Document:

VOLUME SERVICES AMERICA, INC.

                               FIRST AMENDMENT TO
                                CREDIT AGREEMENT

     This FIRST AMENDMENT  dated as of February 8, 1999 TO THE CREDIT  AGREEMENT
(this "AMENDMENT") dated as of December 3, 1998 and is entered into by and among
VOLUME SERVICES AMERICA, INC., a Delaware corporation (the "Borrower''),  VOLUME
SERVICES AMERICA HOLDINGS,  INC., a Delaware corporation  ("Holdings''),  CREDIT
SUPPORT PARTIES,  CERTAIN FINANCIAL  INSTITUTIONS  listed on the signature pages
thereof (each  individually a "LENDER" and collectively  the "LENDERS")  GOLDMAN
SACHS CREDIT PARTNERS L.P.  ("GSCP''),  as a Joint Lead Arranger and Syndication
Agent  (in such  capacity,  the  "SYNDICATION  AGENT''),  CHASE  MANHATTAN  BANK
DELAWARE,  as the Fronting Bank (together with its permitted  successors in such
capacity,  the "FRONTING  BANK'') and THE CHASE  MANHATTAN BANK  ("CHASE'') as a
Joint  Lead  Arranger,  the  Swingline  Lender  (as  defined  therein)  and  the
Administrative  Agent (together with its permitted  successors in such capacity,
the  "ADMINISTRATIVE  AGENT'')  (such  agreement  as  amended,  supplemented  or
otherwise modified from time to time, the "CREDIT AGREEMENT"). Capitalized terms
used herein without  definition shall have the same meanings herein as set forth
in the Credit Agreement and in the amendments contained in Section 1 hereof.

                                    RECITALS

     WHEREAS,  Borrower has requested that Required Lenders and all Lenders with
a Revolving Credit  Commitment agree to modify certain  provisions of the Credit
Agreement  in  connection  with  the  provision  of  Letters  of  Credit  to  be
denominated in Canadian Dollars.

     WHEREAS,  Borrower  proposes  to  issue  the  Subordinated  Notes  and  has
requested,  in  connection  therewith,  that  Required  Lenders  agree to modify
certain  provisions  of the Credit  Agreement  to permit (i) the  incurrence  of
additional Indebtedness pursuant to the issuance of the Subordinated Notes, (ii)
the payment of a dividend by the  Borrower  and  Holdings  with a portion of the
proceeds of the Subordinated Notes, and (iii) certain related transactions.

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

                                        1
<PAGE>

SECTION 1. AMENDMENTS TO CREDIT AGREEMENT

1.1  AMENDMENTS TO SECTION 1: DEFINITIONS
---  ------------------------------------

A.   Subsection 1.1 of the Credit  Agreement is hereby amended by adding thereto
     the following  definitions,  which shall be inserted in proper alphabetical
     order:

          "CANADIAN DOLLARS" shall mean the lawful money of Canada.

          "CANADIAN  DOLLAR  EQUIVALENT"  means,  at any time,  as to any amount
     denominated  in  Dollars  the  equivalent  amount in  Canadian  Dollars  as
     determined  by  Administrative  Agent  at  such  time on the  basis  of the
     applicable  Exchange Rate for the purchase of Canadian Dollars with Dollars
     on the most recent computation date provided for in subsection 2.12(h).

          "CANADIAN  DOLLAR LETTER OF CREDIT  SUBLIMIT" shall mean as defined in
     subsection 2.20(a) of this Agreement.

          "DOLLAR  EQUIVALENT"  means, at any time, as to any amount denominated
     in Canadian Dollars,  the equivalent amount in Dollars as determined by the
     Administrative  Agent at such time on the basis of the applicable  Exchange
     Rate for the purchase of Dollars with  Canadian  Dollars on the most recent
     computation date provided for in subsection 2.12(h).

          "EXCHANGE  RATE"  means,  on any date when an amount  for  Dollars  or
     Canadian  Dollars is to be determined with respect to any Letter of Credit,
     the rate quoted by  Administrative  Agent as the spot rate for the purchase
     by  Fronting  Bank (by  cable  transfer)  of such  currency  with the other
     currency in the New York  foreign  exchange  market at 12:00 noon (New York
     time) on such date.

          "SUBORDINATED  GUARANTY"  shall  mean the  subordinated  guaranty,  in
     respect of the obligations  under the Subordinated  Notes, made by Holdings
     and the Subsidiary Guarantors.

          "SUBORDINATED  NOTE INDENTURE"  means the indenture  pursuant to which
     the  Subordinated  Notes are issued,  as such indenture may be amended from
     time to time to the  extent  permitted  under  Section  6.09  the  term and
     conditions   thereof   being  in  form  and   substance   satisfactory   to
     Administrative Agent.

          "SUBORDINATED  NOTES" shall mean as defined in  Subsection  6.01(t) of
     this Agreement.

B.   Subsection  1.1 of the  Credit  Agreement  is  hereby  further  amended  by
     deleting  the  definitions  of  "EBITDA,""Letter  of Credit  Exposure"  and
     "Non-Wholly-Owned  Subsidiary" in their entirety and substituting  therefor
     the following:

                                        2
<PAGE>

          "EBITDA"  shall mean,  with respect to Holdings,  the Borrower and the
     Subsidiaries on a consolidated  basis for any period,  the consolidated net
     income of Holdings, the Borrower and the Subsidiaries for such period plus,
     to the extent deducted in computing such  consolidated net income,  without
     duplication,  the sum of (a) income tax expense and withholding tax expense
     incurred  in   connection   with  cross   border   transactions   involving
     non-domestic  Subsidiaries,   (b) interest  expense,  (c) depreciation  and
     amortization expense, (d) any fees and expenses incurred in connection with
     the  Transactions,  the  Subordinated  Notes  and this  Amendment,  and any
     special charges or  extraordinary  or  non-recurring  losses related to the
     Transactions   incurred   within   twelve   months  of  the  Closing  Date,
     (e) monitoring  and  management  fees  paid to the  Funds  and/or  any Fund
     Affiliates and GECC or its Affiliates, and (f) other noncash items reducing
     consolidated  net income,  minus,  to the extent  added in  computing  such
     consolidated  net  income,   without   duplication,   (i) interest  income,
     (ii) extraordinary  or  non-recurring  gains and (iii) other  noncash items
     increasing   consolidated  net  income;  provided  that,  for  purposes  of
     calculating EBITDA for any period ending prior to the end of the first four
     full fiscal  quarters  ending after the Closing Date,  the  adjustments  to
     EBITDA set forth in Schedule  1.01 shall be applied  except for purposes of
     calculating  Consolidated  Cash Net  Worth;  provided  further,  that,  for
     purposes of  calculating  EBITDA  (other than Pro Forma  Contract  EBITDA),
     there shall be excluded  therefrom the income (or loss) of any person other
     than a Wholly-Owned Subsidiary of the Borrower, except to the extent of the
     amount of dividends or other distributions actually paid to the Borrower or
     any of its  Wholly-Owned  Subsidiaries by such person during the applicable
     period.

          "LETTER OF CREDIT  EXPOSURE" shall mean at any time the sum of (a) the
     aggregate undrawn amount of all outstanding  Letters of Credit at such time
     plus  (b)  the  aggregate   principal   amount  of  all  Letter  of  Credit
     Disbursements that have not yet been reimbursed at such time. The Letter of
     Credit  Exposure of any Revolving  Credit Lender at any time shall mean its
     Applicable  Percentage of the aggregate  Letter of Credit  Exposure at such
     time. For the purposes of this  definition,  any amount described in clause
     (a) or (b) of the first sentence of this definition which is denominated in
     Canadian Dollars shall be valued in Dollars at the applicable Exchange Rate
     as of the applicable date of determination.

          "NON-WHOLLY-OWNED SUBSIDIARY" shall mean any (i) Subsidiary other than
     a Wholly-Owned Subsidiary and (ii) joint venture.

1.2  AMENDMENTS TO SECTION 2: LETTERS OF CREDIT
---  ------------------------------------------

A.   Subsection 2.12(b) is hereby amended as follows:

          "(b)  In  the  event  of  any  termination  of  the  Revolving  Credit
     Commitments,  the Borrower shall on the date of such  termination  repay or
     prepay all its outstanding Swingline Loans and Revolving Credit Borrowings,
     reduce  the  Letter of Credit  Exposure  to zero and cause all  Letters  of
     Credit to be canceled  and  returned  to the  Fronting  Bank.  In the event
     (y) of  any  partial  reduction  of the  Revolving  Credit  Commitments  or
     (z) after giving effect to the provisions of clause (h) of

                                        3
<PAGE>

     Section  2.12 the  Letter of Credit  Exposure  exceeds  $35,000,000  or the
     Letters of Credit  denominated  in  Canadian  Dollars  exceed the  Canadian
     Dollar  Letter of Credit  Sublimit,  then (i) at or prior to the  effective
     date of any such  reduction,  the  Administrative  Agent  shall  notify the
     Borrower,  the  Swingline  Lender and the Revolving  Credit  Lenders of the
     Total Revolving Credit Exposure and (ii) if after giving effect to any such
     reduction or event  described in clause (h) of this Section 2.12, the Total
     Revolving   Credit  Exposure  would  exceed  the  Total  Revolving   Credit
     Commitment,  then the Borrower shall, on the date of any such reduction, as
     applicable,  repay or  prepay  Revolving  Borrowings  or  repay  or  prepay
     Swingline Loans or reduce the Letter of Credit Exposure (which for purposes
     of this clause (ii) may include cash  collateralization of Letter of Credit
     Exposure pursuant to arrangements satisfactory to Administrative Agent), in
     an aggregate  amount  sufficient to eliminate such excess.  Notwithstanding
     the foregoing, on the date of any termination or reduction of the Revolving
     Credit  Commitments  pursuant to  Section 2.09,  the Borrower  shall pay or
     prepay so much of the Revolving  Credit  Borrowings and Swingline  Loans as
     shall be necessary in order that the Total Revolving  Credit Exposure shall
     not exceed the Total  Revolving  Credit  Commitment  after giving effect to
     such termination or reduction."

B.   Subsection  2.12  is  hereby  further  amended  by  the  addition  of a new
     subsections 2.12(h) as follows:

          "(h)  Fluctuations  in Exchange  Rate.  The Dollar  Equivalent  of the
     aggregate  amount of the Letter of Credit Exposure  denominated in Canadian
     Dollars  shall  be  calculated  on (v) the date of any  participation  in a
     Canadian  Dollar  denominated  Letter  of  Credit  pursuant  to  subsection
     2.20(d),  (w)  the  date  of  any  reimbursement  of  a  Letter  of  Credit
     Disbursement  under a Canadian Dollar denominated Letter of Credit pursuant
     to  subsection  2.20(e),  (x) the date of  issuance of any Letter of Credit
     denominated in Canadian Dollars, (y) the last Business Day of each calendar
     month  and (z)  from  time to time  at  Administrative  Agent's  reasonable
     discretion,  and such  calculation  shall  remain in effect for purposes of
     this  Agreement  until  the next date on which an event  described  in this
     clause (h) occurs and a recalculation is made."

C.   Paragraphs (a), (b), (d) and (e) of Subsection 2.20 of the Credit Agreement
     are hereby amended to read in their entirety as follows:

          "(a) The Borrower may request the issuance of a Letter of Credit, in a
     form  reasonably  acceptable to the  Administrative  Agent and the Fronting
     Bank,  appropriately  completed,  for the account of the  Borrower  and, if
     requested by the Borrower,  a Subsidiary,  on a joint and several basis, at
     any time and from  time to time  while  the  Revolving  Credit  Commitments
     remain in effect.  This Section 2.20(a) shall not be construed to impose an
     obligation  upon the  Fronting  Bank to issue any Letter of Credit  that is
     inconsistent  with the terms and conditions of this Agreement or that would
     result in there  existing  (i)  Letters  of Credit in an  aggregate  stated
     amount at any time in  excess  of  $35,000,000  or (ii)  Letters  of Credit
     denominated in Canadian Dollars in excess of the Canadian Dollar Equivalent
     of  $10,000,000  (the  "Canadian   Dollar  Letter  of  Credit   Sublimit").
     Notwithstanding  anything  herein to the  contrary,  each of the letters of
     credit outstanding on the Closing Date that are identified on Schedule 2.20
     shall be deemed to be a Letter of Credit issued and outstanding  under this
     Agreement as of the Closing Date."

                                        4
<PAGE>

          "(b)  Notice  of  Issuance,  Amendment,  Renewal,  Extension;  Certain
     Conditions.  In order to request the  issuance of a Letter of Credit (or to
     request that the Fronting Bank amend, renew or extend an existing Letter of
     Credit),  the Borrower  shall hand deliver or telecopy to the Fronting Bank
     and the  Administrative  Agent (reasonably in advance of the requested date
     of  issuance,  amendment,  renewal or  extension) a notice  requesting  the
     issuance of such Letter of Credit,  or identifying  any Letter of Credit to
     be amended,  renewed or  extended,  and  specifying  the date of  issuance,
     amendment, renewal or extension, the date on which such Letter of Credit is
     to expire (which shall comply with paragraph (c) below), the amount of such
     Letter of Credit to be issued,  amended,  renewed or extended, the name and
     address of the beneficiary  thereof,  whether the Letter of Credit is to be
     denominated  in Dollars or Canadian  Dollars and such other  information as
     shall be necessary to prepare such Letter of Credit or grant such issuance,
     amendment, renewal or extension. Following receipt of such notice and prior
     to the  issuance,  amendment,  renewal or extension of any Letter of Credit
     the Administrative Agent shall notify the Borrower and the Fronting Bank of
     the amount of the Total  Revolving  Credit  Exposure after giving effect to
     (i) the issuance, amendment, renewal or extension of such Letter of Credit,
     (ii) the issuance or expiration of any other Letter of Credit that is to be
     issued or will  expire  prior to the  requested  date of  issuance  of such
     Letter of Credit and  (iii) the  borrowing or  repayment  of any  Revolving
     Loans and  Swingline  Loans  that  (based  upon  notices  delivered  to the
     Administrative Agent by the Borrower) are to be borrowed or repaid prior to
     the  requested  date of issuance,  amendment,  renewal or extension of such
     Letter of Credit. Each Letter of Credit shall be issued,  amended,  renewed
     or  extended  subject  to the  terms  and  conditions  and  relying  on the
     representations  and  warranties  of Holdings  and the  Borrower  set forth
     herein, and in any case only if, and upon issuance,  amendment,  renewal or
     extension  of each  Letter  of  Credit  the  Borrower  shall be  deemed  to
     represent  and  warrant  that,   after  giving  effect  to  such  issuance,
     amendment,  renewal or extension the Total Revolving  Credit Exposure shall
     not exceed the Total  Revolving  Credit  Commitment in effect at such time.
     Any  Letter  of  Credit  may be issued by the  Fronting  Bank  through  its
     affiliate,  Chase,  and in the event of any such  issuance,  all references
     herein and in the other Loan Documents to the term  "Fronting  Bank" shall,
     with respect to such Letter of Credit, be deemed to refer to Chase, in such
     capacity, as the context shall require."

          "(d) Participations. By the issuance of a Letter of Credit and without
     any further action on the part of the Fronting Bank or the Revolving Credit
     Lenders,  the Fronting Bank will grant to each Revolving Credit Lender, and
     each such Lender will acquire from the Fronting  Bank, a  participation  in
     such Letter of Credit equal to such Revolving  Credit  Lender's  Applicable
     Percentage of the aggregate  amount available to be drawn under such Letter
     of Credit  (calculated  in the case of a Letter of  Credit  denominated  in
     Canadian Dollars, by reference to the applicable Exchange Rate),  effective
     upon the  issuance  of such  Letter  of  Credit.  In  consideration  and in
     furtherance  of  the  foregoing,   each  Revolving   Credit  Lender  hereby
     absolutely and unconditionally  agrees to pay to the Administrative  Agent,
     for the  account of the  Fronting  Bank,  such  Revolving  Credit  Lender's
     Applicable  Percentage of each Letter of Credit Disbursement (which amount,
     in the case of a Letter  of  Credit  Disbursement  under a Letter or Credit
     denominated in Canadian  Dollars,  shall (y)he  calculated by reference to
     the  applicable  Exchange  Rate and  (z) payable  in Dollars),  made by the
     Fronting  Bank  under  such  Letter of  Credit  and not  reimbursed  by the
     Borrower  (or, if  applicable,  another party  pursuant to its  obligations
     under any other Loan Document) on or before

                                        5
<PAGE>

     the next  Business Day as provided in paragraph (e) below.  Each  Revolving
     Credit  Lender  acknowledges  and  agrees  that its  obligation  to acquire
     participations  pursuant to this  paragraph in respect of Letters of Credit
     which were issued upon satisfaction of all applicable  conditions precedent
     is absolute and unconditional and shall not be affected by any circumstance
     whatsoever,  including the  occurrence  and  continuance of a Default or an
     Event of  Default,  and that each such  payment  shall be made  without any
     offset, abatement, withholding or reduction whatsoever."

          "(e)  Reimbursement.  If the  Fronting  Bank  shall make any Letter of
     Credit  Disbursement  in respect of a Letter of Credit,  the Borrower shall
     pay to the Administrative  Agent, on or before the Business Day immediately
     following  the date of such  Letter  of Credit  Disbursement,  an amount in
     Dollars (which amount, in the case of a Letter of Credit Disbursement under
     a Letter of Credit denominated in Canadian Dollars, shall (y) be calculated
     by  reference  to the  applicable  Exchange  Rate  and  (z) be  payable  in
     Dollars),  equal to such  Letter of Credit  Disbursement.  If the  Borrower
     shall fail to pay any amount required to be paid under this paragraph on or
     before such Business Day (or to cause payment  thereof when due pursuant to
     a Revolving  Credit  Borrowing),  then  (i) such  unpaid  amount shall bear
     interest,  for  each  day  from  and  including  such  Business  Day to but
     excluding the date of payment,  at a rate  per annum  equal to the interest
     rate  applicable to overdue ABR Loans that are Revolving  Loans pursuant to
     Section 2.07  (provided  that the 2.00% margin  applicable to overdue Loans
     shall not be  applicable  until the first  Business  Day after the Borrower
     receives  notice from the  Administrative  Agent that such Letter of Credit
     Disbursement has been or will be made), (ii) the Administrative Agent shall
     notify  the  Fronting  Bank  and  the  Revolving  Credit  Lenders  thereof,
     (iii) each  Revolving  Credit Lender shall comply with its obligation under
     paragraph (d) above by wire transfer of immediately available funds, in the
     same manner as provided in  Section 2.02(c)  with  respect to Loans made by
     such  Revolving  Credit Lender (and  Section 2.02(d)  shall apply,  mutatis
     mutandis,  to the payment  obligations of the Revolving Credit Lenders) and
     (iv) the  Administrative  Agent shall  promptly  pay to the  Fronting  Bank
     amounts  so  received  by  it  from  the  Revolving  Credit  Lenders.   The
     Administrative  Agent shall promptly pay to the Fronting Bank on a pro rata
     basis  with  respect  to  outstanding  Letter of Credit  Disbursements  any
     amounts  received by it from the Borrower  pursuant to this paragraph prior
     to the time that any Revolving  Credit Lender makes any payment pursuant to
     paragraph (d)  above; any such amounts received by the Administrative Agent
     thereafter shall be promptly  remitted by the  Administrative  Agent to the
     Revolving  Credit  Lenders  that shall have made such  payments  and to the
     Fronting Bank, as their interests may appear."

1.3  AMENDMENTS TO SECTION 6: NEGATIVE COVENANTS
---  -------------------------------------------

A.   Subsection  6.01 is hereby  amended by the deletion of the word "and" after
     paragraph  "(s)" thereof,  the deletion of paragraph (t) thereof and by the
     addition of new paragraphs (t) and (u) as follows:

          "(t)  Indebtedness  evidenced  by  the  Subordinated  Notes,  and  the
     guaranty  thereof under the Subordinated  Guaranty,  issued pursuant to the
     Subordinated Note Indenture; provided that (A) the Subordinated Notes shall
     (i) be in an aggregate principal amount of not less than $100,000,000, (ii)
     be due no earlier  than 2009 and (iii) all other  terms and  conditions  in
     respect

                                        6
<PAGE>

     thereof shall be in form and substance satisfactory to Administrative Agent
     (the  "Subordinated  Notes")  and (B) the  Subordinated  Guaranty  shall be
     subordinated  on the terms  and  conditions  substantially  the same as the
     subordination provisions set forth in the Subordinated Note Indenture; and

          (u) all premium (if any), interest (including post-petition interest),
     fees, expenses, indemnities,  charges and additional or contingent interest
     on obligations described in clauses (a) through (t) above.

B.   Subsection  6.06 is hereby  amended by deleting the word "and"  immediately
     before clause (j) thereof and the addition of a new clause (k) as follows:

          ";  and (k) so long as no  Default  or  Event of  Default  shall  have
     occurred and be continuing or shall be caused thereby, Borrower may (x) pay
     a dividend to Holdings  and  Holdings may in turn redeem its stock held by,
     or pay dividends to, its  shareholders in an aggregate  amount in each case
     not  to  exceed  $49,500,000,  (y)  make  payments  of  expenses  and  fees
     associated  with the  issuance of the  Subordinated  Notes in an  aggregate
     amount not to exceed  $5,000,000  and (z) repay the GECC  Promissory  Note,
     each from the  proceeds  of, and  simultaneously  with the issuance of, the
     Subordinated Notes."

C.   Subsection  6.06  is  hereby  further  amended  by  the  addition  of a new
     paragraph thereto as follows:

          "Certain  payments of  Subordinated  Indebtedness.  Borrower  may make
     regularly  scheduled  payments of  interest in respect of the  Subordinated
     Notes in accordance  with terms of, and only to the extent required by, and
     subject to the subordination provisions contained in, the Subordinated Note
     Indenture."

D.   Subsection 6.09 (c) is hereby amended to read in its entirety as follows:

          "(c) (i) Amend or modify in any  manner  adverse  to the  Lenders,  or
     grant any  waiver or  release  under or  terminate  in any  manner (if such
     action shall be adverse to the Lenders),  the certificate of  incorporation
     or  bylaws  in any  material  respect  of  Holdings,  the  Borrower  or any
     Subsidiary or the Share Exchange  Agreement or (ii) change the terms of the
     Subordinated Note Indenture or the Subordinated  Notes, or make any payment
     consistent with an amendment  thereof or change  thereto,  if the effect of
     such  amendment  or  change  is  to  increase  the  interest  rate  on  the
     Subordinated Note Indenture or the Subordinated  Notes,  change (to earlier
     dates) any dates upon which scheduled payments of principal or interest are
     due  thereon,  change  any event of  default  or  condition  to an event of
     default with  respect  thereto  (other than to eliminate  any such event of
     default  or  increase  any grace  period  related  thereto  or to make such
     provision  more  favorable  to  the  Borrower),   change  the   redemption,
     prepayment or defeasance  provisions thereof in a manner materially adverse
     to the Lenders,  change the  subordination  provisions of such Subordinated
     Notes (or of any  guaranty  thereof),  or change  any  collateral  therefor
     (other  than to release  such  collateral),  if the effect of such  action,
     amendment or change, together with all other amendments or changes

                                        7
<PAGE>

     made, is to increase  materially the obligations of the obligor  thereunder
     or to confer any  additional  rights on the  holders  of such  Subordinated
     Notes (or a trustee or other representative on their behalf) which would be
     adverse to any Loan Party or Lenders or (iii) designate any Indebtedness as
     "Designated  Senior  Indebtedness"  (as  defined in the  Subordinated  Note
     Indenture)  for purposes of the  Subordinated  Note  Indenture  without the
     prior written consent of the Administrative Agent."

E.   Subsection  6.11 is hereby amended by deleting the table at the end thereof
     and replacing it with the following table:

Fiscal Quarter:                                                         Amount:

First fiscal quarter 1999                                              1.75:1.00

Second fiscal quarter 1999                                             1.75:1.00

Third fiscal quarter 1999                                              1.75:1.00

Fourth fiscal quarter 1999                                             1.75:1.00

First fiscal quarter 2000                                              1.75:1.00

Second fiscal quarter 2000                                             1.75:1.00

Third fiscal quarter 2000                                              1.85:1.00

Fourth fiscal quarter 2000                                             1.85:1.00

First fiscal quarter 2001                                              1.85:1.00

Second fiscal quarter 2001                                             1.85:1.00

Third fiscal quarter 2001                                              2.00:1.00

Fourth fiscal quarter 2001                                             2.00:1.00

First fiscal quarter 2002                                              2.00:1.00

Second fiscal quarter 2002                                             2.00:1.00

Third fiscal quarter 2002                                              2.00:1.00

Fourth fiscal quarter 2002                                             2.00:1.00

First fiscal quarter 2003                                              2.00:1.00

Second fiscal quarter 2003                                             2.00:1.00

Third fiscal quarter 2003                                              2.00:1.00

Fourth fiscal quarter 2003                                             2.00:1.00

First fiscal quarter 2004                                              2.00:1.00

Second fiscal quarter 2004                                             2.00:1.00

                                        8
<PAGE>

Third fiscal quarter 2004                                              2.00:1.00

Fourth fiscal quarter 2004                                             2.00:1.00

First fiscal quarter 2005                                              2.00:1.00

Second fiscal quarter  2005                                            2.00:1.00

Third fiscal quarter 2005                                              2.00:1.00

Fourth fiscal quarter 2005                                             2.00:1.00

First fiscal quarter 2006                                              2.00:1.00

Second fiscal quarter 2006                                             2.00:1.00

Third fiscal quarter 2006                                              2.00:1.00

Fourth fiscal quarter 2006                                             2.00:1.00

F.   Subsection  6.12 is hereby amended by deleting the table at the end thereof
     and replacing it with the following table:

Fiscal Quarter:                                                         Amount:

First fiscal quarter 1999                                              5.60:1.00

Second fiscal quarter 1999                                             5.60:1.00

Third fiscal quarter 1999                                              5.35:1.00

Fourth fiscal quarter 1999                                             5.35:1.00

First fiscal quarter 2000                                              5.35:1.00

Second fiscal quarter 2000                                             5.35:1.00

Third fiscal quarter 2000                                              5.25:1.00

Fourth fiscal quarter 2000                                             5.25:1.00

First fiscal quarter 2001                                              5.25:1.00

Second fiscal quarter 2001                                             5.25:1.00

Third fiscal quarter 2001                                              5.00:1.00

Fourth fiscal quarter 2001                                             5.00:1.00

First fiscal quarter 2002                                              5.00:1.00

Second fiscal quarter 2002                                             5.00:1.00

Third fiscal quarter 2002                                              4.75:1.00

                                        9
<PAGE>

Fourth fiscal quarter 2002                                             4.75:1.00

First fiscal quarter 2003                                              4.75:1.00

Second fiscal quarter 2003                                             4.75:1.00

Third fiscal quarter 2003                                              4.50:1.00

Fourth fiscal quarter 2003                                             4.50:1.00

First fiscal quarter 2004                                              4.50:1.00

Second fiscal quarter 2004                                             4.50:1.00

Third fiscal quarter 2004                                              4.50:1.00

Fourth fiscal quarter 2004                                             4.50:1.00

First fiscal quarter 2005                                              4.50:1.00

Second fiscal quarter 2005                                             4.50:1.00

Third fiscal quarter 2005                                              4.50:1.00

Fourth fiscal quarter 2005                                             4.50:1.00

First fiscal quarter 2006                                              4.50:1.00

Second fiscal quarter 2006                                             4.50:1.00

Third fiscal quarter 2006                                              4.50:1.00

Fourth fiscal quarter 2006                                             4.50:1.00

1.4  AMENDMENTS TO ARTICLE IX.
---  -------------------------

A.   Article IX is hereby amended by adding the following Subsection 9.18 in its
     entirety as follows:

          "9.18  Judgement  Currency.  Borrower,  Agents and each Lender  hereby
     agree that if, in the event that a judgment is given in relation to any sum
     due to any Agent or any  Lender  hereunder,  such  judgement  is given in a
     currency (the "Judgement  Currency")  other than in Dollars Borrower agrees
     to indemnify  such Agent or Lender,  as the case may be, to the extent that
     the amount of Dollars which could have been purchased thereby in accordance
     with normal  banking  procedures on the Business Day  following  receipt of
     such sum is less than the sum which  could have been so  purchased  thereby
     had such  purchase  been made on the day on which such  judgement was given
     or, if such day is not a Business  Day,  on the  Business  Day  immediately
     preceding the giving of such  judgment,  and if the amount which could have
     been purchased on the following Business Day exceeds the amount which could
     have been so purchased  thereby had such  purchase  been made on the day on
     which such judgment was given or, if such day is not a Business Day, on the
     Business

                                       10
<PAGE>

     Day  immediately  preceding such  judgment,  such Agent or Lender agrees to
     remit such excess to Borrower.  The  agreements  in this Section 9.18 shall
     survive payment of any such judgement."

SECTION 2. CONDITIONS TO EFFECTIVENESS

     Section  1  of  this  Amendment  shall  become   effective  only  upon  the
satisfaction  of  all  of  the  following  conditions  precedent  (the  date  of
satisfaction of such conditions being referred to herein as the "First Amendment
Effective Date"):

     A.   EXECUTION.  Loan  Parties,  Required  Lenders  and the Credit  Support
          Parties shall have executed this Amendment.

     B.   RELATED  AGREEMENTS.  Borrower have delivered to Administrative  Agent
          complete and correct  copies of the  Subordinated  Note  Indenture and
          Subordinated Notes and of all exhibits and schedules thereto.

     C.   REPAYMENT OF LOANS.  The Borrower shall repay,  simultaneous  with the
          issuance of the  Subordinated  Notes and the  receipt of the  proceeds
          thereof,  with the balance of the proceeds of such issuance  after the
          payment of the dividend and other  amounts  provided for in Subsection
          1.3B. of this First Amendment, in an aggregate amount of not less than
          $45,000,000,  first the Term Loans to the full extent thereof on a pro
          rata basis, subject to subsection 2.12(g) of the Credit Agreement, and
          second to the extent of any of such proceeds remaining,  the Revolving
          Loans to the full extent thereof.

     D.   OPINIONS OF LOAN PARTIES' COUNSEL.  Administrative Agent (for Lenders)
          shall have received an executed copy of one or more favorable  written
          opinions in respect of the  Subordinated  Notes of Simpson  Thatcher &
          Bartlett, counsel for the Loan Parties dated as of the First Amendment
          Effective Date and in form and substance  reasonably  satisfactory  to
          Administrative Agents and their counsel.

     E.   FEES. The Administrative  Agent shall have received all Fees and other
          amounts due and payable on or prior to the First  Amendment  Effective
          Date,  including,  to the  extent  invoiced,  reimbursement  or  other
          payment of all  out-of-pocket  expenses  required to be  reimbursed or
          paid by the Borrower hereunder or under any other Loan Document.

     F.   NECESSARY  CONSENTS.  Each Loan Party shall have obtained all material
          consents  necessary or advisable in  connection  with the borrowing by
          Borrower of the Indebtedness  evidenced by the Subordinated  Notes and
          the transactions contemplated by the First Amendment.

     G.   OTHER DOCUMENTS.  Administrative Agent and Lenders shall have received
          such other  documents and  information  regarding Loan Parties and the
          Subordinated Notes as Administrative Agent may reasonably request.

                                       11
<PAGE>

SECTION 3. BORROWER'S REPRESENTATIONS AND WARRANTIES

     In order to induce  Lenders to enter into this  Amendment  and to amend the
Credit Agreement in the manner provided herein, Borrower represents and warrants
to each Lender that the following  statements are true,  correct and complete in
all material respects:

     A.   CORPORATE  POWER AND AUTHORITY.  Each Loan Party which is party hereto
          has all  requisite  corporate  power and  authority to enter into this
          Amendment  and to carry  out the  transactions  contemplated  by,  and
          perform its obligations under, the Credit Agreement as amended by this
          Amendment (the "Amended Agreement") and the other Loan Documents.

     B.   AUTHORIZATION  OF  AGREEMENTS.  The  execution  and  delivery  of this
          Amendment and the  performance of the Amended  Agreement and the other
          Loan Documents have been duly authorized by all necessary corporate or
          partnership (as applicable) action on the part of each Loan Party.

     C.   NO  CONFLICT.  The  execution  and delivery by each Loan Party of this
          Amendment  and the  performance  by each  Loan  Party  of the  Amended
          Agreement and the other Loan Documents do not and will not (i) violate
          (A) any provision of any law, statute,  rule or regulation,  or of the
          certificate or articles of  incorporation  or  partnership  agreement,
          other constitutive  documents or by- laws of Holdings, the Borrower or
          any  Subsidiary,  (B) any  applicable  order of any court or any rule,
          regulation or order of any Governmental Authority or (C) any provision
          of any  indenture,  certificate of  designation  for preferred  stock,
          agreement or other  instrument to which Holdings,  the Borrower or any
          Subsidiary is a party or by which any of them or any of their property
          is or may be bound, (ii) be in conflict with, result in a breach of or
          constitute  (alone or with  notice or lapse of time or both) a default
          under any such  indenture,  certificate of  designation  for preferred
          stock,  agreement  or  other  instrument,  where  any  such  conflict,
          violation, breach or default referred to in clause (i) or (ii) of this
          Section 3.C.,  individually  or in the aggregate  could  reasonably be
          expected to have a Material Adverse Effect, (iii) result in or require
          the creation or imposition  of any Lien upon any of the  properties or
          assets of each Loan Party (other than any Liens  created  under any of
          the Loan  Documents  in favor of  Administrative  Agent on  behalf  of
          Lenders),  or (iv) require any approval of stockholders or partners or
          any approval or consent of any Person under any contractual obligation
          of each Loan Party,  except for such  approvals or consents which will
          be obtained on or before the First Amendment Effective Date.

     D.   GOVERNMENTAL CONSENTS. No action, consent or approval of, registration
          or filing with or any other action by any Governmental Authority is or
          will be required in connection with the execution and delivery by each
          Loan Party of this  Amendment  and the  performance  by  Borrower  and
          Holdings of the Amended Agreement and the other Loan Documents, except
          for such actions, consents and approvals the failure to obtain or make
          which could not reasonably be expected to result in a Material Adverse
          Effect or which have been obtained and are in full force and effect.

                                       12
<PAGE>

     E.   BINDING OBLIGATION. This Amendment and the Amended Agreement have been
          duly  executed and delivered by each of the Loan Parties party thereto
          and  each  constitutes  a  legal,  valid  and  binding  obligation  of
          Holdings,  the  Borrower  and such  Loan  Party to the  extent a party
          thereto  enforceable  against such Loan Party in  accordance  with its
          terms,   except  as  enforceability  may  be  limited  by  bankruptcy,
          insolvency, moratorium, reorganization or other similar laws affecting
          creditors'  rights  generally  and  except  as  enforceability  may be
          limited by general  principles of equity  (regardless  of whether such
          enforceability is considered in a proceeding in equity or at law).

     F.   INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT AGREEMENT.
          The  representations  and  warranties  contained in Article III of the
          Amended  Agreement  are and will be true,  correct and complete in all
          material  respects on and as of the First Amendment  Effective Date to
          the same extent as though  made on and as of that date,  except to the
          extent such  representations and warranties  specifically relate to an
          earlier  date,  in which case they were true,  correct and complete in
          all material respects on and as of such earlier date.

     G.   ABSENCE OF DEFAULT.  No event has occurred and is  continuing  or will
          result from the consummation of the transactions  contemplated by this
          Amendment that would constitute an Event of Default or a Default.

SECTION 4. ACKNOWLEDGMENT AND CONSENT

     Each  of  Events  Center  Catering,   Inc.,  Service  America   Concessions
Corporation,   Service  America  Corporation,  Service  America  Corporation  of
Wisconsin,  Servo Canada Inc.,  Servo-Kansas,  Inc.,  Servomation Duchess, Inc.,
Volume  Services,  Inc.  and Volume  Services,  Inc.  (Kansas) is a party to the
Subsidiary  Guarantee Agreement and Security Agreement,  in each case as amended
through  the First  Amended  Effective  Date,  pursuant  to which each of Events
Center Catering, Inc., Service America Concessions Corporation,  Service America
Corporation,  Service  America  Corporation  of  Wisconsin,  Servo  Canada Inc.,
Servo-Kansas,  Inc., Servomation Duchess, Inc., Volume Services, Inc. and Volume
Services,  Inc.  (Kansas) has  (i) guarantied  the  Obligations and (ii) created
Liens in favor of Lenders on certain  Collateral to secure its obligations under
the  Subsidiary  Guarantee  Agreement.  Events Center  Catering,  Inc.,  Service
America Concessions  Corporation,  Service America Corporation,  Service America
Corporation of Wisconsin,  Servo Canada Inc.,  Servo-Kansas,  Inc.,  Servomation
Duchess,  Inc.,  Volume Services,  Inc. and Volume Services,  Inc.  (Kansas) are
collectively  referred  to  herein  as the  "Credit  Support  Parties",  and the
Subsidiary  Guarantee  Agreement  and the Security  Agreement  are  collectively
referred to herein as the "Credit Support Documents".

     Each Credit  Support  Party  hereby  acknowledges  that it has reviewed the
terms and provisions of the Credit  Agreement and this Amendment and consents to
the amendment of the Credit Agreement effected pursuant to this Amendment.  Each
Credit Support Party hereby confirms that each Credit Support  Document to which
it is a party or otherwise bound and all Collateral

                                       13
<PAGE>

encumbered  thereby will continue to guarantee or secure, as the case may be, to
the fullest extent possible in accordance with the Credit Support  Documents the
payment  and  performance  of all  "Obligations"  under  each of the  Subsidiary
Guarantee Agreement and Security Agreement,  as the case may be (in each case as
such terms are defined in the  applicable  Credit Support  Document),  including
without limitation the payment and performance of all such  "Obligations"  under
each of the Subsidiary  Guarantee Agreement and Security Agreement,  as the case
may be, in respect of the  Obligations  of Borrower  now or  hereafter  existing
under or in respect of the Amended Agreement and the Notes defined therein.

     Each Credit  Support Party  acknowledges  and agrees that any of the Credit
Support  Documents to which it is a party or otherwise  bound shall  continue in
full force and effect and that all of its obligations  thereunder shall be valid
and  enforceable  and shall not be  impaired  or  limited  by the  execution  or
effectiveness  of this  Amendment.  Each Credit  Support  Party  represents  and
warrants  that all  representations  and  warranties  contained  in the  Amended
Agreement and the Credit  Support  Documents to which it is a party or otherwise
bound are true,  correct and complete in all material  respects on and as of the
First  Amendment  Effective  Date to the same extent as though made on and as of
that date, except to the extent such representations and warranties specifically
relate to an earlier date, in which case they were true, correct and complete in
all material respects on and as of such earlier date.

     Each Credit Support Party acknowledges and agrees that  (i) notwithstanding
the conditions to effectiveness set forth in this Amendment, such Credit Support
Party is not  required  by the terms of the Credit  Agreement  or any other Loan
Document to consent to the amendments to the Credit Agreement  effected pursuant
to this Amendment and  (ii) nothing in the Credit  Agreement,  this Amendment or
any other Loan  Document  shall be deemed to require  the consent of such Credit
Support Party to any future amendments to the Credit Agreement.

SECTION 5. MISCELLANEOUS

A.   REFERENCE  TO AND  EFFECT  ON THE  CREDIT  AGREEMENT  AND  THE  OTHER  LOAN
     DOCUMENTS.
     ----------

     (i)  On and after the First Amendment Effective Date, each reference in the
          Credit Agreement to "this Agreement",  "hereunder", "hereof", "herein"
          or words of like import  referring to the Credit  Agreement,  and each
          reference  in the other  Loan  Documents  to the  "Credit  Agreement",
          "thereunder",  "thereof"  or words  of like  import  referring  to the
          Credit Agreement shall mean and be a reference to the Credit Agreement
          as amended by this Amendment.

     (ii) Except as specifically amended by this Amendment, the Credit Agreement
          and the other Loan Documents shall remain in full force and effect and
          are hereby ratified and confirmed.

                                       14
<PAGE>

     (iii)The execution,  delivery and  performance of this Amendment shall not,
          except  as  expressly  provided  herein,  constitute  a waiver  of any
          provision of, or operate as a waiver of any right,  power or remedy of
          any Agent or Lender  under,  the Credit  Agreement or any of the other
          Loan Documents.

B.   HEADINGS.  Section and  Subsection  headings in this Amendment are included
     ---------
     herein for convenience of reference only and shall not constitute a part of
     this Amendment for any other purpose or be given any substantive effect.

C.   APPLICABLE  LAW.  THIS  AMENDMENT  AND THE  RIGHTS  AND  OBLIGATIONS OF THE
     ----------  ----
     PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
     IN ACCORDANCE  WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK  (INCLUDING
     WITHOUT  LIMITATION  SECTION 5-1401 OF THE GENERAL  OBLIGATIONS  LAW OF THE
     STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

D.   COUNTERPARTS.  This Amendment may be executed in any number of counterparts
     -------------
     and by different  parties  hereto in separate  counterparts,  each of which
     when so executed and  delivered  shall be deemed an original,  but all such
     counterparts  together shall  constitute  but one and the same  instrument;
     signature  pages may be detached from multiple  separate  counterparts  and
     attached to a single counterpart so that all signature pages are physically
     attached to the same document.

                  [Remainder of page intentionally left blank]

                                       15
<PAGE>

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

         BORROWER:                    VOLUME SERVICES AMERICA, INC.

                                      By:
                                      Name:
                                      Title:

         HOLDINGS:                    VOLUME SERVICES AMERICA HOLDINGS, INC.

                                      By:
                                      Name:
                                      Title:

         CREDIT SUPPORT
         PARTIES:                     EVENTS CENTER CATERING, INC.
                                      (for the purposes of Section 4 only)
                                       as a Credit Support Party

                                      By:
                                      Name:
                                      Title:

                                      SERVICE AMERICA CONCESSIONS CORPORATION
                                      (for the purposes of Section 4 only)
                                       as a Credit Support Party

                                       By:
                                       Name:
                                       Title:

                                       SERVICE AMERICA CORPORATION
                                       (for the purposes of Section 4 only)
                                        as a Credit Support Party

                                        By:
                                        Name:
                                        Title:

                                      S - 1
<PAGE>

                                        SERVICE AMERICA CORPORATION OF
                                          WISCONSIN
                                        (for the purposes of Section 4 only)
                                         as a Credit Support Party

                                         By:
                                         Name:
                                         Title:

                                         SERVO CANADA INC.
                                         (for the purposes of Section 4 only)
                                          as a Credit Support Party

                                          By:
                                          Name:
                                          Title:

                                          SERVO-KANSAS, INC.
                                          (for the purposes of Section 4 only)
                                           as a Credit Support Party

                                           By:
                                           Name:
                                           Title:

                                           SERVOMATION DUCHESS, INC.
                                           (for the purposes of Section 4 only)
                                            as a Credit Support Party

                                            By:
                                            Name:
                                            Title:

                                           VOLUME SERVICES, INC.
                                           (for the purposes of Section 4 only)
                                            as a Credit Support Party

                                            By:
                                            Name:
                                            Title:

                                      S - 2
<PAGE>

                                           VOLUME SERVICES, INC. (KANSAS)
                                           (for the purposes of Section 4 only)
                                            as a Credit Support Party

                                            By:
                                            Name:
                                            Title:

           LENDERS                           GOLDMAN SACHS CREDIT PARTNERS L.P.,
           AND AGENTS:                       as Lender and as a Joint Lead
                                             Arranger and the Syndication Agent

                                             By:
                                                      Authorized Signatory

                                             CHASE MANHATTAN BANK DELAWARE,
                                             as the Fronting Bank

                                             By:
                                             Name:
                                             Title:

                                              THE CHASE MANHATTAN BANK
                                              as a Lender, the Swing Line Lender
                                              and the Administrative Agent

                                              By:
                                              Name:
                                              Title:

                                      S - 3
<PAGE>

                                              FIRST UNION NATIONAL BANK
                                              as a Lender

                                              By:
                                              Name:
                                              Title:

                                              UNION BANK OF CALIFORNIA, N.A.
                                              as a Lender

                                              By:
                                              Name:
                                              Title:

                                               BANKBOSTON N.A.
                                               as a Lender

                                               By:
                                               Name:
                                               Title:

                                               BHF-BANK AKTIENGESELLSCHAFT
                                               as a Lender

                                                By:
                                                Name:
                                                Title:

                                      S - 4
<PAGE>

                                        BALANCED HIGH-YIELD FUND I LTD.
                                        as a Lender

                                        By:      BHF-BANK AKTIENGESELLSCHAFT,
                                                 acting through its New York
                                                 Branch, as attorney-in-fact

                                        By:    _______________________________
                                        Name:
                                        Title:

                                        By:    _______________________________
                                        Name:
                                        Title:

                                         CREDIT LYONNAIS
                                         NEW YORK BRANCH
                                         as a Lender

                                         By:
                                         Name:
                                         Title:

                                         THE BANK OF NOVA SCOTIA
                                         as a Lender

                                         By:
                                         Name:
                                         Title:

                                         THE FUJI BANK, LIMITED,
                                         NEW YORK BRANCH
                                         as a Lender

                                         By:
                                         Name:
                                         Title:

                                      S - 5
<PAGE>

                                            NATIONSBANK, N.A.
                                            as a Lender

                                            By:
                                            Name:
                                            Title:

                                            CERES FINANCE, LTD.
                                            as a Lender

                                            By:      ____________________
                                            Name:
                                            Title:

                                            DRESDNER BANK AG
                                            as a Lender

                                            By:      ________________________
                                            Name:
                                            Title:

                                            By:      ________________________
                                            Name:
                                            Title:

                                            EATON VANCE SENIOR INCOME TRUST
                                            as a Lender

                                            By:      Eaton Vance Management, as
                                                     Investment Advisor

                                            By:    __________________________
                                            Name:
                                            Title:

                                      S - 6
<PAGE>

                                           INDOSUEZ CAPITAL FUNDING IIA,
                                           LIMITED
                                           as a Lender

                                           By:      Indosuez Capital Luxembourg,
                                                    as Collateral Manager

                                           By:     _____________________________
                                           Name:
                                           Title:

                                           INDOSUEZ CAPITAL FUNDING IV, L.P.
                                           as a Lender

                                           By:      Indosuez Capital Luxembourg,
                                                    as Collateral Manager

                                           By:     _____________________________
                                           Name:
                                           Title:

                                            KZH III LLC
                                            as a Lender

                                            By:      _______________________
                                            Name:
                                            Title:

                                            KZH RIVERSIDE LLC
                                            as a Lender

                                            By:      _______________________
                                            Name:
                                            Title:

                                      S - 7
<PAGE>

                                            KZH STERLING LLC
                                            as a Lender

                                            By:      _______________________
                                            Name:
                                            Title:

                                            KZH ING-2 LLC
                                            as a Lender

                                            By:      _______________________
                                            Name:
                                            Title:

                                            KEYPORT LIFE INSURANCE COMPANY
                                            as a Lender

                                            By:      Stein Roe & Farnham
                                                     Incorporated, as agent
                                                     for Keyport Life Insurance
                                                     Company

                                            By:   ______________________________
                                            Name:
                                            Title:

                                            MORGAN STANLEY DEAN WITTER PRIME
                                            INCOME TRUST
                                            as a Lender

                                            By:      _________________________
                                            Name:
                                            Title:

                                      S - 8
<PAGE>

                                        MERRILL LYNCH PRIME RATE
                                        PORTFOLIO
                                        as a Lender

                                        By: Merrill Lynch Asset Management, L.P.
                                            as Investment Advisor

                                        By:  _______________________________
                                        Name:
                                        Title:

                                        MERRILL LYNCH SENIOR FLOATING
                                        RATE FUND, INC.
                                        as a Lender

                                        By:      ___________________________
                                        Name:
                                        Title:

                                        METROPOLITAN LIFE INSURANCE
                                        COMPANY
                                        as a Lender

                                        By:      ______________________________
                                        Name:
                                        Title:

                                        MOUNTAIN CLO TRUST
                                        as a Lender

                                        By:      ____________________________
                                        Name:
                                        Title:

                                      S - 9
<PAGE>
                                      NATIONAL WESTMINSTER BANK, PLC
                                      as a Lender

                                      By: NatWest Capital Markets Limited,
                                          its Agent

                                      By: Greenwich Capital Markets, Inc., its
                                          Agent

                                      By:  _________________________
                                      Name:
                                      Title:

                                      OASIS COLLATERALIZED HIGH INCOME
                                      PORTFOLIOS-I, LTD.
                                      as a Lender

                                      By:      ______________________________
                                      Name:
                                      Title:

                                      SENIOR DEBT PORTFOLIO
                                      as a Lender

                                      By:      Boston Management and Research,
                                               as Investment Advisor

                                      By:      ______________________________
                                      Name:
                                      Title:

                                      VAN KAMPEN PRIME RATE INCOME
                                      TRUST
                                      as a Lender

                                      By:      _____________________________
                                      Name:
                                      Title:

                                     S - 10

<PAGE>

                                       THE TRAVELERS INSURANCE COMPANY
                                       as a Lender

                                       By:      ______________________________
                                       Name:
                                       Title:

                                     S - 11<PAGE>

                                                                   EXHIBIT 10(d)

                         AMENDED EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into by and
between Columbia State Bank, a Washington banking corporation ("Columbia Bank")
together with Columbia Banking System, Inc., a Washington corporation ("CBSI")
(collectively, the "Employer"), and J. JAMES GALLAGHER (the "Executive"). This
Agreement shall become effective as of July 1, 1998.

                                   RECITALS

     1.   Executive has served as outside legal counsel to Employer and has
          substantial knowledge of Employer's affairs and of the business of
          financial institutions in general. Employer has incurred substantial
          growth and is looking to continue expansion of its operations, with
          the assistance of Executive. Executive and Employer entered into an
          Employment Agreement effective as of July 1, 1998.

     2.   This Agreement was amended and restated in June 1999.

     3.   Effective January 1, 2000, Executive was appointed to serve as Chief
          Executive Officer of CBSI, in addition to his position as Vice
          Chairman of CBSI and Columbia Bank. Employer and Executive desire to
          amend and restate this Agreement to reflect the change in position of
          Executive.

     In consideration of the mutual promises made in this Agreement, the parties
agree as follows:

                                   AGREEMENT

     1.   Employment.

     Employer employs Executive and Executive accepts employment with Employer
on the terms and conditions set forth in this Agreement.

     2.   Term.

     The term of this Agreement will commence as of July 1, 1998, and will
continue until June 30, 2003, unless extended or sooner terminated as provided
in this Agreement.

     3.   Duties.

               (a)  Executive will be Vice-Chairman and Chief Executive Officer
of CBSI and Vice Chairman of Columbia Bank. In such capacities, and subject to
the authority of the Board of Directors of CBSI and Columbia Bank, as
appropriate, (i) Executive will have general management of the business of CBSI;
(ii) will be specifically responsible for strategic planning, merger and
acquisition activity, and legal and regulatory compliance of Columbia
<PAGE>

Bank; and (iii) will perform such other tasks in connection with the affairs of
Columbia Bank that are normal and customary to the position he will hold.

               (b)  Executive will perform such other duties as may be
appropriate to his position and as may be prescribed from time to time by the
Board, or that are provided in the Bylaws of CBSI or Columbia Bank.

               (c)  Executive will devote his best efforts and all necessary
time, attention, and effort to the business and affairs of Employer and its
affiliates, as such business and affairs now exist or hereafter may be changed
or supplemented, in order to properly discharge his responsibilities under this
Agreement. He may delegate such of his duties as he sees fit to the other
officers of CBSI or its subsidiaries.

     4.   Salary, Bonus, and Other Compensation.

          4.1  Salary.

               (a)  during the term of this Agreement, Employer will pay
Executive an annual (calendar year) base salary of not less than $175,000 per
year (payable at the rate of $14,583.33 per month) beginning July 1, 1998.

               (b)  Columbia Bank will guarantee payment of any portion of
Executive's compensation that may be allocated to a subsidiary of CBSI.

               (c)  If this Agreement terminates prior to June 30, 2003, then
Employer will pay Executive such greater or lesser amount of the agreed
compensation as provided in Section 5.

          4.2  Bonus. Executive will be eligible to participate in the bonus
pools, if any, that the Board of Columbia Bank or CBSI may establish for senior
executives, either under an executive incentive plan or otherwise.

          4.3  1998 Restricted Stock Award. In order to further incent Executive
in his employment as a senior executive officer, CBSI hereby grants and issues
to and in the name of the Executive as a Restricted Stock Award a total of
fifteen thousand (15,000) shares of the no par value common stock of CBSI (the
"1998 Shares"). The date of grant is July 1, 1998. The terms and conditions of
the Restricted Stock Award are as set forth in the Restricted Stock Award
Agreement with Executive effective as of July 1, 1998.

          4.4  Benefits. In addition to the base salary and bonus payable or
potentially payable to Executive pursuant to this Section 4, Executive will be
entitled to receive benefits similar to those offered to other senior executives
of Employer.

                                       2
<PAGE>

     5.   Termination of Agreement.

          5.1  Early Termination.

               (a)  This Agreement may be terminated at any time by the Board of
Employer or by Executive, and it shall terminate upon Executive's death or
disability. Any termination by the Board of Employer other than termination for
cause (as defined below) shall not prejudice Executive's right to compensation
or other benefits under this Agreement. Except as provided in Section 7, if
Executive voluntarily terminates his employment before June 30, 2003 he will be
entitled to such payments as he would have the right to receive upon termination
for cause under subsection 5.1(b).

               (b)  Except as provided in Section 7, if Employer terminates this
Agreement without cause, Employer shall pay Executive upon the effective date of
such termination all salary earned, benefits accrued and all reimbursable
expenses hereunder incurred through such termination date and, in addition,
liquidated damages in an amount equal to the greater of (i) two years' salary,
or (ii) salary for the then-remaining term of the Agreement payable hereunder;
in such event, all forfeiture provisions regarding the Restricted Stock Award
shall lapse. If Employer terminates this Agreement for cause, Employer shall pay
Executive upon the effective date of such termination only such salary earned,
benefits accrued and expenses reimbursable hereunder incurred through such
termination date. Executive shall have no right to receive compensation or other
benefits for any period after termination for cause.

               (c)  For purposes of this Agreement, the term "cause" shall mean
(i) willful misfeasance or gross negligence in the performance of his duties;
(ii) conduct demonstrably and significantly harmful to Employer (including
willful violation of any final cease and desist order applicable to Employer or
a financial institution subsidiary); or (iii) conviction of a felony. For
purposes of this Agreement, "disability" shall mean a medically reimbursable
physical or mental impairment that may be expected to result in death, or to be
of long, continued duration, and that renders Executive incapable of performing
the duties required under this Agreement. The Board or the Committee, acting in
good faith, shall make the final determination of whether Executive is suffering
under any disability as herein defined and, for purposes of making such
determination, may require Executive to submit himself to a physical examination
by a physician mutually agreed upon by Executive and the Board or the Committee
at Employer's expense.

               (d)  In the event of termination of this Agreement by reason of
Executive's death or disability, all forfeiture provisions regarding the
Restricted Stock Award shall lapse.

          5.2  Obligations. Except as otherwise provided in Section 7 or in a
particular option grant, Executive's rights, if any, to vested but unexercised
stock options will continue for a period of one year after early termination,
other than termination for cause. In the case of termination for cause,
Executive's unvested stock options, if any, shall terminate immediately.

                                       3
<PAGE>

     6.   Restrictive Covenant.

          6.1  Noncompetition.

               (a)  Executive agrees that except as otherwise set forth in this
Agreement, he will not, during the term of this Agreement and for a period of
two years after the later of (i) expiration of the term of this Agreement, or
(ii) completion of service as an active executive officer and/or Board member of
CBSI or Columbia Bank, directly or indirectly, become interested in, as
principal shareholder, director, or officer, any financial institution (other
than an institution controlled by, controlling, or under common control with
Employer and its affiliates) that competes within the State of Washington with
Employer or any of its affiliates, with respect to activities of the type
performed by such companies within such service area immediately prior to
Executive's termination.

               (b)  The restrictions concerning competition after termination as
contained in this Section 6.1 shall apply only in the event that Executive
voluntarily terminates his employment with Employer without good reason. For
purposes of this Agreement, termination for "good reason" shall mean termination
by Executive as a result of any material breach of this Agreement by Employer,
or any diminution of duties of Executive by the Board of either Columbia Bank or
CBSI. The provisions restricting competition by Executive may be waived by the
Employer.

          6.2  Noninterference. During the noncompetition period described in
Section 6.1, Executive shall not solicit or attempt to solicit any other
employee of Employer or its affiliates to leave the employ of those companies,
or in any way interfere with the relationship between Employer and any other
employee of Employer or its affiliates.

          6.3  Interpretation. If a court or any other administrative body with
jurisdiction over a dispute related to this Agreement should determine that the
restrictive covenants set forth above is unreasonably broad, the parties
authorize such court or administrative body to narrow the covenants so as to
make it reasonable, given all relevant circumstances, and to enforce such
revised covenants. The covenants in this paragraph shall survive termination of
this Agreement.

     7.   Change of Control.

          7.1  Benefits. The parties recognize that a "change of control" of
Employer (as defined in Section 7.2) could be detrimental to Executive's
continued employment. Accordingly, in order to give further assurances to the
Executive to enter into this Agreement, if:

               (a)  There is a change of control of CBSI; and either

               (b)  Within 730 days of such change in control, Executive
terminates his employment with Employer; or

               (c)  At any time from and after sixty days prior to the public
announcement by Employer of a transaction that will result in the change of
control, Employer (or its successor) terminates Executive's employment without
cause, then Executive, as of the

                                       4
<PAGE>

date of termination of his employment, subject to the remaining provisions of
this Section 7.1, shall be paid or provided with: (i) continued payment of his
base salary and all benefits provided for in this Agreement until two years
following termination or June 30, 2003, whichever is longer; and (ii) vesting of
all stock options and lapse of all restrictions with respect to the Restricted
Stock Award shall occur. The provisions of this Section 7.1 shall survive
expiration of the term of the Agreement.

          7.2  Definitions. For purposes of this Agreement, the term "change of
control" shall mean the occurrence of one or more of the following events:

               (a)  One person or entity acquiring or otherwise becoming the
owner of twenty-five percent or more of CBSI's outstanding common stock;

               (b)  Replacement of a majority of the incumbent directors of CBSI
or Columbia Bank by directors whose elections have not been supported by a
majority of the Board of either company, as appropriate; or

               (c)  Dissolution, or sale of fifty percent or more in value of
the assets, of either CBSI or Columbia Bank.

          7.3  Reimbursement. In the event the provisions of this Section 7.3
result in imposition of a tax on Executive under the provisions of Internal
Revenue Code (S) 4999, Employer agrees to reimburse Executive for the same,
exclusive of any tax imposed by reason of receipt of reimbursement under this
Section 7.3.

     8.   Miscellaneous.

          8.1  This Agreement contains the entire agreement between the parties
with respect to Executive's employment with Employer and his covenant not to
compete with Employer and its affiliates, and is subject to modification or
amendment only upon amendment in writing signed by both parties.

          8.2  This Agreement shall bind and inure to the benefit of the heirs,
legal representatives, successors, and assigns of the parties, except that
Employer's rights and obligations may not be assigned. The provisions of Section
6.1 of this Agreement are intended to confer upon CBSI and its subsidiaries and
affiliates the benefits of Executive's covenant not to compete.

          8.3  If any provision of this Agreement is invalid or otherwise
unenforceable, all other provisions shall remain unaffected and shall be
enforceable to the fullest extent permitted by law.

          8.4  This Agreement is made with reference to and is intended to be
construed in accordance with the laws of the State of Washington. Venue for any
action arising out of or concerning this Agreement shall lie in Pierce County,
Washington. In the event of a dispute under this Agreement not involving
injunctive relief, the dispute shall be arbitrated pursuant to the Superior
Court Mandatory Arbitration Rules ("MAR") adopted by the Washington State
Supreme Court, irrespective of the amount in controversy. This Agreement shall
be deemed as

                                       5
<PAGE>

stipulation to that effect pursuant to MAR 1.2 and 8.1. The arbitrator, in his
or her discretion, may award attorney's fees to the prevailing party or parties.

          8.5  Any notice required to be given under this Agreement to either
party shall be given by personal service or by depositing a copy thereof in the
United States registered or certified mail, postage prepaid, addressed to the
following address, or such other address as addressee shall designate in
writing:

Employer:     1102 Broadway            Executive:     23 Lagoon Lane North
              Tacoma, WA  98402                       Lakewood, WA  98498

                                       COLUMBIA STATE BANK

                                       By: /s/ W.W. Philip
                                           ------------------------------
                                           W.W. Philip
                                           Its Chairman

                                       COLUMBIA BANKING SYSTEM, INC.

                                       By: /s/ W.W. Philip
                                           ------------------------------
                                           W.W. Philip
                                           Its Chairman

                                       EXECUTIVE

                                       /s/ J. James Gallagher
                                       ----------------------------------
                                       J. JAMES GALLAGHER

                                       6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00004-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00004-of-00352.parquet"}]]