Document:

EXHIBIT AA
                                                                      ----------
                                                                          Part I

                           SENIOR GRID PROMISSORY NOTE

                                                              New York, New York
$1,000,000                                                    December 30, 1999

         For value received,  the undersigned  unconditionally (and if more than
one, jointly and severally)  promises to pay to the order of THE CHASE MANHATTAN
BANK  ("Chase"),  at its office  located at 270 Park Avenue,  New York, New York
10017, or to such other address as Chase may notify the undersigned,  the sum of
One Million and no/100 Dollars  ($1,000,000) or such unpaid  principal amount of
each loan made to the undersigned by Chase and  outstanding  under this Note, on
the earlier of (i) demand,  (ii) the  maturity  date(s) as shown on the attached
schedule  or any  continuation  of the  schedule,  or (iii)  June 30,  2000 (the
"Maturity Date").

         This Note includes any Schedule or Rider attached hereto.

         1.       DEFINITIONS.  As used in this Note:
                  ------------

         "BANKING  DAY"  means  any  day  on  which  commercial  banks  are  not
authorized  or required to close in New York and whenever such day relates to an
Euro Rate loan or notice  with  respect  to any Euro Rate  loan,  a day on which
dealings in U.S.  dollar  deposits are also carried out in the London  interbank
market.

         "CONSOLIDATED CURRENT ASSETS" means, in respect of the undersigned, all
of its current assets and the current assets of its  Subsidiaries  (if any) on a
consolidated  basis which  should,  in  accordance  with GAAP,  be classified as
current assets.

         "CONSOLIDATED   CURRENT   LIABILITIES"   means,   in   respect  of  the
undersigned,  all of its current  liabilities and the current liabilities of its
Subsidiaries (if any) on a consolidated  basis which should,  in accordance with
GAAP, be classified as current liabilities.

         "CONSOLIDATED  TANGIBLE NET WORTH" means,  in respect of a Person,  the
consolidated stockholders' equity in such Person and its Subsidiaries determined
in  accordance  with GAAP,  except that there shall be  deducted  therefrom  all
intangible  assets (other than  leasehold  improvements)  of such Person and its
Subsidiaries, such as organization costs, unamortized debt discount and expense,
goodwill, patents, trademarks,  copyrights, contractual franchises, and research
and development expenses.

         "DEBT" of any  Person  means (i) all  obligations  of such  Person  for
borrowed  money  (including  in the  case  of  the  undersigned)  the  aggregate
outstanding  amount  of  loans  hereunder)  or the  deferred  purchase  price of
property or services,  (ii) all  obligations of such Person  evidenced by bonds,
notes,   debentures,   drafts  or  similar  instruments  or  securities,   (iii)
indebtedness  for borrowed  money or the deferred  purchase price of property or
services  secured by any lien  existing  on  property  owned or acquired by such
Person, whether or not the liability secured thereby shall have been incurred or
assumed by such Person,  (iv) all capitalized  lease obligations of such Person,
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(v) the undrawn  amount of all letters of credit  issued for the account of such
Person, and (vi) all guaranties and other contingent  obligations of such Person
in respect of  obligations  and  liabilities  of others  referred  to in clauses
(i)-(v) above.

         "EURO  RATE"  means,  for any Fixed Rate loan based upon the LIBOR Rate
for any  Interest  Period  therefor,  a rate  per  annum  (rounded  upwards,  if
necessary,  to the  nearest  1/16 of 1%) to be equal to the  quotient of (i) the
LIBOR Rate for such loan for such Interest Period, divided by (ii) one minus the
Reserve Requirement for such loan for such Interest Period plus two and one-half
percent (2.5%).

         "FISCAL  YEAR"  means the  undersigned's  fiscal year  consisting  of a
twelve month period ending on each December 31.

         "GAAP" means  generally  accepted  accounting  principles in the United
States  of  America  as in  effect  on the date  hereof  and  from  time to time
hereafter consistently applied.

         "INTEREST  PERIOD" means with respect to Euro Rate loans, the period as
Chase may offer and as the Borrower may select,  commencing on the Loan Date and
ending on the  numerically  corresponding  day in the first,  second,  third, or
sixth calendar month  thereafter,  provided that each such Interest Period which
commences on the last  Banking Day of a calendar  month (or on any day for which
there is no numerically corresponding day in the appropriate subsequent calendar
month) shall end on the last Banking Day of the  appropriate  calendar month. In
no event  shall an  Interest  Period  have a duration  of less than one month or
exceed the Maturity Date.  "INTEREST  PERIOD" means with respect to Money Market
Rate loans,  for any single  borrowing,  the period for which such  borrowing is
offered.

         "LIBOR RATE" means the rate per annum (rounded  upwards,  if necessary,
to the nearest 1/16 of 1%) quoted by the London office of Chase at approximately
11:00 a.m.  London time (or as soon  thereafter  as  practicable)  on the Second
Business Day prior to the commencement of an Interest Period for the offering by
Chase to leading  banks in the London  interbank  market of United States dollar
deposits  having a term  comparable  to such  Interest  Period  and in an amount
comparable to the principal amount of the loan under the Note.

         "LOAN DATE" means the date on which a loan under this Note is made.

         "MONEY  MARKET  RATE" means if offered,  a rate of interest per year as
offered  by Chase  from time to time on any single  commercial  borrowing  for a
period of up to ninety (90) days.  The Money  Market Rate of interest  available
for any subsequent  borrowings may differ since Money Market Rates may fluctuate
on a daily basis.

         "PERSON" means an individual,  a  corporation,  a company,  a voluntary
association,  a  partnership,  a  trust,  an  unincorporated  organization  or a
government or any agency, instrumentality or political subdivision thereof.

         "REGULATION  D" means  Regulation  D of the Board of  Governors  of the
Federal Reserve System as the same may be amended or  supplemented  from time to
time.
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                                                                               3

         "REGULATORY  CHANGE"  means any change  after the date hereof in United
States federal, state or foreign laws or regulations (including Regulation D) or
the adoption or making  after such date of any  interpretations,  directives  or
requests  applying to a class of banks including the Bank of or under any United
States federal or state,  or any foreign,  laws or  regulations  (whether or not
having  the force of law) by any court or  governmental  or  monetary  authority
charged with the interpretation or administration thereof.

         "RESERVE  REQUIREMENT"  means,  for any Euro Rate loan for any Interest
Period  therefor,  the average  maximum rate at which  reserves  (including  any
marginal,  supplemental  or emergency  reserves)  are required to be  maintained
during such  Interest  Period under  Regulation D by member banks of the Federal
Reserve System in New York City with deposits exceeding  $5,000,000,000  against
"Eurocurrency liabilities" (as such term is used in Regulation D).

         "SUBORDINATED  DEBT" means all indebtedness not to exceed the aggregate
amount  of  $2,975,000  owing  under  the  subordinated   notes  issued  by  the
undersigned to Furman Selz SBIC,  L.P.  pursuant to a Note and Warrant  Purchase
Agreement,  dated  as of  October  31,  1996,  among  FIND/SVP,  Inc.,  FIND/SVP
Published Products, Inc., FIND/SVP Internet Services, Inc. and Furman Selz FBIC,
L.P. and the subordinated  notes issued by the undersigned to SVP, S.A. pursuant
to Note and Warrant Purchase Agreements,  each dated as of November 26, 1996 and
as of August 25, 1997,  respectively,  among FIND/SVP,  Inc., FIND/SVP Published
Products,   Inc.,  FIND/SVP  Internet  Services,   Inc.  and  SVP,  S.A.,  which
indebtedness shall be subject to intercreditor  agreements in form and substance
satisfactory to Chase.

         "SUBSIDIARY"  means any corporation or other entity of which at least a
majority of the securities or other ownership  interests  having ordinary voting
power  (absolutely  or  contingently)  for the  election of  directors  or other
persons  performing  similar  functions  are  at  the  time  owned  directly  or
indirectly by the undersigned.

         2. MATURITY  DATE(S).  Each loan shall mature on the earlier of demand,
the last day of the Interest  Period  therefor as noted on the  Interest  Period
column on the attached  schedule or the  Maturity  Date.  As to a Variable  Rate
loan, if no Interest  Period is noted,  then such loan is payable on the earlier
of demand or the Maturity Date.

         3.  INTEREST.  The  undersigned  promises to pay interest on the unpaid
balance of the principal amount of each such loan from and including the date of
each such loan to but  excluding the date such loan shall be paid in full at the
following  applicable  rates,  as may be  offered by Chase and  selected  by the
undersigned:

         Variable Rate:    A rate of interest per year which shall automatically
                           increase or decrease from time to time so that at all
                           times  such rate shall  remain  equal to that rate of
                           interest from time to time  announced by Chase at its
                           head office as its prime commercial lending rate (the
                           "Prime Rate") plus one-half  percent (.50%).  Changes
                           in the rate of interest  hereunder shall be effective
                           as of and for the entire day on which such  change in
                           the Prime Rate becomes effective;
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         and

        Fixed Rate:        A rate per year for  each  Interest  Period  for each
                           loan under this Note equal to either the Euro Rate or
                           the Money Market Rate.

         Unless  three  Business  Days prior to the  expiration  of an  Interest
Period,  the  undersigned  requests  and  Chase  quotes a new  Fixed  Rate for a
subsequent  Interest Period on an existing Fixed Rate loan, such Fixed Rate loan
shall  automatically  convert  to a  Variable  Rate loan on the day  immediately
following the last day of the current  Interest  Period.  The minimum  principal
amount of a Fixed Rate loan shall be $250,000.

         Interest shall be payable in arrears (a) as to a Variable Rate loan, on
the first day of each month and (b) as to a Fixed Rate loan,  on the last day of
each Interest  Period,  or if such Interest Period is more than 90 days, then on
the 90th day after  the date of such  loan and on the last day of such  Interest
Period, unless otherwise specified on a Rider attached hereto, in respect of the
corresponding principal and (c) on the maturity date of any loan. Interest shall
be  calculated  on each loan on the basis of a year of 360 days and  payable for
the actual number of days elapsed.

         After the occurrence of an Event of Default set forth below,  Chase, at
its option, by written notice to the undersigned, may increase the interest rate
on this Note by an additional  two percent (2%) per year,  effective on the date
of such notice.

         4. PAYMENTS. All payments under this Note shall be made in lawful money
of the United States of America and in  immediately  available  funds at Chase's
office  specified  above.  Chase may (but shall not be  obligated  to) debit the
amount of any payment  (principal  or interest)  under this Note when due to the
deposit  accounts of the undersigned  with Chase listed below.  This Note may be
prepaid without penalty or premium unless otherwise specified herein.  Chase may
apply any money  received or collected for payment of this Note to the principal
of,  interest on or any other amount payable under,  this Note in any order that
Chase may elect.

         All  amounts  payable  hereunder  shall  be  made  without  set-off  or
counterclaim  and  clear  of and  without  deduction  for  any  and  all  taxes,
registration  fees,  duties,  levies or any  other  deductions  or  withholdings
whatsoever imposed, collected or made with repeat to this Note. In the event the
undersigned  or Chase is compelled by  applicable  law to pay or deduct any such
amounts,  the undersigned  shall pay to Chase such additional  amounts to insure
that Chase  receives an amount equal to the full amount it otherwise  would have
received had such deduction not been made.

         Whenever  any payment to be made  hereunder  (including  principal  and
interest) shall be stated to be due on a day on which Chase's head office is not
open for business,  that payment will be due on the next following  Banking Day,
and any extension of time shall in each case be included in the  computation  of
interest payable on this Note.

         If any payment (principal or interest) shall not be paid when due other
than a payment of the entire principal balance of the Note due upon acceleration
after default,  to the extent permitted by applicable law, the undersigned shall
pay a late  payment  charge  equal to five  percent  (5%) of the

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amount of such delinquent payment, provided that the amount of such late payment
charge shall be not less than $25 nor more than $500.

         5.  ADDITIONAL  COSTS. If as a result of any Regulatory  Change,  Chase
determines (which  determination  shall be conclusive) that the cost to Chase of
making  or  maintaining  the  loan  is  increased,  or any  amount  received  or
receivable  by Chase  hereunder  is  reduced,  or Chase is  required to make any
payment (including without limitation in connection with any reserves or capital
adequacy  requirements  or  assessments)  in  connection  with  any  transaction
contemplated  hereby,  then the  undersigned  shall pay to Chase on demand  such
additional  amount or amounts as Chase determines will compensate Chase for such
increased cost, reduction or payment. Chase will, within 90 days of such demand,
provide the undersigned  with a statement  setting forth the calculation of such
additional amount or amounts; provided, however, the failure of Chase to provide
such statement shall not relieve the undersigned of its payment obligation.

         6.  ILLEGALITY.  If it becomes unlawful for Chase or its lending office
to make,  convert  or  maintain  any  loan,  Chase  shall  promptly  notify  the
undersigned, and Chase shall not make, convert or maintain any loan and any loan
outstanding  shall be prepaid on demand,  together with interest and any amounts
due under the CERTAIN COMPENSATION section below.

         7. CERTAIN COMPENSATION (FIXED RATE LOAN ONLY). If for any reason there
is a  principal  payment  of a loan on a date  other  than  the  last day of the
Interest  Period  thereof  (whether by demand,  prepayment,  or  otherwise) or a
failure to borrow on the date specified for borrowing,  the undersigned will pay
to Chase on  demand  such  amount  or  amounts  as shall be  sufficient  (in the
reasonable  opinion of Chase) to compensate  Chase for any loss, cost or expense
which  Chase  determines  is  attributable  to such  payment or such  failure to
borrow;   provided  that  Chase  shall  have  delivered  to  the  undersigned  a
certificate  as to the amount of such loss,  cost or  expense  setting  forth in
reasonable detail the calculation thereof,  which shall be presumptively correct
if made in good faith on a reasonable basis.

         8.  AUTHORIZATIONS.  The undersigned  hereby  authorizes  Chase to make
loans and disburse the proceeds  thereof to the account listed below and to make
repayments  of such loans by debiting  such  account  upon oral,  telephonic  or
telecopied  instructions made by any person purporting to be an officer or agent
of the  undersigned  who is  empowered  to make  such  requests  and  give  such
instructions.  The undersigned may amend these instructions,  from time to time,
effective  upon actual  receipt of the  amendment  by Chase.  Chase shall not be
responsible for the authority,  or lack of authority,  of any person giving such
telephonic instructions to Chase pursuant to these provisions. By executing this
Note, the undersigned agrees to be bound to repay any loan obtained hereunder as
reflected  on  Chase's  books and  records  and made in  accordance  with  these
authorizations, regardless of the actual receipt of the proceeds thereof.

         9. RECORDS. The date, principal amount, interest rate and maturity date
of each loan under this Note and each  payment  of  principal,  loan(s) to which
such  principal is applied  (which shall be at the  discretion of Chase) and the
outstanding  principal balance of loans, shall be recorded by Chase on its books
and prior to any  transfer of this Note (or, at the  discretion  of Chase at any
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                                                                               6

other time) endorsed by Chase on the schedule  attached or any  continuation  of
the schedule. Any such endorsement shall be conclusive absent manifest error.

         10.  REPRESENTATIONS  AND WARRANTIES.  The  undersigned  represents and
warrants upon the execution and delivery of this Note and upon each loan request
hereunder, that: (a) it is duly organized and validly existing under the laws of
the  jurisdiction of its  organization or  incorporation  and, if relevant under
such laws,  in good  standing;  (b) it has the power to execute and deliver this
Note and to perform its obligations hereunder and has taken all necessary action
to authorize  such  execution,  delivery and  performance;  (c) such  execution,
delivery and  performance  do not violate or conflict with any law applicable to
it, any provision of its organizational  documents, any order or judgment of any
court or other agency of government applicable to it or any of its assets or any
material contractual restriction binding on or materially affecting it or any of
its assets;  (d) to the best of  undersigned's  knowledge,  all governmental and
other  consents  that are  required to have been  obtained by it with respect to
this Note have been obtained and are in full force and effect and all conditions
of any such consents have been complied  with;  (e) its  obligations  under this
Note  constitute  its  legal,  valid and  binding  obligations,  enforceable  in
accordance  with its terms  except to the extent  that such  enforcement  may be
limited by applicable  bankruptcy,  insolvency  or other similar laws  affecting
creditors'   rights  generally;   (f)  all  financial   statements  and  related
information  furnished  and to be  furnished  to Chase  from time to time by the
undersigned  are true and  complete  and fairly  present the  financial or other
information  stated therein as at such dates or for the periods covered thereby;
(g) there are no actions,  suits,  proceedings or investigations  pending or, to
the  knowledge  of  the  undersigned,   threatened   against  or  affecting  the
undersigned before any court,  governmental agency or arbitrator,  which involve
forfeiture of any assets of the  undersigned or which may  materially  adversely
affect the  financial  condition,  operations,  properties  or  business  of the
undersigned or the ability of the  undersigned  to perform its obligation  under
this Note;  and (h) there has been no material  adverse  change in the financial
condition  of the  undersigned  since  the last  such  financial  statements  or
information.

         11.      AFFIRMATIVE COVENANTS.  The undersigned agrees that it shall:
                  ---------------------

                  (a)  Furnish  to Chase,  within  120 days  after and as at the
close of each Fiscal Year, a consolidated (and  consolidating)  balance sheet(s)
of  undersigned  and  its  consolidated  Subsidiaries,   and  consolidated  (and
consolidating)  statements  of income,  cash flows and changes in  shareholders'
equity of undersigned and its consolidated  Subsidiaries  prepared in accordance
with GAAP consistently applied, on an audit basis, prepared by Deloitte & Touche
LLP, or other  independent  public  accounting firm  satisfactory to Chase,  and
accompanied by a satisfactory report of such accountants which shall not contain
any qualification of opinion or disclaimer;

                  (b)  Furnish  to Chase,  within 45 days  after the end of each
Fiscal  Quarter,  a  consolidated  (and   consolidating)   balance  sheet(s)  of
undersigned and its consolidated Subsidiaries as at the end of each such quarter
and related consolidated (and consolidating) statements of income, cash flow and
changes  in  shareholders'  equity  of  the  undersigned  and  its  consolidated
Subsidiaries  for the Fiscal  Quarter and from the beginning of such Fiscal Year
to the end of such Fiscal  Quarter,  together with  comparisons  to the previous
year, if  appropriate,  and to budget
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                                                                               7

projections,   prepared  in  conformity  with  GAAP  consistently  applied,  and
certified by an appropriate financial officer of undersigned;

                  (c)  Furnish to Chase when  loans are  outstanding,  within 20
days after the end of each month, a statement of accounts  receivable,  to be in
form and substance satisfactory to Chase;

                  (d)  Furnish to Chase such other  books, records  and  reports
as Chase may from time to time  reasonably request; and

                  (e) Permit  representatives  of Chase to visit and inspect any
of the properties of  undersigned  and its  Subsidiaries,  examine its corporate
books and records, and to make extracts or copies of such books and records, and
discuss its affairs,  finances and accounts with its officers,  accountants  and
agents,  provided that the foregoing shall only be done at reasonable  times and
with  not  more  than  reasonable  frequency,  and  provided  further  that  the
reasonable  cost  of  such  inspections  and  examinations   shall  be  paid  by
undersigned.

         12.      NEGATIVE COVENANTS.  The undersigned agrees that it shall not,
and shall not permit any Subsidiary to:

                  (a)  Incur,  create,  permit to exist or assume,  directly  or
indirectly, any Debt other than (i) Debt to Chase, (ii) Subordinated Debt, (iii)
trade indebtedness (which shall not include any borrowing,  trade acceptances or
notes given in settlement of trade indebtedness) incurred in the ordinary course
of business and not more than 30 days overdue,  and (iv) indebtedness related to
liens permitted by clause (b)(ii) below;

                  (b)  Pledge  or  encumber  any  of  its  assets,   except  (i)
mortgages,  liens,  security interests or encumbrances granted to Chase and (ii)
liens on personal  property  incurred in connection with a capital lease entered
into by the undersigned as lessee in the ordinary  course of business,  provided
that any such  liens are  created  contemporaneously  with the  leasing  of such
personal property and attach only to the property so leased; and

                  (c)  Loan  or make  advances  to,  or  guarantee,  indorse  or
otherwise be or become  liable or  contingently  liable in  connection  with the
obligations or indebtedness of any other Person, directly or indirectly;

         13.      FINANCIAL  COVENANTS.  The undersigned  shall  maintain at all
 times the  following  financial  covenants and ratios:

                  (a)  Debt to Consolidated Tangible Net Worth plus Subordinated
 Debt of not more than 2 to 1; and

                  (b)  Consolidated  Current  Assets  to   Consolidated  Current
Liabilities of not less than 1.25 to 1.

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         14. NO COMMITMENT. This Note does not create and shall not be deemed or
construed  to create  any  contractual  commitment  to lend by  Chase.  Any such
commitment  in  respect  of this  Note  can  only be made by and  shall  only be
effective to the extent set forth in a separate writing expressly designated for
that purpose and subscribed by a duly authorized officer of Chase.

         15. SECURITY.  As collateral  security for the payment of this Note and
of any and all other  obligations  and  liabilities of the undersigned to Chase,
now existing or hereafter  arising,  the undersigned  grants to Chase a security
interest  in and a lien upon and right of offset  against  all  moneys,  deposit
balances,  securities or other property or interest  therein of the  undersigned
now or at any  time  hereafter  held  or  received  by or  for  or  left  in the
possession or control of Chase or any of its affiliates, including subsidiaries,
whether for safekeeping,  custody,  transmission,  collection, pledge or for any
other or different purpose.

         16.      DEFAULT. If any of the following events of default shall occur
with respect to any of the undersigned  (each  an "Event of Default"):

                  (a)  the  undersigned  shall fail to pay the  principal of, or
interest on, this Note, or any other amount payable under this Note, as and when
due and payable;

                  (b) any  representation or warranty made or deemed made by the
undersigned in this Note or in any document granting security or support for (or
otherwise  executed  in  connection  with)  this  Note  or by  any  third  party
supporting   or  liable  with  respect  to  this  Note   (whether  by  guaranty,
subordination,  grant of security or any other credit support,  a "Third Party")
in any document  evidencing the  obligations of a Third Party (this Note and all
of the foregoing  documents and all  agreements,  instruments or other documents
executed by the undersigned or a Third Party being the "Facility  Documents") or
which is contained in any  certificate,  document,  opinion,  financial or other
statement  furnished  at any time  under  or in  connection  with  any  Facility
Document, shall prove to have been incorrect in any material respect on or as of
the date made or deemed made;

                  (c) the  undersigned  or any Third Party shall fail to perform
or observe any term, covenant or agreement contained in any Facility Document on
its part to be performed or observed (not constituting an Event of Default under
any other  clause of this  section),  and such  failure  shall  continue  for 30
consecutive days;

                  (d) the  undersigned or any Third Party shall fail to pay when
due any  indebtedness  (including but not limited to  indebtedness  for borrowed
money) or if any such  indebtedness  shall become due and  payable,  or shall be
capable of  becoming  due and  payable at the option of any holder  thereof,  by
acceleration  of  its  maturity,  or if  there  shall  be  any  default  by  the
undersigned   or  any  Third  Party  under  any   agreement   relating  to  such
indebtedness;

                  (e) the  undersigned or any Third Party:  (i) shall  generally
not, or be unable to, or shall admit in writing its  inability to, pay its debts
as such debts  become  due;  (ii) shall make an  assignment  for the  benefit of
creditors; (iii) shall file a petition in bankruptcy or for any relief under any
law of any jurisdiction relating to reorganization, arrangement, readjustment of
debt,
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                                                                               9

dissolution or  liquidation;  (iv) shall have any such petition filed against it
and the same shall remain  undismissed  for a period of 30 days or shall consent
or  acquiesce  thereto;  or (v) shall have had a receiver,  custodian or trustee
appointed for all or a substantial part of its property;

                  (f) if the  undersigned  or any Third Party is an  individual,
such individual shall die or be declared incompetent;

                  (g) any Third Party  Facility  Document  shall at any time and
for any reason  cease to be in full force and effect or shall be  declared  null
and void, or its validity or  enforceability  shall be contested by the relevant
Third  Party or such Third  Party  shall deny it has any  further  liability  or
obligation under any Facility  Document or shall fail to perform its obligations
under any Facility Document;

                  (h) any security  agreement or other agreement (whether by the
undersigned or any Third Party) granting a security interest,  lien, mortgage or
other encumbrance  securing obligations under any Facility Document shall at any
time and for any reason  cease to create a valid and  perfected  first  priority
security  interest,  lien,  mortgage or other  encumbrance in or on the property
purported to be subject to such agreement or shall cease to be in full force and
effect or shall be declared null and void, or the validity or  enforceability of
any such agreement  shall be contested by any party to such  agreement,  or such
party shall deny it has any further liability or obligation under such agreement
or any such  party  shall  fail to  perform  any of its  obligations  under such
agreement;

                  (i) the  undersigned  shall  make  or  permit  to be made  any
material change in the character,  management or direction of the  undersigned's
business or operations (including, but not limited to, a change in its executive
management  or in the  ownership of its capital  stock which effects a change in
the control of any such business or  operations),  which is not  satisfactory to
Chase;

                  (j) the undersigned or any Third Party shall suffer a material
adverse change in its business, financial condition, properties or prospects;

                  (k) any action, suit,  proceeding or investigation  against or
affecting  the  undersigned  or a Third Party  before any court or  governmental
agency which  involves  forfeiture of any assets of the  undersigned  or a Third
Party shall have been commenced; or

                  (l) one or more  judgments,  decrees or orders for the payment
of money in excess of $50,000 in the  aggregate  shall be  rendered  against the
undersigned  and shall  continue  unsatisfied  and in effect  for a period of 30
consecutive  days  without  being  vacated,  discharged,  satisfied or stayed or
bonded pending appeal.

         THEN,  in any  such  case,  if  Chase  shall  elect  by  notice  to the
undersigned,  the unpaid  principal  amount of this Note,  together with accrued
interest and any other  amounts due  hereunder  shall become  forthwith  due and
payable;  provided that in the case of an event of default under (e) above,  the
unpaid  principal  amount of this Note,  together with accrued  interest and any
other
<PAGE>

                                                                              10

amounts due  hereunder  shall  immediately  become due and  payable  without any
notice or other action by Chase.

         17. CERTAIN WAIVERS.  The undersigned waive(s)  presentment,  notice of
dishonor, protest and any other notice or formality with respect to this Note.

         18. COSTS.  The  undersigned  agree(s) to reimburse Chase on demand for
all reasonable costs, expenses and charges (including,  without limitation,  any
taxes,  fees and charges of external legal counsel for Chase and costs allocated
by  its  internal  legal   department)  in  connection  with  the   preparation,
interpretation,  administration, performance or enforcement of this Note and the
Facility Documents.

         19. NOTICES. All notices,  requests, demands or other communications to
or upon the  undersigned  or Chase shall be in writing and shall be deemed to be
delivered  upon receipt if  delivered by hand or overnight  courier or five days
after  mailing to the  address (a) of the  undersigned  as set forth next to the
undersigned's  execution of this Note, (b) of Chase as first set forth above, or
(c) of the  undersigned  or Chase at such other  address as the  undersigned  or
Chase shall specify to the other in writing.

         20. ASSIGNMENT. This Note shall be binding upon the undersigned and its
or their  successors  and shall inure to the benefit of Chase and its successors
and assigns.

         21.  AMENDMENT  AND WAIVER.  This Note may be amended only by a writing
signed on behalf of each  party and shall be  effective  only to the  extent set
forth in that  writing.  No delay by  Chase  in  exercising  any  power or right
hereunder shall operate as a waiver thereof or of any other power or right;  nor
shall any single or partial  exercise  of any power or right  preclude  other or
future exercise thereof, or the exercise of any other power or right hereunder.

         22.  GOVERNING  LAW;  JURISDICTION.  This Note shall be governed by and
construed in accordance  with the laws of the State of New York. The undersigned
consent(s) to the  nonexclusive  jurisdiction  and venue of the state or federal
courts located in such state. The undersigned  hereby waives any objection which
it or they  may now or  hereafter  have to the  laying  of  venue of any suit or
action arising out of this Note in such courts and further waives any claim that
any such  suit or  action  brought  in any such  court  has been  brought  in an
inconvenient  forum.  In the event of a dispute  hereunder,  suit may be brought
against  the  undersigned  is  such  courts  or in any  jurisdiction  where  the
undersigned or any of its assets may be located.  Service of process by Chase in
connection  with any dispute shall be binding on the  undersigned if sent to the
undersigned by registered  mail at the  address(es)  specified  below or to such
further address(es) as the undersigned may specify to Chase in writing.

         23. MAXIMUM INTEREST. Notwithstanding any other provision of this Note,
the  undersigned  shall not be required to pay any amount  pursuant to this Note
which  is in  excess  of  the  maximum  amount  permitted  to be  charged  under
applicable  law and any such  excess  interest  paid  shall be  refunded  to the
undersigned or applied to principal owing hereunder.
<PAGE>

                                                                              11

         24.  SENIOR  GRID  PROMISSORY  NOTE.  This  Note  and the  indebtedness
evidenced hereby are senior in all respect to the Subordinated  Debt,  including
without limitation, payment of all amounts due hereunder to the holder hereof.

         25. JURY, CERTAIN DEFENSES AND SET-OFF WAIVERS.  THE UNDERSIGNED HEREBY
KNOWINGLY,  VOLUNTARILY  AND  INTENTIONALLY  WAIVE(S)  (TO  THE  FULLEST  EXTENT
PERMITTED BY APPLICABLE LAW) ANY RIGHT TO A TRIAL BY JURY OF ANY DISPUTE ARISING
UNDER OR RELATING  TO THIS NOTE OR ANY  FACILITY  DOCUMENT,  AND AGREES THAT ANY
SUCH DISPUTE SHALL, AT CHASE'S OPTION, BE TRIED BEFORE A JUDGE SITTING WITHOUT A
JURY.

         IN ADDITION,  THE UNDERSIGNED WAIVES THE RIGHT TO INTERPOSE ANY DEFENSE
BASED  UPON ANY  STATUTE OF  LIMITATIONS  OR ANY CLAIM OF DELAY BY CHASE AND ANY
SET-OFF OR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION.

                                            CHASE ACCOUNT NO. TO BE CHARGED FOR
                                            DISBURSEMENTS AND PAYMENTS:

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

                                            FIND/SVP, INC.

                                            BY:  _______________________________

                                            PRINT NAME: ________________________

                                            TITLE:  ____________________________

         ADDRESS FOR NOTICES:
         625 AVENUE OF THE AMERICAS
         NEW YORK, NEW YORK 10011
         TELECOPIER NO.  (212)255-7632

<PAGE>

                     SCHEDULE TO SENIOR GRID PROMISSORY NOTE
                                OF FIND/SVP, INC.
                             DATED DECEMBER 30, 1999
<TABLE>
<CAPTION>
================================================================================================================
                                                                                  AGGREGATE
                                                                                  PRINCIPAL
     DATE OF           INTEREST       AMOUNT OF    INTEREST    AMOUNT OF      BALANCE REMAINING      NOTATION
      LOAN              PERIOD          LOAN         RATE       PAYMENT             UNPAID            MADE BY
----------------------------------------------------------------------------------------------------------------
<S>                    <C>           <C>           <C>        <C>             <C>                   <C>

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

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

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

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

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

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

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

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

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

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

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

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

================================================================================================================
</TABLE>

<PAGE>

                                                                      Exhibit AA
                                                                      ----------
                                                                         Part II

                  SECURITY  AGREEMENT  dated December 30, 1999 made by FIND/SVP,
INC. (the "Pledgor") in favor of THE CHASE MANHATTAN BANK (the "Secured Party").

                              W I T N E S S E T H:

                  WHEREAS the  Pledgor is the maker of a Senior Grid  Promissory
Note of even date  herewith  (as it may be amended,  restated,  supplemented  or
otherwise  modified from time to time, the "Note"),  payable to the order of the
Secured Party; and

                  WHEREAS in order to secure  the  obligations  of the  Pledgor,
including  its  obligations  under  the Note and this  Security  Agreement,  the
Secured  Party has  requested  and the Pledgor has agreed to execute and deliver
this Security Agreement.

                  NOW,  THEREFORE,  in  consideration  of the premises and other
good and valuable consideration,  the receipt and sufficiency of which is hereby
acknowledged, the Pledgor hereby agrees with the Secured Party as follows:

                  1.  SECURITY  INTEREST.  As security for the  Obligations  (as
hereinafter defined),  the Pledgor pledges and assigns to the Secured Party, and
grants to the  Secured  Party a  continuing  security  interest  in,  all of the
Pledgor's right,  title and interest  (whether now existing or hereafter created
or acquired by the Pledgor) in: (a) its accounts  receivable  and other personal
property  that  constitutes  accounts  as such term is  defined  in the  Uniform
Commercial  Code of the  State  of New  York  (the  "Uniform  Commercial  Code")
(collectively, "Accounts"); (b) its inventory, including goods, merchandise, raw
materials, goods in process, finished goods and other tangible personal property
that  constitutes  inventory  as such term is defined in the Uniform  Commercial
Code (collectively,  "Inventory"); (c) its equipment, including all substitutes,
replacements,  accessions and additions thereto,  all tools, parts,  accessories
and  attachments  used in connection  therewith and all other tangible  personal
property  that  constitutes  equipment  as such term is defined  in the  Uniform
Commercial Code)  (collectively,  "Equipment");  (d) its other tangible personal
property  that  constitutes  goods  as  such  term  is  defined  in the  Uniform
Commercial  Code; (e) its intellectual  property,  goodwill,  trademarks,  trade
names,  servicemarks,  copyrights,  permits  and  licenses;  (f) all  contracts,
contract rights,  bills, notes,  drafts,  acceptances,  instruments,  documents,
chattel paper,  choses in action and all other intangible personal property that
constitutes  general  intangibles  as  such  term  is  defined  in  the  Uniform
Commercial  Code; (g) all  securities,  securities  entitlements  and investment
property;  (h) all books and  records  (including  but not  limited to  computer
programs and tapes and related software)  relating to any of the foregoing;  and
(h) all cash and noncash  proceeds and products of any of the foregoing  (all of
the foregoing is collectively called the "Collateral").

                  2. OBLIGATIONS  SECURED. The security interest granted by this
Agreement  is to  secure  the  payment  and  performance  of any  and all of the
Pledgor's   obligations  to  the  Secured  Party  of  every  kind,   nature  and
description,  whether for principal,  interest,  fees or other amounts,  whether
direct or  indirect,  secured  or  unsecured,  joint  and  several  absolute  or
contingent, due or
<PAGE>

                                                                               2

to become due, now existing or hereafter  arising,  regardless of how they arise
or by what agreement or instrument and whether or not evidenced by any agreement
or  instrument,  and all  obligations to perform acts or refrain from taking any
action (all of the foregoing collectively, the "Obligations").

                  3. UNCONDITIONAL  GRANT OF SECURITY INTEREST.  (a) The Pledgor
agrees that this Agreement  shall be binding upon the Pledgor and that the grant
of  the  security   interest  in  the  Collateral   shall  be  irrevocable   and
unconditional,  irrespective of the validity,  legality or enforceability of the
Obligations,  the  absence  of any  action to  enforce  the same,  any waiver or
consent by the Secured  Party with  respect to any  provisions  thereof,  or any
action to enforce the same or any other  similar  circumstances.  The  Pledgor's
obligations  and  liabilities  hereunder  shall not be conditioned or contingent
upon the Secured  Party's pursuit at any time of any right or remedy against any
other  person or entity  that may be or become  liable in  respect of all or any
part of the Obligations or against any collateral  security or guaranty therefor
or right of offset with respect  thereto.  The Pledgor hereby waives  diligence,
presentment,  demand of  payment,  filing of claims with a court in the event of
the Pledgor's merger or bankruptcy,  protest or notice with respect to any notes
evidencing the  Obligations  and all demands  whatsoever.  This Agreement  shall
remain in full force and effect  and be  binding in  accordance  with and to the
extent  of  its  terms  upon  the  Pledgor  until  the  Obligations   have  been
indefeasible paid in full,  notwithstanding  that from time to time there may be
no Obligations outstanding.

                            (b) The  Pledgor  agrees that  without  notice to or
further assent by the Pledgor, its liability or the liability of any other party
for or upon any of the Obligations  may, from time to time, in whole or in part,
be renewed,  extended,  modified,  accelerated,  compromised  or released by the
Secured  Party as the  Secured  Party  may deem  advisable,  and that any  other
collateral or liens for any of the Obligations  may, from time to time, in whole
or in part, be  exchanged,  sold or  surrendered  by the Secured  Party,  as the
Secured Party may deem advisable, all without impairing, abridging, affecting or
diminishing  this  Agreement  or the Secured  Party's  rights  hereunder or with
respect to the Collateral.

                  4.  REPRESENTATIONS,  COVENANTS  AND  WARRANTIES.  The Pledgor
hereby makes the  following  representations,  covenants and  warranties,  which
shall be deemed to be repeated and confirmed upon the creation or acquisition by
the Pledgor of each item of Collateral and upon the creation of any Obligation:

                            (a) The Pledgor is a  corporation,  duly  organized,
validly  existing  and in good  standing  under  the  laws  of the  jurisdiction
indicated  beneath  the  Pledgor's  signature  line of this  Agreement,  has the
requisite  corporate power to own its properties and to carry on its business as
now being conducted,  is qualified to engage in business and is in good standing
in each other  jurisdiction  in which the  character  of its  properties  or the
transaction  of its  business  make such  qualification  necessary,  and has the
requisite corporate power to execute, deliver and perform this Agreement.
<PAGE>

                                                                               3

                            (b) The execution,  delivery and performance of this
Agreement and the granting of the security  interest in the  Collateral  (i) has
been duly authorized by all requisite corporate action of the Pledgor; (ii) will
not:  (A)  violate any  provision  of law,  any order of any court,  tribunal or
agency  of  government  or its  certificate  of  incorporation,  bylaws or other
charter  documents;  (B) violate,  be in conflict with, result in a breach of or
constitute  (with  due  notice  or lapse of time or both) a  default  under  any
indenture,  license,  sublicense,  agreement  or other  instrument  to which the
Pledgor  is a party or by  which  it or any of its  properties  are  bound;  (C)
violate  any  governmental  or agency  rule or  regulation  (including,  but not
limited to, Regulations U and X of the Board of Governors of the Federal Reserve
System);  or (D) result in the  creation or  imposition  of any lien,  charge or
encumbrance  whatsoever  upon any of the  Collateral,  except  for the  security
interest  created  by this  Agreement;  and (iii) do not  require  any filing or
registration with, any permit, license, consent or approval of, or any exemption
by,  any  governmental  or  regulatory  authority,  except  filings  of  Uniform
Commercial  Code financing  statements in the public offices listed on Exhibit A
hereto.

                            (c)  This  Agreement  has  been  duly  executed  and
delivered  by the  Pledgor  and is its  legal,  valid  and  binding  obligation,
enforceable against it in accordance with its terms, subject only to bankruptcy,
insolvency,  reorganization,  moratorium  or similar  laws now or  hereafter  in
effect  relating  to or  affecting  the  enforceability  of rights of  creditors
generally and to general equitable principles that may limit the right to obtain
equitable remedies.  This Agreement creates in the Secured Party's favor a valid
and,  upon the  filing of the  appropriate  Uniform  Commercial  Code  financing
statements in the public offices  listed on Exhibit A hereto,  perfected lien on
and security interest in the Collateral, enforceable against the Pledgor and all
third  parties and  superior in right to all other  security  interests,  liens,
encumbrances or charges, existing or future. Upon such filings or recordings, no
filing or recording of any other financing  statements or other  instruments and
no  recording,  filing or indexing of this  Agreement  is  necessary in order to
preserve and protect the Secured Party's security  interest in the Collateral as
a legal,  valid and enforceable  perfected  security interest in the Collateral,
except filing of  appropriate  continuation  statements  with respect to Uniform
Commercial Code financing statements.

                            (d) On the date  hereof  and at any time  during the
term of this Agreement  during which a security  interest in the Secured Party's
favor in the Collateral exists, no financing  statement (or similar statement or
instrument of registration  under the laws of any jurisdiction) is or will be on
file or registered  in any public office  covering any interest of any kind with
respect to the  Collateral,  or intended so to be, other than those  relating to
the security  interest  created by this Agreement and those  permitted under the
Note,  and the Pledgor will be the lawful owner of the  Collateral and will have
good right to grant the Secured Party a security interest  therein.  The Pledgor
will  perform  all acts and deeds  possible  to assure  that all  documents  and
agreements  held by the Pledgor with respect to the Collateral  will be true and
correct  and in all  respects  what  they  purport  to be;  all  signatures  and
endorsements  that  appear  thereon  will be genuine  and such  signatories  and
endorsers  will have the full  capacity to  contract;  none of the  transactions
underlying or giving rise to the  Collateral  nor any operation or use of any of
the Collateral  will violate any applicable  state or federal law or regulation;
and all
<PAGE>

                                                                               4

documents  relating to the Collateral will be legally sufficient under such laws
and regulations and will be legally  enforceable in accordance with their terms.
None of the  Collateral  is or will be affixed to real estate unless the Pledgor
has furnished to the Secured Party such consents,  waivers or disclaimers as are
necessary  to  make  the  Secured  Party's  security  interest  in  such  of the
Collateral  valid against  persons or entities  holding an interest in such real
estate. The Pledgor will defend the Collateral against all claims and demands of
all other  parties  claiming  the same or an interest  therein,  and none of the
Collateral  will be: (i) sold,  assigned or  transferred to any person or entity
other than the Secured Party except, with respect to Inventory,  in the ordinary
course  of the  Pledgor's  business  or (ii) in any way  pledged,  mortgaged  or
otherwise encumbered except to the Secured Party.

                            (e)(i) The Pledgor  will  perform all acts and deeds
possible to assure that each of its Accounts: (A) is on the date hereof and will
be at all times  during  the term of this  Agreement  a good and  valid  Account
representing an undisputed bona fide indebtedness incurred by the account debtor
named  therein  for  goods  theretofore  sold by the  Pledgor  to,  or  services
theretofore  performed by the Pledgor for, such account debtor;  (B) will not be
subject to any defense, offset,  counterclaim,  holdback, discount or allowance;
(C) will not have been made with an account  debtor under an agreement  pursuant
to which any reduction or discount may be claimed; and (D) will be an Account of
which the Pledgor is the lawful  owner and have the right to subject the same to
the Secured  Party's  security  interest  and (ii) no action has been or will be
taken by the  Pledgor  which has or will have the effect of giving to an account
debtor any defense,  setoff,  claim or counterclaim against the Pledgor that may
be asserted against the Secured Party,  whether in any proceeding to enforce the
Collateral  or otherwise.  No Account will have been or hereafter  will be sold,
assigned or  transferred to any person or entity other than the Secured Party or
in any way encumbered except to the Secured Party.

                            (f) To the  best of the  Pledgor's  knowledge,  each
account  debtor or guarantor or endorser of an Account or other party  obligated
under an Account that at any time is or becomes  subject to a security  interest
in favor of the Secured  Party is and will continue to be solvent and fully able
to pay and  perform in full when due all  Accounts  under  which such  person or
entity is obligated,  and the Pledgor will take all steps  necessary to preserve
the liability of each account debtor, guarantor,  endorser, obligor or secondary
party whose obligations are part of the Collateral.

                            (g)  The  Pledgor  will  perform  all of the  terms,
covenants  and  conditions  on its part to be  observed or  performed  under the
contracts  giving rise to its Accounts and take all steps necessary to keep such
contracts in full force and effect.  Without the Secured  Party's prior consent,
the  Pledgor  will not  compromise,  adjust,  amend,  modify or alter any of the
terms,  covenants or  conditions  of any of its Accounts (or extend the time for
payment  thereof)  or grant any  additional  discounts,  allowances  or  credits
thereon.

                            (h) The  Pledgor  will  promptly  notify the Secured
Party if any Account becomes  evidenced by an instrument,  and, upon the Secured
Party's request, promptly deliver
<PAGE>

                                                                               5

said  instrument  to the Secured  Party,  appropriately  endorsed in the Secured
Party's favor to be held as Collateral hereunder.

                            (i) The Pledgor will furnish to the Secured Party at
such times as the Secured  Party may request  statements,  in form and substance
satisfactory to the Secured Party,  of all of its Accounts,  itemized by account
debtor, and of the location and aggregate value at each such location of all the
Pledgor's  Inventory  and  a  statement  showing  opening  Inventory,  Inventory
acquired,  Inventory sold and held for future  delivery,  Inventory  returned or
repossessed,  Inventory  used or consumed in the Pledgor's  business and closing
Inventory,  each such statement to be certified by the Pledgor's chief financial
officer,  and, promptly from time to time, such other information as the Secured
Party  may  reasonably  request  regarding  the  Collateral  and  the  Pledgor's
operations, business, affairs and financial condition.

                            (j) There is no litigation  pending or threatened in
any court or  jurisdiction,  the  outcome of which  would  affect the  Pledgor's
interest in the Collateral in a materially adverse manner.

                            (k) There are no setoffs,  counterclaims or defenses
with respect to the  Collateral  and no  agreement  has been made with any other
person or party  under  which any  deduction  or  discount  may be claimed  with
respect to the Collateral.

                            (l) The information, exhibits, reports and financial
statements  furnished  by the  Pledgor  in  connection  with  the  Note  or this
Agreement  are true and correct in all  respects and do not contain any omission
or misstatement of fact which would make the statements contained therein false,
misleading or incomplete in any respect.

                            (m)  The  Pledgor   will,   promptly  upon  learning
thereof,  report to the Secured Party:  (i) any material,  adverse change in the
information  contained  herein  relating  to the  Pledgor,  its  business or the
Collateral;  (ii) the  details  of any  material,  adverse  claim or  litigation
affecting the Pledgor or the Collateral; (iii) any material loss of or damage to
the  Collateral or any other  matters  affecting  the value,  enforceability  or
collectibility  of any of the Collateral;  and (iv) any  reclamation,  return or
repossession of any material  portion of the Collateral,  all material delays in
performance, notices of default, claims made or disputes asserted by any account
debtor or other obligor and any other matters  materially,  adversely  affecting
the value, enforceability or collectibility of any of the Collateral.

                            (n)  The  Pledgor  will  conduct  and  carry  on its
business in a manner  consistent with the manner in which it is conducted on the
date  hereof so as to protect and  preserve  the  Collateral  and  maintain,  in
accordance with generally accepted accounting principles,  consistently applied,
accurate books and records  pertaining to the Collateral and, if so requested by
the Secured  Party,  the Pledgor  will mark each of its ledger  cards,  books of
account and other records relating to the Collateral with appropriate notations,
satisfactory  to the Secured  Party,  disclosing  that such  Collateral has been
assigned  and/or  transferred  to the  Secured  Party and that the  Pledgor  has
granted to the Secured Party a security interest therein.
<PAGE>

                                                                               6

                            (o) All  Inventory  or  Equipment  now  owned by the
Pledgor is kept at the locations  indicated on Exhibit B hereto. The location of
its  principal  office and chief  executive  office and the  location  where the
originals  of  its  records  pertaining  to its  Accounts  are  kept  are at the
addresses  indicated  on  Exhibit B hereto.  The  Pledgor  will not  change  the
location of any of its  Inventory  or Equipment  or of its  principal  office or
chief  executive  office or the  location of the office where the records of its
Accounts are kept unless 20 days' prior  written  notice of such change is given
to the Secured Party. The Pledgor's name set forth above its signature hereto is
its correct  legal name,  and the Pledgor has not within the past five years had
any other legal name, nor has the Pledgor done within such five years nor is the
Pledgor now doing business under any other name,  except as set forth on Exhibit
B to this  Agreement.  The Pledgor will not change its legal name, use any other
name nor change the form of its organization without giving the Secured Party 20
days' prior written  notice  thereof.  The Pledgor's  correct  United States tax
identification number is set forth below its signature hereto.

                            (p) The  Pledgor  will do or  cause  to be done  all
recordings,  filings and giving of public  notice  under any  applicable  law or
ordinance  necessary to comply fully with such law or  ordinance,  including any
notices to the United States  government under the Federal  Assignment of Claims
Act, and the Pledgor  will from time to time do whatever  the Secured  Party may
request by way of  obtaining,  executing,  delivering  and/or  filing  financing
statements,  landlord's  or  mortgagee's  lien waivers and other  notices of any
kind, and amendments and renewals  thereto,  and will take any and all steps and
will observe such formalities as the Secured Party may request,  all in order to
create and maintain the Secured  Party's valid security  interest in any and all
of the  Collateral.  The Pledgor  will pay all costs for searches and filings in
connection  therewith.  The Pledgor agrees to execute such financing statements,
security  agreements or other  instruments with respect to any of the Collateral
as the Secured Party may request and authorizes the Secured Party to execute and
file at any time such financing  statements without the Pledgor's signature and,
if upon request the Pledgor fails to do so, to execute such security  agreements
or other  instruments  on its behalf.  The Secured Party may file a photocopy or
other reproduction of this Agreement as a financing statement.

                            (q)  The  Pledgor  will  deliver,  or  cause  to  be
delivered,  to the  Secured  Party from time to time  promptly  upon the Secured
Party's request: (i) any documents of title,  instruments and chattel paper (and
the  Secured  Party has been  granted a direct  security  interest in all of the
Pledgor's  chattel  paper)   constituting,   representing  or  relating  to  the
Collateral;   (ii)   all   books  of   account,   records,   ledgers,   reports,
correspondence,   schedules,  documents,  statements,  lists  and  the  writings
relating to the Collateral  for the purpose of  inspecting,  auditing or copying
the same;  PROVIDED that the Pledgor  shall be permitted to make copies  thereof
before  delivering  such  items  to  the  Secured  Party;  (iii)  all  financial
statements prepared by or for the Pledgor regarding its business; (iv) copies of
all policies and certificates of insurance  relating to the Collateral;  and (v)
such  information  concerning  the Collateral or the Pledgor or any affiliate of
the Pledgor as the Secured Party may reasonably request.

                            (r) The  Pledgor  will at its own  expense  maintain
insurance with insurance companies reasonably  satisfactory to the Secured Party
on such of its assets, in such
<PAGE>

                                                                               7

amounts  and  against  such  risks  as  is  customarily  maintained  by  similar
businesses,  provided that, with respect to insurance  regarding the Collateral,
all such insurance  policies shall contain loss payable clauses  satisfactory to
the Secured Party, naming the Secured Party as a loss payee.

                            (s)  The  Pledgor  will  take  adequate  care of the
Collateral  and pay all costs  necessary to preserve the  Collateral,  including
(but not limited to) all taxes, rates, levies,  assessments and other charges of
every  nature that may be  lawfully  levied,  assessed or imposed  against or in
respect  of the  Pledgor  or the  Collateral  as and when  they  become  due and
payable.

                            (t)  The  Pledgor   will  give  the  Secured   Party
immediate  notice of (i) any default under this  Agreement or (ii) any action or
proceeding to which the Pledgor is a party,  or affecting the Pledgor an adverse
determination  of  which  would  affect  the  Pledgor  or  the  Collateral  in a
materially adverse manner.

                  5. CUSTODY, INSPECTION,  COLLATERAL AND HANDLING OF COLLATERAL
AND RECORDS.  (a) Subject to compliance with the covenants contained herein, the
Pledgor  may,  until the  occurrence  of a  default  by the  Pledgor  hereunder,
possess,  operate,  collect,  use and enjoy and deal with the  Collateral in the
ordinary  course  of its  business  in any  manner  not  inconsistent  with  the
provisions  hereof;  provided always that the Secured Party shall have the right
at any time and from  time to time to  verify  the  existence  and  state of the
Collateral  in any manner the Secured  Party may  consider  appropriate  and the
Pledgor agrees to furnish all assistance and information and to perform all such
acts as the Secured Party may reasonably request in connection therewith and for
such  purpose to grant to the Secured  Party or its agents  access to all places
where  the  Collateral  may  be  located  and to all  premises  occupied  by the
Pledgor's  business.  The Secured Party shall be privileged at any time and from
time to time after the occurrence of a default hereunder to hire and maintain on
any of the Pledgor's premises a custodian or independent  contractor selected by
the Secured  Party who shall have full  authority  to do all acts  necessary  to
protect  the  Secured  Party's  interests  and to  report to the  Secured  Party
thereon. The Pledgor agrees to cooperate with any such person and to do whatever
the  Secured  Party may  reasonably  request  by way of  leasing  warehouses  or
otherwise preserving the Collateral.  All expenses incurred by the Secured Party
by reason of the employment of any such person shall be charged to the Pledgor's
account,  shall  be  part  of  the  Obligations  and  shall  be  secured  by the
Collateral.

                            (b)  If  the   Collateral   at  any  time   includes
securities, the Pledgor authorizes the Secured Party to transfer the same or any
part thereof into the Secured Party's own name or that of its nominee(s) so that
it or its nominee(s)  may appear of record as the sole owner  thereof;  provided
that,  until the occurrence of a default by the Pledgor  hereunder,  the Secured
Party shall deliver promptly to the Pledgor all notices or other  communications
received by the Secured Party or its  nominee(s) as such  registered  owner and,
upon  demand and receipt of payment of any  necessary  expenses  thereof,  shall
issue to the Pledgor or its order a proxy vote and take all action with  respect
to such securities. After a default by the Pledgor hereunder, the Pledgor waives
all rights to receive  any  notices or  communications  received  by the Secured
Party or its nominee(s) as such registered owner and agrees that no proxy issued
by the Secured Party to the Pledgor or its order as aforesaid  shall  thereafter
be effective.

<PAGE>

                                                                               8

                            (c) Until the occurrence of a default by the Pledgor
under this  Agreement,  the  Pledgor  reserves  the right to receive  any moneys
constituting income from or interest on the Collateral, and if the Secured Party
receives any such moneys  before a default by the Pledgor  under this  Agreement
and until the  Obligations  have been satisfied in full, the Secured Party shall
either credit such moneys to the  Pledgor's  account or promptly pay them to the
Pledgor.  After a default by the Pledgor under this Agreement,  the Pledgor will
not  request or receive any moneys  constituting  income from or interest on the
Collateral,  and if the Pledgor  receives any such moneys without any request by
the Secured Party, the Pledgor will pay them promptly to the Secured Party.

                            (d)  Whether or not a default  under this  Agreement
has  occurred,  the Pledgor  authorizes  the Secured  Party:  (i) to receive any
increase in or profits on the Collateral  (other than money) and to hold them as
part of the  Collateral  (money so  received  shall be treated as income for the
purposes of  paragraph  (c) of this Section 5 and dealt with  accordingly);  and
(ii) to receive any payment or  distribution  upon  redemption  or retirement or
upon dissolution and liquidation of the account debtor of any of the Collateral,
to surrender such Collateral in exchange for such payment or distribution and to
hold any such payment or distribution as part of the Collateral.  If the Pledgor
receives  any such  increase  or  profits  (other  than  money) or  payments  or
distributions, the Pledgor will deliver them promptly to the Secured Party to be
held by the Secured Party as provided in this Agreement.

                            (e) The  Pledgor  will,  promptly  upon the  Secured
Party's request,  at any time or from time to time, and the Secured Party may in
its sole discretion  upon a default by the Pledgor under this Agreement,  notify
the Pledgor's  account debtors that payment of all Accounts shall be made to the
Pledgor at such address or addresses as the Secured  Party may from time to time
specify.  Upon such  notification,  the  Secured  Party  shall have the right to
receive,  or its  agents  or  independent  contractors  shall  have the right to
receive on its behalf, the proceeds of, and all documents, instruments or papers
in connection  with, the Pledgor's  Accounts at such address or addresses and to
receive, endorse, assign or deliver in the Secured Party's name or the Pledgor's
name any and all checks,  drafts and other  instruments for the payment of money
relating  to  the  Pledgor's   Accounts,   and  the  Pledgor  waives  notice  of
presentment,  protest and nonpayment of any instrument so endorsed.  The Pledgor
acknowledges that any payments on, or other proceeds of, the Collateral received
by the Pledgor from account  debtors,  whether before or after  notification  to
account debtors of the security  interest  granted by this Agreement and whether
before or after the  occurrence  of a default  under  this  Agreement,  shall be
received  and held by the  Pledgor in trust for the  Secured  Party and shall be
turned  over  to the  Secured  Party  upon  its  request  to be  subject  to the
provisions  of this  Agreement.  Proceeds of Accounts so received by the Secured
Party  or on its  behalf  shall  be  credited,  subject  to  collection,  to the
Pledgor's  account  with the Secured  Party or as  otherwise  determined  by the
Secured Party,  subject to the Secured  Party's right to withhold credit pending
the final  collection  and settlement of any item and its further right to apply
all or part of such proceeds to the then  outstanding  Obligations.  The Pledgor
constitutes the Secured Party or its designee as the Pledgor's  attorney-in-fact
with power: to endorse the Pledgor's name upon any notes,  acceptances,  checks,
drafts,  money orders or other  evidences of payment or Collateral that may come
into the Secured
<PAGE>

                                                                               9

Party's possession;  to sign the Pledgor's name on any invoice or bill of lading
relating to the Pledgor's Accounts, drafts against account debtors,  assignments
and verifications of the Pledgor's  Accounts and notices to account debtors;  to
send  verifications  of Accounts to any of the  Pledgor's  account  debtors;  to
notify the  postal  authorities  to change  the  address  for  delivery  of mail
addressed to the Pledgor to such address as the Secured Party may designate; and
to do all other acts and things necessary to carry out this Agreement.  All acts
of said attorney or designee are hereby ratified and approved, and said attorney
or designee  shall not be liable for any acts of omission or commission  nor for
any error of judgment or mistake of fact or law.  This power being  coupled with
an  interest  is  irrevocable  as  long  as any  Obligation  remains  unpaid  or
unperformed.

                            (f) After the occurrence of a default hereunder, the
Secured Party may,  without  notice to or consent from the Pledgor,  sue upon or
otherwise  collect,  extend the time of payment of or  compromise  or settle for
cash,  credit or otherwise  upon any terms any of the Pledgor's  Accounts or any
securities,  instruments  or insurance  applicable  thereto  and/or  release the
obligor  thereon.  The Secured  Party is  authorized  and  empowered in its sole
discretion to accept the return of the goods represented by any of the Pledgor's
Accounts without notice to or consent by the Pledgor, all without discharging or
in any way affecting the Pledgor's liability under this Agreement.

                  6. DEFAULT.  If any default in the payment or  performance  of
any  of  the  Obligations  occurs  and is  continuing,  if  any  representation,
warranty,  report or certificate  made in this Agreement,  the Note or otherwise
furnished in writing by the Pledgor to the Secured Party in connection with this
Agreement  or the Note proves to have been false or  misleading  in any material
respect when made or deemed made, if the Pledgor  defaults in the due observance
or performance of any other  covenant,  condition or agreement to be observed or
performed  pursuant to the terms of this Agreement or the Note or if the Pledgor
becomes involved as the debtor in any bankruptcy or insolvency proceedings, then
the Pledgor will be in default under this Agreement.

                  7. RIGHTS AND REMEDIES  UPON  DEFAULT.  (a) Upon the Pledgor's
default under this Agreement, and at any time thereafter, the Secured Party may,
without  presentment,  demand,  protest or notice of any kind,  all of which are
hereby expressly waived, declare any or all of the Obligations to be immediately
due and payable.

                            (b) Upon the  Pledgor's  default,  the Secured Party
shall  also have the  right,  without  notice to or assent by the  Pledgor,  and
without  affecting  the  Obligations,  in the  Pledgor's  name or in the Secured
Party's name or otherwise, to: (i) ask for, demand, collect,  receive,  compound
and give acquittance for the Accounts or any part thereof;  (ii) extend the time
of payment of, compromise or settle for cash, credit or otherwise,  and upon any
terms and conditions,  any of the Accounts;  (iii) endorse the Pledgor's name on
any  checks,  drafts or other  orders or  instruments  for the payment of moneys
payable to the Pledgor  issued in respect of any  Accounts or other  Collateral;
(iv) file any claims and commence,  maintain or discontinue any actions,  suits,
or other  proceedings  deemed by the Secured  Party to be necessary or advisable
for
<PAGE>

                                                                              10

the purpose of collecting or enforcing payment of any Accounts;  (v) execute any
instrument  and do any and all other things  necessary and proper to protect and
preserve and realize upon the Accounts or other  Collateral and the other rights
contemplated by this Agreement; (vi) notify any or all account debtors under any
or all of the Accounts to make payment thereof directly to the Secured Party for
the Pledgor's account and to require the Pledgor promptly to give similar notice
to the account debtors; and/or (vii) require the Pledgor promptly to account for
and  transmit to the Secured  Party in the same form as  received  all  proceeds
(other than physical property) of collection of Accounts received by the Pledgor
and, until so  transmitted to the Secured Party,  to hold such proceeds in trust
for the Secured  Party and not  commingle  them with any other of the  Pledgor's
funds.

                            (c) Upon the  Pledgor's  default,  the Secured Party
shall  also have the right,  without  notice to or assent by the  Secured  Party
(except as provided in clause (i) of this paragraph (c)), and without  affecting
the  Obligations,  in the  Pledgor's  name  or in the  Secured  Party's  name or
otherwise,  to: (i) upon notice to such effect,  require the Pledgor to deliver,
at its expense, any or all of the Collateral and all books of account,  records,
ledgers, reports,  correspondence,  schedules, documents,  statements, lists and
other  writings  relating  to the  Collateral  to the  Secured  Party at a place
designated  by the Secured  Party (and after  delivery  thereof the Pledgor will
have no further claim to or interest in such  Collateral);  (ii) take possession
of any or all of the  Collateral  and all books of  account,  records,  ledgers,
reports,  correspondence,  schedules,  documents,  statements,  lists  and other
writings  relating to the Collateral and, for that purpose,  to enter,  with the
aid and assistance of any person or entity, any premises where the Collateral or
any part  thereof  is or may be placed or  assembled,  and to remove any of such
Collateral and  documents;  (iii) execute any instrument and do all other things
necessary and proper to protect and preserve and realize upon the Collateral and
the other rights contemplated by this Agreement;  and/or (iv) without obligation
to resort to other security,  at any time and from time to time, sell,  re-sell,
assign and deliver all or any of the  Collateral,  in one or more parcels at the
same or different  times,  and all right,  title and interest,  claim and demand
therein and right of redemption  thereof,  at public or private sale,  for cash,
upon  credit or for  future  delivery,  and at such  price or prices and on such
terms as the Secured  Party may  determine,  with the amounts  realized from any
such sale to be applied in the manner provided in Section 9.

                            (d) In addition to any rights and remedies contained
in this  Agreement or now or hereafter  granted under  applicable law and not by
way of limitation of any such rights and remedies,  the Secured Party shall have
all the rights and remedies of a secured party under the Uniform Commercial Code
as enacted in any  applicable  jurisdiction.  The  Secured  Party may take legal
proceedings for the appointment of a receiver or receivers (to which the Secured
Party  shall be  entitled  as a  matter  of  right)  to take  possession  of the
Collateral pending the sale thereof pursuant either to the power of sale granted
by this  Agreement  or to a  judgment,  order  or  decree  made in any  judicial
proceeding for the foreclosure or involving the enforcement of this Agreement.
<PAGE>

                                                                              11

                            (e) The  Pledgor  agrees  that all of the  foregoing
rights and actions specified in paragraphs (a), (b), (c) and (d) of this Section
7 may be executed or effected without demand, advertisement or notice (except as
required  by law or by clause (i) of  paragraph  (c) of this  Section 7), all of
which (to the extent permitted by law) are hereby expressly waived.  The Secured
Party shall not be obligated to do any of the acts authorized in this Agreement,
but if the Secured  Party elects to do any such act, the Secured  Party will not
be  responsible  to the  Pledgor  except  for  the  Secured  Party's  own  gross
negligence or willful misconduct.

                            (f) The  Secured  Party  shall have the right in its
sole discretion to determine which rights, security, liens, guarantees, security
interests  or  remedies  the  Secured  Party  will  retain,   pursue,   release,
subordinate, modify or take any other action with respect to, without in any way
modifying  or  affecting  any  other  of them or any of its  rights  under  this
Agreement.  Any of the Pledgor's  moneys,  deposits,  balances or other property
that may come into the Secured  Party's  possession at any time or in any manner
may in its sole  discretion  be retained by the Secured Party and applied to any
of the Obligations.  Notwithstanding any other rights the Secured Party may have
under applicable law and under this Agreement,  the Pledgor agrees that,  should
it at any time be in default under this Agreement,  the Secured Party shall have
the right to apply (including,  but not limited to, by way of setoff) any of the
Pledgor's  property  held  by  the  Secured  Party  or  any  of  its  affiliates
(including,  but not limited to, deposit account balances) to a reduction of the
Obligations.  The Secured Party shall be deemed to have  exercised such right of
setoff  immediately  at the time of making its decision to do so even though any
charge  for such  setoff  is made or  entered  on the  Secured  Party's  records
subsequent to such time.

                  8. SALE OF COLLATERAL. Upon any sale of any of the Collateral,
whether made under the power of sale given by this Agreement or under  judgment,
order or decree in any judicial  proceeding  for  foreclosure  or involving  the
enforcement  of this  Agreement:  (a) the Secured Party may bid for the property
being sold and, upon  compliance  with the terms of sale,  may hold,  retain and
possess and dispose of such property in its own absolute  right without  further
accountability and may, in paying the purchase price for such property,  deliver
any notes  evidencing the Obligations or claims for interest  thereon in lieu of
cash in  payment  of the  amount  equal to the  unpaid  amount of such  notes or
claims;  (b) the  Secured  Party  may  make  and  deliver  to the  purchaser  or
purchasers a good and sufficient deed, bill of sale and instrument of assignment
and  transfer  of the  property  sold;  (c) the  Secured  Party  is  irrevocably
appointed the Pledgor's true and lawful  attorney-in-fact  in the Pledgor's name
and  stead to make  all  necessary  deeds,  bills  of sale  and  instruments  of
assignment and transfer of the property thus sold and for such other purposes as
are necessary or desirable to effectuate the provisions of this  Agreement,  and
for that purpose the Secured Party may execute and deliver all necessary  deeds,
bills of sale and instruments of assignment and transfer, and may substitute one
or more  persons or entities  with like  power,  and the  Pledgor  ratifies  and
confirms  all  that  the  Pledgor's  said  attorney,   or  such   substitute  or
substitutes,  shall  lawfully  do by  virtue  of  this  appointment,  but  if so
requested by the Secured  Party or by any  purchaser the Pledgor will ratify and
confirm any such sale or transfer by  executing  and  delivering  to the Secured
Party or to such  purchaser  all such  deeds,  bills  of  sale,  instruments  of
assignment  and transfer and releases as may be  designated in any such request;
(d) all of the Pledgor's right,  title,  interest,  claim and demand whatsoever,
either at
<PAGE>

                                                                              12

law or in equity or otherwise, in and to the property so sold shall be divested,
such  sale  shall be a  perpetual  bar  both at law and in  equity  against  the
Pledgor,  its successors and assigns and against any and all persons or entities
claiming or who may claim the property sold or any part thereof from, through or
under the Pledgor or its  successors or assigns;  (e) the Pledgor will terminate
and cease  forthwith  all use of the property so sold;  (f) the Secured  Party's
receipt  or a receipt of the  officer  making  such sale  shall be a  sufficient
discharge to the purchaser or  purchasers  at such sale for the purchase  money,
and such purchaser or purchasers, and such purchaser's or purchasers' assigns or
personal  representatives,  shall not,  after  paying  such  purchase  money and
receiving such receipt,  be obligated to see to the application of such purchase
money  or  be  in  any  way   answerable   for  any  loss,   misapplication   or
non-application  thereof; and (g) to the extent that the Pledgor may lawfully do
so, the Pledgor agrees that it will not at any time insist upon or plead,  or in
any  manner   whatsoever  claim  or  take  the  benefit  or  advantage  of,  any
appraisement, valuation, stay, extension or redemption law or any law permitting
it to direct  the order in which the  Collateral  or any part  thereof  shall be
sold,  now or at any time  hereafter  in  force,  that  may  delay,  prevent  or
otherwise  affect  the  performance  or  enforcement  of this  Agreement  or the
Obligations,  and the Pledgor  expressly  waives all benefit or advantage of any
such law and  agrees  that the  Pledgor  will not  hinder,  delay or impede  the
execution  of any  power  granted  or  delegated  to the  Secured  Party in this
Agreement,  but will  suffer  and permit  the  execution  of every such power as
though no such law were in force.  In the event of any sale of  Collateral,  the
Secured  Party  shall,  at least ten days  before  such sale,  give the  Pledgor
written notice of the Secured Party's intention to sell.

                  9. APPLICATION OF MONEYS. Except as otherwise provided in this
Agreement,  all  moneys  the  Secured  Party  receives  in  accordance  with the
provisions of this Agreement shall be applied in the following manner: FIRST, to
the  payment  of  all  costs  and  expenses  incurred  in  connection  with  the
administration and enforcement of, or the preservation of any rights under, this
Agreement or the Note and the realization on the Collateral (including,  but not
limited to, the reasonable fees and disbursements of the Secured Party's counsel
and agents);  and SECOND,  to the payment of all other Obligations in such order
as the Secured Party may choose.  Any surplus shall be accounted for as required
by law.

                  10. WAIVERS, AMENDMENTS,  REQUIRED NOTICES. The Pledgor waives
notice  of  acceptance  of  this  Agreement,   notice  of  nonpayment,   demand,
presentment, protest and notice thereof with respect to any and all instruments,
notice of Collateral received or delivered or any other action taken in reliance
on this Agreement and all other demands and notices of any  description,  except
such as are expressly  provided for in this Agreement or which by applicable law
may not be waived  on the date of this  Agreement.  No  failure  on the  Secured
Party's part to exercise, and no delay in exercising, any right, power or remedy
under this Agreement  shall operate as a waiver thereof or of any default by the
Pledgor under this  Agreement,  nor shall any single or partial  exercise by the
Secured Party of any right,  power or remedy under this  Agreement  preclude any
other or future  exercise  thereof or the exercise of any other right,  power or
remedy.  No amendment or  modification  of this  Agreement nor any waiver of any
provision of this Agreement or consent to any departure by the Pledgor therefrom
shall be effective  unless it is in writing and signed by the Secured  Party and
then any such waiver or consent shall be
<PAGE>

                                                                              13

effective only in the specific  instance and for the purpose for which given. No
notice to or demand on the Pledgor shall, of itself,  entitle the Pledgor to any
other or further notice or demand in similar or other  circumstances.  Except as
otherwise  provided in this  Agreement,  if notice,  whether before or after any
default by the Pledgor under this Agreement has occurred,  is required by law to
be given by the Secured Party to the Pledgor, the Pledgor agrees that five days'
notice given in the manner provided in Section 12 will be reasonable notice.

                  11.  CUMULATIVE  RIGHTS AND REMEDIES.  This  Agreement and the
security  interest  granted  by this  Agreement  are in  addition  to and not in
substitution  for any  other  security  interest  now or  hereafter  held by the
Secured  Party,  and this  Agreement  is, and is  intended  to be, a  continuing
agreement  and shall not operate as a merger of any contract debt or suspend the
fulfillment  of or affect the  Secured  Party's  rights,  remedies  or powers in
respect of any  obligation  or other  security held by the Secured Party for the
fulfillment  thereof. The remedies provided in this Agreement are cumulative and
are not exclusive of any remedy provided by law.

                  12.  NOTICES.  Any notice given under this Agreement  shall be
given in writing (including  teletransmissions)  and mailed,  teletransmitted or
delivered  by the party  giving such notice to the other party at the address or
telefax number, if to the Secured Party, indicated beneath its signature line of
this  Agreement or, if to the Pledgor,  indicated  beneath its signature line of
this  Agreement  or, as to each such  party,  at such  other  address or telefax
number as may be designated by such party by notice  complying with the terms of
this  Section 12. All notices  under this  Agreement  shall be deemed given when
deposited in the mails or delivered or teletransmitted, addressed as provided in
this Section 12.

                  13. COSTS AND EXPENSES.  The Pledgor  agrees to pay,  promptly
after demand, whether or not any default by the Pledgor under this Agreement has
occurred  and whether or not any  proceeding  to enforce  this  Agreement or the
Obligations has been commenced,  all of the Secured Party's reasonable costs and
expenses,  including (but not limited to) all reasonable fees and  disbursements
of  the  Secured  Party's  legal  counsel,   incurred  in  connection  with  the
enforcement of this Agreement,  the security interest granted by this Agreement,
the  receipt  of  proceeds  of  Collateral  under this  Agreement,  the care and
preservation of the Collateral or the preparation of any requested amendments to
this  Agreement,  modifications  of this  Agreement  or waivers or  consents  in
connection  with this  Agreement.  Any such  expenses so incurred by the Secured
Party shall be specified to the Pledgor,  shall be part of the  Obligations  and
shall be secured by the Collateral.

                  If any tax,  assessment,  charge or claim is  claimed  or made
with respect to the Collateral  that in the Secured Party's opinion may possibly
create a valid obligation  having priority over the security interest granted to
the  Secured  Party  by this  Agreement,  the  Secured  Party  may,  in its sole
discretion and without notice, pay such taxes,  assessments,  charges or claims,
and the amount  thereof shall be specified to the Pledgor,  shall be part of the
Obligations and shall be secured by the Collateral.

<PAGE>

                                                                              14

                  Upon the Pledgor's  failure to perform any of its duties under
this  Agreement,  the Secured Party may, but shall not be obligated to,  perform
any or all of such  duties,  and the Pledgor  will pay to the  Secured  Party on
written demand an amount equal to the cash or out-of-pocket  expense incurred by
the Secured Party in so doing plus  interest  thereon from the date such expense
is incurred  until it is paid at a rate per annum  equal to the highest  rate of
interest payable by the Pledgor from time to time on the Obligations.

                  14.  SUCCESSORS  AND  ASSIGNS,  GOVERNING  LAW,  SURVIVAL  AND
SEVERABILITY. This Agreement, shall inure to the benefit of and shall be binding
upon each of the  parties  and  respective  successors  and  assigns;  PROVIDED,
HOWEVER, the Pledgor shall not assign its rights or obligations hereunder or any
interest  herein and any  assignment  in violation  hereof  shall be void.  This
Agreement  shall be governed by and construed in accordance with the laws of the
State of New York. All  covenants,  agreements,  representations  and warranties
made by the Pledgor in this  Agreement  shall survive the execution and delivery
of this  Agreement  and shall  continue  in full force and effect so long as any
Obligation  remains  unpaid or  unperformed.  If any part of this  Agreement  is
contrary  to,   prohibited  by  or  deemed  invalid  under   applicable  law  or
regulations,  such  provision  shall be  inapplicable  and deemed omitted to the
extent so contrary,  prohibited or invalid,  but the remainder of this Agreement
shall not be  invalidated  and shall be given  full  force and  effect so far as
possible,  and any such prohibition or invalidity in any jurisdiction  shall not
invalidate such provision or render it unenforceable in any other jurisdiction.

                  15. NO ASSUMPTIONS OF DUTIES;  LIMITATION ON LIABILITIES.  (a)
Nothing in this Agreement  shall be construed to constitute the Secured Party as
the Pledgor's agent for any purpose  whatsoever.  The Secured Party does not, by
this  Agreement or any  assignment  or  otherwise,  assume any of the  Pledgor's
obligations under any Collateral,  or any contract or agreement  relating to any
Collateral,  and the  Secured  Party  shall  not be  responsible  in any way for
performance of any of the terms and conditions thereof.

                            (b)  Neither  the  Secured  Party  nor  any  of  its
directors, officers, agents or employees shall be liable to any person or entity
for any action taken or omitted by it or any of its directors,  officers, agents
or  employees   under  this  Agreement  or  with  respect  to  any   transaction
contemplated  by  this  Agreement,  except  for  the  Secured  Party's  or  such
director's,  officer's,  agent's or employee's  own gross  negligence or willful
misconduct.  Without limiting the generality of the foregoing, the Secured Party
shall not be  responsible  or liable for any damage,  loss or destruction of any
part of the  Collateral,  wherever it may be located and regardless of the cause
thereof,  unless  due to its own gross  negligence  or willful  misconduct.  The
Secured Party shall not,  under any  circumstances  or in any event  whatsoever,
have any liability  for any error or omission or delay of any kind  occurring in
the  settlement,  collection  or payment  of any  Collateral  or any  instrument
received in payment thereof or for any damage resulting  therefrom.  The Pledgor
assumes all  responsibility and liability arising from the use of the Collateral
and will pay,  and  indemnify  and holds the  Secured  Party  harmless  from and
against,  any and all  liabilities,  obligations,  losses,  damages,  penalties,
actions,  judgments,  suits,  costs,  expenses or  disbursements  of any kind or
nature whatsoever with respect to its right, title and interest in, to and under
the Collateral.
<PAGE>

                                                                              15

                  16.  AMENDMENTS,  MODIFICATIONS  AND WAIVERS  WITH  RESPECT TO
OBLIGATIONS.  The Pledgor  hereby  consents  that,  without the necessity of any
reservation  of rights against it and without notice to or further assent by it,
the  liability  of any  other  person  or  entity  on or  for  any  part  of the
Obligations,  or any collateral security or guaranty therefor or right of offset
with respect  thereto,  may from time to time,  in whole or in part, be renewed,
extended, amended, modified,  accelerated,  compromised,  waived, surrendered or
released  and any other  collateral  security  document  or guaranty or document
delivered  in  connection  therewith  to which the Pledgor is not a party may be
amended, modified, supplemented, restated or terminated, in whole or in part, as
the  Secured  Party may deem  advisable  from time to time,  and any  collateral
security  or  guaranty  or right of offset at any time held for  payment  of the
Obligations  may be sold,  waived,  surrendered  or  released,  all  without the
necessity of any reservation of rights against the Pledgor and without notice to
or further  assent by the Pledgor,  and the Pledgor will remain bound  hereunder
notwithstanding  any  such  renewal,  extension,   modification,   acceleration,
compromise,  amendment,  supplement,  restatement,  termination, sale, exchange,
waiver,  surrender or release. The Pledgor waives any and all notice of or proof
of reliance by the Secured Party on this Agreement, and the Obligations, and any
of them,  shall  conclusively  be  deemed to have been  created,  contracted  or
incurred in reliance upon this Agreement,  and all dealings  between the parties
shall  likewise  be  conclusively  presumed to have been had or  consummated  in
reliance on this Agreement.  The Pledgor waives (to the fullest extent permitted
by  applicable  law)  diligence,  presentment,  protest,  demand for payment and
notice of default or nonpayment to with respect to the Obligations.

                  17. NO  SUBROGATION.  Notwithstanding  any payment or payments
made by the Pledgor  hereunder,  the receipt of any amounts by the Secured Party
with respect to the  Collateral  or any setoff or  application  of the Pledgor's
funds by the Secured  Party,  the Pledgor shall not be entitled to be subrogated
to any of the Secured Party's rights against any collateral security or guaranty
or right of offset held by the Secured Party for the payment of the Obligations,
until this Agreement has terminated in accordance with Section 20 hereof.

                  18.  HEADINGS;   CONSTRUCTION.   The  headings  used  in  this
Agreement are for  convenience  only and are not to be considered a part of this
Agreement  and do not in any way limit or amplify  the terms and  provisions  of
this Agreement.  When the context so requires, the singular number shall be read
as if the plural were expressed and the  provisions of this  Agreement  shall be
read with all grammatical  changes necessary dependent upon the person or entity
referred to being a male, female, firm or corporation.

                  19. SUBMISSION TO JURISDICTION.  The Pledgor expressly submits
to the jurisdiction of all federal and state courts located in the County of New
York, State of New York, and consents that any order, process or other paper may
be served upon it within or without such court's jurisdiction by registered mail
or by personal service at the address  specified  pursuant to Section 12 hereof,
PROVIDED a reasonable  time for appearance is allowed.  The Pledgor  irrevocably
waives any objection 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 brought
in any such court and further  irrevocably  waives any claim that any such suit,
action  or  proceeding  brought  in  any  such
<PAGE>

                                                                              16

court has been  brought in an  inconvenient  forum.  Nothing  contained  in this
Agreement  shall affect the Secured  Party's right to serve legal process in any
other manner  permitted by law or to bring any action or proceeding  against the
Pledgor or its property in the courts of other jurisdictions.

                  20.      DEFEASANCE.  Upon the  indefeasible  satisfaction in
full of the  Obligations,  this Agreement  shall  terminate and be of no further
force  and  effect.   Notwithstanding  the  preceding  sentence,  the  indemnity
agreement  contained in Section  15(b) hereof shall survive the  termination  of
this Agreement.

                  21.      PRIOR UNDERSTANDINGS.  This Agreement supersedes all
prior  understandings  and  agreements,  whether  written or oral,  between  the
parties relating to the transactions provided for herein.

                  22.      COUNTERPARTS.  This Agreement may be executed in any
number of counterparts and by the parties hereto on separate counterparts,  each
of which,  when so executed and  delivered,  shall be an original,  but all such
counterparts shall together constitute one and the same instrument. Counterparts
of this Agreement may be executed by facsimile transmission.

                  23. WAIVER OF JURY TRIAL.  THE PLEDGOR AND, BY ITS  ACCEPTANCE
OF THIS  AGREEMENT,  THE SECURED PARTY EACH HEREBY  KNOWINGLY,  VOLUNTARILY  AND
INTENTIONALLY  WAIVE ANY RIGHT THE  PLEDGOR OR THE  SECURED  PARTY MAY HAVE TO A
TRIAL BY JURY OF ANY DISPUTE  ARISING  UNDER OR RELATING TO THIS  AGREEMENT  AND
AGREE THAT ANY SUCH  DISPUTE  SHALL BE TRIED  BEFORE A JUDGE  SITTING  WITHOUT A
JURY.

                                     FIND/SVP, INC.

                                     By
                                        ----------------------------------------
                                          Name:
                                          Title:
                                          U.S. Tax ID No.:
                                                           ---------------------

                                          Jurisdiction of incorporation:
                                                                        --------

                                      Address for notices:

                                      625 Avenue of the Americas
                                      New York, New York  10011
                                      Attention:
                                      Telephone No.:
                                      Telefax No.:  (212) 255-7632

ACCEPTED:
<PAGE>

                                                                              17

THE CHASE MANHATTAN BANK

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

Address for notices:

1411 Broadway
New York, New York  10018
Attention:  Stephen Szanto
Telephone No.:  (212) 391-7691
Telefax No.:  (212) 391-7117

<PAGE>

                                                                      EXHIBIT A
                                                                      ---------

V3

                               UCC FILING OFFICES
                               ------------------

                        1.       Secretary of State of New York
                        2.       Clerk of the County of New York

<PAGE>

                                                                       EXHIBIT B

ADDRESS OF CHIEF EXECUTIVE OFFICE
AND PRINCIPAL OFFICE (INCLUDE COUNTY, IF APPLICABLE)
----------------------------------------------------

LOCATION OF RECORDS PERTAINING
TO ACCOUNTS (INCLUDE COUNTY, IF APPLICABLE)
-------------------------------------------

LOCATION(S) OF COLLATERAL (INCLUDE COUNTY, IF APPLICABLE)
---------------------------------------------------------

OTHER LEGAL NAME AND/OR TRADE NAMES
-----------------------------------

<PAGE>

                                                                       EXHIBIT B
                                                                       ---------

                      SCHEDULE A TO UCC FINANCING STATEMENT
                      -------------------------------------

DEBTOR:                FIND/SVP, INC.
                       625 Avenue of the Americas
                       New York, New York  10011

SECURED PARTY:         THE CHASE MANHATTAN BANK
                       4 MetroTech Center
                       Brooklyn, New York  11245

                  This FINANCING  STATEMENT  covers the following types of items
of property:

All of Debtor's  right,  title and  interest  (whether now existing or hereafter
created or acquired) in:

                  (a) its accounts  receivable and other personal  property that
constitutes  accounts as such term is defined in the Uniform  Commercial Code of
the State of New York (the "UCC" );

                  (b)  its  inventory,   including   goods,   merchandise,   raw
materials, goods in process, finished goods and other tangible personal property
that constitutes inventory as such term is defined in the UCC;

                  (c) its equipment,  including all  substitutes,  replacements,
accessions and additions thereto, all tools, parts,  accessories and attachments
used in  connection  therewith  and all other  tangible  personal  property that
constitutes equipment as such term is defined in the UCC;

                 (d) its other tangible personal property that constitutes goods
as such term is defined in the UCC;

                 (e) its  intellectual  property,  goodwill,  trademarks,  trade
names, service marks, copyrights, permits and licenses;

                  (f) all contracts,  contract  rights,  bills,  notes,  drafts,
acceptances,  instruments,  documents,  chattel paper, chooses in action and all
other intangible  personal property that constitutes general intangibles as such
term is defined in the UCC;

                 (g) all  securities,  securities  entitlements  and  investment
property;

                 (h)  all  books  and  records  (including  but not  limited  to
computer  programs  and  tapes  and  related  software)  relating  to any of the
foregoing; and

                 (i) all cash and noncash  proceeds  and  products of any of the
foregoing.

<PAGE>

                                                                      EXHIBIT AA
                                                                      ----------
                                                                        Part III

                             SUBORDINATION AGREEMENT

     AGREEMENT  dated  December  30,  1999  among  FIND/SVP,  Inc.,  a New  York
corporation with an office located at 625 Avenue of the Americas,  New York, New
York  10011-2002 (the  "Borrower"),  SVP, S.A., a societe anonyme with an office
located  at  70  rue  des  Rosiers  Saint-Ouen,   Cedex,  France,  F-93585  (the
"Subordinated Creditor") and THE CHASE MANHATTAN BANK, with an office located at
270 Park Avenue, New York, New York 10017 (the "Lender").

                                    RECITALS

     A.   The  Borrower,  together  with FIND/SVP  Published  Products,  Inc., a
Delaware  corporation,   and  FIND/SVP  Internet  Services,   Inc.,  a  Delaware
corporation (collectively, the "Subsidiaries"),  is indebted to the Subordinated
Creditor (i) in the original  principal amount of up to $475,000 as evidenced by
the Series A Senior Subordinated Note dated November 26, 1996 (the "Subordinated
A Note") made by the Borrower and the Subsidiaries to the Subordinated Creditor;
(ii) the Stock Subscription Warrant dated November 26, 1996 (the "Subordinated A
Warrant") from the Borrower to the Subordinated Creditor;  (iii) in the original
principal  amount of $475,000 as evidenced  by the Series B Senior  Subordinated
Note dated  August  25,  1997 made by the  Borrower  and the  Subsidiaries  (the
"Subordinated B Note"); and (iv) the Stock Subscription Warrant dated August 25,
1997  from the  Borrower  to the  Subordinated  Creditor  (the  "Subordinated  B
Warrant") (collectively, the "Subordinated Creditor's Debt") (the Subordinated A
Note, the  Subordinated B Note, the  Subordinated A Warrant,  the Subordinated B
Warrant  and  all  other   documents   executed  in  connection   therewith  are
collectively referred to as the "Subordinated Creditor's Loan Documents").

     B.   The  Borrower  is  indebted  to the Lender in the  original  principal
amount of up to $1,000,000  (the "Lender  Debt") as evidenced by the  $1,000,000
Senior Grid  Promissory  Note dated  December  30, 1999 from the Borrower to the
Lender (the "Lender Note").

     C.   As  security  for the  payment of the  Borrower's  obligations  to the
Lender,  pursuant to a Security Agreement dated December 30, 1999 (the "Security
Agreement"),  the Borrower  granted a security  interest in the  Collateral  (as
therein  defined)  (the  Security  Agreement,  the  Lender  Note  and all  other
documents executed in connection  therewith are collectively  referred to as the
"Lender's Loan Documents").

     D.   In  consideration of and as an inducement for the Lender to consent to
the continued  extension of the  Subordinated  Creditor's Debt, the Subordinated
Creditor and the Borrower  agree to the terms and  conditions  contained in this
Agreement.

                                    AGREEMENT

     In consideration of the Recitals,  which are incorporated by reference, the
terms and  conditions  contained in this  Agreement  and other good and valuable
consideration, the receipt
<PAGE>

                                                                               2

and  sufficiency  of  which is  acknowledged, the parties, intending to be bound
legally, agree as follows:

     1.   DEFINITIONS.

          (a)  "Junior Debt" means all indebtedness, liabilities and obligations
whatsoever,  of every  kind  and  description,  whenever  and  however  arising,
absolute  or  contingent,  due  or to  become  due,  from  the  Borrower  to the
Subordinated Creditor pursuant to the Subordinated Creditor's Debt.

          (b)  "Senior Debt" means all indebtedness, liabilities and obligations
whatsoever,  of every  kind  and  description,  whenever  and  however  arising,
absolute or contingent,  due or to become due, now existing or hereafter arising
from, or in any way connected  with, any direct or indirect  indebtedness of the
Borrower to the Lender, including, but not limited to, the Lender Debt, together
with all costs,  expenses and attorneys'  fees incurred in any action to collect
any  indebtedness  to the  Lender  including  the  Lender  Debt or to enforce or
foreclose  any  mortgage,  security  agreement or other  agreement  securing any
indebtedness to the Lender including the Lender Debt.

     2.   SUBORDINATION.  The Subordinated  Creditor and the Borrower agree that
the Junior Debt is in all respects fully  subordinated  to the full and complete
payment  and  satisfaction  in full of the Senior  Debt in the manner and to the
extent set forth in Section 4 below and that,  except as expressly  permitted in
Section 4 below, no payments shall be made on the Junior Debt.

     3.   WARRANTIES  AND  REPRESENTATION.  The  Borrower  and the  Subordinated
Creditor each represent and warrant that:

          (a)  The total aggregate principal amount of the Junior Debt as of the
date hereof is $950,000;

          (b)  The Junior Debt is evidenced by the Subordinated Loan Documents;

          (c)  The Subordinated Creditor has not assigned the Junior Debt or any
interest therein; and

          (d)  The  Borrower and the  Subsidiaries  have not and will not grant,
directly or  indirectly,  to the  Subordinated  Creditor  any  security  for the
repayment of the Junior Debt.

     4.   COVENANTS.

          (a)  Except  as  restricted  below,  the  Borrower  may  pay  and  the
Subordinated  Creditor  may collect:  (i) all  regularly  scheduled  payments of
interest under the  Subordinated  Creditor's  Loan  Documents;  and (ii) (A) any
non-accelerated  prepayment or regularly  scheduled  payment of principal of the
Junior Debt (a "Principal  Payment") or (B) any payment under the Subordinated A
Warrant or the  Subordinated  B Warrant (a  "Warrant  Payment"),  provided  such
Principal  Payment or Warrant  Payment  does not cause or is not a  contributing
factor in causing a
<PAGE>

                                                                               3

default under any covenant contained in the Lender's Loan Documents or any other
documents evidencing the Senior Debt (a "Covenant Default"). In the event that a
Principal  Payment  or Warrant  Payment  causes or is a  contributing  factor in
causing a Covenant Default,  upon the receipt of a Notice of Non-Payment Default
by the Lender to the Subordinated  Creditor,  such Principal  Payment or Warrant
Payment shall be held in trust for the benefit of the Lender and be  immediately
delivered to the Lender for  application  to the Senior Debt in accordance  with
Section 5 below.

          (b)  (i)  In the  event of any  insolvency,  bankruptcy,  liquidation,
reorganization or other similar proceedings,  or any receivership proceedings in
connection therewith relative to any of the Borrower,  the Subsidiaries or their
respective  creditors  or  property  and in the  event  of any  proceedings  for
voluntary or involuntary liquidation,  dissolution or other winding up of any of
the  Borrower  or the  Subsidiaries,  whether  or not  involving  insolvency  or
bankruptcy proceedings, then all Senior Debt shall first be paid in full, before
the payment on account of principal or interest is made upon any Junior Debt.

               (ii) In any of the  proceedings  referred to in paragraph  (b)(i)
above,  any payment or distribution  of any kind or character,  whether in cash,
property, stock or obligations which may be payable or deliverable in respect of
the Junior Debt shall be paid or delivered directly to the holders of the Senior
Debt for application in payment thereof,  unless and until all Senior Debt shall
have been paid in full.

          (c)  In the event  (i) the  Borrower  shall  fail to make when due any
payment of principal, interest or any other sums on the Senior Debt, or (ii) the
Lender shall have  accelerated  the Senior Debt (the events set forth in clauses
(i) and (ii)  hereafter  referred  to as a  "Payment  Default"),  then  upon the
occurrence  of  the  sending  of  a  written  notice  from  the  Lender  to  the
Subordinated  Creditor  of such  Payment  Default  (with no  obligation  to send
written notice to any successor, assignee,  transferee,  investor or participant
of the Junior Debt) (the "Notice of Payment Default"): (i) effective on the date
of the Notice of Payment  Default,  no payment  shall be made by the Borrower or
any other  co-maker or obligor of the Junior Debt to the  Subordinated  Creditor
and the  Subordinated  Creditor  shall not receive any payments until the Lender
shall have been paid in full or until the Lender shall have sent written  notice
to the  Subordinated  Creditor  indicating that the Lender and the Borrower have
settled or resolved any outstanding  disputes and/or defaults under the Lender's
Loan Documents or any other documents evidencing the Senior Debt; and (ii) while
such  Payment  Default is in effect,  any payment  received by the  Subordinated
Creditor shall be held in trust for the benefit of the Lender and be immediately
delivered to the Lender for  application  to the Senior Debt in accordance  with
Section 5 below.

          (d)  In the event of any default (other than a Payment Default) by the
Borrower of the Lender's Loan  Documents or any other  documents  evidencing the
Senior  Debt  giving  the  Lender the right to  accelerate  the  Senior  Debt (a
"Non-Payment  Default") and the Lender has not accelerated the Senior Debt, then
upon the  occurrence  of the  sending of a notice  specifying  the list of known
Non-Payment  Default(s)  by the  Lender  to the  Subordinated  Creditor  of such
Non-Payment  Default(s) (a "Notice of Non-Payment  Default") (with no obligation
to send  written  notice to any  successor,  assignee,  transferee,  investor or
participant  of the Junior  Debt):  (i)  effective  on the date of the Notice of
Non-Payment  Default,  no  payment  shall be made by the  Borrower  or any other
co-maker  or obligor of the Junior  Debt to the  Subordinated  Creditor  and the
Subordinated  Creditor  shall not receive any payments until the earlier of: (A)
the date that the Lender shall have sent written

<PAGE>

                                                                               4

notice to the Subordinated  Creditor indicating that the Lender and the Borrower
have settled or resolved any  outstanding  disputes  and/or  defaults  under the
Lender's Loan  Documents or any other  documents  evidencing the Senior Debt; or
(B) the date one  hundred  eighty  (180) days  after the  Notice of  Non-Payment
Default was sent by the Lender to the Subordinated  Creditor (the "Payment Block
Period").  Any payment received by the Subordinated  Creditor during the Payment
Block  Period  shall be held in  trust  for the  benefit  of the  Lender  and be
immediately  delivered  to the Lender  for  application  to the  Senior  Debt in
accordance with Section 5 below. The Lender and the Subordinated  Creditor agree
that the Lender  shall  have the right to impose  any  number of  Payment  Block
Periods  pursuant to this  Subsection (d) provided  that:  (i) the  Subordinated
Creditor  shall not be blocked from receiving any payments under the Junior Debt
in excess of one hundred eighty (180) days in any three hundred sixty-five (365)
day  period;  and (ii) in the event any  Payment  Block  Period  was  terminated
pursuant to Clause (A) of the preceding sentence, then (x) any notice of default
for the same covenant  violation in a three hundred  sixty-five (365) day period
shall be given in good  faith and not solely for the  purpose of  instituting  a
payment block against the Subordinated Creditor;  and/or (y) the Lender will not
institute a Payment Block Period for any Non-Payment  Default which was known to
the Lender prior to  instituting  any previous  Payment  Block Period during the
preceding three hundred  sixty-five  (365) day period and not listed in a Notice
of Non-Payment  Default during such three hundred  sixty-five  (365) day period.
The foregoing shall not prevent the Lender from  accelerating any default by the
Borrower or declaring a Payment Default pursuant to Subsection (c) above.

          (e)  The Lender agrees that after it sends a Notice of Payment Default
pursuant to Subsection (c) above the Lender shall diligently  pursue  collection
of the Senior  Debt.  Nothing  set forth  herein  shall  prohibit or prevent the
Lender from  negotiating  or settling any defaults or disputes with the Borrower
under the Lender's Loan Documents or any other  documents  evidencing the Senior
Debt.

          (f)  After a period of one hundred  eighty (180) days from the date of
the Notice of Payment Default pursuant to Subsection (c) above, the Subordinated
Creditor may commence any action or proceeding against the Borrower or any other
co-maker or obligor under the Subordinated  Creditor Loan Documents to demand or
collect the Junior Debt.  Notwithstanding the foregoing, any receipt of funds or
any payment  collected,  garnished  or  otherwise  received by the  Subordinated
Creditor shall be held in trust for the benefit of the Lender and be immediately
delivered to the Lender for  application  to the Senior Debt in accordance  with
Section 5 below.

          (g)  The  Subordinated  Creditor agrees to send to the Lender a notice
indicating  its intention to declare a default and  accelerate  its rights under
the  Subordinated  Creditor's  Loan Documents  prior to any  acceleration of the
Junior Debt.
<PAGE>

                                                                               5

          (h)  Neither the Borrower nor the Subordinated  Creditor shall take or
permit any action  prejudicial  to or  inconsistent  with the Lender's  priority
position over the Subordinated Creditor that is created by this Agreement.

     5.   TURNOVER  OF  PROHIBITED  TRANSFER.  If any  payment on account of the
Junior Debt is received by the  Subordinated  Creditor,  such  payment  shall be
delivered immediately by the Subordinated Creditor to the Lender for application
to the  Senior  Debt,  in the  form  received  except  for the  addition  of any
endorsement  or assignment  necessary to effect a transfer of all rights therein
to the  Lender.  The Lender is  irrevocably  authorized  to supply any  required
endorsement or assignment which may have been omitted.  Until so delivered,  any
such payment shall be held by the Subordinated  Creditor in trust for the Lender
and shall not be  commingled  with other funds or  property of the  Subordinated
Creditor.

     6.   WAIVERS.  The Borrower and the  Subordinated  Creditor  each waive any
defense  based on the  adequacy  of a remedy at law which might be asserted as a
bar to the  remedy of  specific  performance  of this  Agreement  in any  action
brought  therefor by the Lender.  To the fullest  extent  permitted  by law, the
Borrower and the  Subordinated  Creditor each further waive the  following:  (i)
presentment,  demand,  protest,  notice of protest, notice of default, notice of
dishonor,  notice of payment or  nonpayment  and any and all other  notices  and
demands of any kind by the Lender in connection with all instruments  evidencing
all or any  portion of the Senior Debt or the Junior Debt to which the Lender or
Subordinated  Creditor  may be a party;  (ii) notice of the  acceptance  of this
Agreement by the Lender;  (iii) notice of any loans made,  extensions granted or
other action taken in reliance hereon by the Lender;  and (iv) all other demands
and notices in every kind by the Lender in connection with this  Agreement,  the
Senior Debt or the Junior Debt. The Subordinated Creditor consents to, from time
to time, in whole or in part,  any release,  renewal,  modification,  amendment,
settlement,  extension, compromise or postponement of the time of payment of the
Senior Debt, to any substitution, exchange or release of collateral therefor and
to the  addition  or release  of any  person  primarily  or  secondarily  liable
thereon.

     7.   LEGEND.  The Subordinated  Creditor and the Borrower agree on the date
hereof to have  stamped or endorsed on each of the  Subordinated  Creditor  Loan
Documents  and any  other  documents  evidencing  the  Junior  Debt a legend  or
statement  in form  satisfactory  to the  Lender  indicating  that  each of such
documents are expressly subject to the terms and conditions of this Agreement.

     8.   NOTICES.   All  notices,   requests,   consents,   demands  and  other
communications  hereunder  shall be in writing and shall be mailed by registered
or  certified  first  class mail or  delivered  by an  overnight  courier to the
respective parties to this Agreement as follows:

            If to the Borrower:              FIND/SVP, INC.
                                             625 Avenue of the Americas
                                             New York, New York  10011-2002
                                             Attention:
<PAGE>

                                                                               6

            with a copy to:                  Breslow & Walker
                                             767 Third Avenue
                                             New York, New York  10011
                                             Attn:  Howard S. Breslow, Esq.

            If to the Lender:                The Chase Manhattan Bank
                                             1411 Broadway
                                             New York, New York 10018
                                             Attention: Stephen Szanto

            with a copy to:                  Hughes Hubbard & Reed LLP
                                             One Battery Park Plaza, 12th Floor
                                             New York, New York 10004
                                             Attention:  Beverly G. Miller, Esq.

            If to the Subordinated
            Creditor:                        SVP, S.A.
                                             70 rue des Rosiers
                                             Saint-Ouen, Cedex
                                             France, F93585

            with a copy to:                  Jean Louis Bodmer
                                             70 rue des Rosiers
                                             Saint-Ouen, Cedex
                                             France, F93585

     9.   INDULGENCES NOT WAIVERS. Neither the failure nor any delay on the part
of the Lender to exercise any right,  remedy, power or privilege hereunder shall
operate as a waiver thereof or give rise to an estoppel,  nor be construed as an
agreement to modify the terms of this Agreement, nor shall any single or partial
exercise of any right, remedy, power or privilege with respect to any occurrence
be construed as a waiver of such right,  remedy, power or privilege with respect
to any  other  occurrence.  No waiver by a party  hereunder  shall be  effective
unless it is in writing  and signed by the party  making such  waiver,  and then
only to the extent specifically stated in such writing.

     10.  DURATION AND TERMINATION. This Agreement shall constitute a continuing
agreement of subordination and shall remain in effect so long as the Borrower is
in any way indebted, liable or obligated to the Lender.

     11.  ENTIRE AGREEMENT.  This Agreement constitutes and expresses the entire
understanding  between the parties  hereto  with  respect to the subject  matter
hereof,   and   supersedes   all  prior  and   contemporaneous   agreements  and
understandings,  inducements or conditions,  whether express or implied, oral or
written  including,  but not limited to, anything  contained in the Subordinated
Creditor's  Loan  Documents  to the  contrary.  Neither this  Agreement  nor any
portion or provision hereof may be changed, waived or amended orally or in
<PAGE>

                                                                               7

any manner  other than by an  agreement  in writing  signed by the  Lender,  the
Borrower and the Subordinated Creditor.

     12.  SUCCESSORS AND ASSIGNS.  This Agreement  shall inure to the benefit of
the Lender, its successors and assigns,  and shall be binding upon the Borrower,
its successors and assigns,  and the Subordinated  Creditor,  its successors and
assignees.

     13.  GOVERNING  LAW. The validity,  construction  and  enforcement  of this
Agreement shall be governed by the laws of the State of New York and the parties
consent  irrevocably  to the  jurisdiction  and venue of the  federal  and state
courts located in New York City, New York in resolving any dispute  arising from
this  Agreement.  The Borrower and the  Subordinated  Creditor  hereby waive any
objection  which it or they have or may have to the  laying of venue of any such
action or suit arising out of this  Agreement in such courts and further  waives
any claim  that any such  suit or action  has been  brought  in an  inconvenient
forum.

     14. JURY TRIAL  WAIVER.  Each of the parties  hereto waives (to the fullest
extent  permitted by applicable law) any right to a trial by jury of any dispute
arising from this Agreement.

     15.  SEVERABILITY.  The provisions of this Agreement are independent of and
separable from each other. If any provision  hereof shall for any reason be held
invalid or  unenforceable,  it is the intent of the parties that such invalidity
or unenforceability shall not effect the validity or enforceability of any other
provision hereof,  and that this Agreement shall be construed as if such invalid
or unenforceable provision had never been contained herein.

     IN WITNESS  WHEREOF,  the parties have executed this  Agreement on December
30, 1999.

                                 FIND/SVP, Inc.

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

                                 SVP, S.A.

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

<PAGE>

                                                                               8

                                 THE CHASE MANHATTAN BANK

                                 By
                                   ---------------------------------------
                                    Name:
                                    Title:
<PAGE>

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

         On  this  the  ____  day  of  _______________,  1999,  before  me,  the
undersigned  officer,  personally appeared  _________________,  who acknowledged
himself/herself  to be the  ____________ of FIND/SVP,  Inc., a corporation,  and
that he/she, as such officer,  being authorized so to do, executed the foregoing
instrument for the purposes  therein  contained and  acknowledged the same to be
his/her free act and deed individually and as such officer, and the free act and
deed of the corporation.

         IN WITNESS WHEREOF, I hereunto set my hand.

                                              ----------------------------------
                                              Notary Public

My Commission Expires:
<PAGE>

STATE OF ___________                )
                                    )  ss.:  _____________
COUNTY OF _________                 )

         On this the ____ day of ___________,  1999,  before me, the undersigned
officer, personally appeared ________________,  who acknowledged himself/herself
to be a ____________ of SVP, S.A. a societe  anonyme,  and that he/she,  as such
___________ , being  authorized so to do, executed the foregoing  instrument for
the purposes therein  contained and acknowledged the same to be his/her free act
and  deed  individually,  as such  __________  and the  free act and deed of the
___________________.

         IN WITNESS WHEREOF, I hereunto set my hand.

                                              ----------------------------------
                                              Notary Public

My Commission Expires:
<PAGE>

                                                                      Exhibit AA
                                                                      ----------
                                                                         Part IV

                             SUBORDINATION AGREEMENT

     AGREEMENT  dated  December  30,  1999  among  FIND/SVP,  Inc.,  a New  York
corporation with an office located at 625 Avenue of the Americas,  New York, New
York  10011-2002  (the  "Borrower"),  FURMAN  SELZ,  L.P.,  a  Delaware  limited
partnership  with an office  located at 55 East 52nd Street,  New York, New York
10055 (the "Subordinated Creditor") and THE CHASE MANHATTAN BANK, with an office
located at 270 Park Avenue, New York, New York 10017 (the "Lender").

                                    RECITALS

     A.   The  Borrower,  together  with FIND/SVP  Published  Products,  Inc., a
Delaware  corporation,  (the  "Subsidiary"),  is  indebted  to the  Subordinated
Creditor (i) in the original  aggregate  principal amount of up to $2,025,000 as
evidenced  by the Series A Senior  Subordinated  Notes  dated  October  31, 1996
(collectively,  the  "Subordinated  A  Note")  made  by  the  Borrower  and  the
Subsidiary to the Subordinated Creditor; and (ii) the Stock Subscription Warrant
dated October 31, 1996 (the  "Subordinated  A Warrant") from the Borrower to the
Subordinated Creditor  (collectively,  the "Subordinated  Creditor's Debt") (the
Subordinated A Note, the Subordinated A Warrant and all other documents executed
in  connection  therewith  are  collectively  referred  to as the  "Subordinated
Creditor's Loan Documents").

     B.   The  Borrower  is  indebted  to the Lender in the  original  principal
amount of up to $1,000,000  (the "Lender  Debt") as evidenced by the  $1,000,000
Senior Grid  Promissory  Note dated  December  30, 1999 from the Borrower to the
Lender (the "Lender Note").

     C.   As  security  for the  payment of the  Borrower's  obligations  to the
Lender,  pursuant to a Security Agreement dated December 30, 1999 (the "Security
Agreement"),  the Borrower  granted a security  interest in the  Collateral  (as
therein  defined)  (the  Security  Agreement,  the  Lender  Note  and all  other
documents executed in connection  therewith are collectively  referred to as the
"Lender's Loan Documents").

     D.   In  consideration of and as an inducement for the Lender to consent to
the continued  extension of the  Subordinated  Creditor's Debt, the Subordinated
Creditor and the Borrower  agree to the terms and  conditions  contained in this
Agreement.

                                    AGREEMENT

     In consideration of the Recitals,  which are incorporated by reference, the
terms and  conditions  contained in this  Agreement  and other good and valuable
consideration,  the  receipt  and  sufficiency  of  which is  acknowledged,  the
parties, intending to be bound legally, agree as follows:

     1.   Definitions.

          (a)  "Junior Debt" means all indebtedness, liabilities and obligations
whatsoever,  of every  kind  and  description,  whenever  and  however  arising,
absolute or
<PAGE>
                                                                               2

contingent, due or to become due, from the Borrower to the Subordinated Creditor
pursuant to the Subordinated Creditor's Debt.

          (b)  "Senior Debt" means all indebtedness, liabilities and obligations
whatsoever,  of every  kind  and  description,  whenever  and  however  arising,
absolute or contingent,  due or to become due, now existing or hereafter arising
from, or in any way connected  with, any direct or indirect  indebtedness of the
Borrower to the Lender, including, but not limited to, the Lender Debt, together
with all costs,  expenses and attorneys'  fees incurred in any action to collect
any  indebtedness  to the  Lender  including  the  Lender  Debt or to enforce or
foreclose  any  mortgage,  security  agreement or other  agreement  securing any
indebtedness to the Lender including the Lender Debt.

     2.   Subordination.  The Subordinated  Creditor and the Borrower agree that
the Junior Debt is in all respects fully  subordinated  to the full and complete
payment  and  satisfaction  in full of the Senior  Debt in the manner and to the
extent set forth in Section 4 below and that,  except as expressly  permitted in
Section 4 below, no payments shall be made on the Junior Debt.

     3.   Warranties  and  Representation.  The  Borrower  and the  Subordinated
Creditor each represent and warrant that:

          (a)  The total aggregate principal amount of the Junior Debt as of the
date hereof is $2,025,000;

          (b)  The Junior Debt is evidenced by the Subordinated Loan Documents;

          (c)  The Subordinated Creditor has not assigned the Junior Debt or any
interest therein; and

          (d)  The  Borrower and the  Subsidiaries  have not and will not grant,
directly or  indirectly,  to the  Subordinated  Creditor  any  security  for the
repayment of the Junior Debt.

     4.   Covenants.

          (a)  Except  as  restricted  below,  the  Borrower  may  pay  and  the
Subordinated  Creditor  may collect:  (i) all  regularly  scheduled  payments of
interest under the  Subordinated  Creditor's  Loan  Documents;  and (ii) (A) any
non-accelerated  prepayment or regularly  scheduled  payment of principal of the
Junior Debt (a "Principal  Payment") or (B) any payment under the Subordinated A
Warrant  (a  "Warrant  Payment"),  provided  such  Principal  Payment or Warrant
Payment  does not cause or is not a  contributing  factor  in  causing a default
under  any  covenant  contained  in the  Lender's  Loan  Documents  or any other
documents evidencing the Senior Debt (a "Covenant Default"). In the event that a
Principal  Payment  or Warrant  Payment  causes or is a  contributing  factor in
causing a Covenant Default,  upon the receipt of a Notice of Non-Payment Default
by the Lender to the Subordinated  Creditor,  such Principal  Payment or Warrant
Payment shall be held in trust for the benefit of the Lender and be  immediately
delivered to the Lender for  application  to the Senior Debt in accordance  with
Section 5 below.

          (b)  (i)  In the event  of any  insolvency,  bankruptcy,  liquidation,
reorganization or other similar proceedings,  or any receivership proceedings in
connection
<PAGE>
                                                                               3

therewith  relative to any of the Borrower,  the Subsidiary or their  respective
creditors  or property  and in the event of any  proceedings  for  voluntary  or
involuntary liquidation,  dissolution or other winding up of any of the Borrower
or  the   Subsidiary,   whether  or  not  involving   insolvency  or  bankruptcy
proceedings,  then all  Senior  Debt  shall  first be paid in full,  before  the
payment on account of principal or interest is made upon any Junior Debt.

               (ii) In any of the  proceedings  referred to in paragraph  (b)(i)
above,  any payment or distribution  of any kind or character,  whether in cash,
property, stock or obligations which may be payable or deliverable in respect of
the Junior Debt shall be paid or delivered directly to the holders of the Senior
Debt for application in payment thereof,  unless and until all Senior Debt shall
have been paid in full.

          (c)  In the event  (i) the  Borrower  shall  fail to make when due any
payment of principal, interest or any other sums on the Senior Debt, or (ii) the
Lender shall have  accelerated  the Senior Debt (the events set forth in clauses
(i) and (ii)  hereafter  referred  to as a  "Payment  Default"),  then  upon the
occurrence  of  the  sending  of  a  written  notice  from  the  Lender  to  the
Subordinated  Creditor  of such  Payment  Default  (with no  obligation  to send
written notice to any successor, assignee,  transferee,  investor or participant
of the Junior Debt) (the "Notice of Payment Default"): (i) effective on the date
of the Notice of Payment  Default,  no payment  shall be made by the Borrower or
any other  co-maker or obligor of the Junior Debt to the  Subordinated  Creditor
and the  Subordinated  Creditor  shall not receive any payments until the Lender
shall have been paid in full or until the Lender shall have sent written  notice
to the  Subordinated  Creditor  indicating that the Lender and the Borrower have
settled or resolved any outstanding  disputes and/or defaults under the Lender's
Loan Documents or any other documents evidencing the Senior Debt; and (ii) while
such  Payment  Default is in effect,  any payment  received by the  Subordinated
Creditor shall be held in trust for the benefit of the Lender and be immediately
delivered to the Lender for  application  to the Senior Debt in accordance  with
Section 5 below.

          (d)  In the event of any default (other than a Payment Default) by the
Borrower of the Lender's Loan  Documents or any other  documents  evidencing the
Senior  Debt  giving  the  Lender the right to  accelerate  the  Senior  Debt (a
"Non-Payment  Default") and the Lender has not accelerated the Senior Debt, then
upon the  occurrence  of the  sending of a notice  specifying  the list of known
Non-Payment  Default(s)  by the  Lender  to the  Subordinated  Creditor  of such
Non-Payment  Default(s) (a "Notice of Non-Payment  Default") (with no obligation
to send  written  notice to any  successor,  assignee,  transferee,  investor or
participant  of the Junior  Debt):  (i)  effective  on the date of the Notice of
Non-Payment  Default,  no  payment  shall be made by the  Borrower  or any other
co-maker  or obligor of the Junior  Debt to the  Subordinated  Creditor  and the
Subordinated  Creditor  shall not receive any payments until the earlier of: (A)
the date that the Lender  shall  have sent  written  notice to the  Subordinated
Creditor  indicating  that the Lender and the Borrower  have settled or resolved
any  outstanding  disputes  and/or defaults under the Lender's Loan Documents or
any other  documents  evidencing  the Senior  Debt;  or (B) the date one hundred
eighty (180) days after the Notice of Non-Payment Default was sent by the Lender
to the Subordinated Creditor (the "Payment Block Period").  Any payment received
by the  Subordinated  Creditor  during the Payment Block Period shall be held in
trust for the benefit of the Lender and be  immediately  delivered to the Lender
for  application  to the Senior Debt in  accordance  with  Section 5 below.  The
Lender and the Subordinated  Creditor agree that the
<PAGE>
                                       4

Lender  shall  have the right to impose  any  number of  Payment  Block  Periods
pursuant to this  Subsection (d) provided that:  (i) the  Subordinated  Creditor
shall not be blocked from receiving any payments under the Junior Debt in excess
of one  hundred  eighty  (180) days in any three  hundred  sixty-five  (365) day
period;  and (ii) in the event any Payment Block Period was terminated  pursuant
to Clause (A) of the preceding sentence,  then (x) any notice of default for the
same covenant  violation in a three hundred sixty-five (365) day period shall be
given in good  faith and not solely for the  purpose  of  instituting  a payment
block  against  the  Subordinated  Creditor;  and/or  (y) the  Lender  will  not
institute a Payment Block Period for any Non-Payment  Default which was known to
the Lender prior to  instituting  any previous  Payment  Block Period during the
preceding three hundred  sixty-five  (365) day period and not listed in a Notice
of Non-Payment  Default during such three hundred  sixty-five  (365) day period.
The foregoing shall not prevent the Lender from  accelerating any default by the
Borrower or declaring a Payment Default pursuant to Subsection (c) above.

          (e)  The Lender agrees that after it sends a Notice of Payment Default
pursuant to Subsection (c) above the Lender shall diligently  pursue  collection
of the Senior  Debt.  Nothing  set forth  herein  shall  prohibit or prevent the
Lender from  negotiating  or settling any defaults or disputes with the Borrower
under the Lender's Loan Documents or any other  documents  evidencing the Senior
Debt.

          (f)  After a period of one hundred  eighty (180) days from the date of
the Notice of Payment Default pursuant to Subsection (c) above, the Subordinated
Creditor may commence any action or proceeding against the Borrower or any other
co-maker or obligor under the Subordinated  Creditor Loan Documents to demand or
collect the Junior Debt.  Notwithstanding the foregoing, any receipt of funds or
any payment  collected,  garnished  or  otherwise  received by the  Subordinated
Creditor shall be held in trust for the benefit of the Lender and be immediately
delivered to the Lender for  application  to the Senior Debt in accordance  with
Section 5 below.

          (g)  The  Subordinated  Creditor agrees to send to the Lender a notice
indicating  its intention to declare a default and  accelerate  its rights under
the  Subordinated  Creditor's  Loan Documents  prior to any  acceleration of the
Junior Debt.

          (h)  Neither the Borrower nor the Subordinated  Creditor shall take or
permit any action  prejudicial  to or  inconsistent  with the Lender's  priority
position over the Subordinated Creditor that is created by this Agreement.

     5.   Turnover  of  Prohibited  Transfer.  If any  payment on account of the
Junior Debt is received by the  Subordinated  Creditor,  such  payment  shall be
delivered immediately by the Subordinated Creditor to the Lender for application
to the  Senior  Debt,  in the  form  received  except  for the  addition  of any
endorsement  or assignment  necessary to effect a transfer of all rights therein
to the  Lender.  The Lender is  irrevocably  authorized  to supply any  required
endorsement or assignment which may have been omitted.  Until so delivered,  any
such payment shall be held by the Subordinated  Creditor in trust for the Lender
and shall not be  commingled  with other funds or  property of the  Subordinated
Creditor.

     6.   Waivers.  The Borrower and the  Subordinated  Creditor  each waive any
defense  based on the  adequacy  of a remedy at law which might be asserted as a
bar to the  remedy of
<PAGE>
                                                                               5

specific  performance of this  Agreement in any action  brought  therefor by the
Lender.   To  the  fullest  extent  permitted  by  law,  the  Borrower  and  the
Subordinated Creditor each further waive the following: (i) presentment, demand,
protest,  notice of protest,  notice of default,  notice of dishonor,  notice of
payment or  nonpayment  and any and all other notices and demands of any kind by
the Lender in connection with all  instruments  evidencing all or any portion of
the Senior Debt or the Junior Debt to which the Lender or Subordinated  Creditor
may be a party;  (ii) notice of the  acceptance of this Agreement by the Lender;
(iii)  notice of any loans made,  extensions  granted or other  action  taken in
reliance  hereon by the Lender;  and (iv) all other demands and notices in every
kind by the Lender in  connection  with this  Agreement,  the Senior Debt or the
Junior Debt. The Subordinated  Creditor consents to, from time to time, in whole
or  in  part,  any  release,  renewal,  modification,   amendment,   settlement,
extension, compromise or postponement of the time of payment of the Senior Debt,
to any  substitution,  exchange  or release of  collateral  therefor  and to the
addition or release of any person primarily or secondarily liable thereon.

     7.   Legend.  The Subordinated  Creditor and the Borrower agree on the date
hereof to have  stamped or endorsed on each of the  Subordinated  Creditor  Loan
Documents  and any  other  documents  evidencing  the  Junior  Debt a legend  or
statement  in form  satisfactory  to the  Lender  indicating  that  each of such
documents are expressly subject to the terms and conditions of this Agreement.

     8.   Notices.   All  notices,   requests,   consents,   demands  and  other
communications  hereunder  shall be in writing and shall be mailed by registered
or  certified  first  class mail or  delivered  by an  overnight  courier to the
respective parties to this Agreement as follows:

          If to the Borrower:       FIND/SVP, INC.
                                    625 Avenue of the Americas
                                    New York, New York 10011-2002
                                    Attention: ___________________

          with a copy to:           Breslow & Walker
                                    767 Third Avenue
                                    New York, New York 10011
                                    Attn: Howard S. Breslow, Esq.

          If to the Lender:         The Chase Manhattan Bank
                                    1411 Broadway
                                    New York, New York 10018
                                    Attention: Stephen Szanto

          with a copy to:           Hughes Hubbard & Reed LLP
                                    One Battery Park Plaza, 12th Floor
                                    New York, New York 10004
                                    Attention: Beverly G. Miller, Esq.
<PAGE>
                                                                               6

          If to the Subordinated
          Creditor:                 Furman Selz SBIC, L.P.
                                    55 East 52nd Street
                                    New York, New York 10055
                                    Attention: Nicholas Daraviras

          with a copy to:           Dechert Price & Rhoads
                                    4000 Bell Atlantic Tower
                                    1717 Arch Street
                                    Philadelphia, Pennsylvania 19103
                                    Attention: Carmen J. Romano, Esq.

     9.   Indulgences Not Waivers. Neither the failure nor any delay on the part
of the Lender to exercise any right,  remedy, power or privilege hereunder shall
operate as a waiver thereof or give rise to an estoppel,  nor be construed as an
agreement to modify the terms of this Agreement, nor shall any single or partial
exercise of any right, remedy, power or privilege with respect to any occurrence
be construed as a waiver of such right,  remedy, power or privilege with respect
to any  other  occurrence.  No waiver by a party  hereunder  shall be  effective
unless it is in writing  and signed by the party  making such  waiver,  and then
only to the extent specifically stated in such writing.

     10.  Duration and Termination. This Agreement shall constitute a continuing
agreement of subordination and shall remain in effect so long as the Borrower is
in any way indebted, liable or obligated to the Lender.

     11.  Entire Agreement.  This Agreement constitutes and expresses the entire
understanding  between the parties  hereto  with  respect to the subject  matter
hereof,   and   supersedes   all  prior  and   contemporaneous   agreements  and
understandings,  inducements or conditions,  whether express or implied, oral or
written  including,  but not limited to, anything  contained in the Subordinated
Creditor's  Loan  Documents  to the  contrary.  Neither this  Agreement  nor any
portion or provision  hereof may be changed,  waived or amended orally or in any
manner other than by an agreement in writing signed by the Lender,  the Borrower
and the Subordinated Creditor.

     12.  Successors and Assigns.  This Agreement  shall inure to the benefit of
the Lender, its successors and assigns,  and shall be binding upon the Borrower,
its successors and assigns,  and the Subordinated  Creditor,  its successors and
assignees.

     13.  Governing  Law. The validity,  construction  and  enforcement  of this
Agreement shall be governed by the laws of the State of New York and the parties
consent  irrevocably  to the  jurisdiction  and venue of the  federal  and state
courts located in New York City, New York in resolving any dispute  arising from
this  Agreement.  The Borrower and the  Subordinated  Creditor  hereby waive any
objection  which it or they have or may have to the  laying of venue of any such
action or suit arising out of this  Agreement in such courts and further  waives
any claim  that any such  suit or action  has been  brought  in an  inconvenient
forum.

     14.  Jury Trial Waiver.  Each of the parties  hereto waives (to the fullest
extent  permitted by applicable law) any right to a trial by jury of any dispute
arising from this Agreement.
<PAGE>
                                                                               7

     15.  Severability.  The provisions of this Agreement are independent of and
separable from each other. If any provision  hereof shall for any reason be held
invalid or  unenforceable,  it is the intent of the parties that such invalidity
or unenforceability shall not effect the validity or enforceability of any other
provision hereof,  and that this Agreement shall be construed as if such invalid
or unenforceable provision had never been contained herein.

     IN WITNESS  WHEREOF,  the parties have executed this  Agreement on December
30, 1999.

                                    FIND/SVP, Inc.

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

                                    FURMAN SELZ SBIC, L.P.
                                           By: Furman Selz SBIC Investments LLC,
                                               General Partner

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

                                    THE CHASE MANHATTAN BANK

                                    By
                                       -----------------------------------------
                                       Name:
                                       Title:
<PAGE>

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

     On this the ____ day of  _______________,  1999, before me, the undersigned
officer, personally appeared _________________, who acknowledged himself/herself
to be the  ____________ of FIND/SVP,  Inc., a corporation,  and that he/she,  as
such officer,  being authorized so to do, executed the foregoing  instrument for
the purposes therein  contained and acknowledged the same to be his/her free act
and  deed  individually  and as such  officer,  and the free act and deed of the
corporation.

     IN WITNESS WHEREOF, I hereunto set my hand.

                                               ---------------------------------
                                               Notary Public

My Commission Expires:
<PAGE>

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

     On this the ____ day of  _______________,  1999, before me, the undersigned
officer, personally appeared _________________, who acknowledged himself/herself
to be the  ____________ of FURMAN SELZ SBIC  INVESTMENTS LLC, general partner of
FURMAN  SELZ  SBIC,  L.P.,  a  limited  partnership,  and that  he/she,  as such
_________________  of the  general  partner of the  limited  partnership,  being
authorized so to do, executed the foregoing  instrument for the purposes therein
contained and acknowledged the same to be his/her free act and deed individually
and as such  ____________________,  and the  free  act and  deed of the  general
partner and the limited partnership.

     IN WITNESS WHEREOF, I hereunto set my hand.

                                               ---------------------------------
                                               Notary Public

My Commission Expires:SECURITIES PURCHASE AGREEMENT

                                      AMONG

                              KNIPP BROTHERS, INC.,

                               LAWRENCE W. KNIPP,

                     BUILDING MATERIALS HOLDING CORPORATION,

                                       AND

                               BMHC FRAMING, INC.

                           DATED AS OF MARCH 23, 1999

<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE
ARTICLE I - DEFINITIONS.....................................................  2
   1.1   BMHC ASSETS........................................................  2
   1.2   BMHC EQUIPMENT.....................................................  2
   1.3   BMHC INVENTORY.....................................................  3
   1.4   BMHC STOCK.........................................................  3
   1.5   BUSINESS...........................................................  3
   1.6   CLOSING............................................................  3
   1.7   CLOSING BALANCE SHEET..............................................  3
   1.8   CLOSING DATE.......................................................  3
   1.9   CONFIDENTIALITY AGREEMENT..........................................  3
   1.10     CPA PROCEDURE...................................................  3
   1.11     DUE DILIGENCE PERIOD............................................  4
   1.12     ENVIRONMENTAL COSTS.............................................  4
   1.13     ENVIRONMENTAL LAWS..............................................  4
   1.14     ENVIRONMENTAL MATTER............................................  4
   1.15     EXCLUDED ASSETS AND EXCLUDED LIABILITIES........................  5
   1.16     FINANCIAL INFORMATION...........................................  5
   1.17     HAZARDOUS SUBSTANCES............................................  5
   1.18     INTERESTS.......................................................  5
   1.19     INVENTORY.......................................................  5
   1.20     KNOWLEDGE.......................................................  5
   1.21     LOCATIONS.......................................................  5
   1.22     MATERIAL........................................................  6
   1.23     NET WORTH ADJUSTMENT............................................  6
   1.24     OPERATING AGREEMENT.............................................  6
   1.25     PUT AGREEMENT...................................................  6
   1.26     PRELIMINARY CLOSING BALANCE SHEET...............................  6
   1.27     REFERENCE BALANCE SHEET.........................................  6
   1.28     SELLER..........................................................  6
   1.29     TRADE ACCOUNTS PAYABLE..........................................  7
   1.30     TRADE ACCOUNTS RECEIVABLE.......................................  7
   1.31     TRADE NAMES AND TRADEMARKS......................................  7

ARTICLE II - DUE DILIGENCE..................................................  7
   2.1   DUE DILIGENCE......................................................  7
   2.2   DUE DILIGENCE ACTIVITIES...........................................  8
   2.3   CONFIDENTIALITY DURING DUE DILIGENCE...............................  9
   2.4   TERMINATION OF AGREEMENT...........................................  9
   2.5   EXCLUSIVE DEALING..................................................  9

ARTICLE III - PURCHASE AND SALE............................................. 10
   3.1   Purchase and Sale.................................................. 10

ARTICLE IV - DETERMINATION OF PURCHASE PRICE................................ 10
   4.1   DETERMINATION...................................................... 10
      4.1.1    INVENTORY.................................................... 10

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         4.1.1.1  VALUATION................................................. 10
         4.1.1.2  VALUATION OF FINISHED PRODUCT............................. 10
         4.1.1.3  VALUATION OF MISCELLANEOUS INVENTORY ITEMS................ 11
         4.1.1.4  FINAL INVENTORY DETERMINATION............................. 11
         4.1.1.5  INDEPENDENT ACCOUNTANT FEES............................... 11

   4.2   ALLOCATION OF PURCHASE PRICE....................................... 11
ARTICLE V - TERMS OF PAYMENT................................................ 12

   5.1   PAYMENT DUE AT CLOSING............................................. 12
   5.2   POST CLOSING ADJUSTMENT............................................ 12
ARTICLE VI - CAPITAL CONTRIBUTIONS; BMHC EMPLOYEES.......................... 12
   6.1   CAPITAL CONTRIBUTIONS AT CLOSING................................... 12
   6.2   VALUATION OF BMHC CAPITAL CONTRIBUTION............................. 13

      6.2.1    BMHC EQUIPMENT............................................... 13
      6.2.2    THE BMHC INVENTORY........................................... 13

         6.2.2.1  VALUATION OF FINISHED PRODUCT............................. 13
         6.2.2.2  VALUATION OF MISCELLANEOUS INVENTORY ITEMS................ 13
         6.2.2.3  FINAL INVENTORY DETERMINATION............................. 13
         6.2.2.4  INVENTORY COSTS........................................... 14

   6.3   EMPLOYEES OF BMHC.................................................. 14
      6.3.1    DEFINITION................................................... 14
      6.3.2    TERMINATION.................................................. 14
      6.3.3    EMPLOYMENT................................................... 14
      6.3.4    LIABILITIES.................................................. 14

ARTICLE VII - [INTENTIONALLY OMITTED]....................................... 14
ARTICLE VIII - REPRESENTATIONS AND WARRANTIES  OF THE SELLERS............... 14

   8.1   ORGANIZATION AND CORPORATE POWER................................... 15
   8.2   CONDUCT OF BUSINESS................................................ 15
   8.3   CAPITAL ACCOUNTS AND RELATED MATTERS............................... 15
   8.4   SUBSIDIARIES; AFFILIATES........................................... 15
   8.5   CONDUCT OF BUSINESS; LIABILITIES................................... 15
   8.6   FINANCIAL STATEMENTS............................................... 16
   8.7   NO UNDISCLOSED LIABILITIES......................................... 16
   8.8   ABSENCE OF CERTAIN CHANGES......................................... 16
   8.9   TITLE AND RELATED MATTERS.......................................... 17
   8.10     LITIGATION...................................................... 17
   8.11     TAX MATTERS..................................................... 18
   8.12     COMPLIANCE WITH LAWS............................................ 18
   8.13     NO BROKERS...................................................... 18
   8.14     INSURANCE....................................................... 18
   8.15     EMPLOYEES AND LABOR RELATIONS MATTERS........................... 19
   8.16     DISCLOSURE...................................................... 19
   8.17     POWER OF ATTORNEY............................................... 20
   8.18     TRADE ACCOUNTS RECEIVABLE AND TRADE ACCOUNTS PAYABLE............ 20
   8.19     AGREEMENTS AND COMMITMENTS...................................... 20
   8.20     PERSONAL PROPERTY............................................... 21
   8.21     REAL PROPERTY................................................... 21

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   8.22     PERSONNEL....................................................... 21
   8.23     PATENTS, TRADEMARKS, TRADE NAMES, ETC........................... 22
   8.24     ERISA AND RELATED MATTERS....................................... 22
   8.25     ENVIRONMENTAL MATTERS........................................... 22
ARTICLE IX - REPRESENTATIONS AND WARRANTIES OF BMHC AND BUYER............... 24
   9.1   LEGAL STATUS....................................................... 24
   9.2   AUTHORITY.......................................................... 24
   9.3   TITLE AND RELATED MATTERS.......................................... 24
   9.4   LITIGATION......................................................... 24
   9.5   COMPLIANCE WITH LAWS............................................... 25
   9.6   NO BROKERS......................................................... 25
   9.7   EMPLOYEES AND LABOR RELATIONS MATTERS.............................. 25
   9.8   DISCLOSURE......................................................... 26
   9.9   AGREEMENTS AND COMMITMENTS......................................... 26
   9.10     PERSONAL PROPERTY............................................... 26
   9.11     REAL PROPERTY................................................... 27
   9.12     PERSONNEL....................................................... 27
   9.1   ERISA AND RELATED MATTERS.......................................... 28
   9.14     ENVIRONMENTAL MATTERS........................................... 28

ARTICLE X - COLLECTION OF RECEIVABLES; CUSTOMER CLAIMS...................... 29
   10.1     COLLECTION...................................................... 29
   10.2     CUSTOMER CLAIMS AND RETURNS..................................... 30

ARTICLE XI - BMHC'S COVENANTS............................................... 30
ARTICLE XII - [RESERVED].................................................... 30
ARTICLE XIII - INDEMNITY.................................................... 30

   13.1     SURVIVAL OF REPRESENTATIONS AND WARRANTIES...................... 30
   13.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLERS................... 30
   13.3     INDEMNIFICATION AND PAYMENT OF DAMAGES BY BMHC AND BUYER........ 31
   13.4     INDEMNIFICATION PROCEDURE....................................... 32
   13.5     COOPERATION..................................................... 33

ARTICLE XIV - CONDUCT OF OPERATIONS PRIOR  TO CLOSING/GOVERNMENT APPROVALS.. 34
   14.1     CONDUCT OF OPERATIONS........................................... 34
   14.2     REQUISITE GOVERNMENT APPROVALS.................................. 34

ARTICLE XV - CLOSING........................................................ 34
   15.1     CLOSING......................................................... 34
   15.2     TIME IS OF THE ESSENCE.......................................... 34

ARTICLE XVI - CONDITIONS PRECEDENT TO BUYER'S DUTY TO CLOSE................. 34
   16.1     CONTINUED TRUTH OF WARRANTIES................................... 34
   16.2     SUPPLEMENTS TO SCHEDULES........................................ 35
   16.3     PERFORMANCE OF OBLIGATIONS...................................... 35
   16.4     DELIVERY OF CLOSING DOCUMENTS................................... 35
   16.5     LITIGATION...................................................... 35
   16.6     GOVERNMENT APPROVALS............................................ 35
   16.7     DUE DILIGENCE PERIOD............................................ 35
   16.8     APPROVAL BY BOARD OF DIRECTORS.................................. 36

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   16.9     PRELIMINARY CLOSING BALANCE SHEET............................... 36
   16.10    EMPLOYMENT, CONFIDENTIALITY, AND NONCOMPETITION AGREEMENTS...... 36
   16.11    LEASES FOR LOCATIONS............................................ 36
   16.12    OPERATING AGREEMENT............................................. 36
   16.13    PUT AGREEMENT................................................... 36
   16.14    BONUS PLAN...................................................... 36
   16.15    MATERIAL ADVERSE CHANGE......................................... 36
   16.15    LENDER APPROVALS................................................ 36

ARTICLE XVII - CONDITIONS PRECEDENT TO THE SELLERS'DUTY TO CLOSE............ 37
   17.1     CONTINUED TRUTH OF WARRANTIES................................... 37
   17.2     SUPPLEMENTS TO SCHEDULES........................................ 37
   17.3     PERFORMANCE OF OBLIGATIONS...................................... 37
   17.4     DELIVERY OF CLOSING DOCUMENTS................................... 37
   17.5     LITIGATION...................................................... 37
   17.6     LEASE FOR PHOENIX LOCATION...................................... 37
   17.7     OPERATING AGREEMENT............................................. 37
   17.8     PUT AGREEMENT................................................... 38
   17.9     GOVERNMENT APPROVALS............................................ 38
   17.10    MATERIAL ADVERSE CHANGE......................................... 38

ARTICLE XVIII - ITEMS TO BE DELIVERED  AT CLOSING BY SELLERS................ 38
   18.1     OPINION OF COUNSEL.............................................. 38
   18.2     CERTIFICATE OF INCUMBENCY....................................... 38
   18.3     CERTIFICATES OF GOOD STANDING................................... 38
   18.4     REPRESENTATIONS AND WARRANTIES.................................. 38
   18.5     AGREEMENTS...................................................... 38

ARTICLE XIX - ITEMS TO BE DELIVERED AT CLOSING BY BMHC AND BUYER............ 39
   19.1     CERTIFIED RESOLUTION............................................ 39
   19.2     REPRESENTATIONS AND WARRANTIES.................................. 39
   19.3     OPINION OF COUNSEL.............................................. 39
   19.4     INCUMBENCY CERTIFICATE.......................................... 39
   19.5     PURCHASE PRICE.................................................. 39
   19.6     CERTIFICATE OF GOOD STANDING.................................... 39
   19.7     BILL OF SALE.................................................... 40
   19.8     AGREEMENTS...................................................... 40

ARTICLE XX - MISCELLANEOUS.................................................. 40
   20.1     EXPENSES........................................................ 40
   20.2     FURTHER ASSURANCES; CONSENTS.................................... 40
   20.3     NO OTHER AGREEMENTS............................................. 40
   20.4     WAIVER.......................................................... 40
   20.5     PUBLIC ANNOUNCEMENTS............................................ 40
   20.6     NOTICES......................................................... 41
   20.7     BOOKS AND RECORDS............................................... 41
   20.8     BMHC TRADE ACCOUNTS RECEIVABLE.................................. 42
   20.9     THIRD-PARTY BENEFICIARY......................................... 42
   20.10    ASSIGNMENT...................................................... 42

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   20.11    CHOICE OF LAW................................................... 42
   20.12    PARAGRAPH HEADINGS.............................................. 42
   20.13    TIME IS OF THE ESSENCE.......................................... 42
   20.14    ATTORNEY FEES................................................... 42
   20.15    RULES OF INTERPRETATION......................................... 42
   20.16    COUNTERPARTS AND FACSIMILE SIGNATURES........................... 43

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                             EXHIBITS AND SCHEDULES

EXHIBIT 1.2       BMHC EQUIPMENT
EXHIBIT 1.21      LOCATIONS OWNED OR LEASED BY THE COMPANY IN THE
                  CONDUCT OF THE BUSINESS
EXHIBIT 1.23      NET WORTH ADJUSTMENT
EXHIBIT 18.1      OPINION OF COMPANY'S COUNSEL
EXHIBIT 19.3      OPINION OF BUYER'S COUNSEL

EXHIBIT A         OPERATING AGREEMENT
EXHIBIT B         PUT AGREEMENT

SCHEDULE 1.15     EXCLUDED ASSETS AND EXCLUDED LIABILITIES
SCHEDULE 6.3.3    EMPLOYMENT
SCHEDULE 8.8      ABSENCE OF CERTAIN CHANGES
SCHEDULE 8.9      TITLE AND RELATED MATTERS
SCHEDULE 8.10     LITIGATION
SCHEDULE 8.11     TAX MATTERS
SCHEDULE 8.14     INSURANCE
SCHEDULE 8.19     AGREEMENTS AND COMMITMENTS
SCHEDULE 8.20     PERSONAL PROPERTY
SCHEDULE 8.21     REAL PROPERTY
SCHEDULE 8.24     ERISA AND RELATED MATTERS
SCHEDULE 9.3      TITLE AND RELATED MATTERS
SCHEDULE 9.4      LITIGATION
SCHEDULE 9.6      BROKERS
SCHEDULE 9.7      EMPLOYEES AND LABOR RELATIONS MATTERS
SCHEDULE 9.9      AGREEMENTS AND COMMITMENTS
SCHEDULE 9.10     PERSONAL PROPERTY
SCHEDULE 9.11     REAL PROPERTY
SCHEDULE 9.12     PERSONNEL
SCHEDULE 9.13     ERISA AND RELATED MATTERS

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                          SECURITIES PURCHASE AGREEMENT

         THIS AGREEMENT dated as of March 23, 1999, is among KNIPP BROTHERS,
INC., an Arizona corporation ("KBI"), LAWRENCE W. KNIPP, an individual
("Knipp"), and BUILDING MATERIALS HOLDING CORPORATION, a Delaware corporation
("BMHC"), and BMHC FRAMING, INC., a Delaware corporation ("Buyer").

         Sellers and Buyer agree as follows:

                                    RECITALS

         A.   KBI and Knipp own, collectively, 100% of the Interests of Knipp
Brothers Industries, LLC, a Delaware limited liability company (the "Company").

         B.   On the Closing Date, (1) KBI will have contributed substantially
all of its assets to the Company and the Company and will have assumed
substantially all of the liabilities of KBI other than the Excluded Assets and
Excluded Liabilities; and (2) Buyer will contribute the BMHC Assets to the
Company.

         C.   On the Closing Date, (1) Knipp will sell, and Buyer will
purchase, all of Knipp's Interests in the Company; (2) KBI will sell, and Buyer
will purchase, a portion of KBI's Interests in the Company; and (3) the Company
will sell, and Buyer will purchase, Interests in the Company, such that Buyer
will have acquired from KBI, Knipp and the Company a total of forty-nine percent
(49%) of the Interests in the Company.

         D.   Simultaneously with the Closing, the Company will amend and
restate its Operating Agreement in substantially the form attached hereto as
Exhibit A.

                             ARTICLE I - DEFINITIONS

         For purposes of this Agreement, the terms identified in this Article
shall have the meanings assigned to them as follows:

         1.1      BMHC ASSETS.

         The term "BMHC Assets" shall mean the BMHC Inventory and BMHC Equipment
to be transferred to the Company at the Closing as an additional capital
contribution;

         1.2      BMHC EQUIPMENT.

         The term "BMHC Equipment" shall mean the personal property and
equipment described on EXHIBIT 1.2 attached hereto which is used by BMHC in the
conduct of its business in Phoenix, Arizona;

<PAGE>

         1.3      BMHC INVENTORY.

         The term "BMHC Inventory" shall mean all goods, raw materials, work in
progress, inventory in transit, and finished goods not yet sold which are owned
by BMHC as of the Closing Date at its Phoenix, Arizona location;

         1.4      BMHC STOCK.

         The term "BMHC Stock" shall mean the common stock of BMHC, which is
publicly traded;

         1.5      BUSINESS.

         The term "Business" shall mean the framing, roof truss and panel
manufacturing business conducted by KBI and transferred to the Company on the
Closing;

         1.6      CLOSING.

         The term "Closing" shall mean the exchange of Closing documents; the
conveyance by KBI, the Company and Knipp to Buyer of forty-nine percent (49%) of
the Interests in the Company, and the payment by Buyer to Sellers of the
purchase price due under the terms of this Agreement;

         1.7      CLOSING BALANCE SHEET.

         The term "Closing Balance Sheet" shall mean the balance sheet of the
Company as of the Closing Date prepared by Buyer and KBI during the Post Closing
Adjustment Period in accordance with generally acceptable accounting principles
consistently applied and depreciation accounted for on a tax basis and adjusted
for Excluded Assets and Excluded Liabilities;

         1.8      CLOSING DATE.

         The term "Closing Date" shall mean the date on which Closing occurs;

         1.9      CONFIDENTIALITY AGREEMENT.

         The term "Confidentiality Agreement" means the agreement executed by
Buyer and Sellers dated May 26, 1998;

         1.10     CPA PROCEDURE.

         The term "CPA Procedure" means the dispute resolution procedure set
forth in Section 4.1.1.4;

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         1.11     DUE DILIGENCE PERIOD.

         The term "Due Diligence Period" shall mean the period of time
commencing on the date of execution of this Agreement and expiring no later than
April 15, 1999, and any written extension thereof;

         1.12     ENVIRONMENTAL COSTS.

         "Environmental Costs" means any actual cleanup costs, remediation,
removal, or other response costs, losses, liabilities, or obligations, payments,
damages, civil or criminal fines or penalties, judgments, and amounts paid in
settlement arising out of or relating to or resulting from any Environmental
Matter (including, without limitation, reasonable fees and disbursements of
counsel, but excluding any loss, cost or expenses with respect to which the
Company actually receives proceeds of any liability or other insurance policy,
to the extent of the excess of such proceeds received over the costs, if any,
incurred in connection with the collection of such proceeds);

         1.13     ENVIRONMENTAL LAWS.

         "Environmental Laws" means and includes the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. ss.ss. 9601 ET SEQ., the
Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. ss.ss.
11001 ET SEQ., the Resource Conservation and Recovery Act, 42 U.S.C. ss.ss. 6901
ET SEQ., the Toxic Substances Control Act, 15 U.S.C. ss.ss. 2601 ET SEQ., the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. ss.ss. 136 ET
SEQ., the Clean Air Act, 42 U.S.C. ss.ss. 7401 ET SEQ., the Clean Water Act
(Federal Water Pollution Control Act), 33 U.S.C. ss.ss. 1251 ET SEQ., the Safe
Drinking Water Act, 42 U.S.C. ss.ss. 300f ET SEQ., the Occupational Safety and
Health Act, 29 U.S.C. ss.ss. 651 ET SEQ., the Hazardous Materials Transportation
Act, 49 U.S.C. ss.ss. 5101 ET SEQ., as in effect from time to time, all rules
and regulations promulgated pursuant to any of the above statutes, and any other
foreign, federal, state or local law, statute, ordinance, rule or regulation
governing Environmental Matters, as in effect from time to time, including any
common law cause of action providing any right or remedy relating to
Environmental Matters;

         1.14     ENVIRONMENTAL MATTER.

         "Environmental Matter" means any matter or condition arising out of,
relating to, or resulting from pollution, contamination, protection of the
environment, human health or safety, health or safety of employees, sanitation,
and any matters relating to emissions, discharges, disseminations, releases or
threatened releases, of Hazardous Substances into the air (indoor and outdoor),
surface water, groundwater, soil, land surface or subsurface, buildings,
facilities, real property or fixtures, or otherwise arising out of, relating to,
or resulting from the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, handling, release or threatened release of
Hazardous Substances;

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         1.15     EXCLUDED ASSETS AND EXCLUDED LIABILITIES.

         The terms "Excluded Assets" and "Excluded Liabilities" shall mean those
items described in SCHEDULE 1.15 attached hereto;

         1.16     FINANCIAL INFORMATION.

         The term "Financial Information" means the audited financial statements
for the years ended 1994, 1995, 1996, and 1997 and all other financial
statements or schedules delivered by Seller to Buyer;

         1.17     HAZARDOUS SUBSTANCES.

         "Hazardous Substances" means any pollutants, contaminants, toxic or
hazardous or extremely hazardous substances, materials, wastes, constituents,
compounds, chemicals, natural or man-made elements or forces that are regulated
by, or form the basis of liability under, any Environmental Laws;

         1.18     INTERESTS.

         The term "Interests" shall mean the ownership Interests in the Company
as defined in the Operating Agreement;

         1.19     INVENTORY.

         The term "Inventory" shall mean all goods, raw materials, work in
process, inventory in transit, and finished goods not yet sold which are owned
by the Company as of the Closing Date at or for any of the Locations.
"Inventory" shall include goods not yet invoiced which the Company delivered or
caused to be delivered to contractor job sites in the ordinary course of the
Business but for which the customer has not paid;

         1.20     KNOWLEDGE.

         The term "Knowledge" shall mean that, with respect to KBI, [Redacted],
is actually aware of a fact or matter without independent investigation or
should have been aware of such fact or matter based on the standard of a
reasonably prudent business person with the same access to data and information;

         1.21     LOCATIONS.

         The term "Locations" shall mean the locations owned or leased by the
Company in the conduct of the Business described in EXHIBIT 1.21 attached
hereto;

Pursuant to a request for confidential treatment, selected information in this
document has been omitted and separately filed with the Securities and Exchange
Commission.

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         1.22     MATERIAL.

         The term "Material" or "Materially" shall mean an economic impact or
change of $50,000 or more;

         1.23     NET WORTH ADJUSTMENT.

         The term "Net Worth Adjustment" shall mean forty-nine percent (49%) of
any increase in the consolidated net worth of the Business calculated by
comparing the Reference Balance Sheet to the Preliminary Closing Balance Sheet
of the Business, as illustrated in EXHIBIT 1.23 attached hereto. In determining
the Net Worth Adjustment, Excluded Assets and Excluded Liabilities shall be
subtracted from both the Reference Balance Sheet and the Preliminary Closing
Balance Sheet;

         1.24     OPERATING AGREEMENT.

         The term "Operating Agreement" means the amended and restated operating
agreement adopted by the Company at the Closing, in substantially the form
attached as EXHIBIT A;

         1.25     PUT AGREEMENT.

         The term "Put Agreement" shall mean the agreement between KBI and BMHC,
a copy of which is attached as EXHIBIT B;

         1.26     PRELIMINARY CLOSING BALANCE SHEET.

         The term "Preliminary Closing Balance Sheet" shall mean the estimated
balance sheet of the Company as of the Closing Date prepared by Buyer and
Sellers as provided in Article IV hereof;

         1.27     REFERENCE BALANCE SHEET.

         The term "Reference Balance Sheet" shall mean the balance sheet of KBI
as of December 31, 1997, prepared in accordance with generally accepted
accounting principles consistently applied and with depreciation accounted for
on a tax basis and adjusted for Excluded Assets and Excluded Liabilities;

         1.28     SELLER.

         The term "Sellers " means KBI and Knipp, jointly and severally.

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         1.29     TRADE ACCOUNTS PAYABLE.

         The term "Trade Accounts Payable" shall mean the obligations arising
out of the Business to make payment to third parties for goods and services
furnished to the Company at the Locations in the ordinary course of the Business
incurred prior to Closing;

         1.30     TRADE ACCOUNTS RECEIVABLE.

         The term "Trade Accounts Receivable" shall mean the obligations arising
out of the Business to make payment to the Company, including obligations owed
but not yet due, as of Closing by all third-party purchasers of goods and
services from the Company at the Locations in the ordinary course of the
Business prior to Closing; and

         1.31     TRADE NAMES AND TRADEMARKS.

         The terms "Trade Names" and "Trademarks" shall mean the terms "KBI" and
"Knipp Brothers" which are not registered marks with either the States of
Arizona or Nevada or the United States Patent and Trademark Office.

                           ARTICLE II - DUE DILIGENCE

         2.1      DUE DILIGENCE.

         Buyer shall have the Due Diligence Period to perform such inspections,
environmental assessments, and other tests and surveys of the Business as Buyer,
in Buyer's discretion, shall require for the purpose of determining the
suitability of the Business for Buyer's investment. Buyer shall deliver to KBI
copies of all reports received by Buyer from third party consultants regarding
the Locations within five (5) days of Buyer's receipt of such information. If
the transactions provided for in this Agreement do not occur because this
Agreement is terminated under Section 2.4, Sellers shall reimburse Buyer for the
reasonable cost of all such reports and the cost of reasonable attorney and
reasonable accounting fees incurred in preparation of this Agreement excluding
the expenses of or consultant fees for any studies made or caused to be made by
Buyer or BMHC to determine the feasibility of the Business. If the transactions
provided for in this Agreement do not occur because of a breach of this
Agreement by Buyer or a failure to perform by Buyer as required by this
Agreement, then Buyer shall reimburse Sellers for any reasonable attorney and
reasonable accounting fees incurred in preparation of this Agreement and the
attached schedules. Notwithstanding any other provisions of this Agreement, if
the transactions provided for in this Agreement do not occur because of the
failure of a party to meet a condition precedent including, but not limited to,
delivery of a document, such party shall have no liability to reimburse the
other for any fees under this Section, so long as such party has used its best
efforts to consummate the transactions.

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<PAGE>

         2.2      DUE DILIGENCE ACTIVITIES.

         Due Diligence shall include, but not be limited to:

                  2.2.1    Review the status of title to the Locations,
including obtaining preliminary title insurance reports from a title insurer
selected by Buyer.

                  2.2.2    Obtain and review the Phase I environmental audits of
the Locations conducted by TRC Environmental Company. The cost of the Phase I
environmental audits shall be paid by Buyer.

                  2.2.3    Review and conduct surveys of the Locations.

                  2.2.4    Review any appraisals previously obtained by KBI or
Sellers of the Locations.

                  2.2.5    Review of the books and records of the Business
including the financial records and tax records and customer records. Review
procedures and policies for billing customers for work in progress.

                  2.2.6    Review and conduct a review of the Reference Balance
Sheet, including the underlying working papers.

                  2.2.7    Review of KBI's employee compensation, benefits, and
bonus plans;

                  2.2.8    Review of employee records of the Business including
health, workers' compensation, and other benefit records and conduct interviews
of key personnel.

                  2.2.9    Review of Equipment, Inventory, Trade Accounts
Receivable and trade accounts payable of the Business.

                  2.2.10   Review and conduct an audit of the liabilities
of KBI.

                  2.2.11   Obtain estoppel certificates from any lessors of real
or personal property to the Company.

                  2.2.12   Review and obtain copies of all insurance policies.

                  2.2.13   Review and analyze KBI's accounting principles.

                  2.2.14   Review terms of leases for the Locations.

                  2.2.15   Buyer and Sellers shall jointly prepare the list of
Excluded Assets and Excluded Liabilities to be included in SCHEDULE 1.15. Unless
identified as an Excluded Asset, all assets used in connection with the Business
shall be assets of the Company.

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<PAGE>

                  2.2.16   Contact key customers of the Company, in coordination
with the Company, regarding the status of contracts with KBI and impact, if any,
of KBI's assignment of contracts to the Company and Buyer's acquisition of
forty-nine percent (49%) of the Interest in the Company.

                  2.2.17   Sellers shall fully cooperate with Buyer and shall
promptly provide Buyer with all relevant information currently available that is
requested by Buyer during the Due Diligence Period. In the event this Agreement
is terminated for any reason, then all documents provided by Sellers to Buyer,
and all copies made thereof, shall be returned to Sellers pursuant to the terms
of the Confidentiality Agreement.

         2.3      CONFIDENTIALITY DURING DUE DILIGENCE.

         Buyer and Sellers acknowledge and agree that the parties desire to keep
this transaction confidential (except for disclosure to employees of Buyer or
Seller) until jointly announced or when required by law to be announced. Buyer
and Sellers agree to abide by the terms of the Confidentiality Agreement.

         2.4      TERMINATION OF AGREEMENT.

         If during the Due Diligence Period Buyer discovers any problem or
defect with respect thereto which constitutes a material impairment of the value
of the Business, then Buyer may advise Sellers in writing on or before the
expiration of the Due Diligence Period of the nature of each defect or problem
with respect to the Business with the request that Sellers remedy each problem
or defect prior to the Closing. Sellers may, within ten (10) days after receipt
of notice from Buyer, correct such problems or terminate the Agreement by
providing written notice to Buyer of termination.

         Buyer's failure to give written notice of Buyer's exercise of Buyer's
right to cancel this Agreement in accordance with the foregoing provisions shall
constitute Buyer's acceptance of the Business subject to the warranties and
representations hereto and except for and limited to any problems or defects
specified in Buyer's notice.

         2.5      EXCLUSIVE DEALING.

         Sellers agree that upon execution of this Agreement and until the
Closing Date or termination of this Agreement, Sellers will not seek to sell the
Business to any other party nor will Sellers accept or entertain any offers to
acquire the Business from any other party.

                                       9
<PAGE>

                         ARTICLE III - PURCHASE AND SALE

         3.1      PURCHASE, SALE AND ISSUANCE.

         At Closing: (1) Knipp shall sell and convey to Buyer all of his
Interest in the Company (2) KBI shall sell and convey to Buyer a portion of its
Interests in the Company; and (3) the Company shall issue Interests in the
Company to Buyer such that Buyer will acquire, in total, 49% of the Interests in
the Company.

                  ARTICLE IV - DETERMINATION OF PURCHASE PRICE

         4.1      DETERMINATION.

         The Purchase Price to be paid by Buyer to Sellers shall be the total of
the following: (1) $[Redacted] to Knipp (2) an amount to KBI equal to forty nine
percent (49%) of the total capital of the Company, less the $[Redacted] paid to
Knipp, and less the value of the BMHC Assets under Section 6.1. The total
capital of the Company shall be the sum of : (1) $[Redacted]; (2) the Net Worth
Adjustment divided by .49; and (3) the value of the BMHC Assets, using the
Preliminary Closing Balance Sheet. For purposes of calculating the Preliminary
Closing Balance Sheet, the Buyer and Sellers shall cause the preparation of and
agree to the Preliminary Closing Balance Sheet on the Closing Date (subject to
post closing adjustments provided for in Section 5.2) utilizing estimates when
necessary which shall include the following asset values:

                  4.1.1    INVENTORY.

                  The Inventory value for the Closing Balance Sheet shall be the
value determined as follows:

                           4.1.1.1  VALUATION.

                           A physical inventory count and valuation shall be
jointly conducted by Buyer and Sellers immediately preceding the Closing Date.
The value of the Inventory (except as otherwise provided herein) shall be the
lower of KBI's average or actual cost (the sum paid for the items net of any
discounts or rebates taken or to be taken plus freight costs incurred to deliver
the items to the Locations). Any Inventory items defined as damaged or obsolete
shall be valued at net realizable value.

                           4.1.1.2  VALUATION OF FINISHED PRODUCT.

                           Finished trusses not yet delivered shall be jointly
counted by Buyer and Sellers immediately preceding the Closing Date and valued
at 81% of the invoice price. Buyer and Sellers shall jointly inspect the
finished trusses and any such items that are obsolete, damaged, cull lumber,
misordered or otherwise unsaleable shall be valued at the net realizable value
of such items.

Pursuant to a request for confidential treatment, selected information in this
document has been omitted and separately filed with the Securities and Exchange
Commission.

                                       10
<PAGE>

                           4.1.1.3  VALUATION OF MISCELLANEOUS INVENTORY ITEMS.

                           Miscellaneous items, including non-wood commodities
such as plates, nails, or fasteners shall be jointly counted by Sellers and
Buyer immediately preceding the Closing Date, and valued at KBI's actual cost
from normal sources of supply (the sum paid for the items net of any discounts
or rebates taken or to be taken plus freight costs incurred to deliver the items
to the Locations). Buyer and Sellers shall jointly inspect the miscellaneous
inventory items, and such items that are obsolete or damaged shall be valued at
net realizable value.

                           4.1.1.4  FINAL INVENTORY DETERMINATION.

                           Any and all disputes regarding any aspect of the
Inventory count and valuation process shall be negotiated between the parties.
If an agreement cannot be reached, the dispute will be submitted to Lawrence W.
Knipp and Richard F. Blackwood, or their designated agents and their decision
shall be binding and conclusive. In the event said individuals cannot agree on
the value of any item or items, they shall refer the matter to their respective
outside certified public accountants to resolve. If the accountants cannot agree
on the value, the accountants shall select a third accountant ("CPA") who shall
be instructed based solely on the evidence of market value presented by the
accountants, to determine which party's market value most closely approximates
market value. The market value so selected shall be binding and conclusive. The
foregoing dispute resolution procedure is referred to as the CPA Procedure.

                           4.1.1.5  INDEPENDENT ACCOUNTANT FEES.

                           The actual costs incurred for any services by CPA
pursuant to paragraph 4.1.1.5 shall be paid by the party whose estimated value
is furthest from the value determined by CPA. Sellers and Buyer shall each pay
for the costs incurred by each party for counting the Inventory including any
payroll, overtime or travel expenses and for their own outside certified public
accountant.

         4.2      ALLOCATION OF PURCHASE PRICE.

         The parties shall mutually agree to the allocation of the Purchase
Price among the assets pursuant to Sections 755 and 1060 of the Internal Revenue
Code. Such allocation shall be made on a tax basis, except for real estate to
which Purchase Price shall be allocated based on fair market value. Any amounts
of Purchase Price in excess of that allocated to assets on a tax basis and on
the basis of fair market value of real estate shall be allocated to goodwill.

                                       11
<PAGE>

                          ARTICLE V - TERMS OF PAYMENT

         5.1      PAYMENT DUE AT CLOSING.

         At Closing, Buyer shall pay to the Sellers an amount estimated to equal
the Purchase Price as determined in Article IV. Such payment shall consist of
immediately available funds.

         5.2      POST CLOSING ADJUSTMENT.

         Buyer and Sellers agree that during a period of one hundred twenty
(120) days following the Closing Date ("Post Closing Adjustment Period"), Buyer
and Sellers will determine the adjustments to be made to the Preliminary Closing
Balance Sheet to arrive at the Closing Balance Sheet and final determinations of
the Net Worth Adjustment based on the Closing Balance Sheet. Adjustments shall
include but not be limited to: (1) uncollected Trade Accounts Receivable
provided for in Section 10.1; (2) rebates received by KBI after Closing for
goods purchased prior to Closing; (3) returns and allowances for goods sold or
delivered prior to Closing; (4) changes in the liabilities of the Business as of
the Closing Date; and (5) changes in the tax reserves or other reserves of the
Business as of the Closing Date. Within one hundred twenty (120) days after the
Closing Date, Buyer and Sellers shall submit to the other all adjustments
(together with supporting detail) they believe should be made to the Estimated
Purchase Price determined at Closing in order to arrive at the Closing Balance
Sheet. Sellers and Buyer shall have forty-five (45) days after receipt of such
list of adjustments to object to any of the adjustments in writing to each
other. Any adjustments that are not objected to during such forty-five (45) day
period shall be deemed to be agreed to by the other party. Buyer and Sellers
agree to negotiate and attempt to resolve in good faith any adjustments to which
objections have been raised during the period of ten (10) days following receipt
of objections. Any adjustments to the Estimated Purchase Price that either party
has objected to and has not been resolved during the ten (10) day period
following the objection shall be settled in accordance with the CPA Procedure.
At the end of the Post Closing Adjustment Period, Buyer and Sellers agree to pay
to each other, in immediately available funds, the amounts owed, if any, by
either party to the other party to the other as a result of any differences
between the Preliminary Closing Balance Sheet and the Closing Balance Sheet;
provided that if the Post Closing Adjustment is less than $50,000 no adjustment
shall be made. The Post Closing Adjustment shall not be considered an item of
Damages for purposes of Article XIII.

               ARTICLE VI - CAPITAL CONTRIBUTIONS; BMHC EMPLOYEES;

         6.1      CAPITAL CONTRIBUTIONS AT CLOSING.

         At Closing, BMHC shall (1) contribute to the Company the BMHC Assets;
(2) assign to the Company the leases for BMHC assets; and (3) provide a bill of
sale for other assets to be transferred to the Company.

                                       12
<PAGE>

         6.2      VALUATION OF BMHC CAPITAL CONTRIBUTION.

         The BMHC Assets to be contributed to the Company at Closing shall be
valued as follows:

                  6.2.1    BMHC EQUIPMENT.

                  The BMHC Equipment value shall be the net book value of the
Equipment as of the Closing Date.

                  6.2.2    THE BMHC INVENTORY.

                  The BMHC Inventory shall be the value as determined as
follows:

                           6.2.2.1  VALUATION OF FINISHED PRODUCT.

                           A physical inventory count and valuation shall be
jointly conducted by Buyer and Sellers immediately preceding the Closing Date.
The value of the BMHC Inventory (except as otherwise provided herein) shall be
the lower of BMHC's average or actual cost (the sum paid for the items net of
any discounts or rebates taken or to be taken plus freight costs incurred to
deliver the items to the Property). Any Inventory items defined as damaged or
obsolete shall be valued at net realizable value.

                           6.2.2.2  VALUATION OF MISCELLANEOUS INVENTORY ITEMS.

                           Miscellaneous items, including non-wood commodities
such as plates, nails, or fasteners shall be jointly counted by Sellers and
Buyer immediately preceding the Closing Date, and valued at BMHC's actual cost
from normal sources of supply (the sum paid for the items net of any discounts
or rebates taken or to be taken plus freight costs incurred to deliver the items
to the Property). Buyer and Sellers shall jointly inspect the miscellaneous
inventory items, and such items that are obsolete or damaged shall be valued at
net realizable value.

                           6.2.2.3  FINAL INVENTORY DETERMINATION.

                           Any and all disputes regarding any aspect of the
Inventory count and valuation process shall be negotiated between the parties.
If an agreement cannot be reached, the dispute will be submitted to Lawrence W.
Knipp and Richard L. Blackwood, or their designated agents and their decision
shall be binding and conclusive. In the event said individuals cannot agree on
the value of any item or items, they shall resolve the dispute in accordance
with the CPA Procedure.

                                       13
<PAGE>

                           6.2.2.4 INVENTORY COSTS.

                           The actual costs incurred for any services by CPA
pursuant to paragraph 4.1.1.5 shall be paid by the party whose estimated value
is furthest from the value determined by CPA. Sellers and Buyer shall each pay
for the costs incurred by each party for counting the Inventory including any
payroll, overtime or travel expenses and for their own outside certified public
accountant.

         6.3      EMPLOYEES OF BMHC.

                  6.3.1    DEFINITION .

                  BMHC has provided to Sellers a list of all persons employed by
BMHC's subsidiary at its location in Phoenix, Arizona ("Employees").

                  6.3.2    TERMINATION.

                  On the day immediately preceding the Closing Date, BMHC shall
cause all of the Employees to be terminated from employment. BMHC shall be
solely responsible for any liabilities arising out of termination of the
Employees.

                  6.3.3    EMPLOYMENT.

                  The Company shall offer employment to all of the terminated
Employees listed on SCHEDULE 6.3.3 at the same base rate of compensation which
said persons were paid by BMHC's subsidiary immediately prior to termination and
upon the same terms and conditions as the Company's current employees, including
immediate inclusion of the Employees in all of the Company's employment benefit
plans. The term "base rate of compensation" shall mean the hourly wage rate or
monthly salary paid to each employee and shall not include any bonus, profit
sharing, or supplemental pay. The Company shall credit each Employee who becomes
the Company's employee with the years of service recognized by BMHC for each
employee for purposes of the Company's employee policies.

                  6.3.4    LIABILITIES.

                  BMHC shall retain responsibility for all liabilities arising
out of the operation of the Phoenix location prior to the Closing.

                      ARTICLE VII - [INTENTIONALLY OMITTED]

          ARTICLE VIII - REPRESENTATIONS AND WARRANTIES OF THE SELLERS

         Sellers hereby represent and warrant to Buyer as follows, and the
warranties and representations contained in this Article or elsewhere in this
Agreement shall be deemed remade as of Closing that the following matters
regarding the business are true and correct:

                                       14
<PAGE>

         8.1      ORGANIZATION AND CORPORATE POWER.

         The Company is a limited liability company duly formed and validly
existing under the laws of the state of Delaware and the Company is qualified to
do business in every jurisdiction in which its ownership of property or conduct
of business requires it to qualify. The Company has all requisite corporate
power and authority and all material licenses, permits, and authorizations
necessary to own and operate its properties and to carry on its business as now
conducted. The copies of the Company's charter documents and operating agreement
that have been furnished to Buyer reflect all amendments made thereto at any
time prior to the date of this Agreement and are correct and complete.

         8.2      CONDUCT OF BUSINESS.

         Prior to the Closing, the Company has not conducted any business nor
has it incurred any material liability.

         8.3 CAPITAL ACCOUNTS AND RELATED MATTERS.

         As of the Closing, the Interests in the Company which are issued and
outstanding are owned, beneficially and of record, by KBI and Knipp and no other
Interests in the Company are issued and outstanding as of the Closing. The
Company does not have outstanding and has not agreed, orally or in writing, to
issue any Interests or securities convertible or exchangeable for any Interests,
nor does it have outstanding nor has it agreed, orally or in writing, to issue
any Interests or rights to purchase or otherwise acquire its Interests except as
provided in the Operating Agreement. The Company is not subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any of its Interests. The Company has not violated any applicable
securities laws or regulations in connection with the offer or sale of its
Interests other than violations that have been, or will before the Closing have
been, corrected by post-issuance filings. All of the outstanding Interests are
validly issued, fully paid, and nonassessable except with respect to additional
capital contributions. Sellers have, and upon purchase thereof pursuant to the
terms of this Agreement Buyer will have, good and indefeasible title to the
Company's Interests as of the Closing Date, free and clear of all security
interests, liens, encumbrances, or other restrictions or claims, subject only to
restrictions as imposed by securities laws and the Operating Agreement.

         8.4 SUBSIDIARIES; AFFILIATES

         The Company does not own or hold any rights to acquire any shares of
stock or any other security or interest in any other company or entity.

         8.5 CONDUCT OF BUSINESS; LIABILITIES.

         The Business is not in default, no condition exists that with notice or
lapse of time would constitute a default under (1) any mortgage, loan agreement,
evidence of indebtedness, or other instrument evidencing borrowed money to which
the Business is a party or by which the Business or the properties of the
Business are bound or (2) any judgment, order, or injunction of

                                       15
<PAGE>

any court, arbitrator, or governmental agency that would reasonably be expected
to affect materially and adversely the Business, financial condition, or results
of operations of the Business.

         8.6      FINANCIAL STATEMENTS.

         The Financial Statements fairly present the financial position of the
Business and the results of operations for the period then ended and have been
prepared in accordance with generally accepted accounting principles
consistently applied and depreciation is accounted for on a tax basis. Except as
contemplated by or permitted under this Agreement, there are no adjustments that
would be required on audit of the Financial Statements that would, individually
or in the aggregate, have a material adverse effect upon the Business's reported
financial condition or results of operations.

         8.7      NO UNDISCLOSED LIABILITIES.

         The Business does not have any material liabilities or obligations of
any nature (absolute, accrued, contingent, or otherwise) except (1) as set forth
or reflected on the Reference Balance Sheet (or described in the notes thereto),
(2) liabilities incurred in the ordinary course of the Business and consistent
with past practices since the date of the Reference Balance Sheet, or (iii) as
set forth in SCHEDULE 8.8.

         8.8      ABSENCE OF CERTAIN CHANGES.

         Except as contemplated or permitted by this Agreement or as described
in SCHEDULE 8.8, with respect to KBI and the Company, since the date of the
Reference Balance Sheet there has not been:

                  8.8.1    Any material adverse change in the Business,
prospects of the Business, financial condition, operations, or assets;

                  8.8.2    Any damage, destruction, or loss, whether covered by
insurance or not materially adversely affecting the Business or its properties;

                  8.8.3    Any sale or transfer of any tangible or intangible
asset other than in the ordinary course of the Business, any mortgage or pledge
or the creation of any security interest, lien, or encumbrance on any such asset
of the Business, or any lease of property, including equipment, other than tax
liens with respect to taxes not yet due and contract rights of customers in
inventory;

                  8.8.4    Any declaration, setting aside, or payment of a
distribution in respect of or the redemption or other repurchase by the Business
of any equity securities of the Business;

                  8.8.5    Any material transaction to which KBI or the Company
is a party not in the ordinary course of the Business;

                                       16
<PAGE>

                  8.8.6    The lapse of any material trademark, assumed name,
trade name, service mark, copyright, or license or any application with respect
to the Business;

                  8.8.7    Without prior notice to Buyer and Buyer consenting
thereto, a grant of any increase in the compensation of officers or employees of
the Business (including any such increase pursuant to any bonus, pension,
profit-sharing, or other plan) other than customary increases on a periodic
basis or required by agreement or understanding in the ordinary course of the
Business and in accordance with past practice;

                  8.8.8    The discharge or satisfaction of any material lien or
encumbrance or the payment of any material liability other than current
liabilities in the ordinary course of the Business;

                  8.8.9    The making of any material loan, advance, or guaranty
to or for the benefit of any person except the creation of accounts receivable
in the ordinary course of the Business and the shareholder loans; or

                  8.8.10   An agreement to do any of the foregoing.

         8.9      TITLE AND RELATED MATTERS.

         Except as set forth in SCHEDULE 8.9, the Business will have on the
Closing Date good and indefeasible title to all of its property, real and
personal, and other assets included in the Reference Balance Sheet (except
properties and assets sold or otherwise disposed of subsequent to the date of
Reference Balance Sheet in the ordinary course of the Business or as
contemplated in this Agreement), free and clear of all security interests,
mortgages, liens, pledges, charges, claims, or encumbrances of any kind or
character, except (1) statutory liens for property taxes not yet delinquent or
payable subsequent to the date of this Agreement and statutory or common law
liens securing the payment or performance of any obligation of the Company, the
payment or performance of which is not delinquent, or that is payable without
interest or penalty subsequent to the date on which this representation is
given, or the validity of which is being contested in good faith by the Company;
(2) the rights of customers of the Business with respect to inventory under
orders or contracts entered into by the Business in the ordinary course of
business; and (3) claims, easements, liens, and other encumbrances of record
pursuant to filings under real property recording statutes.

         8.10     LITIGATION.

         Except as set forth in SCHEDULE 8.10, there are no material actions,
suits, proceedings, orders, investigations, or claims pending or overtly
threatened against the Business or the Company or any property of the Company,
at law or in equity, or before or by any governmental department, commission,
board, bureau, agency, or instrumentality; the Company

                                       17
<PAGE>

is not subject to any arbitration proceedings under collective bargaining
agreements or otherwise or any governmental investigations or inquiries; and, to
the best knowledge of Sellers , there is no basis for any of the foregoing.

         8.11     TAX MATTERS.

         Except as set forth on SCHEDULE 8.11, (1) KBI has correctly prepared in
all material respects and has filed all federal, state, local, and foreign tax
returns and reports heretofore required to be filed with respect to KBI's
operations and activities and all taxes have been paid shown as due thereon; (2)
no taxing authority has asserted any deficiency in the payment of any tax or
informed the Company or KBI that it intends to assert any such deficiency or to
make any audit or other investigation of the Business for the purpose of
determining whether such a deficiency should be asserted against the Company;
(3) KBI has made provision in the Reference Balance Sheet for payment of all
federal, state and local taxes that have been incurred but are not currently
due; and (4) KBI has properly elected to be treated as a subchapter S
corporation for tax purposes and has complied with all requirements to be taxed
as a subchapter S corporation. "Taxes" means all taxes, charges, fees, levies,
or other assessments of any nature, including, but not limited to, income,
excise, gross receipts, property, sales, use, AD VALOREM, transfer, franchise,
profits, license, withholding, payroll, employment, severance, stamp,
occupation, windfall profits, social security, and unemployment or other taxes
imposed by the United States or any agency or instrumentality thereof, any
state, county, local or foreign government, or any agency or instrumentality
thereof, and any interest or fines, and any and all penalties or additions
relating to such taxes, charges, fees, levies, or other assessments.

         8.12     COMPLIANCE WITH LAWS.

         The conduct of the Business is in substantial compliance with all laws,
statutes, ordinances, regulations, orders, judgments, or decrees applicable to
it. Neither Sellers nor the Company has received any notice of any asserted
present or past failure by the Business to comply with such laws, statutes,
ordinances, regulations, orders, judgments, or decrees, including Environmental
Laws or ERISA.

         8.13     NO BROKERS.

         There are no claims for brokerage commissions, finders' fees, or
similar compensation in connection with the purchase based on any arrangement or
agreement binding upon any of the parties hereto.

         8.14     INSURANCE.

         SCHEDULE 8.14 contains a list of each insurance policy maintained on
the Business with respect to its properties and assets, and each such policy is
in full force and effect. The Business is not in material default with respect
to its obligations under any such policy maintained by it. The Business has not
been notified of the cancellation of any of the insurance policies listed on
SCHEDULE 8.14 or of any material increase in the premiums to be charged for such
insurance policies.

                                       18
<PAGE>

         8.15     EMPLOYEES AND LABOR RELATIONS MATTERS.

                  8.15.1   To Sellers' best knowledge, no executive or key
employee of the Business or any group of employees of the Business has any plans
to terminate employment with the Business;

                  8.15.2   The Business has complied in all material respects
with all labor and employment laws, including provisions thereof relating to
wages, hours, equal opportunity, collective bargaining, Americans With
Disabilities Act, and the payment of social security and other taxes;

                  8.15.3   There is no unfair labor practice charge, complaint,
or other action against the Business pending or, to Sellers' best knowledge,
threatened before the National Labor Relations Board and the Business is not
subject to any order to bargain by the National Labor Relations Board;

                  8.15.4   No questions concerning collective bargaining
representation have been raised or, to Sellers' best Knowledge, are threatened
with respect to employees of the Business;

                  8.15.5   No grievance that might have a material adverse
effect on the Business and no arbitration proceeding arising out of or under any
collective bargaining agreement is pending, and, to Sellers' best Knowledge, no
basis exists for any such grievance or arbitration proceeding; and

                  8.15.6   No employee of the Business is subject to any
noncompetition, nondisclosure, confidentiality, employment, consulting, or
similar agreements with persons other than the Company relating to the present
business activities of the Business.

                  8.15.7   All employees of the Business have provided
documentation required by the Immigration and Naturalization Act and regulations
and such documentation is on file with the Business.

         8.16     DISCLOSURE.

         Neither this Agreement nor any of the schedules, attachments, written
statements, documents, certificates, or other items prepared or supplied to
Buyer with respect to this Agreement contain any untrue statement of a material
fact or omit a material fact necessary to make each statement contained herein
or therein not misleading. Sellers have not intentionally concealed any fact
known by such person to have a material adverse effect upon the Business's
existing or expected financial condition, operating results, assets, customer
relations, employee relations, or business prospects taken as a whole.

                                       19
<PAGE>

         8.17     POWER OF ATTORNEY.

         There are no powers of attorney except with respect to tax matters or
similar authorization given by the Company is presently in effect.

         8.18     TRADE ACCOUNTS RECEIVABLE AND TRADE ACCOUNTS PAYABLE.

         All Trade Accounts Receivable that are reflected on the Reference
Balance Sheet or the Preliminary Closing Balance Sheet represent valid and
collectible obligations arising from sales actually made or services actually
performed in the ordinary course of the Business. There is no material contest,
claim, or right of set-off, other than returns in the ordinary course of
Business with any obligor of a Trade Account Receivable relating to the amount
or validity of such Trade Account Receivable.

         All Trade Accounts Payable that are reflected on the Reference Balance
Sheet or the Preliminary Closing Balance Sheet represent valid obligations of
the Business arising from the acquisition of goods and services by the Business
in the ordinary course of the Business. There is no material contest or claim
with respect to the amount or validity of such Trade Accounts Payable.

         8.19     AGREEMENTS AND COMMITMENTS.

         SCHEDULE 8.19 contains a complete list of each customer master contract
and each other contract to which the Business is a party that provides for
payments in excess of $5,000 per year or whose term is in excess of one year and
is not cancelable upon 30 or fewer days' notice without any liability, penalty,
or premium, other than a nominal cancellation fee or charge. Except as otherwise
set forth in SCHEDULE 8.19:

                  8.19.1   The Business has no collective bargaining or union
contracts agreement in effect or being negotiated;

                  8.19.2   There is no labor strike, dispute, request for
representation, slowdown, or stoppage pending or, to Sellers' best Knowledge,
threatened against the Business;

                  8.19.3   The Business is not in material default under any
such agreements, nor does there exist any event that, with notice or the passage
of time or both, would constitute a material default or event of default by the
Business under any such agreement.

                  8.19.4   The change of control of the Business will not be a
breach of or default under any such agreements.

                  8.19.5   No third party consents are required or needed in
order to make these representations after consummation of the transactions
provided for in this Agreement.

                                       20
<PAGE>

         8.20     PERSONAL PROPERTY.

         Without material exception, SCHEDULE 8.20 contains lists of all
tangible personal property and assets used in the conduct of the Business.
Except as set forth in SCHEDULE 8.20, the Company on the Closing Date will own
and have good title to such properties and none of such properties is subject to
any security interest, mortgage, pledge, conditional sales agreement, or other
lien or encumbrance (except for liens for current taxes, assessments, charges,
or other governmental levies not yet due and payable). Sellers have delivered to
Buyer copies of all leases and other agreements relating to property described
in SCHEDULE 8.20 (including any and all amendments and other modifications to
such leases and other agreements) all of which are valid and binding, and the
Business is not in material default under any such leases or agreements in any
material respects, which are described on SCHEDULE 8.20. Except as set forth in
SCHEDULE 8.20, all material properties listed therein are generally in good
operating condition and repair (ordinary wear and tear excepted), are performing
satisfactorily, and are available for immediate use in the conduct of the
Business and operations of the Company. All such tangible personal property is
in compliance in all material respects with all applicable statutes, ordinances,
rules, and regulations. The properties listed in SCHEDULE 8.20 include
substantially all such properties necessary to conduct the Business.

         8.21     REAL PROPERTY.

         Without material exception, SCHEDULE 8.21 contains a list of all real
property currently owned or leased and used or useful in the conduct of the
Business other than Excluded Assets. Except as set forth in SCHEDULE 8.21, the
Company on the Closing Date will have good and marketable fee simple title to
all of the real property listed as owned in SCHEDULE 8.21, except liens for real
estate taxes, assessments, charges, or other governmental levies not yet due and
payable and except for easements, rights of way, and restrictions of record as
evidenced in title insurance policies to be issued on or prior to the Closing
Date. Sellers have delivered to Buyer copies of all leases listed in SCHEDULE
8.21 (including any and all amendments and other modifications of such leases),
which leases are valid and binding in all material respects. The Business is not
in material default under any such leases. All property listed in SCHEDULE 8.21
(including improvements thereon) is in satisfactory condition and repair
consistent with its present use and is available for immediate use in the
conduct of the Business. Except as set forth in SCHEDULE 8.21, none of the
property listed in SCHEDULE 8.21 or subject to leases listed in SCHEDULE 8.21
violates in any material respect any applicable building or zoning code or
regulation of any governmental authority having jurisdiction. The property and
leases described in SCHEDULE 8.21 include all such property or property
interests necessary to conduct the Business.

         8.22     PERSONNEL.

         Sellers have provided to Buyer a true and complete list of:

                  8.22.1   The names, title, and current salaries of all
officers of the Business as of the Closing Date;

                                       21
<PAGE>

                  8.22.2   The wage rates (or ranges, if applicable) for each
class of exempt and nonexempt, salaried and hourly employees of the Business;

                  8.22.3   All scheduled or contemplated increases in
compensation or bonuses; and

                  8.22.4   All scheduled or contemplated employee promotions.

         8.23     PATENTS, TRADEMARKS, TRADE NAMES, ETC.

         Sellers have no patents, trademarks, trade names, service marks, and
copyrights, presently owned or held subject to license by the Company as of the
Closing Date. The Business has not been operated and is not operating in a
manner that materially infringes the proprietary rights of any other person in
any patents, trademarks, trade names, service marks, copyrights, or confidential
information. The Sellers have not received any written notice of any
infringement or unlawful use of such property.

         8.24     ERISA AND RELATED MATTERS.

         SCHEDULE 8.24 sets forth a description of all "Employee Welfare Benefit
Plans" and "Employee Pension Benefit Plans" (as defined in ss.ss. 3(1) and 3(2),
respectively, of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) existing on the date hereof that are or have been maintained or
contributed to by KBI. Except as listed on SCHEDULE 8.24, KBI does not maintain
any retirement or deferred compensation plan, savings, incentive, stock option
or stock purchase plan, unemployment compensation plan, vacation pay, severance
pay, bonus or benefit arrangement, insurance or hospitalization program or any
other fringe benefit arrangement for any employee, consultant or agent of the
Business, whether pursuant to contract, arrangement, custom or informal
understanding, which does not constitute an "Employee Benefit Plan" (as defined
in ss. 3(3) of ERISA), for which the Company may have any ongoing material
liability after Closing. KBI does not maintain nor has ever contributed to any
Multiemployer Plan as defined by ss. 3(37) of ERISA. KBI does not currently
maintain any Employee Pension Benefit Plan subject to Title IV of ERISA. There
have been no nonexempt "prohibited transactions" (as described in ss. 406 of
ERISA or ss. 4975 of the Code) with respect to any Employee Pension Benefit Plan
or Employee Welfare Benefit Plan maintained by KBI as to which KBI has been a
party. As to any employee pension benefit plan listed on SCHEDULE 8.24 and
subject to Title IV of ERISA, there have been no reportable events (as such term
is defined in ss. 4043 of ERISA).

         8.25     ENVIRONMENTAL MATTERS.

                  8.25.1   KBI has at all times been operated, and is, in
compliance in all material respects, with all Environmental Laws, including all
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules, and timetables contained in all applicable Environmental
Laws;

                                       22
<PAGE>

                  8.25.2   KBI has obtained and will assign to the Company at
Closing, and is materially in compliance with, all permits required by all
Environmental Laws ("Environmental Permits"), including, without limitation,
those regulating emissions, discharges, or releases of Hazardous Substances, or
the use, storage, treatment, transportation, release, emission and disposal, of
raw materials, by-products, wastes, and other substances used or produced by the
Business, and the Business has made all appropriate material filings for
issuance or renewal of such Environmental Permits;

                  8.25.3   There are no claims, notices, civil, criminal or
administrative actions, suits, hearings, investigations, inquiries, or
proceedings pending or, to Sellers' best Knowledge, threatened against the
Business that are based on or related to any Environmental Matters or the
failure of the Business to have any required Environmental Permits;

                  8.25.4   There are no past or present conditions, events,
circumstances, facts, activities, practices, incidents, actions, omissions or
plans that may: (1) interfere with or prevent continued compliance by the
Company with Environmental Laws and the requirements of Environmental Permits;
(2) give rise to any liability or other obligation under any Environmental Laws
that may require the Business to incur any actual Environmental Costs; or (3)
form the basis of any claim, action, suit, proceeding, hearing, investigation or
inquiry against or involving the Company based on or related to any
Environmental Matter or which could require the Company to incur any
Environmental Costs;

                  8.25.5   KBI has not received any notice or other
communication that KBI is or may be a potentially responsible person or
otherwise liable in connection with any waste disposal site used or maintained
or that is otherwise related to the Business allegedly containing any Hazardous
Substances, or other location used for the disposal of any Hazardous Substances,
or notice of any failure of the Business to comply with any Environmental Law or
the requirements of any Environmental Permit;

                  8.25.6   KBI has not been at any time requested or required by
any governmental entity having jurisdiction under any Environmental Laws to
perform any investigative or remedial activity or other action in connection
with any Environmental Matter in respect of the Business;

                  8.25.7   To the best Knowledge of Sellers, KBI has not used
any waste disposal site, or otherwise disposed of or transported any Hazardous
Substances. KBI has not arranged for the transportation of any Hazardous
Substances to any place or location, in violation of any Environmental Laws;

                  8.25.8   There has been no release of any Hazardous Substances
at, on, about, under, or within any assets or properties currently or formerly
owned, leased, or controlled by the Business (other than pursuant to and in
accordance with Environmental Permits held by the Business) and all of the
assets and real property owned or leased by KBI are free of any Hazardous
Substances.

                                       23
<PAGE>

          ARTICLE IX - REPRESENTATIONS AND WARRANTIES OF BMHC AND BUYER

         Buyer hereby represents and warrants to the Sellers as follows, and the
warranties and representations contained in this Article or elsewhere in this
Agreement shall be deemed remade as of Closing:

         9.1      LEGAL STATUS.

         Each of BMHC and Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the state of Delaware and prior
to Closing, it will be qualified or licensed to do business in all states in
which failure to do so would have a material adverse effect on BMHC.

         9.2      AUTHORITY.

         Each of BMHC and Buyer has full power and authority to execute and
perform this Agreement and all action necessary to confirm such authority has
been duly and lawfully taken. Upon execution hereof, this shall be a valid and
legally binding obligation of Buyer, enforceable against Buyer in accordance
with its terms. Neither the execution nor the performance of this Agreement will
violate the terms or any provision of BMHC's or Buyer's Certificate of
Incorporation, or any note, loan agreement, commitment agreement, lease or other
material contract or agreement to which BMHC or Buyer is a party, including any
loan agreement which it will become a party to as a result of or in connection
with this transaction.

         9.3      TITLE AND RELATED MATTERS.

         BMHC or its subsidiary, BMC West Corporation, will have on the Closing
Date good and indefeasible title to all of the BMHC Assets to be transferred to
the Company, free and clear of all security interests, mortgages, liens,
pledges, charges, claims, or encumbrances of any kind or character, except for
the rights of customers of the BMHC's business conducted in Phoenix, Arizona,
with respect to inventory under orders or contracts entered into by the BMHC's
business conducted in Phoenix, Arizona, in the ordinary course of business.

         9.4      LITIGATION.

         There are no material actions, suits, proceedings, orders,
investigations, or claims pending or overtly threatened against BMHC or the
Buyer involving BMHC's operation in Arizona or any of the BMHC Assets, at law or
in equity, or before or by any governmental department, commission, board,
bureau, agency, or instrumentality; BMHC and the Buyer are not subject to any
arbitration proceedings under collective bargaining agreements or otherwise or
any governmental investigations or inquiries; and, to the best knowledge of each
of them, there is no basis for any of the foregoing.

                                       24
<PAGE>

         9.5      COMPLIANCE WITH LAWS.

         The conduct of BMHC's business at its location in Phoenix, Arizona is
in substantial compliance with all laws, statutes, ordinances, regulations,
orders, judgments, or decrees applicable to it. BMHC has not received any notice
of any asserted present or past failure by it to comply with such laws,
statutes, ordinances, regulations, orders, judgments, or decrees, including
Environmental Laws or ERISA.

         9.6      NO BROKERS.

         There are no claims for brokerage commissions, finders' fees, or
similar compensation in connection with this transaction based on any
arrangement or agreement binding upon any of the parties hereto.

         9.7      EMPLOYEES AND LABOR RELATIONS MATTERS.

                  9.7.1    To BMHC's best Knowledge, no key employee of BMHC's
business operations in Phoenix, Arizona or any group of such employees has any
plans to terminate employment with the Business;

                  9.7.2    BMHC's business operation in Phoenix, Arizona has
complied in all material respects with all labor and employment laws, including
provisions thereof relating to wages, hours, equal opportunity, collective
bargaining, Americans With Disabilities Act, and the payment of social security
and other taxes;

                  9.7.3    There is no unfair labor practice charge, complaint,
or other action against BMHC's business operation in Phoenix, Arizona pending
or, to BMHC's best knowledge, threatened before the National Labor Relations
Board and BMHC's business operation in Phoenix, Arizona is not subject to any
order to bargain by the National Labor Relations Board;

                  9.7.4    No questions concerning representation have been
raised or, to BMHC's best Knowledge, are threatened with respect to employees of
BMHC's business operation in Phoenix, Arizona.

                  9.7.5    No grievance that might have a material adverse
effect on BMHC's business operation in Phoenix, Arizona and no arbitration
proceeding arising out of or under any collective bargaining agreement is
pending, and, to BMHC's best Knowledge, no basis exists for any such grievance
or arbitration proceeding;

                  9.7.6    No employee of BMHC's business operation in Phoenix,
Arizona is subject to any noncompetition, nondisclosure, confidentiality,
employment, consulting, or similar agreements with persons other than BMHC and
its subsidiary; and

                                       25
<PAGE>

                  9.7.7    All employees of BMHC's business operation in
Phoenix, Arizona have provided documentation on file with BMHC required by the
Immigration and Naturalization Act and regulations.

         9.8      DISCLOSURE.

         Neither this Agreement nor any of the schedules, attachments, written
statements, documents, certificates, or other items prepared or supplied to
Sellers with respect to this Agreement contain any untrue statement of a
material fact or omit a material fact necessary to make each statement contained
herein or therein not misleading. BMHC has not intentionally concealed any fact
known by such person to have a material adverse effect upon the Business's
existing or expected financial condition, operating results, assets, customer
relations, employee relations, or business prospects taken as a whole.

         9.9      AGREEMENTS AND COMMITMENTS.

         SCHEDULE 9.9 contains a complete and accurate list of each contract,
instrument, and commitment (including license agreements) to which BMHC's
business operation in Phoenix, Arizona is a party that provides for payments in
excess of $5,000 per year or whose term is in excess of one year and is not
cancelable upon 30 or fewer days' notice without any liability, penalty, or
premium, other than a nominal cancellation fee or charge. Except as otherwise
set forth in SCHEDULE 9.9.

                  9.9.1    BMHC's business operation in Phoenix, Arizona has no
collective bargaining or union contracts agreement in effect or being
negotiated;

                  9.9.2    There is no labor strike, dispute, request for
representation, slowdown, or stoppage pending or, to BMHC's best Knowledge,
threatened against the BMHC's business operation in Phoenix, Arizona;

                  9.9.3    BMHC's business operation in Phoenix, Arizona is not
in material default under any such agreements, nor does there exist any event
that, with notice or the passage of time or both, would constitute a material
default or event of default by BMHC's business operation in Phoenix, Arizona
under any such agreement.

                  9.9.4    The change of control of BMHC's business operation in
Phoenix, Arizona will not be a breach of or default under any such agreements.

                  9.9.5    No third party consents are required or needed in
order to make these representations after consummation of the transactions
provided for in this Agreement.

         9.10     PERSONAL PROPERTY.

         Without material exception, SCHEDULE 9.10 contains lists of all
tangible personal property and assets used in the conduct of BMHC's business
operation in Phoenix, Arizona. Except as set forth in SCHEDULE 9.10, BMHC or its
subsidiary, BMC West Corporation, on the

                                       26
<PAGE>

Closing Date will own and have good title to such properties and none of such
properties is subject to any security interest, mortgage, pledge, conditional
sales agreement, or other lien or encumbrance (except for liens for current
taxes, assessments, charges, or other governmental levies not yet due and
payable). BMHC has delivered to Seller copies of all leases and other agreements
relating to property described in SCHEDULE 9.9 (including any and all amendments
and other modifications to such leases and other agreements) all of which are
valid and binding, and BMHC's business operation in Phoenix, Arizona is not in
material default under any such leases or agreements in any material respects,
which are described on SCHEDULE 9.10. Except as set forth in SCHEDULE 9.10, all
material properties listed therein are generally in good operating condition and
repair (ordinary wear and tear excepted), are performing satisfactorily, and are
available for immediate use in the conduct of BMHC's business operation in
Phoenix, Arizona. All such tangible personal property is in compliance in all
material respects with all applicable statutes, ordinances, rules, and
regulations. The properties listed in SCHEDULE 9.10 include substantially all
such properties necessary to conduct BMHC's business operation in Phoenix,
Arizona.

         9.11     REAL PROPERTY.

         Without material exception, SCHEDULE 9.11 contains a list of all real
property currently owned or leased and used or useful in the conduct of BMHC's
business operation in Phoenix, Arizona. BMHC has delivered to Sellers copies of
all leases listed in SCHEDULE 9.11 (including any and all amendments and other
modifications of such leases), which leases are valid and binding in all
material respects. BMHC's business operation in Phoenix, Arizona is not in
material default under any such leases. All property listed in SCHEDULE 9.11
(including improvements thereon) is in satisfactory condition and repair
consistent with its present use and is available for immediate use in the
conduct of BMHC's business operation in Phoenix, Arizona. Except as set forth in
SCHEDULE 9.11, none of the property listed in SCHEDULE 9.11 or subject to leases
listed in SCHEDULE 9.11 violates in any material respect any applicable building
or zoning code or regulation of any governmental authority having jurisdiction.
The property and leases described in SCHEDULE 9.11 include all such property or
property interests necessary to conduct BMHC's business operation in Phoenix,
Arizona.

         9.12     PERSONNEL.

         SCHEDULE 9.12 sets forth a true and complete list of:

                  9.12.1   The names, title, and current salaries of all
employees of BMHC's business operation in Phoenix, Arizona as of the Closing
Date;

                  9.12.2   The wage rates (or ranges, if applicable) for each
class of exempt and nonexempt, salaried and hourly employees of BMHC's business
operation in Phoenix, Arizona.

                  9.12.3   All scheduled or contemplated increases in
compensation or bonuses; and

                                       27
<PAGE>

                  9.12.4   All scheduled or contemplated employee promotions.

         9.13     ERISA AND RELATED MATTERS.

         SCHEDULE 9.13 sets forth a description of all "Employee Welfare Benefit
Plans" and "Employee Pension Benefit Plans" (as defined in ss.ss. 3(1) and 3(2),
respectively, of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) existing on the date hereof that are or have been maintained or
contributed to by BMHC or its subsidiary. Except as listed on SCHEDULE 9.13,
BMHC or its subsidiary does not maintain any retirement or deferred compensation
plan, savings, incentive, stock option or stock purchase plan, unemployment
compensation plan, vacation pay, severance pay, bonus or benefit arrangement,
insurance or hospitalization program or any other fringe benefit arrangement for
any employee, consultant or agent of the business operated by BMHC in Phoenix,
Arizona, whether pursuant to contract, arrangement, custom or informal
understanding, which does not constitute an "Employee Benefit Plan" (as defined
in ss. 3(3) of ERISA), for which the business operated by BMHC in Phoenix,
Arizona may have any ongoing material liability after Closing. BMHC or its
subsidiary does not maintain nor has it ever contributed to any Multiemployer
Plan as defined by ss. 3(37) of ERISA. BMHC or its subsidiary does not currently
maintain any Employee Pension Benefit Plan subject to Title IV of ERISA. BMHC or
its subsidiary has no nonexempt "prohibited transactions" (as described in ss.
406 of ERISA or ss. 4975 of the Code) with respect to any Employee Pension
Benefit Plan or Employee Welfare Benefit Plan maintained by BMHC or its
subsidiary as to which BMHC or its subsidiary has been a party. As to any
employee pension benefit plan listed on SCHEDULE 9.13 and subject to Title IV of
ERISA, there have been no reportable events (as such term is defined in ss. 4043
of ERISA).

         9.14     ENVIRONMENTAL MATTERS.

                  9.14.1   The business operated by BMHC in Phoenix, Arizona has
at all times been operated, and is, in compliance in all material respects, with
all Environmental Laws, including all limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules, and timetables
contained in all applicable Environmental Laws;

                  9.14.2   The business operated by BMHC in Phoenix, Arizona has
obtained and will assign to the Company at Closing, and is materially in
compliance with, all permits required by all Environmental Laws ("Environmental
Permits"), including, without limitation, those regulating emissions,
discharges, or releases of Hazardous Substances, or the use, storage, treatment,
transportation, release, emission and disposal, of raw materials, by-products,
wastes, and other substances used or produced by the business operated by BMHC
in Phoenix, Arizona and it has made all appropriate material filings for
issuance or renewal of such Environmental Permits;

                  9.14.3   There are no claims, notices, civil, criminal or
administrative actions, suits, hearings, investigations, inquiries, or
proceedings pending or, to BMHC's best Knowledge, threatened against the
business operated by BMHC in Phoenix, Arizona that are based on or related to
any Environmental Matters or the failure of it to have any required
Environmental Permits;

                                       28
<PAGE>

                  9.14.4   There are no past or present conditions, events,
circumstances, facts, activities, practices, incidents, actions, omissions or
plans that may: (1) interfere with or prevent continued compliance by the
business operated by BMHC in Phoenix, Arizona with Environmental Laws and the
requirements of Environmental Permits; (2) give rise to any liability or other
obligation under any Environmental Laws that may require it to incur any actual
Environmental Costs; or (3) form the basis of any claim, action, suit,
proceeding, hearing, investigation or inquiry against or involving it based on
or related to any Environmental Matter or which could require it to incur any
Environmental Costs;

                  9.14.5   The business operated by BMHC in Phoenix, Arizona has
not received any notice or other communication that it is or may be a
potentially responsible person or otherwise liable in connection with any waste
disposal site used or maintained or that is otherwise related to it allegedly
containing any Hazardous Substances, or other location used for the disposal of
any Hazardous Substances, or notice of any failure of it to comply with any
Environmental Law or the requirements of any Environmental Permit;

                  9.14.6   The business operated by BMHC in Phoenix, Arizona has
not been at any time requested or required by any governmental entity having
jurisdiction under any Environmental Laws to perform any investigative or
remedial activity or other action in connection with any Environmental Matter in
respect of it.

                  9.14.7   To BMHC's best Knowledge, the business operated by
BMHC in Phoenix, Arizona has not used any waste disposal site, or otherwise
disposed of or transported, any Hazardous Substances. BMHC has not arranged for
the transportation of any Hazardous Substances to any place or location, in
violation of any Environmental Laws;

                  9.14.8   There has been no release of any Hazardous Substances
at, on, about, under, or within any assets or properties currently or formerly
owned, leased, or controlled by the business operated by BMHC in Phoenix,
Arizona(other than pursuant to and in accordance with Environmental Permits held
by the Business) and all of the assets and real property owned or leased by it
are free of any Hazardous Substances.

             ARTICLE X - COLLECTION OF RECEIVABLES; CUSTOMER CLAIMS

         10.1     COLLECTION.

         KBI guarantees to Buyer the collectibility of all of the Trade Accounts
Receivable. During the Post Closing Adjustment Period, the Company shall use its
best efforts to collect the Trade Accounts Receivable. If any of the Trade
Accounts Receivable are determined to be uncollectible during the Post Closing
Adjustment Period , Sellers shall pay to Buyer the amount of such uncollected
Trade Accounts Receivable at the end of the Post Closing Adjustment Period.

                                       29
<PAGE>

         10.2     CUSTOMER CLAIMS AND RETURNS.

         During the Post Closing Adjustment Period, the Company shall honor any
reasonable claims by customers of the Company for returns of goods relating to
invoices issued prior to the Closing Date. The Company shall report any such
returns to KBI and Buyer. Any returns of goods relating to invoices issued prior
to the Closing Date that are of a quality resalable in the ordinary course of
business shall result in a payment by KBI to Buyer in the amount of the gross
profit margin on the goods. KBI shall pay to the Company the total amount of
credits in excess of any reserves as of the Closing Date for returned goods.

                          ARTICLE XI - BMHC'S COVENANTS

         BMHC covenants and agrees to take and shall take all actions necessary
to cause Buyer to comply with the terms of this Agreement and to cause Buyer to
carry out the obligations and transactions provided for in this Agreement.

                            ARTICLE XII - [RESERVED]

                            ARTICLE XIII - INDEMNITY

         13.1     SURVIVAL OF REPRESENTATIONS AND WARRANTIES.

         All of the representations and warranties of the Sellers contained in
Article VIII or made otherwise herein or in any documents delivered in
connection with the Closing shall survive the Closing and continue in full force
and effect for a period of two (2) years (the "Survival Period") provided that
the representations contained in Sections 8.1, 8.3, 8.11, and 8.24 shall survive
indefinitely. All representations and warranties of BMHC and Buyer contained in
this Agreement or in any documents delivered in connection with the Closing
shall continue in full force and effect for the Survival Period except the
representations in Sections 9.1 and 9.2 shall survive indefinitely.

         13.2     INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLERS.

         Sellers will indemnify and hold harmless Buyer for, and will pay to
Buyer the amount of, any loss, liability, claim, damage (including incidental
and consequential damages), expense (including costs of investigation and
defense and reasonable attorneys' fees) or diminution of value, whether or not
involving a third-party claim (collectively, "Damages"), arising, directly or
indirectly, from or in connection with the following provided that the aggregate
amount of Damages from all indemnification claims must exceed a threshold of
$100,000; provided that if Damages exceed $100,000, Seller shall be responsible
for all Damages:

                  13.2.1   any breach of any of the representations, warranties,
covenants or obligations in this Agreement by Sellers, or any other certificate
or document delivered by the Company or Sellers pursuant to this Agreement;

                                       30
<PAGE>

                  13.2.2   any product shipped or manufactured by, or any
services provided by the Business prior to the Closing Date;

                  13.2.3   any claims by any person for a brokerage or finder's
fee or commission or similar payment based upon any alleged agreement with the
Company or Sellers.

To the extent any claim for indemnification is covered by applicable insurance,
Buyer agrees that the Company must first seek recovery from such insurance and
the indemnification claim shall be reduced to the extent of any such insurance
proceeds actually paid to Buyer.

         The party seeking indemnification shall be paid the amount of the claim
within ninety (90) days after submission of the claim. If there is any
disagreement on the right of the Indemnified Party to payment of the claim or
the amount of the claim, the parties shall submit the dispute to non-binding
mediation with CPA. Mediation shall occur within sixty (60) days after the
expiration of the payment date. If mediation does not result in resolution of
the claim, the parties may pursue any legal remedies available to them.

         Except with respect to Damages resulting from (1) the breach of
Sections 8.1 or 8.11 or (2) fraudulent or deliberate misrepresentations, Damages
payable by Sellers shall in no event exceed $5,000,000. Damages, other than
those arising under (1) and (2) above, shall be payable solely by reducing the
Redemption Price (in the case of a Redemption, as defined in the Operating
Agreement) or the Purchase Price (as defined in the Put Agreement, in the case
of the exercise of the Put); provided that any such Damages shall bear interest
from the time they would otherwise have been payable in cash by the Sellers
until the closing of the Redemption or Put (as applicable) at the prime rate of
interest published in THE WALL STREET JOURNAL, plus 1%, compounded monthly.
Notwithstanding the preceding, Sellers at their option may at any time pay to
Buyer all or a portion of the amount otherwise payable under this Section, in
which case the amount of the reduction in the Redemption Price or the Purchase
Price, shall be reduced by such payment.

         13.3     INDEMNIFICATION AND PAYMENT OF DAMAGES BY BMHC AND BUYER.

         BMHC and Buyer will indemnify and hold harmless Sellers, and will pay
to Sellers the amount of any Damages arising, directly or indirectly, from or in
connection with (a) any breach of any representation or warranty made by BMHC or
Buyer in this Agreement or in any certificate delivered by Buyer pursuant to
this Agreement, or (b) any breach by BMHC or Buyer of any covenant or obligation
of Buyer in this Agreement provided that the aggregate amount of Damages from
all indemnification claims must exceed the aggregate threshold of $100,000;
provided that if Damages exceed $100,000, Sellers shall be responsible for all
Damages.

         To the extent any claim for indemnification is covered by applicable
insurance, Sellers and the Company agree that the Company must first seek
recovery from such insurance, and the indemnification claim shall be reduced to
the extent of any such insurance proceeds paid to Sellers or the Company. The
party seeking indemnification shall be paid the amount of the claim within
ninety (90) days after submission of the claim. If there is any disagreement on
the

                                       31
<PAGE>

right of the Indemnified Party to payment of the claim or the amount of the
claim, the parties shall submit the dispute to non-binding mediation with CPA.
Mediation shall occur within sixty (60) days after the expiration of the payment
date. If mediation does not result in resolution of the claim, the parties may
pursue any legal remedies available to them.

         Except with respect to Damages resulting from (1) the breach of
Sections 9.1 or 9.11 or (2) fraudulent or deliberate misrepresentations, Damages
payable by Buyers shall in no event exceed $5,000,000. Damages, other than those
arising under (1) and (2) above, shall be payable solely by increasing the
Redemption Price (in the case of a Redemption, as defined in the Operating
Agreement) or the Purchase Price (as defined in the Put Agreement, in the case
of the exercise of the Put); provided that any such Damages shall bear interest
from the time they would otherwise have been payable in cash by the Buyer until
the closing of the Redemption or Put (as applicable) at the prime rate of
interest published in THE WALL STREET JOURNAL, plus 1%, compounded monthly.
Notwithstanding the preceding, Buyer at its option may at any time pay to
Sellers all or a portion of the amount otherwise payable under this Section, in
which case the amount of the increase in the Redemption Price or the Purchase
Price, shall be reduced by such payment.

         13.4     INDEMNIFICATION PROCEDURE.

                  13.4.1   Any party seeking indemnification, damages, or any
other recovery whatsoever (the "Indemnified Party") from another party or
parties (individually or collectively, the "Indemnifying Party") with respect to
any claim, demand, action, proceeding or other matter pursuant to this Agreement
or arising out of the transactions contemplated hereby (the "Claim") shall
notify the Indemnifying party of the existence of the Claim, setting forth in
reasonable detail the facts and circumstances pertaining thereto and the basis
for the Indemnified Party's right to indemnification (a "Notice of Claims"),
which Notice of Claim shall contain the following information to the extent it
is reasonably available to the Indemnified Party: (a) an estimate of the amount
then reasonably ascertainable of the alleged loss, expense or liability against
which the Indemnified Party is indemnified; (b) a description, in reasonable
detail, of the circumstances giving rise to the alleged loss, expense, or
liability; and (c) a statement identifying each party against whom a Claim is
asserted. In no event shall such notice be valid or enforceable if sent after
the Survival Period.

                  13.4.2   If any third party shall notify any Indemnified Party
with respect to any matter which may give rise to a Claim for indemnification
against the Indemnifying Party under this Agreement, then the Indemnified Party
shall notify the Indemnifying Party thereof, which notice shall set forth the
information required in Section 13.4.1 and be furnished within thirty (30) days
after the Indemnified Party's receipt of notice from the third party; provided,
however, that no delay on the part of the Indemnified Party in notifying any
Indemnifying Party shall relieve the Indemnifying Party from any liability or
obligation hereunder unless (and then solely to the extent) the Indemnifying
Party thereby is materially prejudiced by such failure to give notice. However,
in no event shall such notice be valid or enforceable if sent after the Survival
Period. If the Indemnifying Party notifies the Indemnified Party within thirty
(30) days that it will assume the defense thereof:

                                       32
<PAGE>

                           (1)      the Indemnifying Party shall defend the
Indemnified Party against the matter with counsel of its choice reasonably
satisfactory to the Indemnified Party;

                           (2)      the Indemnified Party may retain separate
counsel at its sole cost and expense (except that the Indemnifying Party will be
responsible for the fees and expenses of the separate counsel to the extent the
Indemnified Party concludes based upon advice of counsel that a conflict of
interest exists between the Indemnified Party and Indemnifying Party that there
may be one or more legal defenses available to the Indemnified Party which are
not available to the Indemnifying Party, or available to the Indemnifying Party,
but the assertion of which would be adverse to the interest of the Indemnified
Party);

                           (3)      the Indemnified Party will not consent to
the entry of any judgment or enter into any settlement with respect to the
matter without the written consent of the Indemnifying Party (not to be withheld
unreasonably); and

                           (4)      the Indemnifying Party will not consent to
the entry of any judgment or enter into any settlement which does not include a
provision whereby the plaintiff or claimant in the matter releases the
Indemnified Party from all liability with respect thereto, without the written
consent of the Indemnified Party (not to be withheld unreasonably);

                  13.4.3   If the Indemnifying Party does not notify the
Indemnified Party within thirty (30) days that it will assume the defense
thereof, then the Indemnified Party may defend against, or enter into any
settlement with respect to, the matter in any manner it reasonably may deemed
appropriate, without prejudice to any of its rights hereunder;

                  13.4.4   The Indemnified Party shall be entitled to
reimbursement for reasonable expenses, included in damages with respect to any
Claim (including, without limitation, the cost of defense, preparation and
investigation relating to such Claim) as such expenses are incurred by the
Indemnified Party;

         13.5     COOPERATION.

         The Indemnified Party and the Indemnifying Party shall each use
commercially reasonable efforts to cooperate with the other such party in
connection with the defense of third-party Claims.

                                       33
<PAGE>

    ARTICLE XIV - CONDUCT OF OPERATIONS PRIOR TO CLOSING/GOVERNMENT APPROVALS

         14.1     CONDUCT OF OPERATIONS.

         From the date hereof until Closing, Sellers shall conduct the Business
in the ordinary course and consistent with its prior practices. KBI agrees not
to enter into any leases for personal or real property that cannot be canceled
without penalty upon thirty (30) days' notification. Sellers shall advise Buyer
of any material customer accounts that Sellers lose during the period between
January 11, 1999, and the Closing Date.

         14.2     REQUISITE GOVERNMENT APPROVALS.

         The parties shall make all other required filings and any requisite
notice to all government agencies and shall have received all required
government approvals for the transactions contemplated herein, including but not
limited to filings required by the Securities Act of 1933 and regulations
promulgated thereunder.

                              ARTICLE XV - CLOSING

         15.1     CLOSING.

         Closing shall occur on May 3, 1999, at the offices of Lewis and Roca
LLP in Phoenix, Arizona, effective as of the close of business on April 30,
1999, or at such other time or place as the parties may agree upon.

         15.2     TIME IS OF THE ESSENCE.

         Time is of the essence for the Closing of this transaction.

           ARTICLE XVI - CONDITIONS PRECEDENT TO BUYER'S DUTY TO CLOSE

         Buyer shall have no duty to Close unless and until each and every one
of the following conditions precedent have been fully and completely satisfied:

         16.1     CONTINUED TRUTH OF WARRANTIES.

         All of the representations and warranties of the Sellers contained
herein shall continue to be true and correct at Closing in all material
respects;

                                       34
<PAGE>

         16.2     SUPPLEMENTS TO SCHEDULES.

         From time to time prior to the Closing, Sellers will promptly
supplement or amend the Schedules with respect to any matter hereafter arising
that, if existing or occurring at the date of this Agreement, would have been
required to be set forth or described in any Schedule and will promptly notify
Buyer of any breach that Sellers discover of any representation, warranty, or
covenant contained in this Agreement. No supplement or amendment of any Schedule
made pursuant to this section will be deemed to cure any breach of any
representation of or warranty made in this Agreement unless Buyer specifically
agrees thereto in writing; provided, however, that if this purchase is closed,
Buyer will be deemed to have waived its rights with respect to any breach of a
representation, warranty, or covenant or any supplement to any Schedule of which
it shall have been notified pursuant to this Section 16.2;

         16.3     PERFORMANCE OF OBLIGATIONS.

         Sellers shall have substantially performed or tendered performance of
each and every one of their obligations hereunder which by its terms is capable
of performance before Closing, including providing evidence to Buyer of the
transfer by KBI of substantially all of its assets to the Company and the
Company's assumption of substantially all of the liabilities of KBI, except for
the Excluded Assets and Excluded Liabilities;

         16.4     DELIVERY OF CLOSING DOCUMENTS.

         The Company and Sellers shall have tendered delivery to Buyer of all
the documents required to be delivered to Buyer by the Company at Closing;

         16.5     LITIGATION.

         No lawsuit, administrative proceedings or other legal action shall be
pending or threatened which seeks to restrain or enjoin the transactions
contemplated hereby;

         16.6     GOVERNMENT APPROVALS.

         The parties shall have received all other government approvals and
shall have made all necessary filings with government agencies required by the
transactions contemplated herein;

         16.7     DUE DILIGENCE PERIOD.

         The due diligence period shall have expired without Buyer terminating
this Agreement and the Sellers shall have satisfactorily cured any problems
raised by Buyer in the due diligence period;

                                       35
<PAGE>

         16.8     APPROVAL BY BOARD OF DIRECTORS.

         The Board of Directors of Business shall have approved the transactions
provided for in this Agreement;

         16.9     PRELIMINARY CLOSING BALANCE SHEET.

         Buyer shall have agreed to the terms of the Preliminary Closing Balance
Sheet;

         16.10    EMPLOYMENT, CONFIDENTIALITY, AND NONCOMPETITION AGREEMENTS.

         The Company shall have entered into Employment, Confidentiality, and
Noncompetition Agreements with [Redacted] in a form reasonably acceptable to
Buyer and Sellers.

         16.11    LEASES FOR LOCATIONS.

         Sellers shall have caused the Company simultaneously with Closing to
enter into or assign leases for each of the Locations, including Buyer's Phoenix
location, on terms and conditions satisfactory to Buyer.

         16.12    OPERATING AGREEMENT.

         Buyer and KBI shall have executed and delivered the Operating
Agreement.

         16.13    PUT AGREEMENT.

         Sellers shall have executed and delivered the Put Agreement with BMHC.

         16.14    BONUS PLAN.

         Sellers shall have prepared and adopted a bonus plan in a form
acceptable to Buyer providing for a payment to employees of the Company
designated by Knipp in the amount of $[Redacted] (including applicable payroll
and withholding taxes) upon transfer of KBI's remaining Interests in the
Company; provided that Knipp receives at least $[Redacted] in value for such
remaining Interests.

         16.15    MATERIAL ADVERSE CHANGE.

         There shall have been no material adverse change in the operations or
prospects of the Business.

         16.16    LENDER APPROVALS.

         BMHC shall have obtained approval of the transaction from its lenders.

Pursuant to a request for confidential treatment, selected information in this
document has been omitted and separately filed with the Securities and Exchange
Commission.

                                       36
<PAGE>

        ARTICLE XVII - CONDITIONS PRECEDENT TO THE SELLERS' DUTY TO CLOSE

         Sellers shall have no duty to Close this transaction unless and until
each and every one of the following conditions precedent have been fully and
completely satisfied:

         17.1     CONTINUED TRUTH OF WARRANTIES.

         All of the representations and warranties of BMHC and Buyer contained
herein shall continue to be true and correct at Closing in all material
respects;

         17.2     SUPPLEMENTS TO SCHEDULES.

         From time to time prior to the Closing, Buyer will promptly supplement
or amend the Schedules with respect to any matter hereafter arising that, if
existing or occurring at the date of this Agreement, would have been required to
be set forth or described in any Schedule and will promptly notify Sellers of
any breach that Buyer discovers of any representation, warranty, or covenant
contained in this Agreement. No supplement or amendment of any Schedule made
pursuant to this section will be deemed to cure any breach of any representation
of or warranty made in this Agreement unless Sellers specifically agree thereto
in writing; provided, however, that if this purchase is closed, Sellers will be
deemed to have waived their rights with respect to any breach of a
representation, warranty, or covenant or any supplement to any Schedule of which
they shall have been notified pursuant to this Section 17.2;

         17.3     PERFORMANCE OF OBLIGATIONS.

         BMHC and Buyer shall have substantially performed or tendered
substantial performance of each and every one of their respective obligations
hereunder which by its terms is capable of performance before Closing;

         17.4     DELIVERY OF CLOSING DOCUMENTS.

         BMHC and Buyer shall have tendered delivery to the Company of all the
documents required to be delivered to Sellers or the Company by BMHC and Buyer
at Closing pursuant to this Agreement;

         17.5     LITIGATION.

         No lawsuit, administrative proceedings or other legal action shall be
pending or threatened which seeks to restrain or enjoin the transactions
contemplated hereby.

         17.6     LEASE FOR PHOENIX LOCATION

         Buyer shall have caused the Company simultaneously with Closing to
enter into or assign a lease for its Phoenix location on terms and conditions
satisfactory to Sellers.

         17.7     OPERATING AGREEMENT.

                                       37
<PAGE>

         Buyer and Sellers shall have executed and delivered the Operating
Agreement.

         17.8     PUT AGREEMENT.

         Buyer and Sellers shall have executed and delivered the Put Agreement.

         17.9     GOVERNMENT APPROVALS.

         The parties shall have received all other government approvals and
shall have made all necessary filings with government agencies required by the
transactions contemplated herein.

         17.10    MATERIAL ADVERSE CHANGE.

         There shall have been no material adverse change in BMHC's or Buyer's
financial condition or prospects.

           ARTICLE XVIII - ITEMS TO BE DELIVERED AT CLOSING BY SELLERS

         At Closing, Sellers shall, unless waived by Buyer, deliver the
following items to Buyer:

         18.1     OPINION OF COUNSEL.

         The opinion of Lewis and Roca LLP in the form attached hereto as
EXHIBIT 18.1.

         18.2     CERTIFICATE OF INCUMBENCY.

         A copy of KBI's certificate of incumbency certified by the secretary of
the KBI;

         18.3     CERTIFICATES OF GOOD STANDING.

         Certificates of good standing or due qualification from the Secretary
of State of Delaware, dated within a reasonable period before Closing;

         18.4     REPRESENTATIONS AND WARRANTIES.

         A certificate signed by the Sellers to the effect that all of the
representations and warranties contained herein by the Sellers are true and
correct in all material respects as of Closing.

         18.5     AGREEMENTS.

                                       38
<PAGE>

         Sellers shall have executed and delivered in a form acceptable to BMHC
and Buyer the documents provided for in Sections 16.9, 16.10, 16.11, 16.12,
16.13 and 16.14.

        ARTICLE XIX - ITEMS TO BE DELIVERED AT CLOSING BY BMHC AND BUYER

         At Closing, BMHC and Buyer shall, unless waived by the Company or
Sellers, deliver the following items to Sellers and the Company:

         19.1     CERTIFIED RESOLUTION.

         A copy of the resolutions of the Board of Directors of BMHC and Buyer
authorizing the execution and performance of this Agreement, certified by the
Secretary of BMHC;

         19.2     REPRESENTATIONS AND WARRANTIES.

         A certificate signed by an officer of BMHC and Buyer to the effect that
all the representations and warranties of Buyer contained herein are true and
correct in all material respects as of Closing;

         19.3     OPINION OF COUNSEL.

         An opinion of BMHC and Buyer's counsel in the form attached hereto as
EXHIBIT 19.3.

         19.4     INCUMBENCY CERTIFICATE.

         A certificate signed by an officer of BMHC and the Buyer to the effect
that all persons having signed or signing documents pursuant to this Agreement
were authorized to do so and identifying the officers and directors of BMHC and
the Buyer and containing exemplar signatures of each such officer who has signed
documents delivered pursuant to this Agreement;

         19.5     PURCHASE PRICE.

         The Purchase Price to be paid at Closing shall be paid in immediately
available funds by wire transfer to such of the Sellers' bank accounts as they
may designate; and

         19.6     CERTIFICATE OF GOOD STANDING.

         Certificate of good standing or due qualification from the secretary of
state of Delaware, dated within a reasonable period before Closing.

                                       39
<PAGE>

         19.7     BILL OF SALE.

         A bill of sale for the tangible personal property to be transferred to
the Company.

         19.8     AGREEMENTS.

         Buyer and BMHC shall have executed and delivered in a form agreed to by
KBI and Knipp the documents provided for in Sections 16.12, 17.7 and 17.8.

                           ARTICLE XX - MISCELLANEOUS

         20.1     EXPENSES.

         Except as otherwise expressly provided in this Agreement, each party to
this Agreement will bear its respective expenses incurred in connection with the
preparation, execution, and performance of this Agreement and the contemplated
transactions, including all fees and expenses of agents, representatives,
counsel, and accountants.

         20.2     FURTHER ASSURANCES; CONSENTS.

         Each party shall, at any time after Closing, execute and deliver to the
other party all such additional instruments of conveyance and assignments,
certificates or similar documents as such other party may reasonably request.
The parties shall not unreasonably withhold consent for any actions or matters
necessary to carry out the terms of this Agreement.

         20.3     NO OTHER AGREEMENTS.

         This Agreement constitutes the entire agreement between the parties
with respect to its subject matter except for the Confidentiality Agreement. All
prior and contemporaneous negotiations, proposals and agreements between the
parties are included in this Agreement. Any changes to this Agreement must be
agreed to in writing by both parties.

         20.4     WAIVER.

         Either party may waive the performance of any obligation owed to it by
the other party hereunder for the satisfaction of any condition precedent to the
waiving party's duty to perform any of its covenants, including its obligations
to close. Any such waiver shall be valid only if contained in a writing signed
by the parties.

         20.5     PUBLIC ANNOUNCEMENTS.

         No public announcements of this Agreement shall be made unless BMHC and
the Sellers have mutually agreed on the timing, distribution, and contents of
such announcements, except as may be required by the security laws.

                                       40
<PAGE>

         20.6     NOTICES.

         Any notices required or allowed in this Agreement shall be effectively
given if placed in a sealed envelope, postage prepaid, and deposited in the
United States mail, registered or certified, addressed as follows:

         To Sellers:       Lawrence W. Knipp
                           Knipp Brothers, Inc.
                           6840 West Frier Drive
                           Glendale, AZ  85303

         Copy To:          Lewis and Roca LLP
                           40 N. Central Ave.
                           Phoenix, AZ 85004-4429
                           Attn:  David E. Manch, Esq.

         To Buyer:         Building Materials Holding Corporation
                           One Market Plaza
                           Steuart Street Tower
                           26th Floor, Suite 2650
                           San Francisco, California 94105-1475
                           Attention:  Ellis C. Goebel, Senior Vice President -
                           Finance and Treasurer

         Copy To:          Building Materials Holding Corporation
                           720 Park Boulevard, Suite 200
                           Post Office Box 70006
                           Boise, Idaho  83707-0106
                           Attention:  Paul S. Street, Senior Vice President,
                           General Counsel and Secretary

         20.7     BOOKS AND RECORDS.

         After execution of this Agreement, and for the records retention period
of the subject records, and at such time and place mutually agreed upon by the
parties, Sellers, at their sole cost and expense, shall have the right to review
the records which pertain exclusively to the Company for periods of time prior
to the Closing Date and at their cost make any copies of such records. Buyer
shall be provided access to any books and records in the Sellers' possession
relating to or necessary for filing tax returns on behalf of the Company.

                                       41
<PAGE>

         20.8     BMHC TRADE ACCOUNTS RECEIVABLE.

         The Company, at no expense to BMHC, shall collect the trade accounts
receivable of BMHC existing for the Phoenix operation of BMHC on the Closing
Date and remit the proceeds to BMHC. If the customer continues to purchase
products from the Company, payments received by the Company will first be
applied to the oldest invoice unless the customer specifically designates
otherwise. If it is necessary to retain legal counsel to collect any of the BMHC
trade accounts receivable, BMHC shall be responsible for all legal fees and
costs incurred.

         20.9 THIRD-PARTY BENEFICIARY.

         Nothing contained herein shall create or give rise to any third-party
beneficiary rights for any individual as a result of the terms and provisions of
this Agreement.

         20.10    ASSIGNMENT.

         Neither party shall assign this Agreement without the prior written
consent of the other party. Any attempt to assign this Agreement without prior
written consent shall be void.

         20.11    CHOICE OF LAW.

         This Agreement shall be governed by and interpreted in accordance with
the laws of the state of Arizona.

         20.12    PARAGRAPH HEADINGS.

         The Section and Article paragraph headings contained herein are for
convenience only and shall have no substantive bearing on the interpretation of
this Agreement.

         20.13    TIME IS OF THE ESSENCE.

         Time is of the essence in the performance and observance of all
obligations and duties under this Agreement.

         20.14    ATTORNEY FEES.

         In the event either party is required to file any action to enforce the
terms of this Agreement, the prevailing party shall be entitled to recover its
reasonable costs and attorney fees.

         20.15 RULES OF INTERPRETATION.

         The following rules of interpretation shall apply to this Agreement,
the exhibits hereto and any certificates, reports or other documents or
instruments made or delivered pursuant to or in connection with this Agreement,
unless otherwise expressly provided herein or therein and unless the context
hereof or thereof clearly requires otherwise:

                                       42
<PAGE>

         A reference to any document or agreement shall include such document or
agreement as amended, modified or supplemented from time to time in accordance
with its terms, and if a term is said to have the meaning assigned to such term
in another document or agreement and the meaning of such term therein is
amended, modified or supplemented, then the meaning of such term herein shall be
deemed automatically amended, modified or supplemented in a like manner.

         References to the plural include the singular, the singular the plural
and the part the whole.

         The words "include," "includes" and "including" are not limiting.

         A reference to any law includes any amendment or modification to such
law which is in effect on the relevant date.

         A reference to any person or entity includes its successors, heirs and
permitted assigns.

         Where the character or amount of any asset or liability or item of
income or expense is required to be determined or any consolidation or other
accounting computation is required to be made for purposes of this Agreement or
any exhibit hereto or certificate, report or other document or instrument made
or delivered pursuant to or in connection with this Agreement, such
determination or computation shall be done in accordance with generally accepted
accounting principles at the time in effect, to the extent applicable, except
where such principles are inconsistent with the express requirement hereof or of
such exhibit, certificate, report, document or instrument.

         The words "hereof," "herein," "hereunder" and similar terms in this
Agreement refer to this Agreement as a whole and not to any particular provision
of this Agreement.

         All exhibits to this Agreement constitute material terms of this
Agreement and are incorporated fully into the terms of this Agreement.

         20.16    COUNTERPARTS AND FACSIMILE SIGNATURES.

         This Agreement may be executed in multiple counterparts, each of which
shall be an original, but which shall together constitute one agreement. The
parties agree that facsimile signatures attached to this Agreement shall be
valid and binding as an original signature.

                        [SIGNATURES FOLLOW ON NEXT PAGE]

                                       43
<PAGE>

         The parties have executed this Agreement on the day and year first
written above.

SELLERS:

KNIPP BROTHERS, INC.,
an Arizona corporation

By
  -------------------------------------
  LAWRENCE W. KNIPP
  President

---------------------------------------
  LAWRENCE W. KNIPP

BMHC:

BUILDING MATERIALS HOLDING
CORPORATION, a Delaware corporation

By
  -------------------------------------
  ROBERT E. MELLOR
  President and Chief Executive Officer

BUYER:

BMHC FRAMING, INC.,
a Delaware corporation

By
  -------------------------------------
  ROBERT E. MELLOR
  President and Chief Executive Officer

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