneous

SECTION 10.01.        Notices.................................................67
SECTION 10.02.        Waivers; Amendments.....................................67
SECTION 10.03.        Expenses; Indemnity; Damage Waiver......................69
SECTION 10.04.        Successors and Assigns..................................70
SECTION 10.05.        Survival................................................74
SECTION 10.06.        Counterparts; Integration; Effectiveness................74
SECTION 10.07.        Severability............................................75
SECTION 10.08.        Right of Setoff.........................................75
SECTION 10.09.        Governing Law; Jurisdiction; Consent to Service of
                      Process.................................................75
SECTION 10.10.        WAIVER OF JURY TRIAL....................................76
SECTION 10.11.        Headings................................................76
SECTION 10.12.        Confidentiality.........................................76
SECTION 10.13.        Conversion of Currencies................................77
SECTION 10.14.        Release of Grantors and Collateral......................78
SECTION 10.15.        Incorporation of Amendments to Five-Year Credit
                      Agreement...............................................78
SECTION 10.16.        Security Documents......................................79
SECTION 10.17.        Power of Attorney.......................................79

                                       3

<PAGE>

SECTION 10.18.        Appointment.............................................79

                                       4
<PAGE>

EXHIBITS
Exhibit A           -      Administrative Questionnaire
Exhibit B           -      Form of Assignment and Assumption
Exhibit C           -      Executed 2002 Form of Guarantee and Collateral
                            Agreement
Exhibit D           -      Executed 2002 Perfection Certificate
Exhibit E-1         -      Executed 2002 New York Mortgage
Exhibit E-2         -      Executed 2002 Wisconsin Mortgage
Exhibit E-3         -      Executed 2002 Iowa Mortgage

SCHEDULES
Schedule 1.01(a)           Cash Restructuring Charges
Schedule 1.01(b)           Property Subject to Sales Contract Located in or near
                            Sydney, New South Wales, Australia
Schedule 2.01              Commitments
Schedule 4.02              Required Authorizations
Schedule 4.03              Required Approvals
Schedule 4.05              Real Properties
Schedule 4.06              Disclosed Matters
Schedule 4.13              Subsidiaries and Loan Parties
Schedule 4.14              Filing Offices
Schedule 6.01              Debt
Schedule 6.02              Liens

                                       5

<PAGE>

                        AMENDED AND RESTATED TERM LOAN AGREEMENT dated as of May
                    24, 2004 (this "Agreement"), among THE READER'S DIGEST
                    ASSOCIATION,  INC., as a Borrower and as the Guarantor (each
                    as defined  herein),  BOOKS ARE FUN,  LTD.,  QSP,  INC., and
                    REIMAN MEDIA GROUP,  INC.,  as  Borrowing  Subsidiaries  (as
                    defined herein),  the LENDERS (as defined herein),  ABN AMRO
                    BANK N.V.,  NATIONAL  AUSTRALIA  BANK  LIMITED and THE ROYAL
                    BANK  OF  SCOTLAND  plc,  as  co-documentation  agents,  and
                    JPMORGAN  CHASE  BANK,  as   administrative   agent  and  as
                    collateral agent.

     The  Borrowers  (such  term and each  other  capitalized  term used but not
otherwise  defined  herein  having the  meaning  assigned  to it in Article  I),
certain of the Lenders and the Administrative  Agent are parties to the Existing
Term Loan Agreement,  under which Tranche B Term Loans in an aggregate principal
amount of $385,000,000  are outstanding on the date hereof and no Tranche A Term
Loans are outstanding.  The Borrowers,  certain of the Lenders  representing the
Required  Lenders under and as defined in the Existing  Term Loan  Agreement and
the  Administrative  Agent have entered  into  Amendment  Agreement  pursuant to
which, on the date hereof,  subject to the conditions set forth therein, (a) the
Tranche A Lenders  are making new  Tranche A Term Loans to the  Borrowers  in an
aggregate  principal amount of $200,000,000,  (b) the proceeds of such Tranche A
Term Loans are being used to prepay a like principal  amount of the  outstanding
Tranche B Term Loans, with the result that  $185,000,000 in aggregate  principal
amount of the Tranche B Term Loans will remain  outstanding and (c) the Existing
Term Loan Agreement is being amended and restated in the form of this Agreement.
The  Lenders  are  willing  to make the  Tranche A Term Loans and  continue  the
remaining  Tranche B Term Loans to the Borrowers on the terms and subject to the
conditions herein set forth.

     Accordingly, the parties hereto agree as follows:

                                   ARTICLE I

                                   DEFINITIONS

     SECTION 1.01.  DEFINITIONS.  The following terms, as used herein,  have the
following meanings:

                  "ABR Borrowing" means a Borrowing comprised of ABR Loans.

                  "ABR Loan" means any Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.

<PAGE>

                  "Acquisition" means the purchase of substantially all the
assets and rights, and assumption of certain liabilities, of Reiman Holding
Company, LLC; Reiman Publications, LLC; Reiman Management Company; Reiman
Advertising and Promotion, LLC; World Wide Country Tours, LLC and Homemaker
Schools, LLC pursuant to the Asset Purchase Agreement.

                  "Adjusted LIBO Rate" means, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.

                  "Administrative Agent" means JPMCB in its capacity as
administrative agent for the Lenders hereunder, and its successors in such
capacity.

                  "Administrative Questionnaire" means an administrative
questionnaire in the form of Exhibit A hereto.

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

                  "Agents" means the Administrative Agent, the Collateral Agent
and the Syndication Agent.

                  "Agreement Currency" has the meaning set forth in Section
10.13(b).

                  "Alternate Base Rate" means, 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%. Any change in the Alternate Base Rate
due to a change in the Prime Rate or the Federal Funds Effective Rate shall be
effective from and including the effective date of such change in the Prime Rate
or the Federal Funds Effective Rate, respectively.

                  "Amendment Agreement" means the Amendment Agreement dated as
of the date hereof among the Borrowers, certain of the Lenders and the
Administrative Agent, providing for the amendment and restatement of the
Existing Term Loan Agreement in the form of this Agreement.

                  "Applicable Creditor" has the meaning set forth in Section
10.13(b).

                  "Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of an ABR Loan, or
such Lender's Eurodollar Lending Office in the case of a Eurodollar Loan.

                  "Applicable Rate" means on any date, with respect to any
Tranche A Term Loan or Tranche B Term Loan, the applicable rate per annum set
forth below in the applicable table under the caption "Eurodollar Spread" (in
the case of a Eurodollar Loan)

                                       2
<PAGE>

or "ABR Spread" (in the case of an ABR Loan), as the case may be, based upon the
Ratings:

                             Tranche A Pricing Table

      Ratings                      Eurodollar Spread                 ABR Spread
   (S&P/Moody's)
Level 1                                  1.75%                         0.75%
BBB/Baa2 or higher
Level 2                                  2.00%                         1.00%
BB/Ba2 or higher and lower than
BBB/Baa2
Level 3                                  2.25%                         1.25%
lower than BB and Ba2 or unrated

                            Tranche B Pricing Table

      Ratings                      Eurodollar Spread                 ABR Spread
  (S&P/Moody's)
Level 1                                  2.00%                         1.00%
BB/Ba2 or higher
Level 2                                  2.25%                         1.25%
lower than BB and Ba2 or unrated

For purposes of the foregoing tables, (i) if the Ratings in effect or deemed to
be in effect on any date fall in different Levels, the Applicable Rate shall be
determined on such date by reference to the Level corresponding to the lower
Rating, (ii) if either Moody's or S&P shall not have, or shall be deemed not to
have, a Rating in effect (other than because such rating agency shall no longer
be in the business of rating corporate debt obligations or corporate credit),
then such rating agency will be deemed to have in effect a Rating in Level 3 for
purposes of the Tranche A Pricing Table and Level 2 for purposes of the Tranche
B Pricing Table; and (iii) if any Rating established or deemed to have been
established by Moody's or S&P shall be changed (other than as a result of a
change in the rating system of either Moody's or S&P), such change shall be
effective as of the day after the date on which such change is first announced
by the rating agency making such change. Each change in the Applicable Rate
shall apply during the period commencing on the effective date of such change
and ending on the date immediately preceding the effective date of the next such
change. If the rating system of either Moody's or S&P shall change, or if either
such rating agency shall cease to be in the business of rating corporate debt
obligations or corporate credit, the Company and the Lenders shall negotiate in
good faith to amend the references to specific ratings in this definition to
reflect such changed rating system or the non-availability of ratings from such
rating agency, and pending any such amendment the Applicable Rate shall be
determined by reference to the ratings provided immediately prior to such change
or cessation.

                  "Approved Fund" has the meaning set forth in Section 10.04.

                  "Asset Purchase Agreement" means the Asset Purchase Agreement
dated as of March 21, 2002, among The Reader's Digest Association, Inc., Reiman
Holding Company, LLC and certain other parties.

                                       3

<PAGE>

                  "Assignee" means a Person to whom any Lender has assigned all
or a portion of its rights and obligations under this Agreement (including, if
the Tranche A Commitments remain in effect, all or a portion of its Tranche A
Commitment and the Loans at the time owing to it) pursuant to Section 10.04.

                  "Assignment and Assumption" means an agreement substantially
in the form of Exhibit B hereto.

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

                  "Borrower" means the Company or any Borrowing Subsidiary.

                  "Borrowing" means Loans of the same Class and, in the case of
Eurodollar Loans, as to which a single Interest Period is in effect.

                  "Borrowing Subsidiary" means any Subsidiary named as such in
the heading of this Agreement.

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

                  "Business Day" means any day (other than a Saturday, Sunday or
legal holiday in the State of New York) on which banks are open for business in
New York City; provided, however, that when used in connection with a Eurodollar
Loan, the term "Business Day" shall also exclude any day on which banks are not
open for dealings in dollar deposits in the London interbank market.

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

                  A "Change in Control" shall be deemed to have occurred (a) if
the equity capital structure of the Reader's Digest Association, Inc. consists
of Class A Non-Voting Common Stock and Class B Voting Common Stock, then if (i)
The DeWitt Wallace-Reader's Digest Fund, Inc., the Lila Wallace-Reader's Digest
Fund, Inc., The Employee Ownership Plan and 401(k) Partnership of the Reader's
Digest Association, Inc. and any other employee benefit plans of the Company or
any Subsidiary, taken together (the "Current Control Group"), shall cease to be
the "beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange
Act of 1934, as in effect as of the date hereof) of shares representing 30% or
more of the voting power represented by the issued and outstanding capital stock
of the Company; (ii) any person or group (other than the Current Control Group)
shall acquire "beneficial ownership" (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as in effect as of the date hereof) of shares
representing a greater percentage of the voting power represented by the issued
and

                                       4
<PAGE>

outstanding capital stock of the Company than the percentage of such voting
power represented by the shares beneficially owned by the Current Control Group;
or (iii) during any period of 12 consecutive calendar months, (A) the directors
(the "preceding directors") constituting the Company's board of directors at the
beginning of such period and (B) any new directors (x) whose election by the
Company's directors or whose nomination for election by the Company's
stockholders was, in each case, approved by a majority of the Company's
directors then still in office who were either preceding directors or whose
election or nomination for election was previously so approved or (y) whose
election or nomination for election was voted for or approved, as the case may
be, by the Current Control Group, when all such directors are taken together,
shall cease for any reason to constitute a majority of the Company's board of
directors, and (b) if the equity capital structure of the Company is different
from that described in clause (a) above, then if (i) any person or group shall
acquire "beneficial ownership" (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as in effect as of the date hereof) of Equity Interests
representing 35% or more of the voting power represented by the issued and
outstanding Equity Interests of the Company; or (ii) during any period of 12
consecutive calendar months, (A) the directors (the "preceding directors")
constituting the Company's board of directors at the beginning of such period
and (B) any new directors whose election by the Company's directors or whose
nomination for election by the Company's stockholders was, in each case,
approved by a majority of the Company's directors then in office who were either
preceding directors or whose election or nomination for election was previously
so approved, when all such directors are taken together, shall cease for any
reason to constitute a majority of the Company's board of directors. As used in
this definition, "group" shall have the meaning given to such term in Rule 13d-5
of the Securities Exchange Act of 1934 as in effect on the date hereof.
Notwithstanding anything to the contrary in clause (a) above, no Change of
Control shall be deemed to have occurred as a result of the Recapitalization.

                  "Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof after the date of
this Agreement or (c) compliance by any Lender with any request, guideline or
directive (whether or not having the force of law) of any Governmental Authority
made or issued after the date of this Agreement.

                  "Class", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are Tranche
A Term Loans or Tranche B Term Loans.

                  "Class B Repurchase" means the purchase by the Company of
shares of its Class B Voting Common Stock for consideration not to exceed
$100,000,000 pursuant to and on the terms set forth in the Recapitalization
Agreement.

                  "CLO" has the meaning set forth in Section 10.04.

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

                                       5

<PAGE>

                  "Collateral" means "Collateral" as defined in the Guarantee
and Collateral Agreement and any other property or assets in which Liens are
created to secure the Obligations under any other Security Document.

                  "Collateral Agent" means JPMCB, in its capacity as collateral
agent for the Lenders.

                  "Collateral and Guarantee Requirement" means, at any time, the
requirement that:

(a)      the Administrative Agent shall have received from the Company and each
         Domestic Subsidiary (other than (i) the Excluded Subsidiaries and (ii)
         gifts.com, Inc. for so long as efforts to sell or wind down such
         Subsidiary shall not have been terminated) existing at such time either
         a counterpart of the Guarantee and Collateral Agreement duly executed
         and delivered on behalf of the Company or such Subsidiary or, in the
         case of any Person (other than an Excluded Subsidiary) that shall have
         become a Domestic Subsidiary after the Original Effective Date, a
         supplement to the Guarantee and Collateral Agreement, in the form
         specified therein, duly executed and delivered on behalf of such
         Domestic Subsidiary;

(b)      the Administrative Agent shall have received any Foreign Pledge
         Agreements that it determines, based on the advice of counsel, to be
         necessary or advisable in connection with the pledge of 65% of the
         outstanding voting Equity Interests of The Reader's Digest Association
         Limited, Verlag das Beste GmbH and Selection du Reader's Digest S.A.,
         or any other first-tier Foreign Subsidiary that has accounted for 5% or
         more of Consolidated Revenue for any period of four fiscal quarters;

(c)      all outstanding Equity Interests of any Subsidiary or any other Person
         directly owned by any Grantor at such time shall have been pledged
         pursuant to the Guarantee and Collateral Agreement (except that the
         Grantors shall not be required to pledge more than 65% of outstanding
         voting Equity Interests of any Foreign Subsidiary) and the Collateral
         Agent shall have received certificates representing all such Equity
         Interests (other than (i) uncertificated Equity Interests, (ii) Equity
         Interests in gifts.com, Inc. for so long as efforts to sell or wind
         down such Subsidiary shall not have been terminated, and (iii) Equity
         Interests in LookSmart, Ltd. and WebMD Corporation), together with
         undated stock powers or other instruments of transfer with respect
         thereto endorsed in blank;

(d)      all Debt of any Person that is owed to any Grantor at such time (other
         than obligations that individually do not exceed $1,000,000) shall have
         been pledged pursuant to the Guarantee and Collateral Agreement, and
         the Collateral Agent shall have received all promissory notes or other
         instruments evidencing any such Debt, together with undated instruments
         of transfer with respect thereto endorsed in blank;

                                       6
<PAGE>

(e)      all documents and instruments, including all Uniform Commercial Code
         financing statements and filings with the United States Copyright
         Office and the United States Patent and Trademark Office, required by
         law or reasonably requested by the Collateral Agent to be filed,
         registered or recorded to perfect the Liens intended to be created by
         the Guarantee and Collateral Agreement shall have been filed,
         registered or recorded or delivered to the Collateral Agent for filing,
         registration or recording; provided that Liens on Intellectual
         Property, as defined in the Guarantee and Collateral Agreement, will be
         perfected by filings in the United States Copyright Office and the
         United States Patent and Trademark Office only insofar as they relate
         to items of Intellectual Property deemed by the Collateral Agent, after
         consultation with the Company, to be material to the Company and the
         Subsidiaries, taken as a whole, and will not be perfected by filings in
         any jurisdiction outside the United States;

(f)      the Collateral Agent shall have received (i) counterparts of a Mortgage
         with respect to each Mortgaged Property existing at such time, duly
         executed and delivered by the record owner of such Mortgaged Property,
         (ii) a policy or policies of title insurance issued by a nationally
         recognized title insurance company insuring the Lien of each such
         Mortgage as a valid first Lien on the Mortgaged Property described
         therein, free of any other Liens except as expressly permitted by
         Section 6.02, together with such endorsements, coinsurance and
         reinsurance as the Collateral Agent or the Required Lenders may
         reasonably request, and (iii) such appraisals, surveys, legal opinions
         and other documents as may be required by applicable law or regulation
         or as the Collateral Agent or the Required Lenders may reasonably
         request with respect to any such Mortgage or Mortgaged Property; and

(g)      each Grantor shall have obtained all consents and approvals required to
         be obtained by it in connection with the execution and delivery of the
         Guarantee and Collateral Agreement and each other Security Document to
         which it is a party, the performance of its obligations thereunder and
         the granting by it of the Liens thereunder;

                  provided, that the foregoing definition shall not require the
creation or perfection of pledges of or security interests in, or the obtaining
of title insurance or legal opinions with respect to, particular assets of the
Grantors if and for so long as, the Collateral Agent, in consultation with the
Company, determines that the cost of creating or perfecting such pledges or
security interests in such assets or obtaining title insurance or legal opinions
in respect of such assets shall be excessive in view of the benefits to be
obtained by the Lenders therefrom. The Collateral Agent may grant extensions of
time for the perfection of security interests in or the obtaining of title
insurance or legal opinions with respect to particular assets (including
extensions beyond the Effective Date for the perfection of security interests in
the assets of the Company and the Subsidiaries on such date) where it determines
that perfection cannot be accomplished without undue effort or expense by the
time or times at which it would otherwise be required by this Agreement or the
Security Documents.

                                       7
<PAGE>

                  "Company" means The Reader's Digest Association, Inc., a
Delaware corporation.

                  "Consolidated Assets" means, at any time, all assets of the
Company and its consolidated Subsidiaries at such date, as determined on a
consolidated basis in accordance with GAAP.

                  "Consolidated Capital Expenditures" means, for any period, (a)
the additions to property, plant and equipment and other capital expenditures of
the Company and its consolidated Subsidiaries that are (or would be) set forth
in a consolidated statement of cash flows of the Company for such period
prepared in accordance with GAAP and (b) Capital Lease Obligations incurred by
the Company and its consolidated Subsidiaries during such period.

                  "Consolidated EBITDA" means, for any period, Consolidated Net
Income for such period plus, to the extent not otherwise included in such
Consolidated Net Income, the sum (without duplication) of (a) income tax
expense, (b) Interest Expense, (c) depreciation and amortization, (d)
non-recurring, non-cash restructuring charges and cash restructuring charges
identified in Schedule 1.01(a), (e) losses on the contemplated sale of the
Company's subsidiary gifts.com, Inc., and extraordinary losses, (f) non-cash
charges in respect of compensation paid to employees or members of the Board of
Directors of the Company in the form of equity incentives (including, but not
limited to, stock options, restricted stock and deferred stock) and (g) the
cumulative effect of changes in accounting principles, minus, to the extent
added in computing such Consolidated Net Income, the sum (without duplication)
of (x) consolidated interest income, (y) extraordinary gains and (z) the
cumulative effect of changes in accounting principles.

                  "Consolidated Fixed Charge Coverage Ratio" means the ratio of
(a) Consolidated EBITDA minus the sum of (i) Consolidated Capital Expenditures,
(ii) taxes actually paid in cash, (iii) permitted dividends actually paid in
cash, (iv) amounts paid in cash or other consideration other than Equity
Interests in connection with share repurchases (other than the Class B
Repurchase and payments to holders of not more than $5,000,000 in stated value
of preferred stock of the Company that are required to be made as a result of
the exercise of appraisal rights to which they may be entitled in connection
with the Recapitalization), and (v) scheduled amortization payments in respect
of Debt, to (b) Consolidated Net Interest Expense.

                  "Consolidated Interest Coverage Ratio" means the ratio of (a)
Consolidated EBITDA to (b) Consolidated Net Interest Expense.

                  "Consolidated Leverage Ratio" means, at any time, the ratio of
(a) Consolidated Total Debt at such time to (b) Consolidated EBITDA for the
period of four fiscal quarters ended at or most recently prior to such time.

                                       8

<PAGE>

                 "Consolidated Net Income" means, for the Company and the
consolidated Subsidiaries for any period, the aggregate net income (or net
deficit) of such persons, determined on a consolidated basis in accordance with
GAAP consistently applied.

                  "Consolidated Net Interest Expense" means, with respect to the
Company and the consolidated Subsidiaries for any period, Interest Expense (net
of any interest income for such period determined on a consolidated basis in
accordance with GAAP).

                  "Consolidated Revenue" means, for the Company and the
consolidated Subsidiaries for any period, the aggregate revenues of such
persons, determined on a consolidated basis in accordance with GAAP consistently
applied.

                  "Consolidated Total Debt" means, for the Company and the
consolidated Subsidiaries at any date, the aggregate Debt of such persons,
determined on a consolidated basis in accordance with GAAP consistently applied.

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

                  "Current Control Group" has the meaning set forth in the
definition of "Change in Control".

                  "Debt" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person upon which interest charges are customarily paid, (d)
the principal amounts (as defined in the definition of "Swap" herein) of the
obligations of such Person under Swap Agreements, (e) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (f) all obligations of such Person in respect
of the deferred purchase price of property or services, (g) all Debt of others
secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Debt secured thereby has been
assumed, (h) all Guarantees by such Person of Debt of others, (i) all Capital
Lease Obligations of such Person, (j) all Securitization Transactions of such
Person and (k) all obligations, contingent or otherwise, of such Person as an
account party in respect of letters of credit, letters of guaranty and banker's
acceptances; provided, however, that Debt of any Person shall not include (i)
trade payables, (ii) any obligations of such Person incurred in connection with
letters of credit, letters of guaranty, banker's acceptances, bills of exchange
and similar instruments obtained or created in the ordinary course of business
to support or evidence obligations of such Person that do not constitute Debt,
(iii) endorsements of checks, bills of exchange and other instruments for
deposit or collection in the ordinary course of business, (iv) customer deposits
and advances and interest payable thereon in the ordinary course of business in
accordance with customary trade terms and other obligations incurred in the
ordinary course of business through credit on an open account

                                       9
<PAGE>

basis  customarily   extended  to  such  Person,  (v)  any  Debt  secured  on  a
non-recourse  basis  by any  assets  of  such  Person  to the  extent  that  the
outstanding  balance thereof exceeds the fair market value of such assets,  (vi)
statutory  or other  legal  requirements  to make  deposits in  connection  with
sweepstakes  or  similar  contests,  or surety  bonds  posted  pursuant  to such
requirements  and (vii)  obligations  under  overdraft  arrangements  with banks
outside the United States  incurred in the ordinary  course of business to cover
working  capital  needs,  but only to the  extent  that such  overdrafts  remain
outstanding for not more than three Business Days and do not in the aggregate at
any time exceed $5,000,000.

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

                  "Disclosed Matters" means the actions, suits and proceedings
and the environmental matters disclosed in Schedule 4.06.

                  "Dollars" or "$" means lawful currency of the United States.

                  "Domestic Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Domestic Lending Office" on Schedule
2.01 or, as to any person who becomes a Lender after the date hereof, on the
Assignment and Assumption executed by such person or such other office of such
Lender as such Lender may hereafter designate from time to time as its "Domestic
Lending Office" by notice to the Company and the Administrative Agent.

                  "Domestic Subsidiary" means any Subsidiary organized under the
laws of the United States, any State thereof, the District of Columbia or any of
its territories or possessions or any political subdivision thereof.

                  "Effective Date" means the date on which the conditions
specified in Section 7 of the Amendment Agreement are satisfied and this
Agreement becomes effective.

                  "Environmental Laws" means any and all federal, state and
local statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes into
the environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes or the clean-up or other
remediation thereof.

                  "Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Company or any Subsidiary
directly or indirectly resulting from or

                                       10
<PAGE>

based upon (a) violation or alleged violation of any Environmental  Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal of any
Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened  release of any Hazardous  Materials into the  environment or (e) any
contract,  agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.

                  "Equity Interest" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person, and any
warrants or options or other rights to acquire any of the foregoing.

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

                  "ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Company, is treated as a single employer
under Section 414 of the Code.

                  "ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder (other than an event
for which the 30-day notice period is waived), with respect to a Plan; (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Company or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Company or any ERISA Affiliate
from the PBGC or a plan administrator of any notice of termination, or the
intention to terminate, any Plan or Plans or to appoint a trustee to administer
any Plan where the Administrative Agent or the Required Lenders shall have
determined in good faith that such termination or appointment is reasonably
likely to result; (f) the incurrence by the Company or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal
from any Plan or Multiemployer Plan; or (g) the receipt by the Company or any
ERISA Affiliate of any notice of the imposition of, or an intention to impose,
Withdrawal Liability, where the Administrative Agent or the Required Lenders
shall have determined in good faith that such imposition is reasonably likely to
result or a determination that a Multiemployer Plan is, or is expected to be,
insolvent or in reorganization, within the meaning of Title IV of ERISA.

                  "Eurodollar Borrowing" means a Borrowing comprised of
Eurodollar Loans.

                  "Eurodollar Lending Office" means, with respect to each
Lender, the branch or Affiliate of such Lender which such Lender has designated
as its "Eurodollar Lending Office" on Schedule 2.01 or, as to any person who
becomes a Lender after the date hereof, on the Assignment and Assumption
executed by such person or such other

                                       11

<PAGE>

office of such Lender as such Lender may hereafter  designate  from time to time
as  its   "Eurodollar   Lending  Office"  by  notice  to  the  Company  and  the
Administrative Agent.

                  "Eurodollar Loan" means any Loan bearing interest at a rate
determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article II.

                  "Event of Default" has the meaning set forth in Article VII.

                  "Excess Cash Flow" means, for any fiscal year, the sum
(without duplication) of:

(a)      the Consolidated Net Income of the Company and the consolidated
         Subsidiaries for such fiscal year, adjusted to exclude any gains or
         losses attributable to Prepayment Events; plus

(b)      the excess, if any, of the Net Proceeds received during such fiscal
         year by the Company and its consolidated Subsidiaries in respect of any
         Prepayment Events over the sum of (i) the aggregate principal amount of
         Term Loans prepaid pursuant to Section 2.12(b) with such Net Proceeds
         and (ii) the aggregate amount of such Net Proceeds reinvested or held
         for reinvestment in property, plant or equipment of the Company and the
         Subsidiaries as provided in Section 2.12(b); plus

(c)      depreciation, amortization and other non-cash charges or losses
         deducted in determining such Consolidated Net Income for such fiscal
         year; plus

(d)      the amount, if any, by which Net Working Capital decreased during such
         fiscal year; minus

(e)      the sum of (i) any non-cash gains included in determining such
         consolidated net income (or loss) for such fiscal year plus (ii) the
         amount, if any, by which Net Working Capital increased during such
         fiscal year; minus

(f)      the sum of (i) Consolidated Capital Expenditures for such fiscal year
         (except to the extent attributable to the incurrence of Capital Lease
         Obligations or otherwise financed by incurring Long-Term Debt) plus
         (ii) cash consideration paid during such fiscal year to make
         acquisitions or other capital investments (except to the extent
         financed by incurring Long-Term Debt) plus (iii) the principal amount
         of any Long-Term Debt referred to in the preceding clauses (i) and (ii)
         that is incurred to finance capital expenditures, acquisitions or other
         capital investments in such fiscal year and that is repaid in such
         fiscal year; minus

(g)      the aggregate principal amount of Long-Term Debt or Capital Lease
         Obligations repaid by the Company and the consolidated Subsidiaries
         during such fiscal year, excluding (i) Term Loans prepaid pursuant to
         Section 2.12(a), (b), (c) or (d), (ii) repayments or prepayments of
         Long-Term Debt financed by the incurrence of other Long-Term Debt and
         (iii) repayments or prepayments under

                                       12
<PAGE>

         revolving credit or similar arrangements without concomitant reductions
         of the lenders' commitments by the amounts repaid or prepaid; minus

(h)      payments to holders of not more than $5,000,000 in stated value of
         preferred stock of the Company that are required to be made as a result
         of the exercise of appraisal rights to which they may be entitled in
         connection with the Recapitalization.

                  "Excluded Subsidiaries" means, at any time, Domestic
Subsidiaries that do not represent more than 1% for any such Subsidiary, or more
than 5% in the aggregate for all such Subsidiaries, of either (a) Consolidated
Assets or (b) the consolidated revenues of the Company and the Subsidiaries for
the period of four fiscal quarters most recently ended, and that (i) do not own
Equity Interests or Debt (other than de minimis Debt) of any Material
Subsidiary, (ii) do not own material intellectual property and (iii) do not have
any Debt that is guaranteed by the Company or any Material Subsidiary; provided
that no Subsidiary that is a Borrowing Subsidiary under this Agreement or the
Five-Year Credit Agreement shall be an Excluded Subsidiary.

                  "Excluded Taxes" means, with respect to the Administrative
Agent, any Lender or any other recipient of any payment to be made by or on
account of any obligation of any Borrower hereunder, (a) income, franchise or
other taxes imposed on (or measured by) its net income by the United States, or
by the jurisdiction under the laws of which such recipient is organized or in
which its principal office is located or, in the case of any Lender, in which
its Applicable Lending Office is located, (b) any branch profits taxes imposed
by the United States or any similar tax imposed by any other jurisdiction in
which such Borrower is located and (c) in the case of a Foreign Lender (other
than an assignee pursuant to a request by the Borrower under Section 2.20(b)),
any withholding tax that is imposed by the United States or by any other
jurisdiction in which such Lender is organized, has its principal office or its
Applicable Lending Office on amounts payable to such Foreign Lender at the time
such Foreign Lender becomes a party to this Agreement (or designates a new
lending office) or is attributable to such Foreign Lender's failure to comply
with Section 2.19(e), except to the extent that such Foreign Lender (or its
assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from any Borrower with
respect to such withholding tax pursuant to Section 2.19(a).

                  "Existing Term Loan Agreement" means the Term Loan Agreement
dated as of May 20, 2002, among the Company, certain borrowing subsidiaries,
certain lenders and JPMorgan Chase Bank, as administrative agent.

                  "Federal Funds Effective Rate" means, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of

                                       13
<PAGE>

the quotations for such day for such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by it.

                  "Financial Officer" of any Person shall mean the chief
financial officer, principal accounting officer, treasurer or comptroller of
such Person.

                  "Five-Year Credit Agreement" means the Amended and Restated
Five-Year Revolving Credit and Competitive Advance Facility Agreement dated as
of May 20, 2002, among the Company, certain borrowing subsidiaries, certain
lenders and JPMorgan Chase Bank, as administrative agent.

                  "Foreign Lender", with respect to any Loan, means any Lender
making such Loan that is organized under the laws of a jurisdiction other than
the United States.

                  "Foreign Pledge Agreement" means a pledge agreement governed
by the law of a jurisdiction other than the United States and satisfactory in
form and substance to the Administrative Agent and the Company.

                  "Foreign Subsidiary" means any Subsidiary organized under the
laws of a jurisdiction outside the United States or any of its territories or
possessions or any political subdivision thereof.

                  "GAAP" means United States generally accepted accounting
principles, applied on a consistent basis.

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

                  "Granting Lender" shall have the meaning assigned to such term
in Section 10.04(h).

                  "Grantors" means the Company and each Domestic Subsidiary that
is, or is required to be, a party to the Guarantee and Collateral Agreement or
any other Security Document.

                  "Guarantee" means any agreement by which the Company or any
Subsidiary assumes, guarantees, endorses, contingently agrees to purchase or
provide funds for the payment of, or otherwise becomes liable upon, the Debt of
another Person, or agrees to maintain the net worth or working capital or other
financial condition of such Person so as to enable such Person to pay such Debt
or otherwise assure any creditor of such Person against loss with respect to
such Debt, but shall not include (i) customary indemnifications, representations
and warranties made in connection with purchases, sales or leasing of property
or assets or issuances of securities, (ii) assurances given in the ordinary
course of business of the payment of obligations of customers or suppliers of
the Company or any Subsidiary, (iii) retained liability in connection with sales
of accounts

                                       14
<PAGE>

receivable or chattel paper in the ordinary course of business (but
only to the extent customary in connection with sales accounted for as true
sales) or (iv) guarantees of loans or advances made to present or former
officers and directors of the Company or any Subsidiary (x) to enable them to
acquire Equity Interests of the Company or any Subsidiary or (y) so long as the
aggregate amount thereof does not exceed $3,000,000, for any other purpose.

                  "Guarantee and Collateral Agreement" means the Guarantee and
Collateral Agreement among the Company, the Collateral Agent and the Subsidiary
Guarantors substantially in the form of Exhibit C.

                  "Guarantor" means the Company, in its capacity as guarantor of
the Obligations hereunder.

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

                  "Headquarters Sale and Leaseback" means a sale and leaseback
transaction consisting of the sale of the Company's headquarters located in the
town of New Castle and having a mailing address at Reader's Digest Road,
Pleasantville, NY 10570, for Net Proceeds of not less than $35,000,000, which
Net Proceeds shall be used to repay (a) amounts outstanding under this Agreement
as required pursuant to Section 2.12(b) hereof or (b) Standby Loans under the
Five-Year Credit Agreement to the extent such Standby Loans have been borrowed
to prepay Term Loans outstanding hereunder, and the partial leaseback of such
headquarters by the Company.

                  "Indemnified Taxes" means Taxes, including Other Taxes, but
excluding Excluded Taxes.

                  "Indemnitee" shall have the meaning assigned to such term in
Section 10.03(b).

                  "Information" shall have the meaning assigned to such term in
Section 10.12.

                  "Information Memorandum" means the Confidential Information
Memorandum dated April 2002 relating to the Company and the Transactions.

                  "Intellectual Property" shall have the meaning assigned to
such term in the Guarantee and Collateral Agreement.

                  "Interest Election Request" means, a request by any Company to
convert or continue a Borrowing in accordance with Section 2.06.

                                       15
<PAGE>

                  "Interest Expense" means, for any period, the interest expense
of the Company and the consolidated Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP (and giving effect to any Swap
Agreements that have the effect of increasing or decreasing such interest
expense), including (i) the amortization of debt discounts to the extent
included in interest expense in accordance with GAAP, (ii) the amortization of
all fees (including fees with respect to interest rate protection agreements or
other interest rate hedging agreements) payable in connection with the
incurrence of indebtedness to the extent included in interest expense in
accordance with GAAP, (iii) the portion of any rents payable under capital
leases allocable to interest expense in accordance with GAAP and (iv) the amount
of commitment fees incurred prior to the Original Effective Date under the Fee
Letter dated as of March 21, 2002, as amended as of April 19, 2002, among the
Company, JPMCB and GSCP; provided, that for purposes of computing the
Consolidated Interest Coverage Ratio and the Consolidated Fixed Charge Coverage
Ratio for any period, Interest Expense will exclude the effect of any
acceleration of the amortization of deferred financing fees paid in cash in
earlier periods as a result of the making of the Tranche A Term Loans and the
application of the proceeds thereof as provided herein.

                  "Interest Payment Date" means (a) with respect to any Loan,
the last day of each Interest Period applicable to the Borrowing of which such
Loan is a part and, in addition, the date of any prepayment of such Loan or
conversion of such Loan to a Loan of a different Type and (b) in the case of a
Eurodollar Loan with an Interest Period of more than three months' duration,
each day that would have been an Interest Payment Date for such Loan had
successive Interest Periods of three months' duration been applicable to such
Loan.

                  "Interest Period" means (a) as to any Eurodollar Borrowing,
the period commencing on the date of such Borrowing or on the last day of the
immediately preceding Interest Period applicable to such Borrowing, as the case
may be, and ending on the numerically corresponding day (or, if there is no
numerically corresponding day, on the last day) in the calendar month that is 1,
2, 3 or 6 months thereafter, as the Borrower may elect and (b) as to any ABR
Borrowing, the period commencing on the date of such Borrowing or on the last
day of the immediately preceding Interest Period applicable to such Borrowing,
as the case may be, and ending on the earliest of (i) the next succeeding March
31, June 30, September 30 or December 31, (ii) the Tranche A Maturity Date or
the Tranche B Maturity Date, as the case may be, and (iii) the date such
Borrowing is converted to a Borrowing of a different Type or repaid or prepaid
in accordance with Section 2.11 or Section 2.12; provided, however, that if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless, in the case
of Eurodollar Loans only, such next succeeding Business Day would fall in the
next calendar month, in which case such Interest Period shall end on the next
preceding Business Day. Interest shall accrue from and including the first day
of an Interest Period to but excluding the last day of such Interest Period.

                  "JPMCB" means JPMorgan Chase Bank, and its successors.

                                       16
<PAGE>

                  "Judgment Currency" shall have the meaning assigned to such
term in Section 10.13(b).

                  "Lenders" means the Tranche A Lenders and the Tranche B
Lenders.

                  "LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/100 of 1%) equal to the arithmetic average of the rates
that appear on the Reuters Screen LIBO Page as of 11:00 a.m. (London time) on
the date two Business Days prior to the commencement of such Interest Period for
deposits in Dollars with a maturity comparable to such Interest Period or, in
the event no such rates appear on the Reuters Screen LIBO Page, the rate at
which deposits in Dollars approximately equal in principal amount to such
Borrowing and for a maturity comparable to such Interest Period are offered to
the principal London office of the Administrative Agent in immediately available
funds in the London interbank market at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period.

                  "Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset. For the purposes of this Agreement, the Company or any Subsidiary shall
be deemed to own subject to a Lien any asset which it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
asset.

                  "Loan" means a Tranche A Term Loan or a Tranche B Term Loan.

                  "Loan Documents" means this Agreement, the Guarantee and
Collateral Agreement, each Mortgage and the notes and each amendment,
supplement, modification, consent or waiver of, to or in respect of any of the
foregoing.

                  "Loan Parties" means the Company, the Borrowing Subsidiaries
and the Grantors.

                  "Long-Term Debt" means any Debt that, in accordance with GAAP,
constitutes (or, when incurred, constituted) a long-term liability.

                  "Material Adverse Effect" means (a) a materially adverse
effect on the business, assets, operations or financial condition of the Company
and its Subsidiaries, taken as a whole, (b) material impairment of the ability
of the Company and its Subsidiaries, taken as a whole, to perform the
Obligations or (c) material impairment of the rights available to the Lenders or
the Agents under any Loan Document.

                  "Material Debt" means Debt (other than the Loans), or
obligations in respect of one or more Swap Agreements, of any one or more of the
Company and its Subsidiaries in an aggregate principal amount exceeding
$20,000,000 (or the equivalent thereof in one or more other currencies).

                                       17
<PAGE>

                  "Material Subsidiary" means, at any time, each Subsidiary
other than (a) Excluded Subsidiaries and (b) Foreign Subsidiaries that do not
represent more than 1% for any such Foreign Subsidiary, or more than 5% in the
aggregate for all such Foreign Subsidiaries, of either (a) Consolidated Assets
or (b) the Consolidated Revenues of the Company and the Subsidiaries for the
period of four fiscal quarters most recently ended, and that (i) do not own
Equity Interests or Debt (other than de minimis Debt) of any Material
Subsidiary, (ii) do not own material intellectual property and (iii) do not have
any Debt that is guaranteed by the Company or any Material Subsidiary; provided
that each Subsidiary that is a Borrowing Subsidiary under this Agreement or the
Five-Year Credit Agreement or that is a Grantor shall be a Material Subsidiary.

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

                  "Mortgage" means a mortgage or deed of trust, assignment of
leases and rents, or other security documents reasonably satisfactory in form
and substance to the Collateral Agent granting a Lien on any Mortgaged Property
to secure the Obligations.

                  "Mortgaged Property" means, at any time, each parcel of real
property and the improvements thereto owned by any Grantor, including each such
parcel identified on Schedule 4.05 and each other parcel with respect to which a
Mortgage is required to be granted pursuant to Section 5.11 or 5.12; provided
that any parcel of real property and improvements thereto with a fair market
value of less than $1,000,000 shall not be a Mortgaged Property.

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

                  "Net Proceeds" means, with respect to any Prepayment Event,
(a) the cash proceeds received by the Company or any Subsidiary in respect of
such Prepayment Event, including (i) any cash received in respect of any
non-cash proceeds, but only as and when received, (ii) in the case of a
casualty, insurance proceeds in excess of $500,000, and (iii) in the case of a
condemnation or similar event, condemnation awards and similar payments in
excess of $500,000, net of (b) the sum of (i) all fees, discounts, commissions
and out-of-pocket expenses paid by the Company and the Subsidiaries to third
parties (other than Affiliates) in connection with such Prepayment Event, (ii)
in the case of a sale, transfer or other disposition of an asset (including
pursuant to a sale and leaseback transaction or a casualty or a condemnation or
similar proceeding), the amount of all payments required to be made by the
Company and the Subsidiaries as a result of such Prepayment Event to repay Debt
(other than Loans) secured by such asset or otherwise subject to mandatory
prepayment as a result of such event, and (iii) the amount of all taxes paid (or
reasonably estimated to be payable) by the Company and the Subsidiaries, and the
amount of any reserves established by the Company and the Subsidiaries to fund
contingent liabilities reasonably estimated to be payable, to the extent such
taxes and reserves are directly attributable to such Prepayment Event (as
determined reasonably and in good faith by the chief financial officer of the
Company).

                                       18
<PAGE>

                  "Net Working Capital" means, at any date, (a) the consolidated
current assets of the Company and its consolidated Subsidiaries as of such date
(excluding cash and Permitted Investments or other cash equivalents) minus (b)
the consolidated current liabilities of the Company and its consolidated
Subsidiaries as of such date (excluding current liabilities in respect of Debt
and excluding unearned revenue). Net Working Capital at any date may be a
positive or negative number. Net Working Capital increases when it becomes more
positive or less negative and decreases when it becomes less positive or more
negative.

                  "Obligations" means (a) the due and punctual payment of (i)
the principal of and interest (including interest accruing during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding) on the Loans,
when and as due, whether at maturity, by acceleration, upon one or more dates
set for prepayment or otherwise, and (ii) all other monetary obligations of the
Loan Parties to any of the Secured Parties under this Agreement and each of the
other Loan Documents, including fees, costs, expenses and indemnities, whether
primary, secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), (b) the due and punctual performance of all other
obligations of the Loan Parties under this Agreement and the other Loan
Documents and (c) the due and punctual payment and performance of all
obligations of the Company or any Subsidiary under each Swap Agreement that (i)
shall have been in effect on the Effective Date with a counterparty that shall
have been a Lender or an Affiliate of a Lender as of the Effective Date or (ii)
shall have been entered into after the Effective Date with any counterparty that
shall have been a Lender or an Affiliate of a Lender at the time such Swap
Agreement was entered into.

                  "Original Effective Date" means May 20, 2002.

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

                  "Participant" has the meaning set forth in Section 10.04.

                  "Participation Percentage" means, with respect to any Lender,
the percentage of the aggregate outstanding Loans represented by such Lender's
outstanding Loans.

                  "Payment Location" shall mean an office, branch or other place
of business of any Borrower.

                  "PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.

                                       19
<PAGE>

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

                  "Permitted Encumbrances" means:

(a)      Liens imposed by law for Taxes, fees, assessments or other governmental
         charges or levies that are not yet due and payable or are being
         contested in compliance with Section 5.04;

(b)      carriers', warehousemen's, mechanics', materialmen's, repairmen's,
         vendors' or lessors' Liens (and deposits to obtain the release of such
         Liens), set-off rights and other like Liens imposed by law (or
         contract, to the extent that such contractual Liens are similar in
         nature and scope to Liens imposed by law), in each case arising in the
         ordinary course of business and securing obligations that either (i)
         are not overdue by more than 60 days or (ii) are being contested in
         compliance with Section 5.04;

(c)      Liens incurred and pledges and deposits made in the ordinary course of
         business in connection with workers' compensation, disability or
         unemployment insurance, old-age pensions, retiree health benefits and
         other similar plans or programs and other social security laws or
         regulations;

(d)      deposits (including deposits made to satisfy statutory or other legal
         obligations in connection with sweepstakes or similar contests) to
         secure the performance of bids, trade contracts, leases, statutory
         obligations, surety and appeal bonds, performance bonds and other
         obligations of a like nature, in each case in the ordinary course of
         business;

(e)      (i)   easements,   covenants,   conditions,    restrictions,    zoning
          restrictions,  building  codes,  land  use  laws,  leases,  subleases,
          licenses,  rights of way, minor  irregularities  in, or lack of, title
          and similar encumbrances affecting real property, (ii) with respect to
          any  lessee's or  licensee's  interest  in real or personal  property,
          mortgages,  liens,  rights  and  obligations  and  other  encumbrances
          arising by,  through or under any owner,  lessor or licensor  thereof,
          with or without the lessee's or licensee's consent,  and (iii) leases,
          licenses,   rights  and   obligations  in  connection   with  patents,
          copyrights, trademarks, tradenames and other intellectual property, in
          each case that do not secure  the  payment of  borrowed  money  (other
          than,  with respect to any lessee's or licensee's  interest in real or
          personal property,  mortgages, liens, rights and obligations and other
          encumbrances  arising  by,  through  or under  any  owner,  lessor  or
          licensor  thereof) to the extent, in the case of each of (i), (ii) and
          (iii),  that the Liens  referred to therein do not, in the  aggregate,
          materially  detract from the value of the affected property as used by
          the Company or any  Subsidiary  in the ordinary  course of business or
          materially  interfere with the ordinary conduct of the business of the
          Company and its Subsidiaries, taken as a whole;

                                       20
<PAGE>

(f)      Liens in favor of customs and revenue authorities to secure payment of
         customs duties in connection with the importation of goods;

provided that "Permitted Encumbrances" shall not include any Lien securing Debt.

                  "Permitted Investments"  shall mean:

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

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

(c)      investments in certificates of deposit, banker's acceptances and time
         deposits maturing within 180 days from the date of acquisition thereof
         issued or guaranteed by or placed with, and money market deposit
         accounts issued or offered by, any domestic office of any commercial
         bank organized under the laws of the United States or any State thereof
         which has a short term deposit rating of A1 from S&P and P1 from
         Moody's and has a combined capital and surplus and undivided profits of
         not less than $500,000,000;

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

(e)      money market funds that (i) comply with the criteria set forth in
         Securities and Exchange Commission Rule 2a-7 under the Investment
         Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody's and
         (iii) have portfolio assets of at least $5,000,000,000.

                  "Person" means an individual, a corporation, a partnership, a
limited liability company, a limited liability partnership, an association, a
trust or any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.

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

                                       21
<PAGE>

                  "Prepayment Event" means:

(a)       any sale, transfer or other disposition  (including pursuant to a sale
          and leaseback  transaction) of any property or asset of the Company or
          any Subsidiary,  other than (i) dispositions  described in clauses (a)
          and (b) of Section 6.05, (ii)  dispositions  resulting in Net Proceeds
          not exceeding  $500,000 for any such disposition,  (iii)  dispositions
          resulting in aggregate  Net Proceeds not  exceeding  $5,000,000 in the
          aggregate during any fiscal year of the Company and (iv)  dispositions
          of real estate located in or near Sydney,  New South Wales,  Australia
          as set  forth on  Schedule  1.01(b)  for net  proceeds  not  exceeding
          $3,500,000 in the aggregate; or

(b)      any casualty or other insured damage to, or any taking under power of
         eminent domain or by condemnation or similar proceeding of, any
         property or asset of the Company or any Subsidiary, but only to the
         extent that the Net Proceeds therefrom have not been applied to repair,
         restore or replace such property or asset within 180 days after such
         event; or

(c)       the  incurrence by the Company or any  Subsidiary  of any Debt,  other
          than (i) Debt hereunder and under the Five-Year Credit Agreement, (ii)
          Debt of Subsidiaries  permitted under Section 6.01 as in effect on the
          date hereof,  (iii) unsecured Debt of the Company (1) the principal of
          which is not by its terms payable or required to be prepaid, redeemed,
          repurchased  or  defeased,  in whole or in part,  at the option of any
          holder  thereof or on any date prior to the Tranche B Maturity Date or
          the  "Maturity  Date"  under and as  defined in the  Five-Year  Credit
          Agreement,  (2) that is not guaranteed by any Subsidiary,  (3) that is
          fully  subordinated  to the  Obligations  and to any  obligations  the
          proceeds   of  which   are   used  to   refinance   such   Obligations
          (collectively,   the  "Senior   Obligations")  in  the  event  of  any
          bankruptcy,  reorganization  or insolvency  proceeding with respect to
          any Loan Party, (4) that provides that no payments will be made during
          the  continuance  of any Default in the payment of the principal of or
          interest on the Senior  Obligations,  (5) that  provides on  customary
          terms that  payments of interest may be suspended  for a period of 180
          days during the continuance of non-payment  Defaults upon notice given
          by the  Administrative  Agent on  behalf  of the  Lenders  and (6) the
          subordination  provisions  of  which,  insofar  as they  relate to the
          Senior  Obligations,  are  otherwise  customary  for publicly  offered
          subordinated debt securities and (iv) other Debt for borrowed money in
          an aggregate principal amount at any time outstanding not greater than
          $25,000,000.

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

                  "Ratings" shall mean (a) the published ratings by Moody's and
S&P of the Company's senior, secured debt, or (b) if either such rating agency
shall not have such a published rating, any confidential or private rating by
such rating agency of the

                                       22
<PAGE>

Company's senior, secured debt. In the event either rating agency shall have
in effect a confidential or private rating of the sort referred to in clause (b)
of the preceding sentence, the Company shall cause such rating to be reissued by
such rating  agency at least once during each 12 month  period and at such other
times as the  Administrative  Agent,  acting  in good  faith,  shall  reasonably
request,  and shall provide a copy of such ratings to the  Administrative  Agent
and the Lenders. At any time when such rating shall not have been so renewed and
provided, such rating agency shall be deemed not to have a Rating in effect.

                  "Recapitalization" means the recapitalization transaction
provided for in the Recapitalization Agreement including the Class B Repurchase.

                  "Recapitalization Agreement" means the Recapitalization
Agreement dated as of April 12, 2002, by and among the DeWitt Wallace-Reader's
Digest Fund, Inc., a New York not-for-profit corporation, the Lila
Wallace-Reader's Digest Fund, Inc., a New York not-for-profit corporation, and
the Company.

                  "Register" shall have the meaning assigned to such term in
Section 10.04(b).

                  "Registered Note" shall have the meaning assigned to such term
in Section 2.05(d).

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

                  "Regulation X" means Regulation X of the Board, as in effect
from time to time.

                  "Reiman" means Reiman Holding Company, LLC; Reiman
Publications, LLC; Reiman Management Company; Reiman Advertising and Promotion,
LLC; World Wide Country Tours, LLC and Homemaker Schools, LLC.

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

                  "Required Lenders" means, at any time, Lenders having Loans
representing more that 50% of the aggregate principal amount of the total Loans
outstanding.

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

                                       23
<PAGE>

                  "Reuters Screen LIBO Page" means the display designated as
page "LIBO" on the Reuters Monitor Money Rates Service (or such other page as
may replace the LIBO page on that service for the purpose of displaying London
interbank offered rates of major banks).

                  "S&P" means Standard and Poor's Ratings Group, a division of
McGraw-Hill.

                  "Secured Parties" means (a) the Agents, (b) the Lenders, (c)
the Agents and Lenders under and as defined in the credit agreement establishing
the Five-Year Credit Agreement, (d) each counterparty to any Swap Agreement with
the Company or any Subsidiary that either (i) is in effect on the Effective Date
if such counterparty is a Lender or an Affiliate of a Lender (or a Lender or an
Affiliate of a Lender under the Five-Year Credit Agreement) as of the Effective
Date or (ii) is entered into after the Effective Date if such counterparty is a
Lender or an Affiliate of a Lender (or a Lender or an Affiliate of a Lender
under the Five-Year Credit Agreement) at the time such Swap Agreement is entered
into, (e) the beneficiaries of each indemnification obligation undertaken by any
Loan Party under this Agreement or the Five-Year Credit Agreement or any other
Loan Document, (f) each holder from time to time of Designated Letter of Credit
Obligations (as defined in the Guarantee and Collateral Agreement) and (g) the
successors and assigns of each of the foregoing.

                  "Securitization Transaction" means any transfer by the Company
or any Subsidiary of accounts receivable or interests therein (a) to a trust,
partnership, corporation or other entity, which transfer is funded in whole or
in part, directly or indirectly, by the incurrence or issuance by the transferee
or any successor transferee of debt or other securities that are to receive
payments from, or that represent interests in, the cash flow derived from such
accounts receivable or interests, or (b) directly to one or more investors or
other purchasers. The amount of any Securitization Transaction shall be deemed
at any time to be the aggregate principal or stated amount of the Debt or other
securities referred to in the preceding sentence or, if there shall be no such
principal or stated amount, the uncollected amount of the accounts receivable
transferred pursuant to such Securitization Transaction net of any such accounts
receivable that have been written off as uncollectible.

                  "Security Documents" means the Guarantee and Collateral
Agreement, the Mortgages and the Foreign Pledge Agreements.

                  "Statutory Reserve Rate" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which the Administrative Agent is
subject for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Board). Such reserve percentages shall
include those imposed pursuant to such Regulation D. Eurodollar Loans shall be
deemed to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that

                                       24
<PAGE>

may be available from time to time to any Lender under such Regulation D or
any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.

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

                  "Subsidiary" means any subsidiary of the Company.

                  "Subsidiary Guarantor" has the meaning set forth in the
Guarantee and Collateral Agreement.

                  "Swap Agreement" means any agreement with respect to any swap,
forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions; provided that
no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Company or the Subsidiaries shall be a Swap Agreement. The
"principal amount" of the obligations of the Company or any Subsidiary in
respect of any Swap Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that the Company or such Subsidiary
would be required to pay if such Swap Agreement were terminated at such time.

                   "Synthetic Purchase Agreement" means any agreement pursuant
to which the Company or a Subsidiary is or may become obligated to make (i) any
payment in connection with the purchase by any third party from a person other
than the Company or a Subsidiary of any Equity Interest or Debt or (ii) any
payment (other than on account of a permitted purchase by it of any Equity
Interest or Debt) the amount of which is determined by reference to the price or
value at any time of any Equity Interest or Debt of the Company or a Subsidiary;
provided that no phantom stock or similar plan providing for payments only to
current or former directors, officers or employees of the Company or the
Subsidiaries (or to their heirs or estates) shall be deemed to be a Synthetic
Purchase Agreement.

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

                                       25
<PAGE>

liabilities with respect thereto (including without limitation any interest,
penalties or other additions to tax).

                  "Tranche A Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make a Tranche A Term Loan hereunder on
the Effective Date, expressed as an amount representing the maximum permitted
principal amount of the Tranche A Term Loan to be made by such Lender hereunder,
as such commitment may be (a) reduced from time to time pursuant to Section 2.10
and (b) reduced or increased from time to time pursuant to assignments by or to
such Lender pursuant to Section 10.04. The initial amount of each Lender's
Tranche A Commitment is set forth on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender shall have assumed its Tranche A
Commitment, as applicable. The initial aggregate amount of the Lenders' Tranche
A Commitments is $200,000,000.

                  "Tranche A Lender" means each financial institution listed as
such in Schedule 2.01, each Assignee that becomes a Tranche A Lender pursuant to
Section 10.04, and their respective successors, other than any such Person that
ceases to be a Tranche A Lender pursuant to an Assignment and Assumption.

                  "Tranche A Maturity Date" means November 20, 2007.

                  "Tranche A Term Loan" means a Loan made pursuant to paragraph
(a) of Section 2.01.

                  "Tranche B Lender" means each financial institution listed as
such in Schedule 2.01, each Assignee that becomes a Tranche B Lender pursuant to
Section 10.04, and their respective successors, other than any such Person that
ceases to be a Tranche B Lender pursuant to an Assignment and Assumption.

                  "Tranche B Maturity Date"  means May 20, 2008.

                  "Tranche B Term Loan" means a Loan made as a Tranche B Term
Loan under the Existing Term Loan Agreement and remaining outstanding hereunder
as provided in clause (b) of Section 2.01.

                  "Transactions" means the execution, delivery and performance
by the Loan Parties of the Loan Documents, the borrowing of Loans hereunder, the
use of the proceeds of such Loans, the creation of the Guarantees and Liens
provided for in the Security Documents, the completion of the Acquisition, the
Class B Repurchase and the Recapitalization and the other transactions
contemplated hereby.

                  "Type", when used in respect of any Loan or Borrowing, shall
refer to the Rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, "Rate" shall
include the LIBO Rate and the Alternate Base Rate.

                  "United States" and "U.S." each means the United States of
America.

                                       26
<PAGE>

                  "U.S. Person" means any Person that is (i) a citizen or
resident of the United States, (ii) a corporation, partnership or other entity
created or organized under the laws of the United States or any State thereof or
(iii) any estate or trust that is subject to U.S. Federal income taxation
regardless of the source of its income.

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

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

     SECTION  1.04.  Accounting  Terms  and  Determinations.   Unless  otherwise
specified  herein,  all accounting  terms used herein shall be interpreted,  all
accounting  determinations hereunder shall be made, and all financial statements
required to be delivered  hereunder shall be prepared in accordance with GAAP as
in  effect  from  time to time;  provided  that,  if the  Company  notifies  the
Administrative  Agent that the  Company  wishes to amend any  provision  hereof,
including,  without  limitation,  any covenant in Article VI, to  eliminate  the
effect of any change in generally accepted  accounting  principles adopted after
the Effective Date on the operation of such provision (or if the  Administrative
Agent  notifies  the Company  that the  Required  Lenders wish to amend any such
provision for such purpose),  then the Company's  compliance with such provision
shall be  determined  on the  basis of GAAP in  effect  immediately  before  the
relevant change in GAAP became effective,  until either such notice is withdrawn
or such  provision  is amended in a manner  satisfactory  to the Company and the
Required Lenders.

                                       27
<PAGE>

                                   ARTICLE II

                                    The Loans

     SECTION 2.01. Tranche A Commitments;  Continuation of Tranche B Term Loans.
(a) Subject to the conditions  set forth in the Amendment  Agreement and relying
upon the  representations and warranties herein set forth, each Tranche A Lender
agrees,  severally and not jointly to make a Tranche A Term Loan to any Borrower
on the  Effective  Date in a  principal  amount  not  exceeding  its  Tranche  A
Commitment.   The  principal  amounts  of  the  Tranche  A  Lenders'  Tranche  A
Commitments are set forth opposite their  respective names in Schedule 2.01. The
Tranche A Term Loans will be denominated in Dollars.  Principal  amounts prepaid
or repaid in respect of Tranche A Term Loans may not be reborrowed.

     (b) Subject to the  conditions  set forth in the  Amendment  Agreement  and
relying upon the  representations and warranties herein set forth, all Tranche B
Term Loans made under the Existing Term Loan  Agreement and  outstanding  on the
Effective  Date  after  giving  effect to the  prepayments  provided  for in the
Amendment  Agreement  shall  continue  outstanding as Tranche B Term Loans under
this  Agreement  with the same Interest  Periods as in effect under the Existing
Term Loan Agreement. The aggregate principal amounts of the Tranche B Term Loans
of the Lenders on the Effective  Date are set forth  opposite  their  respective
names in Schedule 2.01. Notwithstanding any other provision contained herein, no
Lender  shall have any  obligation  to make any  additional  Tranche B Term Loan
hereunder.  Principal  amounts  prepaid  or repaid in  respect of Tranche B Term
Loans may not be reborrowed.

     SECTION  2.02.  Loans.  (a) The  Tranche A Term Loans  shall be made by the
Tranche  A  Lenders  ratably  in  accordance  with  their  respective  Tranche A
Commitments. The failure of any Tranche A Lender to make any Tranche A Term Loan
required to be made by it shall not  relieve  any other  Tranche A Lender of its
obligations hereunder;  provided that the Tranche A Commitments of the Tranche A
Lenders are several and no Tranche A Lender shall be  responsible  for any other
Tranche A Lender's failure to make Tranche A Term Loans as required.

     (b) Subject to Section 2.13,  each Loan shall be comprised  entirely of ABR
Loans or Eurodollar  Loans as the Borrower may request in  accordance  herewith.
Each Lender at its option may make any  Eurodollar  Loan by causing any domestic
or foreign  branch or Affiliate of such Lender to make such Loan;  provided that
any exercise of such option shall not affect the  obligation  of the  applicable
Borrower to repay such Loan in accordance with the terms of this Agreement.

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

                                       28
<PAGE>

     (d) Each  Lender  shall  make each Loan to be made by it  hereunder  on the
proposed date thereof by wire  transfer of  immediately  available  funds to the
Administrative  Agent in New York, New York, not later than 12:00 noon, New York
City time, and the Administrative  Agent shall by 2:00 p.m., New York City time,
credit the amounts so received to the account or accounts specified from time to
time in one or more notices delivered by the Company to the Administrative Agent
or, if a Borrowing shall not occur on such date because any condition  precedent
herein  specified shall not have been met, return the amounts so received to the
respective Lenders.

     SECTION  2.03.  Requests for  Borrowings.  To request each  Borrowing,  the
Borrower shall notify the Administrative  Agent of such request by telephone (a)
in the case of a Eurodollar Borrowing,  not later than 11:00 a.m., New York City
time, three Business Days before the Effective Date or (b) in the case of an ABR
Borrowing,  not later than 11:00  a.m.,  New York City time,  one  Business  Day
before the  Effective  Date.  Each such  telephonic  Borrowing  Request shall be
irrevocable and shall be confirmed  promptly by hand delivery or telecopy to the
Administrative  Agent of a written  Borrowing  Request in a form approved by the
Administrative  Agent and  signed by the  Borrower.  Each  such  telephonic  and
written Borrowing Request shall specify the following  information in compliance
with Section 2.02:

(i)      the aggregate amount of such Borrowing;

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

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

(iv)     the location and number of the Borrower's account to which funds are to
         be disbursed, which shall comply with the requirements of Section 2.04.

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

     SECTION 2.04.  Funding of Borrowings.  (a) Each Lender shall make each Loan
to be made by it hereunder on the Effective Date by wire transfer of immediately
available  funds by 12:00  noon,  New York  City  time,  to the  account  of the
Administrative Agent designated by it for such purpose by notice to the Lenders.
The  Administrative  Agent will make such Loans  available  to the  Borrower  by
promptly crediting the amounts so received,  in like funds, to an account of the
Borrower

                                       29
<PAGE>

maintained  with  the  Administrative  Agent  in  New  York  City  and
designated by the Borrower in the applicable Borrowing Request.

     (b) Unless the  Administrative  Agent  shall have  received  notice  from a
Lender prior to the Effective  Date that such Lender will not make  available to
the   Administrative   Agent  such  Lender's   share  of  any   Borrowing,   the
Administrative  Agent may assume that such Lender has made such share  available
on such date in  accordance  with  paragraph  (a) of this  Section  and may,  in
reliance upon such  assumption,  make available to the Borrower a  corresponding
amount.  In such  event,  if a  Lender  has not in fact  made  its  share of the
applicable Borrowing available to the Administrative  Agent, then the applicable
Lender  and the  Borrower  severally  agree to pay to the  Administrative  Agent
forthwith on demand such  corresponding  amount with interest thereon,  for each
day from and including the date such amount is made available to the Borrower to
but excluding  the date of payment to the  Administrative  Agent,  at (i) in the
case of such Lender,  the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation or (ii) in the case of the Borrower, the interest rate
applicable to ABR Loans.  If such Lender pays such amount to the  Administrative
Agent,  then such amount shall  constitute  such  Lender's Loan included in such
Borrowing.

     SECTION  2.05.  Evidence  of  Debt.  (a)  Each  Lender  shall  maintain  in
accordance  with its usual  practice  an  account  or  accounts  evidencing  the
indebtedness  to such  Lender  resulting  from each  Loan  made by such  Lender,
including the amounts of principal and interest  payable and paid to such Lender
from time to time.

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

     (c) The entries made in the accounts  maintained pursuant to paragraphs (a)
and (b) of this  Section  shall be prima  facie  evidence of the  existence  and
amounts of the obligations therein recorded; provided, however, that the failure
of any Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligations of the Borrowers to repay
the Loans in accordance with their terms.

     (d)  Any  Lender  may  request  that  Loans  made by it be  evidenced  by a
promissory note. In such event, the Borrower shall prepare,  execute and deliver
to such Lender a  promissory  note or notes  payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its registered  assigns (in
each such case, a "Registered  Note")) and in a form reasonably  approved by the
Administrative  Agent.  Thereafter,  the Loans evidenced by such promissory note
and interest thereon shall at all times (including after assignment  pursuant to
Section  10.04)  be  represented  by one or

                                       30
<PAGE>

more  promissory  notes in such form  payable  to the  order of the payee  named
therein (or, if such promissory note is a Registered Note, to such payee and its
registered assigns).

     SECTION 2.06. Interest Elections.  (a) Each Borrowing initially shall be of
the Type  specified in the  applicable  Borrowing  Request (or, in the case of a
Tranche B Term  Loan,  most  recently  elected  by the  applicable  Borrower  in
accordance  with the provisions of the Existing Term Loan Agreement) and, in the
case of a  Eurodollar  Borrowing,  shall  have an  initial  Interest  Period  as
specified in such  Borrowing  Request (or, in the case of a Tranche B Term Loan,
most  recently  selected  by the  applicable  Borrower  in  accordance  with the
provisions of the Existing Term Loan  Agreement).  Thereafter,  the Borrower may
elect  to  convert  such  Borrowing  to a  different  Type or to  continue  such
Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods
therefor,  all as provided in this  Section.  The Borrower  may elect  different
options with respect to different portions of the affected  Borrowing,  in which
case each such portion shall be allocated  ratably among the Lenders holding the
Loans  comprising  such  Borrowing,  and the Loans  comprising each such portion
shall be considered a separate Borrowing.

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

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

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

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

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

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

                                       31
<PAGE>

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

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

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

     SECTION 2.07.  Interest on Loans.  (a) Subject to the provisions of Section
2.08,  the Loans  comprising  each  Eurodollar  Borrowing  shall  bear  interest
(computed  on the basis of the actual  number of days elapsed over a year of 360
days) at a rate per  annum  equal to the  Adjusted  LIBO  Rate for the  Interest
Period in effect for such Borrowing  plus the Applicable  Rate from time to time
in effect.

     (b) Subject to the  provisions of Section 2.08, the Loans  comprising  each
ABR Borrowing shall bear interest (computed on the basis of the actual number of
days  elapsed  over a year of 365 or 366 days,  as the case may be, for  periods
during which the  Alternate  Base Rate is  determined  by reference to the Prime
Rate and 360 days for other  periods) at a rate per annum equal to the Alternate
Base Rate plus the Applicable Rate from time to time in effect.

     (c)  Interest on each Loan shall be payable on each  Interest  Payment Date
applicable  to such Loan except as  otherwise  provided in this  Agreement.  The
applicable Adjusted LIBO Rate or Alternate Base Rate for each Interest Period or
day within an Interest  Period,  as the case may be, shall be  determined by the
Administrative Agent, and such determination shall be conclusive absent manifest
error.

     SECTION  2.08.  Default  Interest.  If any  Borrower  shall  default in the
payment of the principal of or interest on any Loan or any other amount becoming
due hereunder, whether by scheduled maturity, notice of prepayment, acceleration
or  otherwise,  such  Borrower  shall  on  demand  from  time to time  from  the
Administrative  Agent pay interest  from and including the date of such default,
to the  extent  permitted  by  law,  on such  defaulted  amount  up to (but  not
including) the date of actual  payment  (after as well as before  judgment) at a
rate per annum (computed as provided in Section 2.07) equal to the higher of (a)
the rate,  if any,  otherwise  applicable to such amount  hereunder

                                       32
<PAGE>

plus 2% per annum and (b) the Alternate Base Rate plus the Applicable  Rate from
time to time in effect plus 2% per annum.

     SECTION  2.09.  Alternate  Rate  of  Interest.  In the  event,  and on each
occasion,  that on the day two Business  Days prior to the  commencement  of any
Interest Period for a Eurodollar  Borrowing the Administrative  Agent shall have
determined  (i) that deposits in Dollars in the  principal  amounts of the Loans
comprising  such Borrowing are not generally  available in the London  interbank
market or any other  market in which the  Lenders  shall be funding  such Loans,
(ii) that the rates at which such deposits are being offered will not adequately
and fairly  reflect  the cost to Lenders of making or  maintaining  their  Loans
included in such  Borrowing  for such Interest  Period or (iii) that  reasonable
means do not exist for  ascertaining  the LIBO Rate,  the  Administrative  Agent
shall,  as  soon  as  practicable  thereafter,  give  telecopy  notice  of  such
determination  to the  Company  and  the  Lenders.  In  the  event  of any  such
determination, until the Administrative Agent shall have advised the Company and
the Lenders that the  circumstances  giving rise to such notice no longer exist,
any affected  Borrowing  shall bear  interest at the Alternate  Base Rate.  Each
determination by the  Administrative  Agent hereunder shall be conclusive absent
manifest error.

     SECTION  2.10.  Termination  of Tranche A  Commitments.  Unless  previously
terminated,  the Tranche A Commitments  shall  terminate at 5:00 p.m.,  New York
City time, on the Effective Date.

     SECTION  2.11.  Amortization  of Term  Loans.  (a)  Subject  to  adjustment
pursuant to paragraph (d) of this Section,  the Borrowers  shall repay Tranche A
Term Loan  Borrowings on each date set forth below in an amount  (expressed as a
percentage  of the  aggregate  original  principal  amount of the Tranche A Term
Loans) set forth opposite such date:

                                 Date                              Amount
                                 ----                              ------
                           June 30, 2004                            3.75%
                           September 30, 2004                       3.75%
                           December 31, 2004                        3.75%
                           March 31, 2005                           3.75%
                           June 30, 2005                            7.50%
                           September 30, 2005                       7.50%
                           December 31, 2005                        7.50%
                           March 31, 2006                           7.50%
                           June 30, 2006                           10.00%
                           September 30, 2006                      10.00%
                           December 31, 2006                       10.00%
                           March 31, 2007                          10.00%
                           June 30, 2007                            7.50%
                           November 20, 2007                        7.50%

                                       33
<PAGE>

(b)      Subject to adjustment pursuant to paragraph (d) of this Section, the
         Borrowers shall repay Tranche B Term Loan Borrowings on each date set
         forth below in an amount (expressed as a percentage of the aggregate
         original principal amount of the Tranche B Term Loans as of the
         Effective Date) set forth opposite such date:

                                       Date                        Amount
                                       ----                        ------
                           June 30, 2004                            0.25%
                           September 30, 2004                       0.25%
                           December 31, 2004                        0.25%
                           March 31, 2005                           0.25%
                           June 30, 2005                            0.25%
                           September 30, 2005                       0.25%
                           December 31, 2005                        0.25%
                           March 31, 2006                           0.25%
                           June 30, 2006                            0.25%
                           September 30, 2006                       0.25%
                           December 31, 2006                        0.25%
                           March 31, 2007                           0.25%
                           June 30, 2007                            0.25%
                           September 30, 2007                      24.17%
                           December 31, 2007                       24.17%
                           March 31, 2008                          24.17%
                           May 20, 2008                            24.17%

     (a) To the extent not  previously  paid, (i) all Tranche A Term Loans shall
be due and  payable on the  Tranche A Maturity  Date and (ii) all Tranche B Term
Loans shall be due and payable on the Tranche B Maturity Date.

     (b) Each  prepayment  of the  Borrowings  pursuant to Section  2.12 will be
applied  against the  installments  of principal  becoming due after the date of
such  prepayment  in respect of Borrowings  of the  applicable  Class ratably in
accordance with the amounts of such installments.

     SECTION 2.12. Prepayment. (a) The Borrower shall have the right at any time
and from  time to time to prepay  any  Borrowing,  in whole or in part,  without
premium or penalty (but including amounts owed under Section 2.15).

     (b) In the event and on each occasion that any Net Proceeds are received by
or on behalf of the  Company or any  Subsidiary  in  respect  of any  Prepayment
Event, the Company shall, on the Business Day immediately  following the date on
which such Net Proceeds are received,  prepay  Borrowings in an aggregate amount
equal to 100% of such Net Proceeds; provided that, in the case of any Prepayment
Event  described in clause (a) or (b) of the  definition of the term  Prepayment
Event, if the Company shall

                                       34
<PAGE>

deliver to the Administrative  Agent a certificate of a Financial Officer to the
effect that the Company and the  Subsidiaries  intend to apply the Net  Proceeds
from such event (or a portion thereof specified in such  certificate),  within 6
months  after  receipt  of such Net  Proceeds,  to  acquire  property,  plant or
equipment to be used in the business of the Company and the  Subsidiaries  or to
acquire  other Persons or business  units,  and  certifying  that no Default has
occurred and is  continuing,  then no prepayment  shall be required  pursuant to
this  paragraph  in respect of the Net Proceeds of such event (or the portion of
such Net Proceeds  specified in such certificate,  if applicable)  except to the
extent of any such Net Proceeds that have not been so applied by the end of such
six month  period,  at which time a  prepayment  shall be  required in an amount
equal to such Net Proceeds  that have not been so applied.  Notwithstanding  the
foregoing,  (i) if on the date a  prepayment  would be due under  the  preceding
sentence,  the Ratings shall be lower than BBB- or Baa3 or shall be BBB- or Baa3
but not with a "stable"  outlook but the  Consolidated  Leverage  Ratio shall be
less than 2.50:1.00,  in the case of a Prepayment  Event described in clause (a)
or (b) of the  definition  of the term  Prepayment  Event,  or the  Consolidated
Leverage  Ratio would be less than  2.50:1.00  on a pro forma basis after giving
effect to the  incurrence  of the  applicable  Debt in the case of a  Prepayment
Event  described in clause (c) of the definition of the term  Prepayment  Event,
then (A) in the case of a  Prepayment  Event  described in clauses (a) or (b) of
the  definition  of the  term  Prepayment  Event,  references  in the  preceding
sentence to "six months"  shall be deemed to be references to "one year" and (B)
in the case of a Prepayment  Event  described in clause (c) of the definition of
the term Prepayment  Event, no prepayment shall be required,  and (ii) if on the
date a prepayment would be due under the preceding sentences,  the Ratings shall
be at least BBB- and Baa3, in each case with a "stable" outlook, then (A) in the
case of a Prepayment Event described in clauses (a) and (b) of the definition of
the term Prepayment  Event,  the references to "100%" in the preceding  sentence
shall be deemed to be a reference  to "50%" and the  reference  to "one year" in
clause (i) of this sentence  shall remain a reference to "one year",  and (B) in
the case of a Prepayment  Event described in clause (c) of the definition of the
term Prepayment  Event,  no prepayment  shall be required.  Notwithstanding  the
foregoing, (i) up to $52,000,000 of Net Proceeds received by or on behalf of the
Company  or any  Subsidiary  on or after the  Effective  Date in  respect of the
Headquarters  Sale and  Leaseback  or any other  Prepayment  Event  described in
clause (a) of the definition of the term Prepayment Event in Section 1.01 may be
applied to prepay  borrowings made on or after May 1, 2004,  under the Five-Year
Credit  Agreement  and  applied  on or prior  to the  Effective  Date to  prepay
Borrowings outstanding under the Existing Term Loan Agreement and, to the extent
so applied,  shall not be required to be applied to prepay Borrowings under this
paragraph,  and (ii) Net Proceeds received by or on behalf of the Company or any
Subsidiary  in respect of sales of real  properties  located  outside the United
States may be applied to prepay  borrowings under the Five-Year Credit Agreement
and,  to the extent so  applied,  shall not be  required to be applied to prepay
Borrowings under this paragraph.

     (c) The Company shall prepay Borrowings in an aggregate amount equal to 50%
of Excess  Cash Flow for each of its fiscal  years,  commencing  with the fiscal
year ending June 30, 2004,  minus (i) the aggregate amount of all prepayments of
Borrowings made pursuant to Section 2.12(a) during such fiscal year and (ii) the
aggregate  amount of all  prepayments  of  Borrowings  made  pursuant to Section
2.12(d)  during such fiscal year.

                                       35
<PAGE>

Each  prepayment  pursuant to this paragraph  shall be made on the date on which
financial  statements are delivered pursuant to Section 5.01 with respect to the
fiscal  year for which  Excess Cash Flow is being  calculated  (and in any event
within  90  days  after  the  end of  such  fiscal  year).  Notwithstanding  the
foregoing, if on the date a prepayment would be due under the preceding sentence
in respect of any fiscal year, (i) the Consolidated Leverage Ratio shall be less
than 2.50:1.00 or (ii) the Ratings shall be at least BBB- and Baa3, in each case
with a "stable" outlook, then no prepayment shall be required in respect of such
fiscal year.

     (d) The Company shall prepay Borrowings in an aggregate amount equal to the
aggregate amount of all cash dividends,  stock  repurchases and other Restricted
Payments  made in any  fiscal  year if the total of such cash  dividends,  stock
repurchases  and other  Restricted  Payments  made in such fiscal  year  exceeds
$25,000,000,  as required  pursuant to the second  proviso  contained in Section
6.10(a)(vi),  commencing with the fiscal year ending June 30, 2004.  Prepayments
of Borrowings required by this paragraph (d) shall be reduced by any prepayments
of Borrowings  made during such fiscal year as provided in Section  6.10(a)(vi),
but shall not be reduced by any  prepayments of Borrowings  required during such
fiscal year pursuant to Section 2.12(b) or (c). Each prepayment pursuant to this
paragraph  shall be made no later than the last day of the fiscal  year in which
the  applicable  Restricted  Payments  shall have been made  pursuant to Section
6.10(a)(vi).

     (e) Prior to any optional or mandatory prepayment of Borrowings  hereunder,
the Borrower  shall select the  Borrowing or  Borrowings to be prepaid and shall
specify such  selection in the notice of such  prepayment  pursuant to paragraph
(f) of this  Section.  In the event of any optional or mandatory  prepayment  of
Borrowings  made at a time when  Borrowings of both Classes remain  outstanding,
the Borrower shall select  Borrowings to be prepaid so that the aggregate amount
of such  prepayment is allocated  between the Tranche A Term Loan Borrowings and
Tranche B Term Loan Borrowings  ratably based on the aggregate  principal amount
of outstanding Borrowings of each such Class; provided that any Tranche B Lender
may elect,  by notice to the  Administrative  Agent by telephone  (confirmed  by
telecopy) at least one Business Day prior to the prepayment date, to decline all
or any portion of any  prepayment  of its Tranche B Term Loans  pursuant to this
Section  (other than an optional  prepayment  pursuant to paragraph  (a) of this
Section,  which may not be declined),  in which case the aggregate amount of the
prepayment  that was so declined  shall be applied to prepay on a ratable  basis
Tranche A Term  Loan  Borrowings;  provided  that  Tranche  B  Lenders  shall be
permitted to decline any prepayment  only to the extent the aggregate  amount of
the  prepayment  declined shall not exceed the aggregate  outstanding  Tranche A
Term  Loan  Borrowings  (and any  reduction  of the  amounts  declined  shall be
distributed ratably among the declining Lenders).

     (f) The  Borrower  shall  notify  the  Administrative  Agent  by  telephone
(confirmed  by  telecopy)  of  any  prepayment  hereunder  (i) in  the  case  of
prepayment of a Eurodollar  Borrowing,  not later than 11:00 a.m., New York City
time,  three  Business Days before the date of prepayment  (or, in the case of a
prepayment under paragraph (b) above, as soon after such time as practicable) or
(ii) in the case of prepayment of an ABR

                                       36
<PAGE>

Borrowing,  not later than 10:00  a.m.,  New York City time,  one  Business  Day
before the date of prepayment  (or, in the case of a prepayment  under paragraph
(b) above,  as soon after such time as  practicable).  Each such notice shall be
irrevocable and shall specify the prepayment  date, the principal amount of each
Borrowing  or  portion  thereof to be prepaid  and,  in the case of a  mandatory
prepayment,  a reasonably detailed calculation of the amount of such prepayment.
Promptly following receipt of any such notice,  the  Administrative  Agent shall
advise the Lenders of the  contents  thereof.  Each  partial  prepayment  of any
Borrowing  shall be in an amount that is at least  $10,000,000  (or, if smaller,
the amount of such  Borrowing)  and an integral  multiple of $1,000,000  (or, if
smaller,  the amount of such Borrowing),  except as necessary to apply fully the
required amount of a mandatory prepayment.  Each prepayment of a Borrowing shall
be applied ratably to the Loans included in the prepaid  Borrowing.  Prepayments
shall be accompanied by accrued interest to the extent required by Section 2.07.
All  prepayments  under this  Section  2.12 shall be subject to Section 2.15 but
otherwise without premium or penalty.

     SECTION  2.13.   Reserve   Requirements;   Change  in  Circumstances.   (a)
Notwithstanding  any other  provision  herein but subject to paragraph (d) below
and to  Section  2.20,  if any  Change  in Law shall  result in the  imposition,
modification  or  applicability  of any  reserve,  special  deposit  or  similar
requirement  against  assets of,  deposits  with or for the account of or credit
extended by any Lender,  or shall result in the  imposition on any Lender or the
London interbank  market or any other market in which the funding  operations of
any  Lender  shall be  conducted  of any  other  condition,  in any  such  case,
affecting this Agreement,  such Lender's  Tranche A Commitment or any Eurodollar
Loan made by such  Lender,  and the result of any of the  foregoing  shall be to
increase the cost to such Lender of making or maintaining any Eurodollar Loan or
to reduce the amount of any sum received or receivable by such Lender  hereunder
(whether of principal, interest or otherwise) by an amount deemed by such Lender
to be material,  then the Company and the applicable  Borrower agree to pay such
additional  amount or amounts as will compensate such Lender for such additional
costs or reduction.

     (b) If any Lender shall have  determined  that any Change in Law  regarding
capital  adequacy has or would have the effect of reducing the rate of return on
such Lender's  capital or on the capital of such Lender's  holding  company,  if
any, as a consequence of this Agreement,  such Lender's  Tranche A Commitment or
the Loans made by such Lender  pursuant  hereto to a level below that which such
Lender or such Lender's  holding company could have achieved but for such Change
in Law (taking into  consideration  such  Lender's  policies and the policies of
such  Lender's  holding  company with respect to capital  adequacy) by an amount
deemed by such  Lender  to be  material,  then the  Company  and the  applicable
Borrower agree to pay to such Lender from time to time such additional amount or
amounts as will compensate such Lender for such reduction.

     (c) A  certificate  of each Lender  setting forth such amount or amounts as
shall be necessary to compensate such Lender or its holding company as specified
in  paragraph  (a) or (b)  above,  as the  case  may be,  and  setting  forth in
reasonable  detail the manner in which  such  amount or amounts  shall have been
determined,  shall be delivered

                                       37
<PAGE>

to the Company with a copy to the  Administrative  Agent and shall be conclusive
absent manifest error. The Company or the applicable  Borrower,  as the case may
be,  shall  pay each  Lender  the  amount  shown as due on any such  certificate
delivered by it within 10 Business Days after its receipt of the same.

     (d) Failure or delay on the part of any Lender to demand  compensation  for
any increased costs or reduction in amounts  received or receivable or reduction
in return on capital  shall not  constitute a waiver of such  Lender's  right to
demand such compensation with respect to such period or any other period, except
that no Lender shall be entitled to any compensation under this Section 2.13 for
any costs  incurred or reduction  suffered  with respect to any date unless such
Lender shall have notified the Company that it will demand compensation for such
costs or  reductions  under  paragraph (c) above not more than 60 days after the
later of (i) such date and (ii) the date on which such Lender  shall have become
aware of such costs or  reductions.  The  protection  of this  Section  shall be
available to each Lender regardless of any possible contention of the invalidity
or  inapplicability  of any law, rule,  regulation or guideline or any Change in
Law.  Notwithstanding  any other provision in this Section 2.13, no Lender shall
demand  compensation for any increased cost or reduction referred to above if it
shall not at the time be the general policy or practice of such Lender to demand
such compensation in similar  circumstances under comparable provisions of other
credit  agreements,  if any. If any Lender shall  receive as a refund any moneys
from any  source in  respect  of any  increased  cost or  reduction  that it has
identified on any certificate  provided  pursuant to paragraph (c) above, to the
extent  that the  Company or any  Borrower  has  previously  paid the Lender any
compensation in respect  thereof,  the Lender shall promptly forward such refund
to the Company or such Borrower, as the case may be, without interest.

     SECTION 2.14. Change in Legality.  (a)  Notwithstanding any other provision
herein,  if any  Change  in Law shall  make it  unlawful  for any  Lender or its
Applicable  Lending  Office to make or maintain any  Eurodollar  Loan or to give
effect to its obligations as contemplated  hereby with respect to any Eurodollar
Loan,  then, such Lender shall give written notice thereof to the Company and to
the  Administrative  Agent  and  as  long  as  such  illegality,  limitation  or
impracticality continues to exist, such Lender:

(i)      may declare that Eurodollar Loans will not thereafter be made by such
         Lender hereunder, and any request by any Borrower for Eurodollar Loans
         shall, as to such Lender only, be deemed a request for an ABR Loan
         unless such declaration shall be subsequently withdrawn; and

(ii)     shall promptly enter into negotiations with the Company and negotiate
         in good faith to agree to a solution to such illegality, limitation or
         impracticability; provided, however, that if such an agreement has not
         been reached by the date at which the applicable notice becomes
         effective as provided in paragraph (b) below, the affected Eurodollar
         Loans shall be automatically converted on such date into ABR Loans.

                                       38
<PAGE>

(b)      For purposes of this Section 2.14, a notice by any Lender shall be
         effective as to each Eurodollar Loan, if lawful, on the last day of the
         Interest Period currently applicable to such Eurodollar Loan; in all
         other cases such notice shall be effective on the date of receipt.

(c)      Each Lender that has delivered a notice pursuant to paragraph (a)
         above, if the circumstances giving rise to such notice cease to exist,
         shall notify each applicable Borrower thereof as soon as practicable.

     SECTION  2.15.  Indemnity.  Each Borrower  agrees to indemnify  each Lender
making any Loan to it against any loss or expense  which such Lender may sustain
or incur as a  consequence  of (a) any  failure by any  Borrower to borrow or to
refinance,  convert or continue any Loan hereunder after  irrevocable  notice of
such borrowing, refinancing,  conversion or continuation has been given pursuant
to Section  2.03,  (b) any payment,  prepayment  or conversion of a Loan to such
Borrower  required by any other provision of this Agreement or otherwise made or
deemed made,  or any purchase  required  pursuant to the  provisions  of Section
2.20(b)  (except  pursuant to Sections 2.20  (b)(iii) or (iv)),  on a date other
than the last day of the Interest Period, if any,  applicable thereto or (c) any
default by such Borrower in payment or prepayment of the principal amount of any
Loan or any  part  thereof  or  interest  accrued  thereon,  as and when due and
payable (at the due date thereof,  whether by scheduled maturity,  acceleration,
irrevocable  notice of prepayment or otherwise),  including,  in each such case,
any loss or  reasonable  expense  sustained  or incurred or to be  sustained  or
incurred in  liquidating  or employing  deposits from third parties  acquired to
effect or  maintain  such  Loan or any part  thereof.  Such  loss or  reasonable
expense  shall  include an amount  equal to the excess,  if any,  as  reasonably
determined  by such Lender,  of (i) its cost of obtaining the funds for the Loan
being  paid,  prepaid,  refinanced  or not  borrowed  (which  in the  case  of a
Eurodollar Loan will be assumed to be the LIBO Rate applicable  thereto) for the
period  from the date of such  payment,  prepayment,  refinancing  or failure to
borrow or refinance to the last day of the Interest Period for such Loan (or, in
the case of a failure to borrow or refinance  the Interest  Period for such Loan
which would have  commenced on the date of such failure) over (ii) the amount of
interest  (as  reasonably  determined  by such Lender) that would be realized by
such  Lender  in  reemploying  the funds so paid,  prepaid  or not  borrowed  or
refinanced for such period or Interest Period, as the case may be. A certificate
of any Lender  setting forth any amount or amounts which such Lender is entitled
to receive  pursuant to this Section and setting forth in reasonable  detail the
manner in which such  amount or  amounts  shall  have been  determined  shall be
delivered to such Borrower with a copy to the Administrative  Agent and shall be
conclusive absent manifest error.

     SECTION 2.16. Pro Rata Treatment. Each Borrowing, each payment of principal
of any Borrowing (other than any prepayment to the extent otherwise  provided in
Section 2.12(e)), each payment of interest on the Loans comprising any Borrowing
and each conversion or continuation of any Borrowing shall be allocated pro rata
among the Lenders in accordance with the respective  principal  amounts of their
outstanding  Loans  included  in such  Borrowing.  Each  Lender  agrees  that in
computing  such  Lender's  portion of any  Borrowing to be made  hereunder,  the
Administrative Agent may, in its

                                       39
<PAGE>

discretion,  round each Lender's percentage of such Borrowing to the next higher
or lower whole dollar amount.

     SECTION  2.17.  Sharing of Setoffs.  Each  Lender  agrees that if it shall,
through the exercise of a right of banker's  lien,  setoff or  counterclaim,  or
pursuant to a secured  claim under  Section 506 of Title 11 of the United States
Code or other  security or interest  arising  from,  or in lieu of, such secured
claim,  received by such Lender under any applicable  bankruptcy,  insolvency or
other similar law or otherwise, or by any other means (other than as provided in
Section 2.14 or pursuant to an assignment  under Section 2.20 or Section 10.04),
obtain payment  (voluntary or  involuntary) in respect of any Loan or Loans as a
result  of  which  the  unpaid   principal   portion  of  its  Loans   shall  be
proportionately less than the unpaid principal portion of the Loans of any other
Lender,  it shall be deemed  simultaneously  to have  purchased  from such other
Lender at face value,  and shall  promptly pay to such other Lender the purchase
price  for,  a  participation  in the Loans of such  other  Lender,  so that the
aggregate unpaid principal amount of the Loans and  participations  in the Loans
held by each Lender  shall be in the same  proportion  to the  aggregate  unpaid
principal  amount of all Loans then  outstanding as the principal  amount of its
Loans prior to such exercise of banker's lien,  setoff or  counterclaim or other
event  was to the  principal  amount  of all  Loans  outstanding  prior  to such
exercise of banker's  lien,  setoff or  counterclaim  or other event;  provided,
however,  that, if any such purchase or purchases or  adjustments  shall be made
pursuant  to this  Section  2.17  and the  payment  giving  rise  thereto  shall
thereafter be  recovered,  such  purchase or purchases or  adjustments  shall be
rescinded to the extent of such  recovery  and the  purchase  price or prices or
adjustment  restored without  interest.  Any Lender holding a participation in a
Loan  deemed  to have  been so  purchased  may  exercise  any and all  rights of
banker's lien,  setoff or counterclaim  with respect to any and all moneys owing
to such  Lender by reason  thereof as fully as if such Lender had made a Loan in
the amount of such participation.

     SECTION  2.18.  Payments.   (a)  Each  Borrower  shall  make  each  payment
(including the principal of or interest on any Borrowing made by it or any other
amounts  payable by it) hereunder  from a Payment  Location in the United States
not later than 12:00 noon,  New York City time,  on the date when due in Dollars
to the  Administrative  Agent at its offices at 270 Park Avenue,  New York,  New
York, in immediately  available funds. The Administrative Agent shall distribute
any such  payments  received  by it for the  account of any other  Person to the
appropriate recipient promptly following receipt thereof.

     (b) Whenever  any payment  (including  the  principal of or interest on any
Borrowing or any other amount)  hereunder  shall become due, or otherwise  would
occur, on a day that is not a Business Day, such payment may be made on the next
succeeding  Business  Day,  and such  extension  of time  shall in such  case be
included in the computation of interest, if applicable.

     SECTION  2.19.  Taxes.  (a) Any and all  payments  by or on  account of any
obligation of the Borrowers  hereunder or under any other Loan Document shall be
made free and clear of and without  deduction for any Indemnified Taxes or Other
Taxes;

                                       40
<PAGE>

provided that if any Borrower shall be required to deduct any Indemnified
Taxes or Other  Taxes  from such  payments,  then (i) the sum  payable  shall be
increased  as  determined  in good  faith  by the  Administrative  Agent  or the
applicable  Lender to be necessary so that after making all required  deductions
(including  deductions applicable to additional sums payable under this Section)
the Administrative Agent or Lender (as the case may be) receives an amount equal
to the sum it would have received had no such  deductions  been made,  (ii) such
Borrower  shall make such  deductions and (iii) such Borrower shall pay the full
amount  deducted to the  relevant  Governmental  Authority  in  accordance  with
applicable law.

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

     (c) The Borrowers shall indemnify the Administrative  Agent and each Lender
within  20 days  after  written  demand  therefor,  for the full  amount  of any
Indemnified  Taxes or Other  Taxes  paid by the  Administrative  Agent,  or such
Lender,  as the case may be, on or with  respect to any payment by or on account
of any  obligation of the  Borrowers  hereunder or under any other Loan Document
(including   Indemnified  Taxes  or  Other  Taxes  imposed  or  asserted  on  or
attributable to amounts payable under this Section) and any penalties,  interest
and reasonable  expenses arising  therefrom or with respect thereto,  whether or
not such  Indemnified  Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental  Authority. A certificate as to the amount
of such  payment or liability  delivered  to the Company by a Lender,  or by the
Administrative  Agent on its own  behalf  or on  behalf  of a  Lender,  shall be
conclusive absent manifest error.

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

     (e) Any Foreign  Lender that is entitled to an exemption  from or reduction
of  withholding  tax under the law of the  jurisdiction  in which a Borrower  is
located,  or any treaty to which such  jurisdiction is a party,  with respect to
payments under this  Agreement  shall deliver to the Company (with a copy to the
Administrative  Agent),  at the time or times prescribed by applicable law, such
properly  completed and executed  documentation  prescribed by applicable law or
reasonably  requested  by the Company as will  permit  such  payments to be made
without withholding or at a reduced rate.

     (f) If  the  Administrative  Agent  or a  Lender  determines,  in its  sole
discretion,  that it has  received  a refund of any  Taxes or Other  Taxes as to
which it has been  indemnified by a Borrower or with respect to which a Borrower
has paid  additional  amounts  pursuant to this Section  2.19, it shall pay over
such refund to the Company (but only to the extent of indemnity  payments  made,
or  additional  amounts  paid,  by the  Borrowers  under this  Section 2.19 with
respect to the Taxes or Other  Taxes  giving  rise to such  refund),  net of all
out-of-pocket  expenses of the  Administrative  Agent or such Lender and without
interest  (other than any interest paid by the relevant  Governmental  Authority
with respect to

                                       41
<PAGE>

such  refund);   provided,   that  the  Borrowers,   upon  the  request  of  the
Administrative Agent or such Lender, agree to repay the amount paid over to such
Borrower (plus any penalties,  interest or other charges imposed by the relevant
Governmental  Authority) to the Administrative Agent or such Lender in the event
the Administrative Agent or such Lender is required to repay such refund to such
Governmental  Authority.  This  section  shall not be  construed  to require the
Administrative  Agent or any Lender to make  available  its tax  returns (or any
other  information  relating  to its taxes which it deems  confidential)  to any
Borrower or any other Person.

     SECTION  2.20.  Duty  to  Mitigate;  Assignment  of  Rights  Under  Certain
Circumstances.  (a) Any Lender claiming any additional  amounts payable pursuant
to Section 2.13, or 2.19, or exercising its rights under Section 2.14, shall use
reasonable efforts  (consistent with legal and regulatory  restrictions) to file
any  certificate  or  document  requested  by  the  Company  or  to  change  the
jurisdiction  of its Applicable  Lending Office or to take such other actions as
may  reasonably  be  requested  by the Company if the making of such a filing or
change  would  avoid the need for or reduce  the  amount of any such  additional
amounts which may thereafter  accrue or avoid the  circumstances  giving rise to
such exercise and would not, in the reasonable  determination of such Lender, be
otherwise disadvantageous to such Lender.

     (b) In the event  that (i) any  Lender  shall  have  delivered  a notice or
certificate  pursuant  to  Section  2.13 or  2.14,  (ii) any  Borrower  shall be
required or reasonably believes it will be required, to make additional payments
to  any  Lender  under  Section  2.19,  (iii)  any  Lender  shall  become,  or a
substantial part of the property of any Lender shall become,  the subject of any
receivership  or  similar  proceeding  or (iv) any Lender  shall  default on its
commitment  to lend  hereunder,  the  Company  shall have the right,  at its own
expense,  upon notice to such Lender and the  Administrative  Agent,  to require
such  Lender to  transfer  and assign  without  recourse,  free and clear of all
deductions and withholding (in accordance with, upon the terms of and subject to
the  restrictions  contained  in  Section  10.04),  all  interests,  rights  and
obligations  contained hereunder to another financial  institution or to another
Lender which shall assume such obligations; provided that (A) no such assignment
shall  conflict with any law,  rule or  regulation or order of any  Governmental
Authority and (B) the assignee or the Company,  as the case may be, shall pay to
the  affected  Lender  in  immediately  available  funds  on the  date  of  such
assignment  the principal of and the interest  accrued to the date of payment on
the Loans made by it hereunder and all other amounts  accrued for its account or
owed to it hereunder.

                                       42
<PAGE>

                                  ARTICLE III

                                   Conditions

     SECTION 3.01.  Effectiveness.  This Agreement shall become effective on the
date on which each of the  conditions  set forth in  Section 7 of the  Amendment
Agreement shall have been satisfied.

                                   ARTICLE IV

                         Representations and Warranties

     The  Company,  as to itself and each of its  Subsidiaries,  represents  and
warrants to the Agents and each of the Lenders,  as of the  Effective  Date,  as
follows:

     SECTION  4.01.   Organization;   Powers.   Each  of  the  Company  and  its
Subsidiaries is duly organized,  validly existing and in good standing under the
laws  of  the  jurisdiction  of  its  organization   (except,  in  the  case  of
Subsidiaries  that are not  Material  Subsidiaries,  where the failure to do so,
individually or in the aggregate,  could not reasonably be expected to result in
a Material  Adverse  Effect),  has all requisite power and authority to carry on
its  business  as  now  conducted  and,  except  where  the  failure  to do  so,
individually or in the aggregate,  could not reasonably be expected to result in
a Material  Adverse  Effect,  is  qualified  to do  business  in, and is in good
standing in, every jurisdiction where such qualification is required.

     SECTION  4.02.  Authorization;  Enforceability.  Except  as  set  forth  in
Schedule 4.02, the Transactions are within the corporate powers of each Borrower
and each  Subsidiary  Guarantor  and have been duly  authorized by all necessary
corporate  and, if required,  stockholder  action.  This Agreement has been duly
executed  and  delivered  by the  Company  and  each  Borrowing  Subsidiary  and
constitutes  (assuming  due  execution by the Lenders and the Agents),  and each
other  Loan  Document  to which any Loan  Party is a party,  when  executed  and
delivered by such Loan Party,  will  constitute  (assuming  due execution by the
Lenders and the  Agents),  a legal,  valid and binding  obligation  of such Loan
Party,   enforceable  in  accordance  with  its  terms,  subject  to  applicable
bankruptcy,  insolvency,  reorganization,  moratorium  or other  laws  affecting
creditors' rights generally and to general  principles of equity,  regardless of
whether considered in a proceeding in equity or at law.

     SECTION 4.03. Governmental Approvals; No Conflicts.  Except as set forth in
Schedule 4.03, the  Transactions  (a) do not require any consent or approval of,
registration or filing with or other action by any Governmental  Authority,  (b)
will not violate any  applicable  material  law or  regulation  or the  charter,
by-laws  or  other  organizational  documents  of  the  Company  or  any  of its
Subsidiaries or any order of any Governmental Authority, (c) will not violate or
result  in a  default  under  any  indenture  or  other  material  agreement  or
instrument  binding upon the Company or any of its Subsidiaries or any assets of
any of them,  or give rise to a right  thereunder  to require  any payment to be
made by the Company or any of its  Subsidiaries,  and (d) will not result in

                                       43
<PAGE>

the  creation or  imposition  of any Lien  (other than the Liens  created by the
Security Documents) on any asset of the Company or any of its Subsidiaries.

     SECTION 4.04.  Financial  Condition;  No Material  Adverse Change.  (a) The
Company has heretofore  furnished to the Lenders its consolidated  balance sheet
and statements of income,  stockholders  equity and cash flows (i) as of and for
the fiscal year ended June 30, 2003, reported on by KPMG LLP, independent public
accountants,  and (ii) as of and for the fiscal  quarter  and the portion of the
fiscal year ended March 31, 2004, certified by its chief financial officer. Such
financial  statements  present fairly, in all material  respects,  the financial
position  and  results  of  operations  and cash  flows of the  Company  and its
consolidated  Subsidiaries  as of such dates and for such periods in  accordance
with GAAP.

     (b) Since June 30, 2003,  there has been no change that would  constitute a
material  adverse  change in the  business,  assets,  operations  or  condition,
financial or otherwise, of the Company and its Subsidiaries taken as a whole.

     SECTION 4.05. Properties.  (a) Each of the Company and its Subsidiaries has
good title to all its real and  personal  property  purportedly  owned by it and
material  to its  business,  except for  defects or lack of title that could not
reasonably be expected to result in a Material Adverse Effect. All such real and
personal  property  is free and clear of all Liens  other than  Liens  permitted
under Section 6.02.

     (b) Each of the Company and its  Subsidiaries  owns, or is licensed to use,
all trademarks,  tradenames, copyrights, patents and other intellectual property
material to its business, except where lack of ownership or of any license could
not reasonably be expected to result in a Material  Adverse Effect,  and the use
thereof by the Company and its Subsidiaries does not infringe upon the rights of
any other Person, except for any such infringements that, individually or in the
aggregate,  could not  reasonably  be expected  to result in a Material  Adverse
Effect.  All such owned trademarks,  tradenames,  copyrights,  patents and other
intellectual property are free and clear of all Liens other than Liens permitted
under Section 6.02.

     (c) Schedule  4.05 sets forth the address and county of each real  property
with a fair market value of  $1,000,000  or greater that is owned by the Company
or any of its Domestic Subsidiaries as of the Effective Date after giving effect
to the Transactions.

     SECTION 4.06.  Litigation  and  Environmental  Matters.  (a) Except for the
Disclosed Matters,  there are no actions,  suits or proceedings by or before any
arbitrator or Governmental Authority pending against or, to the knowledge of the
Company,  threatened against or affecting the Company or any of its Subsidiaries
(i) as to which there is a reasonable  possibility  of an adverse  determination
and that, if adversely determined, could reasonably be expected, individually or
in the  aggregate,  to have a Material  Adverse  Effect or (ii) that  assert the
invalidity or  unenforceability  of or otherwise challenge this Agreement or the
Transactions.

                                       44
<PAGE>

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

     SECTION 4.07. Compliance with Laws and Agreements.  Neither the Company nor
any of its  Subsidiaries is in violation of any law,  regulation or order of any
Governmental  Authority  applicable  to it or its  property  or  any  indenture,
agreement  or other  instrument  binding  upon it or its  property,  where  such
violation,  individually  or in  the  aggregate  with  other  violations,  could
reasonably be expected to have a Material Adverse Effect.

     SECTION 4.08.  Not an Investment  Company or Holding  Company.  Neither the
Company nor any of its  Subsidiaries  is (a) an "investment  company" as defined
in, or subject to regulation under, the Investment  Company Act of 1940 or (b) a
"holding  company" as defined  in, or subject to  regulation  under,  the Public
Utility Holding Company Act of 1935.

     SECTION 4.09.  Taxes.  Each of the Company and its  Subsidiaries has timely
filed or caused to be timely filed all returns and reports required to have been
filed and has paid or caused to be paid all Taxes  required to have been paid by
it,  except (a) Taxes  that are being  contested  in good  faith by  appropriate
proceedings and for which the Company or such Subsidiary, as applicable, has set
aside on its books adequate reserves or (b) to the extent that the failure to do
so could not reasonably be expected to result in a Material Adverse Effect.

     SECTION 4.10. ERISA. No ERISA Event has occurred or is reasonably  expected
to occur that,  when taken  together  with all other such ERISA Events for which
liability  is  reasonably  expected to occur,  could  reasonably  be expected to
result in a Material Adverse Effect.

     SECTION  4.11.  Disclosure.  None  of the  reports,  financial  statements,
certificates  or other  information  furnished by or on behalf of the Company to
the  Administrative  Agent or any Lender in connection  with the  negotiation of
this  Agreement or delivered  hereunder  (as modified or  supplemented  by other
information so furnished),  taken as a whole, contains any material misstatement
of fact or omits to state any material  fact  necessary  to make the  statements
therein,  in the light of the  circumstances  under  which they were  made,  not
misleading;  provided that, with respect to projected financial information, the
Company  represents only that such  information was prepared in good faith based
upon assumptions believed to be reasonable at the time (it being understood that
various of such assumptions by the Company's management  concerning  anticipated
results  of  the  Company  are  based  in  part  on  statements,  estimates  and
projections  of Reiman  that  have been  reviewed  by the  Company  and that the
Company  has no reason to

                                       45
<PAGE>

believe should not be relied on, but that themselves reflect various assumptions
by Reiman's management concerning such anticipated results).

     SECTION 4.12. Federal Reserve Regulations.  (a) Neither the Company nor any
of  the  Subsidiaries  is  engaged  principally,  or as  one  of  its  important
activities,  in the  business of  extending  credit for the purpose of buying or
carrying margin stock (as defined in Regulation U).

     (b) No part of the proceeds of any Loan will be used,  whether  directly or
indirectly, and whether immediately, incidentally or ultimately, for any purpose
that  entails a violation of the  provisions  of the  Regulations  of the Board,
including  Regulation  U or X. Not more than 25% of the assets of the Company or
the  Company  and the  Subsidiaries  taken as a whole  that are  subject  to the
restrictions of Sections 6.02, 6.04 and 6.05 will at any time constitute  margin
stock.

     SECTION 4.13.  Subsidiaries.  At the Effective Date, except as set forth in
Schedule 4.13, all the issued and  outstanding  Equity  Interests of each of the
Subsidiaries  have been validly issued and are fully paid and  nonassessable and
are owned  directly or indirectly  by it free and clear of all Liens,  and there
are no options,  warrants, calls, conversions or exchange rights, commitments or
agreements of any character obligating any of the Subsidiaries to issue, deliver
or sell  additional  shares  of  capital  stock of any  class or any  securities
convertible  into or  exchangeable  for any such capital stock or any additional
partnership or other Equity Interests. Schedule 4.13 sets forth the name of, and
the  ownership  interest of the Company in, each  Subsidiary  of the Company and
identifies  each  Subsidiary  that  is a Loan  Party,  in  each  case  as of the
Effective Date.

     SECTION  4.14.  Security  Documents.   (a)  The  Guarantee  and  Collateral
Agreement  creates in favor of the Collateral  Agent, for the ratable benefit of
the Secured Parties,  a legal,  valid and enforceable  security  interest in the
Collateral (as defined in the Guarantee and Collateral  Agreement)  securing the
Obligations,  subject to Liens  permitted  under Section 6.02, and constitutes a
fully perfected Lien on all right, title and interest of the Loan Parties in the
Collateral  (other than Intellectual  Property,  as defined in the Guarantee and
Collateral  Agreement)  prior and  superior  to the rights of any other  Person,
subject only to Liens permitted under Section 6.02.

     (b) Each Mortgage creates in favor of the Collateral Agent, for the ratable
benefit of the Secured Parties, a legal, valid and enforceable Lien securing the
Obligations on all the applicable  mortgagor's  right, title and interest in and
to the Mortgaged  Properties subject thereto and the proceeds thereof,  and when
the Mortgages  have been filed in the counties  specified on Schedule  4.05, the
Mortgages  will  constitute  a fully  perfected  Lien on all  right,  title  and
interest of the mortgagors in the Mortgaged Properties and the proceeds thereof,
prior and  superior in right to any other  Person (but subject to Liens or other
encumbrances  for which  exceptions are taken in the policies of title insurance
delivered in respect of the Mortgaged  Properties and subject to Liens permitted
under Section 6.02).

                                       46
<PAGE>

     (c)  The  Lien  created  under  the  Guarantee  and  Collateral   Agreement
constitutes a fully perfected Lien on all right,  title and interest of the Loan
Parties in the material  Intellectual  Property (as defined in the Guarantee and
Collateral Agreement) in which a security interest may be perfected by filing in
the United States and its  territories and  possessions,  in each case prior and
superior in right to any other Person,  subject to Liens permitted under Section
6.02 and other than Liens that may exist on immaterial Intellectual Property (it
being  understood  that  subsequent  recordings  in the United States Patent and
Trademark  Office or the United  States  Copyright  Office may be  necessary  to
perfect  a  Lien  on  registered   trademarks  and  trademark   applications  or
copyrights, respectively, acquired by the Grantors after the Effective Date).

                                   ARTICLE V

                              Affirmative Covenants

     Until the Tranche A  Commitments  have expired or been  terminated  and the
principal of and interest on each Loan shall have been paid in full, the Company
covenants and agrees with the Lenders that:

     SECTION 5.01. Financial Statements and Other Information.  The Company will
furnish to the Agents and each Lender:

(a)       within 90 days after the end of each fiscal year of the  Company,  its
          audited   consolidated   balance  sheet  and  related   statements  of
          operations,  stockholders'  equity and cash flows as of the end of and
          for such  year,  setting  forth in each case in  comparative  form the
          figures for the previous  fiscal year,  all reported on by KPMG LLP or
          other independent public  accountants of recognized  national standing
          (without a "going  concern" or like  qualification  or  exception  and
          without any  qualification or exception as to the scope of such audit)
          to the effect  that such  consolidated  financial  statements  present
          fairly in all material respects the financial condition and results of
          operations  of the  Company  and its  consolidated  Subsidiaries  on a
          consolidated basis in accordance with GAAP consistently applied;

(b)       within  45  days  after  the end of each  of the  first  three  fiscal
          quarters of each fiscal year of the Company,  its consolidated balance
          sheet and related statements of operations,  stockholders'  equity and
          cash flows as of the end of and for such  fiscal  quarter and the then
          elapsed  portion of the  fiscal  year,  setting  forth in each case in
          comparative  form the  figures  for the  corresponding  period  of the
          previous fiscal year, or such other financial  statements  required to
          be included in  Securities  and  Exchange  Commission  Form 10-Q,  all
          certified by one of its Financial Officers as presenting fairly in all
          material respects the financial condition and results of operations of
          the Company and its consolidated  Subsidiaries on a consolidated basis
          in  accordance  with  GAAP  consistently  applied,  subject  to normal
          year-end audit adjustments and the absence of footnotes;

                                       47
<PAGE>

(c)       concurrently  with any delivery of financial  statements  under clause
          (a) or (b) above, a certificate of a Financial  Officer of the Company
          (i)  certifying as to whether a Default has occurred and, if a Default
          has occurred,  specifying the details  thereof and any action taken or
          proposed  to  be  taken  with  respect  thereto,  (ii)  setting  forth
          calculations  demonstrating  that the  Company is in  compliance  with
          Sections 6.12, 6.13, 6.14 and 6.15, (iii) in the case of each delivery
          of  financial  statements  under  clause (a) above,  setting  forth in
          reasonable  detail the  calculation of the Company's  Excess Cash Flow
          for the  applicable  fiscal  year and (iv) if any  change  in GAAP has
          occurred  since the last date of delivery of financial  statements and
          has had a material effect on the financial  statements of the Company,
          specifying such effect,  unless such effect is noted in such financial
          statements;

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

(e)      promptly following any request therefor, such other information
         regarding the operations, business affairs and financial condition of
         the Company or any Subsidiary, or compliance with the terms of this
         Agreement, as the Administrative Agent or any Lender may reasonably
         request.

     SECTION 5.02. Notices of Material Events. Upon becoming aware of any of the
following, the Company will furnish to the Agents and each Lender prompt written
notice thereof:

(a)      the occurrence of any Default;

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

(c)      the occurrence of any ERISA Event or event that would be an ERISA Event
         if the Administrative Agent or the Required Lenders made the
         determination referred to in the definition of ERISA Event, in each
         case, that, alone or together with any other ERISA Events that have
         occurred, could reasonably be expected to result in liability of the
         Company and its Subsidiaries in an aggregate amount exceeding
         $5,000,000; and

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

Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Company setting forth the
details of the
                                       48
<PAGE>

event or  development  requiring such notice and any action taken or proposed to
be taken with respect thereto.

     SECTION 5.03.  Existence;  Conduct of Business.  The Company will, and will
cause each of its  Subsidiaries  to, do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its legal existence and the
rights,  licenses,  permits,  privileges,   patents,   copyrights,   trademarks,
tradenames and franchises  material to the conduct of its business  except where
the failure to do so could not reasonably be expected to have a Material Adverse
Effect;   provided   that  the   foregoing   shall  not   prohibit  any  merger,
consolidation, liquidation or dissolution permitted under Section 6.04.

     SECTION 5.04. Payment of Obligations. The Company will, and will cause each
of its  Subsidiaries  to, pay its Debt (and  other  obligations,  including  Tax
liabilities) before the same shall become delinquent or in default, except where
(a) the  validity  or  amount  thereof  is  being  contested  in good  faith  by
appropriate  proceedings and the Company or such Subsidiary has set aside on its
books adequate  reserves with respect thereto in accordance with GAAP or (b) the
failure to make payment could not reasonably be expected to result in a Material
Adverse Effect.

     SECTION 5.05. Maintenance of Properties;  Insurance.  The Company will, and
will  cause each of its  Subsidiaries  to, (a) keep and  maintain  all  property
material to the conduct of its  business in good  working  order and  condition,
ordinary  wear and tear  excepted,  except  where the failure to do so could not
reasonably be expected to have a Material Adverse Effect and (b) maintain,  with
financially sound and reputable insurance  companies,  insurance in such amounts
and  against  such risks as are  customarily  maintained  by  similar  companies
engaged  in the same or  similar  businesses  operating  in the same or  similar
locations;  provided that the Company and its  Subsidiaries  may (i) self-insure
against  such risks and in such amounts as are usually  self-insured  by similar
companies  engaged in the same or similar  businesses  operating  in the same or
similar locations and (ii) elect not to carry publisher's liability insurance or
terrorism insurance.

     SECTION 5.06. Books and Records;  Inspection  Rights. The Company will, and
will cause each of its  Subsidiaries to, keep proper books of record and account
in  which  true  and  correct  entries  are made of all  material  dealings  and
transactions in relation to its business and  activities.  The Company will, and
will cause each of its Subsidiaries to, permit any representatives designated by
the Administrative  Agent or any Lender,  upon reasonable prior notice, to visit
and inspect its  properties,  to examine  and make  extracts  from its books and
records,  and to discuss its affairs,  finances and condition  with its officers
and independent accountants, all at such reasonable times during normal business
hours as reasonably requested.

     SECTION 5.07.  Compliance  with Laws. The Company will, and will cause each
of its Subsidiaries to, comply with all laws,  rules,  regulations and orders of
any Governmental  Authority  applicable to it or its property,  except where the
failure to

                                       49
<PAGE>

do so,  individually  or in the  aggregate,  could not reasonably be expected to
result in a Material Adverse Effect.

     SECTION 5.08. Use of Proceeds.  The proceeds of the Loans will be used only
for the  purposes set forth in the  preamble to this  Agreement.  No part of the
proceeds  of any Loan will be used,  whether  directly  or  indirectly,  for any
purpose  that  entails  a  violation  of any of the  Regulations  of the  Board,
including Regulations U and X.

     SECTION  5.09.  Information  Regarding  Collateral.  (a) The  Company  will
furnish to the  Administrative  Agent and to Cravath,  Swaine & Moore LLP, Attn:
James Cooper or such other  Person as the  Administrative  Agent shall  specify,
prompt written notice of any change (i) in any Loan Party's corporate name or in
any trade name used to  identify  it in the  conduct of its  business  or in the
ownership of its  properties,  (ii) in the  location of any Loan  Party's  chief
executive  office,  principal  place of business or jurisdiction of organization
(including any such change resulting from any merger or consolidation  involving
such Loan  Party),  (iii) in any Loan Party's  identity or corporate  structure,
(iv)  in  any  Loan   Party's   Federal   Taxpayer   Identification   Number  or
organizational  identification  number  and (v) in the  ownership  of any Equity
Interests  pledged  under the Guarantee and  Collateral  Agreement.  The Company
agrees not to effect or permit any change referred to in the preceding  sentence
until the Company has notified the  Collateral  Agent in writing of such change,
and that prior to or promptly  after any such  change the Company  will take all
such  actions  as may be  required  in order  that the  Collateral  Agent  shall
continue at all times following such change to have a valid, legal and perfected
security  interest in all the  Collateral.  The Company also agrees  promptly to
notify the Collateral Agent if any material portion of the Collateral is damaged
or destroyed.

     (b) Each year  (commencing  with the fiscal year ending June 30, 2003),  at
the time of delivery of annual  financial  statements  pursuant to clause (a) of
Section  5.01,  the  Company  shall  deliver to the  Administrative  Agent,  for
distribution  to the Lenders,  and to Cravath,  Swaine & Moore LLP, Attn:  James
Cooper or such  other  Person  as the  Administrative  Agent  shall  specify,  a
certificate  of a Financial  Officer and the chief legal  officer of the Company
dated as of a recent  date and (i)  setting  forth  information  of the type set
forth in the Perfection  Certificate but as of the date of such  certificate (or
confirming that there has been no change in such  information  since the date of
the  Perfection  Certificate  delivered on the Effective Date or the date of the
most recent  certificate  delivered  pursuant to this Section),  (ii) certifying
that  all  Uniform  Commercial  Code  financing  statements  (including  fixture
filings,   as  applicable)   or  other   appropriate   filings,   recordings  or
registrations,   including  all  refilings,  rerecordings  and  reregistrations,
containing a  description  of the  Collateral  have been filed of record in each
governmental,  municipal  or  other  appropriate  office  in  each  jurisdiction
identified  pursuant to clause (i) above to the extent  necessary to protect and
perfect the security interests under the Guarantee and Collateral  Agreement for
a period of not less than 18 months after the date of such  certificate  (except
as noted therein with respect to any continuation  statements to be filed within
such period) and (iii) certifying that the Collateral and Guarantee  Requirement
continues to be satisfied.

                                       50
<PAGE>

     SECTION 5.10.  Casualty and  Condemnation.  The Company (a) will furnish to
the  Collateral  Agent and the Lenders  prompt written notice of any casualty or
other  insured  damage to any material  Collateral  or the  commencement  of any
action or proceeding  for the taking of any material  Collateral or any material
part thereof or material  interest  therein under power of eminent  domain or by
condemnation or similar  proceeding and (b) will ensure that the Net Proceeds of
any such event (whether in the form of insurance  proceeds,  condemnation awards
or  otherwise)  are  collected  and applied in  accordance  with the  applicable
provisions of the Guarantee and Collateral Agreement and this Agreement.

     SECTION  5.11.   Additional   Subsidiaries.   If  any  additional  Domestic
Subsidiary,  or  Foreign  Subsidiary  owned in whole or in part by any  Domestic
Subsidiary,  is formed or acquired  after the Effective  Date, the Company will,
within ten Business Days after such Subsidiary is formed or acquired, notify the
Administrative  Agent and the  Lenders  thereof  and cause  the  Collateral  and
Guarantee  Requirement to be satisfied  insofar as they apply to such Subsidiary
and its assets.

     SECTION 5.12.  Further  Assurances.  The Company will,  and will cause each
Grantor  to,  execute  any  and all  further  documents,  financing  statements,
agreements and instruments,  and take all further  reasonable actions (including
the filing and recording of financing  statements,  fixture filings,  mortgages,
deeds of trust and other  documents),  that may be required under any applicable
law,  or that  the  Collateral  Agent or the  Required  Lenders  may  reasonably
request,  to cause the  Collateral  and Guarantee  Requirement  to be and remain
satisfied,  all at the  expense of the  Grantors.  The  Company  also  agrees to
provide  to the  Collateral  Agent,  from  time to time upon  request,  evidence
reasonably  satisfactory  to  the  Collateral  Agent  as to the  perfection  and
priority of the Liens  created or intended  to be created by the  Guarantee  and
Collateral Agreement.

     SECTION 5.13. Interest Rate Protection. As promptly as practicable,  and in
any event within 90 days after the Original  Effective  Date,  the Borrower will
enter  into,  and  thereafter  for a period of not less than  three  years  will
maintain in effect,  one or more  interest  rate  protection  agreements on such
terms and with such parties as shall be reasonably  satisfactory  to the Agents,
the effect of which shall be to fix or limit the  interest  cost to the Borrower
with  respect  to at least  33.33%  of the  aggregate  principal  amount  of the
outstanding Loans.

     SECTION 5.14. Compliance with Federal Reserve Regulations.  The Company and
its Subsidiaries will comply with all rules, regulations and restrictions of the
Regulations of the Board, including Regulation U and X.

                                   ARTICLE VI

                               Negative Covenants

     Until  the  Tranche  A  Commitments  have  expired  or  terminated  and the
principal  of and  interest  on each Loan have  been paid in full,  the  Company
covenants and agrees with the Lenders that:

                                       51
<PAGE>

     SECTION 6.01.  Debt and Preferred  Stock of  Subsidiaries.  (a) The Company
will not permit any Subsidiary to create,  incur,  assume or permit to exist any
Debt, except:

(i)      Debt outstanding on the Original Effective Date and set forth on
         Schedule 6.01;

(ii)     Debt created under the Loan Documents;

(iii)    Debt created under the Five-Year Credit Agreement or the "Loan
         Documents" referred to therein;

(iv)     Debt of any Subsidiary to the Company or any other Subsidiary that in
         either case shall not have been transferred or pledged to any third
         party (other than under the Security Documents);

(v)       Debt  of  any   Subsidiary   incurred  to  finance  the   acquisition,
          construction or improvement of any fixed or capital assets,  including
          Capital Lease Obligations, and any Debt assumed in connection with the
          acquisition of any such assets or secured by a Lien on any such assets
          prior  to  the  acquisition  thereof,  and  extensions,  renewals  and
          replacements  of any such Debt that do not  increase  the  outstanding
          principal  amount  thereof;  provided  that (A) such Debt is  incurred
          prior to or within 180 days after  such  acquisition  or the
          completion of such  construction  or improvement and (B) the aggregate
          principal amount of Debt permitted by this clause (v) shall not exceed
          $10,000,000 at any time outstanding;

(vi)     Debt of any Person that shall have become a Subsidiary after the
         Original Effective Date; provided that (A) such Debt shall have existed
         at the time such Person becomes a Subsidiary and shall not have been
         created in contemplation of or in connection with such Person becoming
         a Subsidiary and (B) the aggregate principal amount of Debt permitted
         by this clause (vi) shall not exceed $10,000,000 at any time
         outstanding;

(vii)    Debt refinancing or replacing any of the Debt referred to in the
         preceding clauses (i) through (vi); provided that (A) the principal
         amount of such refinancing or replacement Debt shall not exceed that of
         the Debt refinanced or replaced, (B) the maturity and weighted average
         life to maturity of such refinancing or replacement Debt shall not be
         less than that of the Debt refinanced or replaced and (C) the obligors
         on such refinancing or replacement Debt shall not include Subsidiaries
         that were not obligors in respect of the Debt refinanced or replaced;

(viii)   Debt of any Subsidiary as an account party in respect of trade letters
         of credit employed in the ordinary course of business; and

(ix)     other Debt that, when aggregated with the aggregate outstanding Debt of
         the Company secured by Liens permitted pursuant to Section 6.02(o) and
         the

                                       52
<PAGE>

         aggregate sale price of the assets sold in sale and leaseback
         transactions permitted pursuant to Section 6.03(b), shall at no time
         exceed 5.0% of Consolidated Assets.

(b)      The Company will not permit any Subsidiary to issue any preferred stock
         or other preferred Equity Interest, other than any preferred stock or
         other preferred Equity Interest held by the Company or another
         Subsidiary.

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

(a)      Permitted Encumbrances;

(b)      any Lien on any property or asset of the Company or any Subsidiary
         existing on the Original Effective Date and set forth in Schedule 6.02;
         provided that (i) such Lien shall not apply to any other property or
         asset of the Company or any Subsidiary and (ii) such Lien shall secure
         only those obligations which it secures on the date hereof and
         extensions, renewals and replacements thereof that do not increase the
         outstanding principal amount thereof as of the date hereof;

(c)       any Lien  existing on any  property or asset prior to the  acquisition
          thereof by the Company or any  Subsidiary  or existing on any property
          or asset of any Person that becomes a Subsidiary after the date hereof
          prior to the time such Person becomes a Subsidiary; provided that
          such Lien is not created in  contemplation  of or in  connection  with
          such acquisition or such Person becoming a Subsidiary, as the case may
          be, (ii) such Lien shall not apply to any other  property or assets of
          the Company or any  Subsidiary  and (iii) such Lien shall  secure only
          those  obligations which it secures on the date of such acquisition or
          the date such  Person  becomes a  Subsidiary,  as the case may be, and
          extensions, renewals and replacements thereof that do not increase the
          outstanding principal amount thereof as of such date;

(d)      any Lien on fixed or capital assets acquired, constructed or improved
         by the Company or any Subsidiary, and extensions, renewals and
         replacements thereof that do not increase the outstanding principal
         amount thereof; provided that (i) such Lien and the Debt secured
         thereby are incurred prior to or within 180 days after such acquisition
         or the completion of such construction or improvement, (ii) the Debt
         secured thereby does not exceed the cost of acquiring, constructing or
         improving such fixed or capital assets and (iii) such Lien shall not
         apply to any other property or assets of the Company or any Subsidiary;

(e)      any Lien on the property or assets of any Subsidiary of the Company in
         favor of the Company or any wholly owned Subsidiary;

(f)      any Lien on equipment (including printing presses and data-processing
         equipment) owned by the Company or any Subsidiary and located on the
         premises

                                       53
<PAGE>

         of any supplier and used in the ordinary course of the
         Company's or such Subsidiary's business;

(g)      any judgment or judicial attachment Lien with respect to any judgment
         that does not constitute an Event of Default;

(h)      any Lien securing any reimbursement, indemnification or similar
         obligation or liability incurred in connection with any letter of
         credit, letter of guaranty, banker's acceptance, bill of exchange or
         similar instrument to backstop trade obligations (but not Debt) of the
         Company or a Subsidiary;

(i)      any Lien imposed by law where (x) the validity or amount thereof is
         being contested in good faith by appropriate proceedings and the
         Company or any Subsidiary has set aside on its books adequate reserves
         with respect thereto in accordance with GAAP or (y) the failure to
         remove such Lien could not reasonably be expected to result in a
         Material Adverse Effect;

(j)      any Lien deemed to exist by virtue of any Capital Lease Obligation not
         otherwise prohibited hereunder;

(k)      any Lien arising under any Loan Document;

(l)      any Lien on assets of a Subsidiary that is not a Material Subsidiary
         securing obligations that do not constitute Debt;

(m)      Liens or other encumbrances for which exceptions are taken in the
         policies of title insurance delivered in respect of the Mortgaged
         Properties;

(n)      other Liens arising in the ordinary course of business that do not
         secure Debt and do not interfere with the material operations of the
         Company and the Subsidiaries and do not individually or in the
         aggregate materially impair the value of the assets of the Company and
         the Subsidiaries; and

(o)      other Liens securing Debt that, when aggregated with the Debt of
         Subsidiaries permitted under Section 6.01(a)(ix) and the aggregate sale
         price of the assets sold in sale and leaseback transactions permitted
         under Section 6.03(b), does not exceed 5.0% of Consolidated Assets at
         any time.

     SECTION 6.03.  Sale and Leaseback  Transactions.  The Company will not, and
will not permit any  Subsidiary  to,  enter into any  arrangement,  directly  or
indirectly, with any Person whereby it shall sell or transfer any property, real
or  personal,  used or useful in its  business,  whether now owned or  hereafter
acquired,  and  thereafter  rent or lease  property  which it intends to use for
substantially  the same  purpose  or  purposes  as the  property  being  sold or
transferred; provided, however, that, notwithstanding the above, (a) the Company
may  consummate the  Headquarters  Sale and Leaseback and (b) the Company or any
Subsidiary  may  engage  in any other  sale and  leaseback  transactions  if the
aggregate  sale  price  of the  assets  sold in such  other  transactions,  when

                                       54
<PAGE>

aggregated with the Debt of Subsidiaries permitted under Section 6.01(a)(ix) and
the Debt secured by Liens permitted pursuant to Section 6.02(o), does not exceed
5.0% of Consolidated Assets at any time.

     SECTION 6.04.  Fundamental  Changes. (a) The Company will not, and will not
permit any  Material  Subsidiary  to, merge into or  consolidate  with any other
Person,  or permit  any other  Person to merge into or  consolidate  with it, or
sell, transfer, lease or otherwise dispose of (in one transaction or in a series
of transactions)  assets (including capital stock of Subsidiaries)  constituting
all or  substantially  all the assets of the Company and the  Subsidiaries  on a
consolidated  basis (whether now owned or hereafter  acquired),  or liquidate or
dissolve,  except  that,  if at the time  thereof and  immediately  after giving
effect  thereto no Default shall have occurred and be continuing (i) the Company
or any Subsidiary may merge or consolidate with any Person; provided that (A) in
the case of any merger or consolidation involving the Company, the Company shall
be the continuing or surviving  corporation and (B) in the case of any merger or
consolidation  involving a Subsidiary (other than a merger or consolidation with
the Company),  the surviving  entity shall be a Subsidiary,  (ii) any Subsidiary
may sell,  transfer,  lease or otherwise dispose of its assets to the Company or
to another  Subsidiary,  (iii) any  Subsidiary  may liquidate or dissolve if the
Company  determines in good faith that such liquidation or dissolution is in the
best  interests  of the Company  and is not  materially  disadvantageous  to the
Lenders,  (iv) the Company may effect the  Recapitalization  and (v) the Company
may effect asset transfers permitted under Section 6.05 by causing  Subsidiaries
(other than Borrowing Subsidiaries) to be merged with or into other Persons.

     (b) The Company will not, and will not permit any  Subsidiary to, engage to
any  material  extent in any  business  other than  businesses  of the type,  or
involving  similar  themes,  content and customer  orientation,  as the business
conducted by the Company and its  Subsidiaries  on the date  hereof,  businesses
reasonably related thereto and extensions thereof consisting of the licensing of
Intellectual Property.

     SECTION  6.05.  Asset Sales.  The Company will not, and will not permit any
Subsidiary to, sell, transfer, lease or otherwise dispose of (including pursuant
to any merger or consolidation)  any asset,  including any Equity Interest owned
by it,  nor  will the  Company  permit  any of the  Subsidiaries  to  issue  any
additional Equity Interests in such Subsidiary, except:

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

(b)      sales, transfers and dispositions to the Company or a Subsidiary;
         provided that any such sales, transfers or dispositions involving a
         Subsidiary that is not a Subsidiary Guarantor shall be made in
         compliance with Section 6.07;

(c)      sales of Equity Interests in LookSmart, Ltd. and WebMD Corporation;

(d)      the sale of the Company's headquarters in connection with the
         Headquarters Sale and Leaseback and (ii) sales, transfers and
         dispositions of other

                                       55
<PAGE>

         assets for consideration not greater than $5,000,000 for any such
         transaction or series of related transactions;

(e)      other sales, transfers and dispositions of assets for consideration in
         an aggregate amount not greater than $50,000,000 during any fiscal year
         of the Company (or, if the Ratings are at least BBB- and Baa3, in each
         case with stable outlook, $100,000,000);

(f)      issuances by Subsidiaries of directors', officers' or nominees'
         qualifying shares; and

(g)      issuances of Equity Interests by Subsidiaries to the Company or other
         Subsidiaries.

     SECTION 6.06.  Investments,  Loans, Advances,  Guarantees and Acquisitions.
The Company will not, and will not permit any Subsidiary to,  purchase,  hold or
acquire any Equity Interests in or evidences of indebtedness or other securities
(including  any option,  warrant or other right to acquire any of the foregoing)
of, make or permit to exist any loans or advances to,  Guarantee any obligations
of or make or permit to exist any investment or any other interest in, any other
Person,  or purchase or  otherwise  acquire (in one  transaction  or a series of
transactions) any assets of any other Person that are substantial in relation to
the Company and the Subsidiaries taken as a whole (other than inventory acquired
in the ordinary course of business) or that constitute a business unit, except:

(a)      Permitted Investments;

(b)      investments existing on the date hereof;

(c)      investments made with consideration consisting solely of common stock
         of Company; provided that, if the value of such common stock exceeds
         $50,000,000 during any fiscal year of the Company, such investments may
         be made only if (i) no Default shall have occurred and be continuing at
         the time of any such investment, (ii) the Company shall have delivered
         to the Agents a certificate of a Financial Officer demonstrating pro
         forma compliance with the covenant set forth in Section 6.13 and (iii)
         the Ratings shall be at least BBB- and Baa3, in each case with stable
         outlook;

(d)       investments by the Company and its  Subsidiaries  in Equity  Interests
          of, and, to the extent  permitted by Section  6.01,  Guarantees by the
          Company and its  Subsidiaries  of Debt of,  persons that are direct or
          indirect   Subsidiaries  of  Company  prior  to  the  making  of  such
          investments;  provided  that (i) any such Equity  Interests  held by a
          Loan Party shall be pledged  pursuant to the  Collateral  and
          Guarantee  Agreement to the extent required by this Agreement and (ii)
          the  aggregate  amount of  investments  by Loan  Parties in, loans and
          advances by Loan  Parties to, and  Guarantees  by Loan Parties of Debt
          of,  Subsidiaries  that are not Subsidiary  Guarantors (other than any
          such  investments,  loans,  advances  and

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<PAGE>

          Guarantees  existing on the Original  Effective  Date)  shall not
          exceed $15,000,000 at any time outstanding;

(e)      loans or advances made by the Company to any Subsidiary or made by any
         Subsidiary to the Company or any other Subsidiary; provided that (i)
         any such loans and advances made by a Grantor shall be pledged pursuant
         to the Collateral and Guarantee Agreement to the extent required by
         this Agreement and (ii) the amount of such loans and advances made by
         Subsidiary Guarantors to Subsidiaries that are not Subsidiary
         Guarantors shall be subject to the limitation set forth in clause (d)
         above;

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

(g)      the Acquisition and the Recapitalization;

(h)      Restricted Payments permitted by Section 6.10(a)(iii), (v) or (vi);

(i)      acquisitions of Equity Interests or assets for consideration with a
         value not greater than $50,000,000 during any fiscal year; provided
         that after June 30, 2004, any acquisition of Equity Interests or assets
         may be completed without regard to such limitation so long as (i) no
         Default shall have occurred and be continuing at the time of such
         acquisition, (ii) the Company shall have delivered to the Agents a
         certificate of a Financial Officer demonstrating pro forma compliance
         with the covenant set forth in Section 6.13 and (iii) the Company shall
         have Ratings of at least BBB- and Baa3, in each case with stable
         outlook; and

(j)      other investments, which would not be permitted but for this clause
         (j), in an aggregate amount not to exceed $10,000,000 at any time
         outstanding.

     SECTION 6.07. Transactions with Affiliates.  The Company will not, and will
not permit any  Subsidiary  to, sell,  lease or otherwise  transfer any material
property or assets to, or  purchase,  lease or  otherwise  acquire any  material
property or assets from, or otherwise engage in any other material  transactions
with, any of its  Affiliates,  except (a) in the ordinary  course of business at
prices and on terms and  conditions  not less  favorable  to the Company or such
Subsidiary than could be obtained on an arm's-length  basis from unrelated third
parties,  (b) transactions  between or among any wholly owned Subsidiary and the
Company or any other wholly owned Subsidiary not involving any Affiliate that is
not a wholly owned Subsidiary,  (c) the Class B Repurchase, the Recapitalization
and the other transactions provided for in the Recapitalization  Agreement,  and
any  Restricted  Payment  permitted by Section 6.10, (d) payments made and other
transactions  entered into in the ordinary  course of business with officers and
directors of the Company or any  Subsidiary,  and  consulting  fees and expenses
incurred  in the  ordinary  course of  business  payable to former  officers  or
directors of the Company or any Subsidiary,  (e) reclassifications or changes in
the terms of or other  transactions  relating to Equity Interests in the Company
held by Affiliates that do not involve the

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<PAGE>

payment of any consideration (other than Equity Interests of the Company) or any
other transfer of value by the Company or any Subsidiary to any such  Affiliate,
(f)  other  transactions   involving  the  purchase  or  redemption,   or  other
monetization  of, Equity Interests of the Company held by members of the Current
Control  Group,  to the extent such  transactions  are not otherwise  prohibited
under  Section  6.10  or any  other  provision  of this  Agreement,  and (g) any
payments by the Company or any  Subsidiary  to or on behalf of any  Affiliate of
the Company or any Subsidiary in connection with out-of-pocket expenses incurred
in connection  with any public or private  offering,  other  issuance or sale of
stock by the Company or an Affiliate of the Company or other transaction for the
benefit of the Company or any Subsidiary;  provided,  however, that this Section
shall not limit the  operation  or effect  of, or any  payments  under,  (i) any
license, lease, service contract, purchasing agreement, disposition agreement or
similar  arrangement entered into in the ordinary course of business between any
Subsidiary and the Company or any other  Subsidiary or (ii) any joint venture to
which the Company or any Subsidiary is a party entered into in connection  with,
or reasonably related to, its lines of business.

     SECTION 6.08.  Restrictive  Agreements.  The Company will not, and will not
permit any Subsidiary to, directly or indirectly, enter into, incur or permit to
exist any agreement or other  arrangement  that prohibits,  restricts or imposes
any  condition  upon the ability of any  Subsidiary  to pay  dividends  or other
distributions  with respect to its Equity Interests or to make or repay loans or
advances  to the Company or any other  Subsidiary  or to  guarantee  Debt of the
Company or any other Subsidiary;  provided that the foregoing shall not apply to
(a)  restrictions  and  conditions  imposed  by law or by  this  Agreement,  (b)
restrictions and conditions with respect to a Person that is not a Subsidiary on
the date hereof,  which restrictions and conditions are in existence at the time
such Person becomes a Subsidiary and are not incurred in connection  with, or in
contemplation of, such Person becoming a Subsidiary and (c) provisions  limiting
loans,  advances,  guarantees or other  investments  or  Restricted  Payments by
Subsidiaries that are not more restrictive than the provisions related to loans,
advances, guarantees or other investments or Restricted Payments by Subsidiaries
set forth in Section 6.06 or Section 6.10(a).

     SECTION 6.09.  Swap  Agreements.  The Company will not, and will not permit
any of its Subsidiaries  to, enter into any Swap Agreement,  other than (a) Swap
Agreements  required by Section 5.13 and (b) Swap Agreements entered into in the
ordinary  course of business to hedge or mitigate  risks to which the Company or
any  Subsidiary  is exposed in the conduct of its business or the  management of
its  liabilities  or to take  advantage of reduced  interest rates by converting
fixed rate obligations to floating rate obligations.

     SECTION 6.10.  Restricted Payments;  Certain Payments of Indebtedness.  (a)
The Company will not, nor will it permit any  Subsidiary to, declare or make, or
agree to pay or make,  directly or indirectly,  any Restricted Payment, or incur
any  obligation  (contingent  or otherwise) to do so, except (i) the Company may
declare and pay dividends  with respect to its capital  stock payable  solely in
Equity  Interests,  (ii) Subsidiaries may declare and pay dividends ratably with

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<PAGE>

respect to their capital  stock,  (iii) the Company may make payments to holders
of not more than  $5,000,000  in stated value of preferred  stock of the Company
that are required to be made as a result of the exercise of appraisal  rights to
which they may be entitled in  connection  with the  Recapitalization,  (iv) the
Company  or  its  Subsidiaries  may  make  Restricted  Payments,  not  exceeding
$5,000,000  during any fiscal  year,  pursuant to and in  accordance  with stock
option plans or other benefit  plans for  management or employees of the Company
and its  Subsidiaries,  (v) the Company may carry out the Class B Repurchase and
the Recapitalization;  provided that such transactions are completed on or prior
to December 31, 2002 and (vi) the Company may pay cash  dividends and repurchase
stock and make other Restricted  Payments during any fiscal year in an aggregate
amount not exceeding $50,000,000; provided that for any fiscal year during which
the Company shall pay cash dividends, repurchase stock and make other Restricted
Payments in an aggregate amount greater than $25,000,000, the Company shall make
prepayments  of Borrowings  pursuant to Section  2.12(d) in an aggregate  amount
equal to (I) the  aggregate  amount  paid  during such fiscal year in respect of
cash dividends,  stock repurchases and other Restricted  Payments minus (II) the
aggregate  amount of all  prepayments  of  Borrowings  made  pursuant to Section
2.12(a) during such fiscal year; provided further that so long as (x) no Default
shall have occurred and be  continuing,  (y) the Company shall  demonstrate  pro
forma compliance with the covenant set forth in Section 6.13 and (z) the Company
shall have Ratings of at least BBB- and Baa3, in each case with stable  outlook,
the second proviso above shall not apply, and the Company may pay cash dividends
and repurchase stock and make other  Restricted  Payments during any fiscal year
in an aggregate amount equal to Excess Cash Flow for the prior year.

(b)      The Company will not, nor will it permit any Subsidiary to, make or
         agree to pay or make, directly or indirectly, any payment or other
         distribution (whether in cash, securities or other property) of or in
         respect of principal of or interest on any Debt, or any payment or
         other distribution (whether in cash, securities or other property),
         including any sinking fund or similar deposit, on account of the
         purchase, redemption, retirement, acquisition, cancellation or
         termination of any Debt, except:

(i)      payments in respect of Debt created under the Loan Documents or the
         Five-Year Credit Agreement;

(ii)     payments in respect of Debt owed to the Company or any Subsidiary;

(iii)    required interest and principal payments as and when due in respect of
         other Debt, other than payments in respect of any Debt subordinated to
         the Obligations that is prohibited by the applicable subordination
         provisions; and

(iv)     prepayments of Debt with the net proceeds of new Debt permitted
         hereunder to the extent such net proceeds are not required to be
         applied to prepay Borrowings under Section 2.12; provided that (A) the
         obligors in respect of such new Debt do not include Subsidiaries that
         are not obligors in respect of the Debt so prepaid, (B) the maturity of
         such new Debt shall not be earlier, and the weighted average life of
         such new Debt shall not be shorter, than that of the Debt so prepaid
         and (C) if the Debt so prepaid shall have been subordinated to the

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<PAGE>

         Obligations, then such new Debt shall likewise be so subordinated on
         terms not less favorable to the Lenders.

(c)      Neither the Company nor any Subsidiary shall enter into or be party to,
         or make any payment under, any Synthetic Purchase Agreement, except
         that the Company may enter into any Synthetic Purchase Agreement
         related to any Equity Interest of the Company so long as the payments
         required to be made thereunder, if they constituted payments in respect
         of the purchase of Equity Interests of the Company, would be permitted
         under clause (vii) of paragraph (a) above.

     SECTION 6.11.  Amendment of Material  Documents.  The Company will not, nor
will it permit any Subsidiary to, amend, modify or waive any of its rights under
any instrument or agreement  evidencing or governing  Material Debt or any other
material instrument or agreement if such amendment, modification or waiver would
shorten the maturity or reduce the weighted average life of any Material Debt or
be adverse in any material respect to the rights or interests of the Lenders.

     SECTION 6.12.  Consolidated  Interest  Coverage Ratio. The Company will not
permit  the  Consolidated  Interest  Coverage  Ratio  for  any  period  of  four
consecutive fiscal quarters ending after the date hereof to be less than 4.00 to
1.00.

     SECTION 6.13.  Consolidated Leverage Ratio. The Company will not permit the
Consolidated  Leverage Ratio as of any date during any period set forth below to
be greater than the ratio set forth opposite such period:

         Period                                          Ratio
         ------                                          -----
Through 6/30/04                                       3.75:1.00

7/1/04 through 9/30/04                                4.00:1.00

10/1/04 through 12/31/04                              3.25:1.00

1/1/05 through 3/31/05                                3.00:1.00

4/1/05 through 9/30/05                                2.75:1.00

10/1/05 and thereafter                                2.50:1.00

     SECTION 6.14.  Consolidated  Fixed Charge Coverage Ratio.  The Company will
not permit the  Consolidated  Fixed Charge Coverage Ratio for any period of four
consecutive fiscal quarters to be less than 1.75 to 1.00.

     SECTION   6.15.   Capital   Expenditures.   The  Company  will  not  permit
Consolidated  Capital  Expenditures to exceed (i) $30,000,000  during the fiscal
year of the Company  ending on June 30,  2004,  or (ii)  $40,000,000  during any
fiscal  year of the  Company  thereafter;  provided  that,  notwithstanding  the
foregoing,  an amount not greater than 50% of the scheduled amount available for
capital expenditures in any given year

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<PAGE>

but not  used in such  year  may be used for  capital  expenditures  in the next
subsequent  year only (it being  agreed that the  scheduled  amount for any year
will be deemed used before any amount carried over from a prior year).

                                  ARTICLE VII

                                Events Of Default

     If any of the following events ("Events of Default") shall occur:

(a)      any representation or warranty made or deemed made by or on behalf of
         the Company or any Subsidiary in or in connection with any Loan
         Document, or in any report, certificate, financial statement or other
         document furnished pursuant to or in connection with any Loan Document,
         shall prove to have been incorrect in any material respect when made or
         deemed made;

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

(c)      any Borrower shall fail to pay any interest on any Loan or any other
         amount (other than an amount referred to in clause (b) above) payable
         under any Loan Document, when and as the same shall become due and
         payable, and such failure shall continue unremedied for a period of
         three Business Days;

(d)      the Company or any Subsidiary shall fail to observe or perform any
         covenant, condition or agreement contained in Section 5.02, Section
         5.03 (with respect to any Borrower's existence) or Section 5.08 or in
         Article VI;

(e)      the Company or any Subsidiary shall fail to observe or perform any
         covenant, condition or agreement contained in any Loan Document (other
         than those specified in clause (b), (c) or (d) above), and such failure
         shall continue unremedied for a period of 30 days after notice thereof
         from the Administrative Agent or any Lender to the Company;

 (f)     (i) the  Company  or any  Material  Subsidiary  shall fail to make any
          payment  of  principal,  interest  or other  amounts in respect of any
          Material Debt,  when and as the same shall become due and payable (or,
          in the case of  payments  other than  principal  payments,  within any
          applicable grace period),  or (ii) any other event or condition occurs
          that results in any Material  Debt becoming due prior to its scheduled
          maturity  or that  enables  or  permits  the  holder or holders of any
          Material  Debt or any trustee or agent on its or their behalf to cause
          any  Material  Debt to  become  due,  or to  require  the  prepayment,
          repurchase,  redemption or defeasance thereof,  prior to its scheduled
          maturity;  provided that this clause (ii) shall not apply to
          secured  Debt that  becomes due as a result of the  voluntary  sale or
          transfer of the property or assets  securing such Debt, or (iii)

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<PAGE>

          there  shall  occur any Event of  Default  under and as defined in the
          Five-Year Credit Agreement;

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

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

(i)      the Company or any Material Subsidiary shall become unable, admit in
         writing or fail generally to pay its debts as they become due;

(j)      one or more judgments (other than pursuant to the exercise of appraisal
         rights in connection with the Recapitalization) for the payment of
         money in an aggregate amount (to the extent not covered by insurance)
         in excess of $20,000,000 shall be rendered against the Company, any
         Material Subsidiary or any combination thereof and the same shall
         remain undischarged for a period of 30 consecutive days during which
         execution shall not be effectively stayed, or any action shall be
         legally taken by a judgment creditor to attach or levy upon any assets
         of the Company or any Material Subsidiary to enforce any such judgment;

(k)      an ERISA Event shall have occurred that, when taken together with all
         other ERISA Events that have occurred, could reasonably be expected to
         result in any liability of the Company and its Subsidiaries in an
         aggregate amount not exceeding $10,000,000 or could reasonably be
         expected to result in a Material Adverse Effect;

(l)      a Change in Control shall occur;

(m)      any material provision of the Guarantee or Guarantee and Collateral
         Agreement, or of any other Security Document relating to any material
         portion of

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<PAGE>

          the Collateral, shall, for any reason, not be, or shall be asserted in
          writing by the Company or any  Subsidiary not to be, in full force and
          effect, or otherwise valid, binding and enforceable against any person
          purported to be bound by it; or

(n)      any Lien purported to be created under the Guarantee and Collateral
         Agreement or any other Security Document, in each case, with respect to
         any material portion of the Collateral shall cease to be, or shall be
         asserted by any Loan Party not to be, a valid, perfected first priority
         Lien (subject only to Liens permitted under Section 6.02) on such
         Collateral, except as a result of the release of such Collateral
         pursuant to the provisions of this Agreement or the Security Documents

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

     Upon the occurrence and during the  continuance of any Event of Default the
Administrative  Agent may, with the consent of the Required Lenders,  and shall,
at the  request  of the  Required  Lenders,  instruct  the  Collateral  Agent to
exercise any remedies available to it under any Security Document.

                                  ARTICLE VIII

                                   The Agents

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

     The bank or banks  serving  as the  Agents  hereunder  shall  have the same
rights and  powers in their  capacity  as  Lenders  as any other  Lender and may
exercise  the

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<PAGE>

same as though they were not Agents, and such bank or banks and their Affiliates
may accept  deposits  from,  lend money to and  generally  engage in any kind of
business  with the Company or any  Subsidiary or other  Affiliate  thereof as if
they were not Agents hereunder.

     The Agents shall not have any duties or obligations  except those expressly
set forth  herein.  Without  limiting the  generality  of the  foregoing (a) the
Agents shall not be subject to any fiduciary or other implied duties, regardless
of whether a Default has  occurred and is  continuing,  (b) the Agents shall not
have any duty to take any  discretionary  action or exercise  any  discretionary
powers,  except  discretionary  rights and powers expressly  contemplated hereby
that the Agents are required to exercise in writing by the Required Lenders, and
(c) except as expressly set forth herein,  the Agents shall not have any duty to
disclose,  and shall not be liable for the failure to disclose,  any information
communicated  to  the  Agents  by or  relating  to  the  Company  or  any of its
Subsidiaries.  The Agents  shall not be liable for any action taken or not taken
by them with the  consent  or at the  request  of the  Required  Lenders  or the
Lenders,  as the case may be, or in the absence of their own gross negligence or
wilful misconduct. In addition, the Agents shall be deemed not to have knowledge
of any Default unless and until written notice thereof is given to the Agents by
the Company or a Lender, and the Agents shall not be responsible for or have any
duty to ascertain or inquire into (i) any statement,  warranty or representation
made  in or in  connection  with  this  Agreement,  (ii)  the  contents  of  any
certificate,  report or other  document  delivered  hereunder  or in  connection
herewith,  (iii)  the  performance  or  observance  of  any  of  the  covenants,
agreements  or other terms or conditions  set forth  herein,  (iv) the validity,
enforceability,  effectiveness  or  genuineness  of this  Agreement or any other
agreement,  instrument or document, or (v) the satisfaction of any condition set
forth in Article III or elsewhere herein, other than to confirm receipt of items
expressly required to be delivered to the Agents.

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

     The Agents may perform any and all their duties and  exercise  their rights
and powers by or through any one or more sub-agents appointed by the Agents. The
Agents and any such  sub-agent may perform any and all their duties and exercise
their rights and powers through their  respective  Affiliates.  The  exculpatory
provisions of the preceding  paragraphs shall apply to any such sub-agent and to
the Affiliates of the Agents and any such sub-agent.

     Subject to the  appointment and acceptance of a successor Agent as provided
below,  either  Agent may resign at any time by  notifying  the  Lenders and the

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<PAGE>

Company. Upon any such resignation, the Required Lenders shall have the right to
appoint a successor  with the  Company's  written  consent  (which  shall not be
unreasonably  withheld or delayed and shall not be required  from the Company if
an Event of Default has occurred and is continuing).  If no successor shall have
been  so  appointed  by the  Required  Lenders  and  shall  have  accepted  such
appointment  within  30 days  after  the  retiring  Agent  gives  notice  of its
resignation,  then the retiring  Agent may, on behalf of the  Lenders,  with the
Company's  written consent (which shall not be unreasonably  withheld or delayed
and  shall  not  be  required  if an  Event  of  Default  has  occurred  and  is
continuing),  appoint a successor  Agent  which shall be a bank or an  Affiliate
thereof, in each case with a net worth of at least  $1,000,000,000 and an office
in New York, New York. Upon the acceptance of its appointment as Agent hereunder
by a successor,  such successor  shall succeed to and become vested with all the
rights,  powers,  privileges and duties of the retiring Agent,  and the retiring
Agent shall be discharged  from its duties and obligations  hereunder.  After an
Agent's resignation hereunder,  the provisions of this Article and Section 10.03
shall  continue  in effect for its  benefit in respect of any  actions  taken or
omitted to be taken by it while it was acting as Agent.

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

     None of the Joint Lead Arrangers,  the Co-Arrangers,  the Syndication Agent
or the Co-Documentation  Agents named on the cover page of this Agreement shall,
in their  capacity  as such,  have any  duties or  responsibilities  under  this
Agreement.

                                   ARTICLE IX

               Joint And Several Liability Of Borrowers; Guarantee

     SECTION 9.01. Joint and Several Liability of Borrowers. Notwithstanding any
other  provision of this  Agreement,  it is agreed that each  Borrower  shall be
fully liable, both severally and jointly with the other Borrowers,  for the full
amount of the  Obligations,  whether  incurred by such  Borrower or by any other
Borrower.

     SECTION 9.02. Guarantee. In order to induce the Lenders to extend credit to
the Borrowing  Subsidiaries  hereunder,  and without  limiting the provisions of
Section 9.01, the Guarantor hereby  unconditionally and irrevocably  guarantees,
as a  primary  obligor  and not  merely  as a  surety,  the  Obligations  of the
Borrowing  Subsidiaries.  The Guarantor also agrees that the  Obligations of the
Borrowing  Subsidiaries may be extended or renewed, in whole or in part, without
notice to or  further  assent  from it, and that it will  remain  bound upon its
Guarantee  hereunder  notwithstanding  any such extension or renewal of any such
Obligation.

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     The Guarantor waives  presentment to, demand of payment from and protest to
any Borrower of any of the Obligations of the Borrowing  Subsidiaries,  and also
waives  notice of  acceptance  of its  obligations  and  notice of  protest  for
nonpayment.  The obligations of the Guarantor hereunder shall not be affected by
the  failure  of any  Lender or the  Agents to assert  any claim or demand or to
enforce any right or remedy under the provisions of this Agreement or any of the
other Loan Documents or otherwise,  or, except as specifically provided therein,
by any  rescission,  waiver,  amendment or  modification  of any of the terms or
provisions  of this  Agreement,  any of the other  Loan  Documents  or any other
agreement.

     The Guarantor  further  agrees that its Guarantee  hereunder  constitutes a
promise of payment when due and not merely of  collection,  and waives any right
to require  that any resort be had by any Lender to any  balance of any  deposit
account  or  credit  on the  books  of any  Lender  in  favor  of any  Borrowing
Subsidiary or any other person.

     The  obligations  of the  Guarantor  hereunder  shall not be subject to any
reduction,  limitation,  impairment or termination for any reason, and shall not
be subject to any defense or setoff,  counterclaim,  recoupment  or  termination
whatsoever by reason of the invalidity,  illegality or  unenforceability  of the
Obligations of the Borrowing Subsidiaries,  any impossibility in the performance
of such Obligations or otherwise and regardless of any law,  regulation or order
of any  jurisdiction,  or any  other  event,  affecting  any  term  of any  such
Obligation or any Lender's  rights with respect  thereto.  Without  limiting the
generality of the foregoing,  the  obligations of the Guarantor  hereunder shall
not be discharged or impaired or otherwise affected by the failure of the Agents
or any Lender to assert any claim or demand or to enforce any remedy  under this
Agreement or under any other Loan Document or any other agreement, by any waiver
or  modification  in respect of any thereof,  by any default,  failure or delay,
wilful or otherwise, except as specifically provided therein, in the performance
of the  Obligations of the Borrowing  Subsidiaries,  by any release of any other
guarantor,  or by any other act or omission  which may or might in any manner or
to any extent vary the risk of the Guarantor or otherwise operate as a discharge
of the Guarantor as a matter of law or equity.

     The Guarantor further agrees that its obligations  hereunder shall continue
to be effective or be reinstated, as the case may be, if at any time payment, or
any part thereof, of principal of or interest on any Obligation of the Borrowing
Subsidiaries  is  rescinded  or must  otherwise be restored by the Agents or any
Lender upon the bankruptcy or reorganization of any Borrower or otherwise.

     In  furtherance  of the  foregoing and not in limitation of any other right
which  the  Agents  or any  Lender  may  have at law or in  equity  against  the
Guarantor by virtue hereof, upon the failure of any Borrowing  Subsidiary to pay
any Obligation  when and as the same shall become due,  whether at maturity,  by
acceleration,  after notice of  prepayment or  otherwise,  the Guarantor  hereby
promises to and will,  upon receipt of written  demand by the Agents,  forthwith
pay, or cause to be paid, in cash the amount of such unpaid Obligation.

                                       66
<PAGE>

     Upon payment by the Guarantor of any sums as provided above,  all rights of
the Guarantor  against any Borrowing  Subsidiary  arising as a result thereof by
way of right of subrogation or otherwise  shall in all respects be  subordinated
and junior in right of payment to the prior indefeasible  payment in full of all
the Obligations, the Guarantor hereby agreeing that it will not assert any claim
in respect of such rights until all the Obligations shall have been indefeasibly
paid in full.

                                   ARTICLE X

                                  Miscellaneous

     SECTION  10.01.   Notices.   Except  in  the  case  of  notices  and  other
communications  expressly  permitted to be given by  telephone,  all notices and
other  communications  provided  for  herein  shall be in  writing  and shall be
delivered  by  hand  or  overnight  courier  service,  mailed  by  certified  or
registered mail or sent by telecopy, as follows:

(a)      if to the Company, to it at Reader's Digest Road, Pleasantville, New
         York 10570-7000, Attention of Treasurer (Telecopy No. (914) 244-5904);

(b)      if to the Administrative Agent or Collateral Agent, to JPMorgan Chase
         Bank, One Chase Plaza, 8th Floor, New York, New York 10081, Attention
         of Margaret Swales (Telecopy No. (212) 552-5662), with a copy to
         JPMorgan Chase Bank, 270 Park Avenue, New York, New York 10017,
         Attention of Tina Ruyter (Telecopy No. (212) 270-5120). Each notice
         required to be given by the Administrative Agent or by the Required
         Lenders under this Agreement, other than any notice under Article 2 or
         Section 10.04, shall simultaneously be given to the Collateral Agent;
         and

(c)      if to a Lender, to it at its address (or telecopy number) set forth in
         its Administrative Questionnaire;

provided, however, that any notice or other communication provided for herein to
be given to or by the Company or any Borrowing Subsidiary shall be deemed
effective as to the Company and as to all Borrowing Subsidiaries when given to
or by the Company, as the case may be.

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

     SECTION  10.02.  Waivers;  Amendments.  (a)  No  failure  or  delay  by the
Administrative  Agent or any Lender in exercising  any right or power  hereunder
shall operate as a waiver thereof,  nor shall any single or partial  exercise of
any such  right or  power,  or any  abandonment  or  discontinuance  of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the  exercise  of any other  right or power.

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<PAGE>

The rights and remedies of the  Administrative  Agent and the Lenders  hereunder
are  cumulative  and are not exclusive of any rights or remedies that they would
otherwise  have. No waiver of any provision of this  Agreement or consent to any
departure by any Borrower  therefrom shall in any event be effective  unless the
same shall be permitted by paragraph (b) below,  and then such waiver or consent
shall be effective  only in the specific  instance and for the purpose for which
given.

     (b) None of this Agreement, any other Loan Document or any provision hereof
or thereof may be waived, amended or modified except pursuant to an agreement or
agreements in writing entered into by the Borrowers and the Required  Lenders or
by the Borrowers and the  Administrative  Agent or the Collateral  Agent, as the
case may be, with the consent of the  Required  Lenders;  provided  that no such
agreement  shall (i)  increase  or extend the  expiration  date of the Tranche A
Commitment of any Lender without the written consent of such Lender, (ii) reduce
or forgive all or part of the principal amount of any Loan or reduce the rate of
interest  thereon,  or reduce any other amounts payable  hereunder,  without the
written consent of each Lender affected thereby,  (iii) postpone the date of any
payment due under Section  2.11(a),  (b) or (c) of the  principal  amount of any
Loan or the date of any payment of any interest payable hereunder, or reduce the
amount of, waive or excuse any such payment, without the written consent of each
Lender affected  thereby,  (iv) change Section 2.16 in a manner that would alter
the pro rata sharing of any payment  without the written  consent of each Lender
adversely  affected  thereby,  or change  any  provision  of the  Guarantee  and
Collateral  Agreement  or any  other  Security  Document  to alter  the pro rata
distribution of amounts payable to the Secured Parties, in each case without the
written  consent  of each  Lender  adversely  affected  thereby,  (v)  reduce or
terminate the  obligations  of the  Guarantor or any Borrower  under Article IX,
without the written consent of each Lender, (vi) change any of the provisions of
this  Section or the  definition  of "Required  Lenders" or any other  provision
hereof  specifying  the number or  percentage  of Lenders  required  in order to
waive,  amend or modify any rights hereunder or make any  determination or grant
any consent hereunder, without the written consent of each Lender, (vii) release
all or substantially  all the Subsidiary  Guarantors from their Guarantees under
the Guarantee and Collateral Agreement,  or release all or substantially all the
Collateral  from the Liens of the  Guarantee  and  Collateral  Agreement and the
Mortgages,  without  the  written  consent  of each  Lender,  (viii)  change the
allocation of prepayments under Section 2.12 as between the Tranche A Term Loans
and the Tranche B Term Loans  without  the written  consent of Tranche A Lenders
holding a majority of the  Tranche A Term Loans and Tranche B Lenders  holding a
majority of the  Tranche B Term  Loans,  (ix) change the rights of the Tranche B
Lenders to decline mandatory  prepayments as provided in Section 2.12(d) without
the written  consent of Tranche B Lenders  holding a majority of the outstanding
Tranche  B Term  Loans,  or (x)  effect  any other  amendment  that by its terms
adversely affects the Lenders holding Loans of one Class without a corresponding
effect on the  Lenders  holding  Loans of the other  Class  without  the written
consent of  Lenders  holding a majority  of the  outstanding  Loans of the Class
adversely affected;  provided further that no such agreement shall amend, modify
or otherwise affect the respective  rights or duties of either Agent without the
prior written consent of such Agent.

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<PAGE>

     SECTION 10.03. Expenses;  Indemnity;  Damage Waiver. (a) The Company agrees
to pay (i) all reasonable  out-of-pocket expenses incurred by each Agent and its
Affiliates, including the reasonable fees, charges and disbursements of Cravath,
Swaine & Moore LLP,  counsel for the Agents,  in connection with the syndication
of the credit facilities provided for herein, the preparation and administration
of this Agreement and the other Loan Documents or any amendments,  modifications
or waivers of the provisions  hereof or thereof (whether or not the transactions
contemplated  hereby or thereby shall be  consummated)  and  evaluations  of the
Collateral  (limited,  in the  absence  of a  continuing  Default,  to one  such
evaluation  in any fiscal year) or other due  diligence  conducted by the Agents
and (ii) all reasonable  out-of-pocket  expenses incurred by either Agent or any
Lender,  including the reasonable fees, charges and disbursements of any counsel
for such Agent or Lender,  in connection  with the  enforcement or protection of
its rights in connection  with this Agreement or the Loans made  hereunder.  The
Lenders shall endeavor in good faith to limit the number of counsel  retained by
them to avoid duplication of expenses.

     (b) The  Company  agrees to  indemnify  each  Agent and each  Lender,  each
Affiliate  of any  of  the  foregoing  Persons  and  each  of  their  respective
directors,  officers,  employees, trustee, advisors and agents (each such Person
being called an  "Indemnitee")  against,  and to hold each  Indemnitee  harmless
from, any and all losses,  claims,  damages,  liabilities and related  expenses,
including the fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted  against any  Indemnitee  relating to the  execution  or
delivery of this Agreement or any agreement or instrument  contemplated thereby,
the performance of its obligations  thereunder,  the Borrowings  hereunder,  the
consummation of the Transactions or any other transactions  contemplated hereby,
the  enforcement  of its rights under any Loan Document or any actual or alleged
presence or release of Hazardous  Materials on or from any property currently or
formerly owned,  operated or leased by the Company or any of its Subsidiaries or
Environmental  Liability  related  in  any  way  to  the  Company  or any of its
Subsidiaries, including any of the foregoing arising out of, in connection with,
or as a result of any claim, litigation, investigation or proceeding (whether or
not any Indemnitee is a party thereto);  provided that such indemnity shall not,
as to any  Indemnitee,  be  available  to the extent that such  losses,  claims,
damages,  liabilities or related expenses are determined by a court of competent
jurisdiction to have resulted from the gross  negligence,  wilful  misconduct or
bad faith of such Indemnitee.  The Lenders shall endeavor in good faith to limit
the number of counsel retained by them to avoid duplication of expenses.

     (c) To the extent  that the  Company,  any  Borrower  or the Company in its
capacity  as  Guarantor  fails to pay any  amount  required  to be paid by it to
either Agent under paragraph (a) or (b) of this Section,  each Lender  severally
agrees to pay to such Agent such Lender's  Participation  Percentage (determined
as of the time that the applicable  unreimbursed expense or indemnity payment is
sought)  of such  unpaid  amount;  provided  that the  unreimbursed  expense  or
indemnified loss, claim,  damage,  liability or related expense, as the case may
be, was  incurred by or asserted  against such Agent in its capacity as such and
are not  determined by a court of competent  jurisdiction  to have resulted from
the gross negligence, wilful misconduct or bad faith of such Agent.

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<PAGE>

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

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

(f) Notwithstanding anything above to the contrary, no indemnified person shall
be liable for any damages arising from the use by others of information or other
materials obtained through electronic telecommunications or other information
transmission systems.

     SECTION 10.04. Successors and Assigns. (a) The provisions of this Agreement
shall be binding  upon and inure to the benefit of the parties  hereto and their
respective  successors and assigns permitted hereby, except that (i) no Borrower
may 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 any 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.  Nothing in this  Agreement,
expressed or implied,  shall be construed to confer upon any Person  (other than
the parties hereto,  their respective  successors and assigns  permitted hereby,
Participants  (to the extent  provided in paragraph (c) of this Section) and, to
the extent  expressly  contemplated  hereby,  the Related Parties of each of the
Administrative  Agent and the Lenders) any legal or equitable  right,  remedy or
claim under or by reason of this Agreement.

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

                  (A) the Company; provided that no consent of the Company 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 assignee; and

                  (B) the Administrative Agent, provided that no consent of the
         Administrative Agent shall be required for an assignment 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 or an
         Affiliate of a Lender, the amount of the Loans of the assigning Lender
         subject to each such

                                       70
<PAGE>

          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  $1,000,000  or, if smaller,  the entire
          remaining amount of the assigning  Lender's Loans,  unless the Company
          and the Administrative  Agent shall otherwise  consent,  provided that
          (i) in the event of concurrent  assignments  to two or more  assignees
          that are  Affiliates of one another,  or to two or more Approved Funds
          managed by the same  investment  advisor or by  affiliated  investment
          advisors,  all such  concurrent  assignments  shall be  aggregated  in
          determining  compliance  with this subsection and (ii) no such consent
          of the Company  shall be required if an Event of Default has  occurred
          and is continuing;

                  (B) each partial assignment shall be made as an assignment of
         a proportionate part of all the assigning Lender's rights and
         obligations under this Agreement. Notwithstanding anything above to the
         contrary, Section 10.04(b)(ii)(B) shall not be construed to prohibit
         assignment of a proportionate part of all the assigning Lender's rights
         and obligations in respect of one Class of Loans.

                  (C) 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; provided that in the event
         of concurrent assignments to two or more assignees that are Affiliates
         of one another, or to two or more Approved Funds managed by the same
         investment advisor or by affiliated investment advisors, only one such
         fee shall be payable;

                  (D) the assignee, if it shall not be a Lender, shall deliver
         to the Administrative Agent an Administrative Questionnaire; and

                  (E) in the case of an assignment by a Lender to a CLO (as
         defined below) managed by such Lender or by an Affiliate of such
         Lender, unless such assignment (or an assignment to a CLO managed by
         the same manager or an Affiliate of such manager) shall have been
         approved by the Company (the Company hereby agreeing that such
         approval, if requested, will not be unreasonably withheld or delayed),
         the assigning Lender shall retain the sole right to approve any
         amendment, modification or waiver of any provision of this Agreement,
         except that the Assignment and Assumption between such Lender and such
         CLO may provide that such Lender will not, without the consent of such
         CLO, agree to any amendment, modification or waiver described in the
         first proviso to Section 10.02(b) that affects such CLO.

     For the purposes of this Section  10.04(b),  the terms  "Approved Fund" and
"CLO" have the following meanings:

                  "Approved Fund" means (a) with respect to any Lender, a CLO
managed by such Lender or by an Affiliate of such Lender and (b) with respect to
any Lender that is a fund which invests in bank loans and similar extensions of
credit, any other fund that

                                       71
<PAGE>

invests in bank  loans and  similar  extensions  of credit and is managed by the
same  investment  advisor as such Lender or by an Affiliate  of such  investment
advisor.

                  "CLO" means any entity (whether a corporation, partnership,
trust or otherwise) that is engaged in making, purchasing, holding or otherwise
investing in bank loans and similar extensions of credit in the ordinary course
of its business and is administered or managed by a Lender or an Affiliate of
such Lender.

     (iii) Subject to acceptance  and  recording  thereof  pursuant to paragraph
(b)(iv) of this  Section,  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
2.13, 2.15, 2.19 and 10.03). Any assignment or transfer by a Lender of rights or
obligations  under this  Agreement  that does not comply with this Section 10.04
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
Borrowers,  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 principal  amount of the Loans 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  Borrowers,   the
Administrative  Agent  and the  Lenders  may treat  each  Person  whose  name is
recorded in the Register  pursuant to the terms hereof as a Lender hereunder for
all purposes of this  Agreement,  notwithstanding  notice to the  contrary.  The
Register shall be available for inspection by the Company 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 notice to or the consent of the Company 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 the Loans owing
to it);  provided that (A) such

                                       72
<PAGE>

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 Borrowers,  the Administrative Agent
and the Lenders  shall  continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations  under this Agreement.  Any
agreement or  instrument  pursuant to which a Lender sells such a  participation
shall  provide  that such  Lender  shall  retain the sole right to enforce  this
Agreement and to approve any amendment,  modification or waiver of any provision
of this  Agreement;  provided that such agreement or instrument may provide that
such Lender  will not,  without  the  consent of the  Participant,  agree to any
amendment,  modification  or waiver  described  in the first  proviso to Section
10.02(b)  that affects such  Participant.  Subject to paragraph  (c)(ii) of this
Section,  the  Borrowers  agree that each  Participant  shall be entitled to the
benefits  of  Sections  2.13,  2.15 and 2.19 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  10.08 as though it were a Lender,  provided
such  Participant  agrees  to be  subject  to  Section  2.17 as though it were a
Lender.

     (ii) A  Participant  shall not be entitled  to receive any greater  payment
under Section 2.13 or 2.19 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 Company's
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender  shall not be entitled to the benefits of Section 2.19 unless the Company
is notified of the  participation  sold to such Participant and such Participant
agrees,  for the benefit of the  Borrowers,  to comply with  Section  2.19(e) as
though it were a Lender.

     (d) Any Lender,  without  notice to or the  consent of any  Borrower or the
Administrative  Agent,  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.

     (e) By executing and delivering an Assignment and Assumption, the assigning
Lender thereunder and the assignee  thereunder shall be deemed to confirm to and
agree  with each  other  and the  other  parties  hereto  as  follows:  (i) such
assigning  Lender  warrants  that it is the  legal and  beneficial  owner of the
interest being assigned thereby free and clear of any adverse claim and that the
outstanding  balances of its Term Loans,  in each case without  giving effect to
assignments  thereof  that have not become  effective,  are as set forth in such
Assignment and  Assumption;  (ii) except as set forth in clause (i) above,  such
assigning   Lender   makes  no   representation   or  warranty  and  assumes  no
responsibility  with respect to any  statements,  warranties or  representations
made in or in connection  with this  Agreement or any other Loan Document or any
other  instrument  or document  furnished  pursuant  hereto or  thereto,  or the
execution, legality, validity,

                                       73
<PAGE>

enforceability,  genuineness,  sufficiency or value of any of the foregoing,  or
the financial  condition of the Loan Parties or the performance or observance by
the Loan Parties of any of their  obligations  under this Agreement or under any
other Loan  Document  or any other  instrument  or document  furnished  pursuant
hereto or thereto;  (iii) each of the assignee and the assignor  represents  and
warrants  that it is  legally  authorized  to enter  into  such  Assignment  and
Assumption;  (iv) such  assignee  confirms  that it has  received a copy of this
Agreement, together with copies of any amendments or consents entered into prior
to the date of such  Assignment  and  Assumption  and copies of the most  recent
financial statements delivered pursuant to Section 5.01 and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into such  Assignment and  Assumption;  (v) such assignee will
independently and without reliance upon the Agents, such assigning Lender 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 decisions in taking or
not  taking  action  under  this  Agreement;  (vi) such  assignee  appoints  and
authorizes  the  Agents to take such  action  as  agents  on its  behalf  and to
exercise such powers under this  Agreement  and the other Loan  Documents as are
delegated to them by the terms hereof and thereof,  together with such powers as
are reasonably  incidental thereto;  and (vii) such assignee agrees that it will
perform in accordance with their terms all the obligations  that by the terms of
this Agreement are required to be performed by it as a Lender.

     SECTION 10.05.  Survival.  All covenants,  agreements,  representations and
warranties  made  by the  Borrowers  herein  and in the  certificates  or  other
instruments  prepared  or  delivered  in  connection  with or  pursuant  to this
Agreement  shall be  considered  to have been relied  upon by the other  parties
hereto and shall survive the  execution  and delivery of this  Agreement and the
making of any  Loans,  regardless  of any  investigation  made by any such other
party or on its behalf and notwithstanding  that the Administrative Agent or any
Lender  may  have  had  notice  or   knowledge   of  any  Default  or  incorrect
representation  or warranty at the time any credit is  extended  hereunder,  and
shall  continue  in full  force and  effect as long as the  principal  of or any
accrued interest on any Loan or any other amount payable under this Agreement is
outstanding  and unpaid.  The provisions of Sections 2.13,  2.15, 2.19 and 10.03
and Article VIII shall survive and remain in full force and effect regardless of
the consummation of the transactions  contemplated  hereby, the repayment of the
Loans or the termination of this Agreement or any other provision hereof.

     SECTION 10.06. Counterparts; Integration; Effectiveness. This Agreement may
be  executed in  counterparts  (and by  different  parties  hereto on  different
counterparts), each of which shall constitute an original, but all of which when
taken  together  shall  constitute a single  contract.  This  Agreement  and any
separate letter  agreements  with respect to fees payable to the  Administrative
Agent  constitute the entire contract among the parties  relating to the subject
matter hereof and supersede any and all previous  agreements and understandings,
oral or written,  relating to the subject matter  hereof.  Except as provided in
Section 3.01,  this  Agreement  shall become  effective  when it shall have been
executed by the  Administrative  Agent and when the  Administrative  Agent shall
have  received  counterparts  hereof  which,  when  taken  together,   bear  the
signatures of each of the other parties hereto,  and thereafter shall be binding
upon and

                                       74
<PAGE>

inure to the  benefit  of the  parties  hereto  and  their  respective
permitted  successors  and  assigns.  Delivery of an executed  counterpart  of a
signature page of this Agreement by telecopy shall be effective as delivery of a
manually executed counterpart of this Agreement.

     SECTION  10.07.  Severability.  Any provision of this  Agreement held to be
invalid,  illegal  or  unenforceable  in  any  jurisdiction  shall,  as to  such
jurisdiction,  be  ineffective to the extent of such  invalidity,  illegality or
unenforceability without affecting the validity,  legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a  particular  jurisdiction  shall not  invalidate  such  provision in any other
jurisdiction.

     SECTION  10.08.  Right of  Setoff.  (a) If an Event of  Default  shall have
occurred and be  continuing,  each Lender is hereby  authorized  at any time and
from time to time, to the fullest extent  permitted by law, to set off and apply
any and all deposits (general or special, time or demand,  provisional or final)
at any time held and other  indebtedness  at any time owing by such Lender to or
for the credit or the account of the Company or any Borrower  against any of and
all the  Obligations  held by such Lender,  irrespective  of whether or not such
Lender  shall  have made any demand  under  this  Agreement  and  although  such
Obligations  may be unmatured.  The rights of each Lender under this Section are
in addition to other  rights and  remedies  (including  other  rights of setoff)
which such Lender may have.

     (b) Each Lender agrees promptly to notify the Administrative  Agent and the
Company  or the  applicable  Borrower  after any such  setoff  and  application;
provided, however, that the failure to give any such notice shall not affect the
validity of such setoff and application.

     SECTION 10.09. Governing Law; Jurisdiction;  Consent to Service of Process.
(a) THIS  AGREEMENT  SHALL BE CONSTRUED IN  ACCORDANCE  WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK.

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

                                       75
<PAGE>

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

     (d) Each party to this Agreement irrevocably consents to service of process
in the manner  provided for notices in Section 10.01.  Nothing in this Agreement
will  affect the right of any party to this  Agreement  to serve  process in any
other manner permitted by law.

     SECTION 10.10.  WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES,  TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY  IN ANY  LEGAL  PROCEEDING  DIRECTLY  OR  INDIRECTLY  ARISING  OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS  CONTEMPLATED  HEREBY. EACH PARTY
HERETO (A)  CERTIFIES  THAT NO  REPRESENTATIVE,  AGENT OR  ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED,  EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
IN THE  EVENT OF  LITIGATION,  SEEK TO  ENFORCE  THE  FOREGOING  WAIVER  AND (B)
ACKNOWLEDGES  THAT IT AND THE OTHER  PARTIES  HERETO HAVE BEEN  INDUCED TO ENTER
INTO  THIS   AGREEMENT   BY,  AMONG  OTHER  THINGS,   THE  MUTUAL   WAIVERS  AND
CERTIFICATIONS IN THIS SECTION.

     SECTION  10.11.  Headings.  Article and Section  headings  and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement  and  shall  not  affect  the   construction  of,  or  be  taken  into
consideration in interpreting, this Agreement.

     SECTION 10.12.  Confidentiality.  Each of the Administrative  Agent and the
Lenders   agrees  to  maintain  and  cause  its   Affiliates   to  maintain  the
confidentiality  of the Information (as defined below),  except that Information
may be disclosed (a) to its and its Affiliates' directors,  officers,  employees
and agents,  including  accountants,  legal counsel and other advisors or to any
other Lender or Participant  (it being  understood  that such disclosure will be
made only to such Persons who have,  and only to the extent of, the need to know
such  Information  and only if the Persons to whom such  disclosure  is made are
informed of the  confidential  nature of such Information and instructed to keep
such  Information  confidential  and use such  information  only as necessary in
connection  with (i) their  evaluation  of the  ability  of the  Company  or any
Borrowing  Subsidiary  to repay the Loans and perform  their  other  obligations
under  the  Loan  Documents,  (ii)  administering  the  Obligations  under  this
Agreement,  (iii)  servicing the Borrowings  hereunder,  (iv)  protecting  their
interests  under this  Agreement  or (v)  performing  any  similar  function  in
connection with any other extension of credit by the Lenders to the Company or a
Subsidiary),  (b) to the extent  requested by any regulatory  authority to

                                       76
<PAGE>

which the Lender is subject or in connection  with an  examination of the Lender
by any such authority,  (c) to the extent otherwise  required by applicable laws
and  regulations or by any subpoena or similar legal process,  (d) in connection
with the exercise of any remedies  hereunder or any suit,  action or  proceeding
relating to this Agreement or the enforcement of rights  hereunder,  (e) subject
to an agreement  containing  provisions  substantially the same as those of this
Section, to any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations  under this  Agreement,  or, in
the case of any Approved Fund, to any rating agency,  commercial paper dealer or
provider  of a surety,  guarantee  or credit or  liquidity  enhancement  to such
Approved  Fund,  (f) with the prior written  consent of the Company,  (g) to any
direct  or  indirect  contractual  counterparty  in any swap,  hedge or  similar
agreement (or to any professional advisor of such contractual counterparty),  so
long as such contractual  counterparty (or such professional  advisor) agrees in
writing to be bound by the provisions of this Section, or (h) to the extent such
Information  (i)  becomes  publicly  available  other  than  as  a  result  of a
disclosure by an Agent or Lender or (ii) becomes available to the Administrative
Agent or any  Lender on a  nonconfidential  basis  from a source  other than any
Borrower  that is not  known to the  Administrative  Agent or such  Lender to be
bound by any duty of confidentiality  with respect thereto.  For the purposes of
this Section,  "Information"  means all information  received from the Borrowers
relating to any Borrower,  Reiman,  and Subsidiaries of the Company or Reiman or
their respective  businesses,  other than any such information that is available
to the  Administrative  Agent or any Lender on a nonconfidential  basis prior to
disclosure by any Borrower;  provided that, in the case of information  received
from the Borrowers after the date hereof, such information is clearly identified
at the time of delivery as  confidential.  Any Person  required to maintain  the
confidentiality  of  Information as provided in this Section shall be considered
to have complied  with its  obligation to do so if such Person has exercised the
same degree of care to maintain the  confidentiality of such Information as such
Person would accord to its own confidential information.

     SECTION  10.13.  Conversion  of  Currencies.  (a) If,  for the  purpose  of
obtaining  judgment  in any  court,  it is  necessary  to  convert  a sum  owing
hereunder in one currency into another  currency,  each party hereto agrees,  to
the fullest extent that it may effectively do so, that the rate of exchange used
shall be that at which in  accordance  with  normal  banking  procedures  in the
relevant  jurisdiction  the first  currency  could be purchased  with such other
currency  on the  Business  Day  immediately  preceding  the day on which  final
judgment is given.

     (b) The obligations of each Borrower in respect of any sum due to any party
hereto  or any  holder  of the  obligations  owing  hereunder  (the  "Applicable
Creditor")  shall,  notwithstanding  any judgment in a currency  (the  "Judgment
Currency")  other  than the  currency  in which  such  sum is  stated  to be due
hereunder (the "Agreement Currency"),  be discharged only to the extent that, on
the  Business  Day  following  receipt  by the  Applicable  Creditor  of any sum
adjudged to be so due in the Judgment Currency,  the Applicable  Creditor may in
accordance with normal banking procedures in the relevant  jurisdiction purchase
the  Agreement  Currency  with  the  Judgment  Currency;  if the  amount  of the
Agreement  Currency  so  purchased  is less than the sum  originally  due to the
Applicable  Creditor in the  Agreement  Currency,  such  Borrower  agrees,  as a

                                       77
<PAGE>

separate  obligation and  notwithstanding  any such  judgment,  to indemnify the
Applicable  Creditor  against  such  loss.  The  obligations  of  the  Borrowers
contained in this Section 10.13 shall survive the  termination of this Agreement
and the payment of all other amounts owing hereunder.

     SECTION 10.14. Release of Grantors and Collateral.  (a) Notwithstanding any
contrary  provision  herein or in any other Loan Document,  if the Company shall
request the release under the Guarantee  and  Collateral  Agreement or any other
Security  Document of any  Subsidiary or any  Collateral to be sold or otherwise
disposed of (including  through the sale or disposition of any Subsidiary owning
any such  Subsidiary  or  Collateral)  to a Person  other than the  Company or a
Subsidiary  in a  transaction  permitted  under the terms of this  Agreement and
shall deliver to the Collateral Agent a certificate to the effect that such sale
or other  disposition  and the  application of the proceeds  thereof will comply
with the terms of this  Agreement,  the Collateral  Agent, if satisfied that the
applicable  certificate  is correct,  shall,  without the consent of any Lender,
execute and deliver all such  instruments,  releases,  financing  statements  or
other  agreements,  and take all such further actions,  as shall be necessary to
effectuate  the  release of such  Subsidiary  or such  Collateral  substantially
simultaneously  with or at any time after the  completion  of such sale or other
disposition. Any such release shall be without recourse to, or representation or
warranty  by, the  Collateral  Agent and shall not  require  the  consent of any
Lender.  Notwithstanding  the  foregoing,  in  the  event  the  Company  or  any
Subsidiary shall dispose of Equity Interests in gifts.com, Inc., LookSmart, Ltd.
or  WebMD  Corporation  in a  transaction  permitted  under  the  terms  of this
Agreement,  such  Equity  Interests  shall be  automatically  released  from the
Guarantee  and  Collateral  Agreement  without  any  action  on the  part of the
Collateral Agent or any other Person.

     (b) Without  limiting the  provisions of Section  10.03,  the Company shall
reimburse the Collateral Agent for all costs and expenses,  including attorneys'
fees  and   disbursements,   incurred  by  it  in  connection  with  any  action
contemplated by this Section.

     (c)  Each of the  Lenders  hereby  consents  to the  Headquarters  Sale and
Leaseback and hereby  authorizes the Collateral  Agent,  pursuant to (i) Section
3.04 of the Mortgage  encumbering  the  Company's  headquarters,  to execute and
deliver any documents and take all actions  reasonably  requested by the Company
to release  such  Mortgage  and (ii)  Section  10.14(a)  hereof,  to execute and
deliver any documents and take all actions  reasonably  requested by the Company
to release any Liens on the Company's headquarters.

SECTION 10.15. Incorporation of Amendments to Five-Year Credit Agreement.
Notwithstanding any other provision contained herein, in the event that the
Five-Year Credit Agreement shall be amended to add thereto any affirmative or
negative covenant or event of default that is either more restrictive than the
corresponding provision contained herein or not comparable to any provision
contained herein, this Agreement shall be deemed to have been amended to
incorporate such affirmative or negative covenant or event of default, mutatis
mutandis, into the appropriate Article herein. The Company covenants and agrees
that it will (a) provide the Lenders with

                                       78
<PAGE>

complete and accurate copies of each amendment to the Five-Year Credit Agreement
of the sort referred to in this Section  promptly  after the execution  thereof,
and  (b)  execute  any and  all  further  documents  and  agreements,  including
amendments  hereto,  and take all such further  actions,  as shall be reasonably
requested by the Agents to give effect to this Section.

     SECTION 10.16. Security Documents.  Each Agent and Lender hereby authorizes
and directs the  Collateral  Agent to execute  and  deliver  the  Guarantee  and
Collateral Agreement and each other Security Document. Each Agent and Lender, by
executing and delivering this Agreement,  acknowledges and approves,  and agrees
to be bound  by and act in  accordance  with the  terms  and  conditions  of the
Guarantee  and  Collateral  Agreement and each other  Security  Document (to the
extent,  in the case of each  other  Security  Document,  that  either  (a) such
Security  Document  shall have been made  available to the Lenders  prior to the
effectiveness  of this Agreement or (b) such terms and conditions are comparable
to those  contained in the Guarantee  and  Collateral  Agreement),  specifically
including the  provisions  of Articles VII,  VIII, IX and X of the Guarantee and
Collateral Agreement governing the exercise of remedies under such Agreement and
limiting the  responsibilities  of, and providing for the indemnification of and
the  reimbursement  of expenses  incurred by, the Collateral  Agent.  Each party
hereto further agrees that the provisions of Articles VII, VIII, IX and X of the
Guarantee  and  Collateral  Agreement  shall be  deemed  to be  incorporated  by
reference  into  each  other  Security  Document,  mutatis  mutandis,  and as so
incorporated  shall  govern the  exercise of remedies  under each such  Security
Document and limit the  responsibilities of, and provide for the indemnification
of  and  the  reimbursement  of  expenses  incurred  by,  the  Collateral  Agent
thereunder.

     SECTION  10.17.  Power of Attorney.  Each Lender hereby (i)  authorizes the
Collateral  Agent to execute and  deliver,  on behalf of and in the name of such
Lender,  the Share Pledge  Agreement with Reader's Digest  Association,  Inc. in
connection  with the pledge to the Lenders of shares in Verlag DAS BESTE GmbH, a
company  organized  under the laws of Germany and  registered in the  Commercial
Register of the Lower  District  Court of  Stuttgart  under no. HR B 1453,  (ii)
authorizes  the  Collateral  Agent to appoint any further agents or attorneys to
execute and  deliver,  or  otherwise to act, on behalf of and in the name of the
Collateral Agent for any such purpose,  (iii) authorizes the Collateral Agent to
do any and all acts and to make all  declarations  which are deemed necessary or
appropriate to the Collateral  Agent and (iv) approves,  pursuant to Section 185
of the German  Civil  Code,  the acts  performed  and  declarations  made by the
Collateral or its representatives or  attorneys-in-fact  before Notary Dr. Armin
Hauschild in Dusseldorf, Germany in connection with the pledge to the Lenders of
shares in Verlag Das Beste GmbH. The Lenders hereby relieve the Collateral Agent
from the  self-dealing  restrictions  imposed by Section 181 of the German Civil
Code.

     SECTION  10.18.  Appointment.  Each Agent and Lender  hereby  appoints  the
Collateral  Agent to act as its agent and trustee under and in  connection  with
the  Charge  over  Shares to the Agents  and  Lenders of shares in The  Reader's
Digest Association Limited, a company incorporated under the laws of England and
Wales (registered number 340452) and to hold the assets charged under the Charge
over  Shares

                                       79
<PAGE>

as trustee for the Agents and  Lenders on the trusts and other  terms  contained
herein and in the  Charge  over  Shares  and each  Agent and Lender  irrevocably
authorizes the Collateral Agent to exercise such rights, powers, authorities and
discretions as are  specifically  delegated to the Collateral Agent by the terms
of the Charge over Shares together with all such rights, powers, authorities and
discretion as are reasonably incidental thereto.

                                       80
<PAGE>

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

                                 THE READER'S DIGEST ASSOCIATION, INC.,
                                 by

                                 -----------------------------------------------
                                 Name:
                                 Title:

                                 BOOKS ARE FUN, LTD.,
                                 by

                                 -----------------------------------------------
                                 Name:
                                 Title:

                                 QSP, INC.,
                                 by

                                 -----------------------------------------------
                                 Name:
                                 Title:

                                 REIMAN MEDIA GROUP, INC.,
                                 by

                                 -----------------------------------------------
                                 Name:
                                 Title:

                                 Guarantor
                                 THE READER'S DIGEST ASSOCIATION, INC.,
                                 by

                                ------------------------------------------------
                                 Name:
                                 Title:

                                       81
<PAGE>

                                 JPMORGAN CHASE BANK, INDIVIDUALLY AND AS
                                 ADMINISTRATIVE AGENT AND COLLATERAL AGENT,
                                 BY

                                 -----------------------------------------------
                                 Name:
                                 Title:

                                 NATIONAL AUSTRALIA BANK LIMITED, AS
                                 CO-DOCUMENTATION AGENT,
                                 by

                                 -----------------------------------------------
                                 Name:
                                 Title:

                                 THE ROYAL BANK OF SCOTLAND PLC, INDIVIDUALLY
                                 AND AS CO-DOCUMENTATION AGENT,
                                 by

                                 -----------------------------------------------
                                 Name:
                                 Title:

                                 ABN AMRO BANK N.V., INDIVIDUALLY AND AS
                                 CO-DOCUMENTATION AGENT,
                                 by

                                 -----------------------------------------------
                                 Name:
                                 Title:

                                       82
<PAGE>Exhibit 10.38

                                                               EXECUTION VERSION

                                    FOURTH AMENDMENT, dated as of May 24, 2004
                           (this "Amendment"), to the $192,500,000 AMENDED AND
                           RESTATED FIVE-YEAR REVOLVING CREDIT AND COMPETITIVE
                           ADVANCE FACILITY AGREEMENT, dated as of May 20, 2002
                           (as amended, the "Revolving Credit Agreement"), among
                           THE READER'S DIGEST ASSOCIATION, INC., a Delaware
                           corporation (the "Company"), the BORROWING
                           SUBSIDIARIES party thereto (the "Borrowing
                           Subsidiaries"), the LENDERS party thereto (the
                           "Lenders") and JPMORGAN CHASE BANK, as administrative
                           agent (in such capacity, the "Administrative Agent")
                           and collateral agent (in such capacity, the
                           "Collateral Agent").

                                   WITNESSETH:

     WHEREAS,  pursuant to the  Revolving  Credit  Agreement,  the Lenders  have
agreed  to extend  credit to the  Borrowers  on the  terms  and  subject  to the
conditions set forth therein.

     WHEREAS,  the Company has requested that the Required Lenders amend certain
provisions of the Revolving  Credit  Agreement in connection  with the amendment
and  restatement of the Term Loan Agreement (as defined in the Revolving  Credit
Agreement  prior to  giving  effect to this  Amendment)  and the  Lenders  whose
signatures appear below, constituting at least the Required Lenders, are willing
to amend  the  Revolving  Credit  Agreement  on the  terms  and  subject  to the
conditions set forth herein.

     NOW, THEREFORE,  in consideration of the mutual agreements herein contained
and other good and valuable consideration,  the sufficiency and receipt of which
are hereby acknowledged, the parties hereto hereby agree as follows:

     SECTION 1. Defined Terms.  Capitalized terms used but not otherwise defined
herein have the meanings assigned to them in the Revolving Credit Agreement.

     SECTION 2. Amendments to Section 1.01. The following  definitions set forth
in Section 1.01 of the Revolving  Credit Agreement are hereby amended by to read
in their entirety as follows

                  "Headquarters Sale and Leaseback" means a sale and leaseback
         transaction consisting of the sale of the Company's headquarters
         located in the town of New Castle and having a mailing address at
         Reader's Digest Road, Pleasantville, NY 10570, for Net Proceeds of not
         less than $35,000,000 (which Net Proceeds shall be used to repay either
         (a) amounts outstanding under the Term Loan Agreement as required
         pursuant to Section 2.12(b) thereof or (b) Standby Loans to the extent
         such Standby Loans have been borrowed to prepay Term Loans outstanding
         under the Term Loan Agreement), and the partial leaseback of such
         headquarters by the Company.

<PAGE>
                                                                               2

                  "Interest Expense" means, for any period, the interest expense
         of the Company and the consolidated Subsidiaries for such period
         determined on a consolidated basis in accordance with GAAP (and giving
         effect to any Swap Agreements that have the effect of increasing or
         decreasing such interest expense), including (i) the amortization of
         debt discounts to the extent included in interest expense in accordance
         with GAAP, (ii) the amortization of all fees (including fees with
         respect to interest rate protection agreements or other interest rate
         hedging agreements) payable in connection with the incurrence of
         indebtedness to the extent included in interest expense in accordance
         with GAAP, (iii) the portion of any rents payable under capital leases
         allocable to interest expense in accordance with GAAP and (iv) the
         amount of commitment fees incurred prior to the Original Effective Date
         under the Fee Letter dated as of March 21, 2002, as amended as of April
         19, 2002, among the Company, JPMCB and GSCP; provided, that for
         purposes of computing the Consolidated Interest Coverage Ratio and the
         Consolidated Fixed Charge Coverage Ratio for any period, Interest
         Expense will exclude the effect of any acceleration of the amortization
         of deferred financing fees paid in cash in earlier periods as a result
         of the making of the Tranche A Term Loans under the Term Loan Agreement
         and the application of the proceeds thereof as provided therein.

                  "Term Loan Agreement" means the Amended and Restated Term Loan
         Agreement dated as of May 24, 2004, as amended, supplemented or
         otherwise modified from time to time, among the Company, certain
         borrowing subsidiaries, certain lenders, ABN Amro Bank N.V., National
         Australia Bank Limited and The Royal Bank of Scotland plc, as
         co-documentation agents, and JPMorgan Chase Bank, as administrative
         agent and collateral agent.

     SECTION 3. Representations,  Warranties and Agreements.  The Company, as to
itself and each of its  Subsidiaries,  hereby  represents  and  warrants  to and
agrees with each Lender and the Administrative Agent that:

(a)      The representations and warranties set forth in Article IV of the
         Revolving Credit Agreement, as amended hereby, are true and correct in
         all material respects on and as of the Amendment Effective Date (as
         defined below), and after giving effect to this Amendment, with the
         same effect as if made on and as of such date, except to the extent
         such representations and warranties expressly relate to an earlier
         date; and

(b)      This Amendment has been duly authorized, executed and delivered by the
         Company and each Borrowing Subsidiary. Each of this Amendment and the
         Revolving Credit Agreement as amended hereby constitutes a legal, valid
         and binding obligation of the Company and each Borrowing Subsidiary,
         enforceable against the Company and each Borrowing Subsidiary in
         accordance with its terms, except as enforceability may be limited by
         (i) any applicable bankruptcy, insolvency, reorganization, moratorium
         or similar laws affecting the enforcement of creditors' rights
         generally and (ii) general principles of equity.

<PAGE>
                                                                               3

(b)      As of the Amendment Effective Date (as defined below), after giving
         effect to this Amendment, no Default has occurred and is continuing.

     SECTION  4.  Conditions  to  Effectiveness.  This  Amendment  shall  become
effective  as of the date  that the  following  conditions  are  satisfied  (the
"Amendment Effective Date"):

(a)      The Administrative Agent shall have received duly executed counterparts
         hereof which, when taken together, bear the authorized signatures of
         the Company, the Borrowing Subsidiaries and the Required Lenders;

(b)      To the extent invoiced, the Administrative Agent shall have been
         reimbursed for all its reasonable out of pocket expenses, including the
         reasonable fees, charges and disbursements of its counsel, related to
         this Amendment or the Revolving Credit Agreement.

     SECTION  5.  Revolving  Credit  Agreement.  Except as  specifically  stated
herein,  the Revolving  Credit Agreement shall continue in full force and effect
in  accordance  with  the  provisions  thereof.  As  used  therein,   the  terms
"Agreement",  "herein",  "hereunder",  "hereto",  "hereof"  and words of similar
import  shall,  unless the context  otherwise  requires,  refer to the Revolving
Credit Agreement as modified hereby.

     SECTION 6.  Applicable Law. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

     SECTION 7.  Counterparts.  This  Amendment may be executed in  counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original but all of which, when taken together, shall constitute a
single  instrument.  Delivery of an executed  counterpart of a signature page of
this Amendment by telecopy shall be effective as delivery of a manually executed
counterpart hereof.

     SECTION 8.  Expenses.  The  Company  agrees to (a) pay all fees  separately
agreed to between  the  Company and the  Administrative  Agent  relating to this
Amendment  and  (b)  reimburse  the  Administrative  Agent  for  its  reasonable
out-of-pocket  expenses  in  connection  with  this  Amendment,   including  the
reasonable  fees,  charges and  disbursements  of  Cravath,  Swaine & Moore LLP,
counsel for the Administrative Agent.

<PAGE>
                                                                               4

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

                           THE READER'S DIGEST ASSOCIATION, INC.,
                           by:

                           -----------------------------------------------------
                           Name:
                           Title:

                           BOOKS ARE FUN, LTD.,
                           by:

                           -----------------------------------------------------
                           Name:
                           Title:

                           QSP, INC.,
                           by:

                           -----------------------------------------------------
                           Name:
                           Title:

                           REIMAN MEDIA GROUP, INC.,
                           by:

                           -----------------------------------------------------
                           Name:
                           Title:

                           JPMORGAN CHASE BANK, individually and as
                           Administrative Agent and Collateral Agent,
                           by:

                           -----------------------------------------------------
                           Name:
                           Title:

<PAGE>

                           To approve the Fourth Amendment to the Revolving
                           Credit Agreement:

                           Name of Institution:
                           -----------------------------------------------------
                           by:

                            ----------------------------------------------------
                            Name:
                            Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00067-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00067-of-00352.parquet"}]]