Document:

<PAGE>

                                                                    Exhibit 10.1

                                                                  Execution Copy
                                                                  --------------

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                                AMERIPATH, INC.

                               CREDIT AGREEMENT

                      Originally Dated as of May 29, 1996
                 Amended and Restated as of December 16, 1999
                   Amended and Restated as of June 11, 2001

                             FLEET NATIONAL BANK,
                             Administrative Agent

                             BANK OF AMERICA, N.A.
                               Syndication Agent

                              CITICORP USA, INC.
                              Documentation Agent

                                 BANK ONE, NA,
                                   Co-Agent

                          FIRST UNION NATIONAL BANK,
                                   Co-Agent

                      BANCBOSTON ROBERTSON STEPHENS INC.,
                                   Arranger

 -------------------------------------------------------------------------------
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<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                         Page
                                                                                         -----
<S>                                                                                       <C>
1.     Restatement; Definitions.........................................................   1
       1.1.  Restatement................................................................   1
       1.2.  Definitions; Certain Rules of Construction.................................   1
2.     The Credits......................................................................  23
       2.1.  Revolving Credit...........................................................  23
       2.2.  Swingline Credit...........................................................  24
       2.3.  Letters of Credit..........................................................  26
       2.4.  Application of Proceeds....................................................  29
       2.5.  Nature of Obligations of Lenders to Make Extensions of Credit..............  29
3.    Interest; LIBOR Pricing Options; Fees.............................................  30
       3.1.  Interest...................................................................  30
       3.2.  LIBOR Pricing Options......................................................  30
       3.3.  Interest on Swingline Loan.................................................  32
       3.4.  Commitment Fees............................................................  33
       3.5.  Letter of Credit Fees......................................................  33
       3.6.  Changes in Circumstances; Yield Protection.................................  33
       3.7.  Computations of Interest and Fees..........................................  35
4.     Payment..........................................................................  35
       4.1.  Payment at Maturity........................................................  35
       4.2.  Contingent Required Prepayments............................................  35
       4.3.  Voluntary Prepayments......................................................  36
       4.4.  Letters of Credit..........................................................  36
       4.5.  Reborrowing; Application of Payments, etc..................................  36
5.     Conditions to Extending Credit...................................................  37
       5.1.  Conditions on Initial Closing Date.........................................  37
       5.2.  Conditions to Each Extension of Credit.....................................  38
6.     General Covenants................................................................  39
       6.1.  Taxes and Other Charges; Accounts Payable..................................  39
       6.2.  Conduct of Business, etc...................................................  39
       6.3.  Insurance..................................................................  40
       6.4.  Financial Statements and Reports...........................................  41
       6.5.  Certain Financial Tests....................................................  45
       6.6.  Indebtedness...............................................................  47
       6.7.  Guarantees; Letters of Credit..............................................  48
       6.8.  Liens......................................................................  48
       6.9.  Investments and Permitted Acquisitions.....................................  49
       6.10. Distributions..............................................................  50
       6.11. Asset Dispositions and Mergers.............................................  50
       6.12. Lease Obligations..........................................................  51
       6.13. Issuance of Stock by Subsidiaries; Subsidiary Distributions................  51
</TABLE>

                                      -i-
<PAGE>

<TABLE>

<S>                                                                                      <C>
       6.14. Voluntary Prepayments of Other Indebtedness................................  52
       6.15. Derivative Contracts.......................................................  52
       6.16. Negative Pledge Clauses....................................................  52
       6.17. ERISA, etc.................................................................  52
       6.18. Transactions with Affiliates...............................................  53
       6.19. Interest Rate Protection...................................................  53
       6.20. Environmental Laws.........................................................  53
       6.21. Permitted Acquisitions; General............................................  53
       6.22. Year 2000 Compliant........................................................  56
7.     Representations and Warranties...................................................  56
       7.1.  Organization and Business..................................................  56
       7.2.  Financial Statements and Other Information; Material Agreements............  57
       7.3.  Agreements Relating to Financing Debt, Investments, etc....................  58
       7.4.  Changes in Condition.......................................................  58
       7.5.  Title to Assets............................................................  59
       7.6.  Operations in Conformity With Law, etc.....................................  59
       7.7.  Litigation.................................................................  59
       7.8.  Authorization and Enforceability...........................................  59
       7.9.  No Legal Obstacle to Agreements............................................  59
       7.10. Defaults...................................................................  60
       7.11. Licenses, etc..............................................................  60
       7.12. Tax Returns................................................................  61
       7.13. Certain Business Representations...........................................  61
       7.14. Environmental Regulations..................................................  62
       7.15. Pension Plans..............................................................  63
       7.16. Acquisition Agreement, etc.................................................  63
       7.17. Foreign Trade Regulations; Government Regulation; Margin Stock.............  63
       7.18. Disclosure.................................................................  63
       7.19. Year 2000 Compliance.......................................................  64
8.     Defaults.........................................................................  64
       8.1.  Events of Default..........................................................  64
       8.2.  Certain Actions Following an Event of Default..............................  67
       8.3.  Annulment of Defaults......................................................  69
       8.4.  Waivers....................................................................  69
9.     Guarantees.......................................................................  69
       9.1.  Guarantees of Credit Obligations...........................................  69
       9.2.  Continuing Obligation......................................................  70
       9.3.  Waivers with Respect to Credit Obligations.................................  70
       9.4.  Lenders' Power to Waive, etc...............................................  72
       9.5.  Information Regarding the Borrower, etc....................................  73
       9.6.  Certain Guarantor Representations..........................................  73
       9.7.  Subrogation................................................................  74
       9.8.  Subordination..............................................................  74
       9.9.  Further Assurances.........................................................  74
</TABLE>

                                     -ii-
<PAGE>

<TABLE>
<S>                                                                                         <C>
10.    Security...........................................................................   74
       10.1.   Credit Security............................................................   74
       10.2.   Additional Credit Security.................................................   77
       10.3.   Representations, Warranties and Covenants with Respect to Credit Security..   77
       10.4.   Administration of Credit Security..........................................   80
       10.5.   Right to Realize upon Credit Security......................................   81
       10.6.   Custody of Credit Security.................................................   84
11.    Expenses; Indemnity................................................................   85
       11.1.   Expenses...................................................................   85
       11.2.   General Indemnity..........................................................   85
       11.3.   Indemnity With Respect to Letters of Credit................................   86
12.    Operations; Agent..................................................................   86
       12.1.   Interests in Credits.......................................................   86
       12.2.   Agent's Authority to Act, etc..............................................   86
       12.3.   Borrower to Pay Agent, etc.................................................   86
       12.4.   Lender Operations for Advances, Letters of Credit, etc.....................   87
       12.5.   Sharing of Payments, etc...................................................   88
       12.6.   Actions by Agent, Amendments, Consents, Waivers, etc.......................   89
       12.7.   Agent's Resignation........................................................   90
       12.8.   Concerning the Agent.......................................................   90
       12.9.   Rights as a Lender.........................................................   92
       12.10.  Independent Credit Decision................................................   93
       12.11.  Indemnification............................................................   93
13.    Successors and Assigns; Lender Assignments and Participations......................   93
       13.1.  Assignments by Lenders......................................................   93
       13.2.  Credit Participants.........................................................   96
       13.3.  Replacement of Lender.......................................................   97
       13.4.  Foreign Lenders.............................................................   98
14.    Confidentiality....................................................................   99
15.    Acknowledgments and Consents.......................................................  100
16.    Notices............................................................................  100
17.    Course of Dealing; Amendments and Waivers..........................................  100
18.    Defeasance.........................................................................  101
19.    Venue; Service of Process..........................................................  101
20.    WAIVER OF JURY TRIAL...............................................................  101
21.    No Strict Construction.............................................................  102
22.    General............................................................................  102
</TABLE>

                                     -iii-
<PAGE>

                                   EXHIBITS

1          -    Applicable Interest Rates

2.1.4      -    Revolving Note

2.2.3      -    Swingline Note

5.2.1      -    Officer's Certificate

6.6        -    Existing Indebtedness

6.8        -    Existing Liens

6.11       -    Asset Dispositions and Mergers

6.18       -    Transactions with Affiliates

6.21.1(a)  -    Subordination Agreement

6.21.1(b)  -    Joinder Agreement

6.21.1(f)  -    6.21.1 Permitted Acquisition Compliance Certificate

6.21.2(d)  -    6.21.2 Permitted Acquisition Compliance Certificate

7.1        -    Company and its Subsidiaries

7.1.4      -    Stockholders of the Company

7.2.2      -    Material Agreements

7.3        -    Financing Debt, Certain Investments, etc.

7.4        -    Changes in Condition

7.7        -    Litigation

7.14       -    Environmental

7.15       -    Multi-employer and Defined Benefit Plans

10.4.2     -    Depository Institutions

12.1       -    Interests in Credits

13.1.1     -    Assignment and Acceptance

                                     -iv-
<PAGE>

                                AMERIPATH, INC.

                               CREDIT AGREEMENT

     This Agreement, originally dated as of May 29, 1996 and amended and
restated as of December 16, 1999, is among AmeriPath, Inc., a Delaware
corporation, certain Subsidiaries of AmeriPath, Inc. from time to time party
hereto, the Lenders from time to time party hereto and Fleet National Bank, both
in its capacity as a Lender and in its capacity as administrative agent for
itself and the other Lenders.  The parties agree as follows:

1.   Restatement; Definitions.
     ------------------------

1.1. Restatement.  Effective as of the Initial Closing Date, this Agreement
     -----------
amends and restates in its entirety the Credit Agreement dated as of May 29,
1996, as amended and restated as of December 16, 1999, as amended and in effect
on the date hereof prior to giving effect to this Agreement, among the Company,
its Subsidiaries and a group of lenders for which Fleet National Bank is acting
as agent.  Citicorp USA, Inc. and Credit Suisse First Boston are joining as
Lenders to the Credit Agreement and have committed $37,500,000 and $15,000,000
respectively to the Revolving Credit. The commitments from Citicorp USA, Inc.
and Bank Suisse First Boston increase the Revolving Credit to $282,500,000 from
$230,000,000. This increase is permitted by the advanced approval provided in
Section 2.1.2 of the Credit Agreement. The addition of Citicorp USA, Inc. as
Documentation Agent requires that the Credit Agreement be amended and restated.
This Agreement will incorporate the three amendments to the Credit Agreement
adopted since the December 16, 1999 Restatement.  This Agreement is not a
termination or novation of such existing Credit Agreement, which shall continue
in effect as modified hereby. The Credit Obligations, Credit Security and other
Credit Documents presently outstanding in connection with such existing Credit
Agreement shall remain in effect from and after the Initial Closing Date, as
modified by this Agreement.  On the Initial Closing Date the Agent will make
such arrangements to reallocate the Loan and Letter of Credit Exposure held by
the Lenders in accordance with their Percentage Interests as set forth on
Exhibit 12.1 hereto.  Amounts in respect of interest, commitment fees, Letter of
Credit fees and other amounts payable hereunder shall be payable in accordance
with the terms of such existing Credit Agreement as in effect prior to the
amendment and restatement on the Initial Closing Date for periods prior to the
Initial Closing Date and in accordance with this Agreement (as it modifies such
existing Credit Agreement) for periods from and after the Initial Closing Date.

1.2. Definitions; Certain Rules of Construction.  Certain capitalized terms are
     ------------------------------------------
used in this Agreement and in the other Credit Documents with the specific
meanings defined below in this Section 1.  Except as otherwise explicitly
specified to the contrary or unless the context clearly requires otherwise, (a)
the capitalized term "Section" refers to sections of this Agreement, (b) the
capitalized term "Exhibit" refers to exhibits to this Agreement, (c) references
to a particular Section include all subsections thereof, (d) the word
"including" shall be construed as "including without limitation", (e) accounting
terms not otherwise defined herein have the
<PAGE>

meaning provided under GAAP, (f) terms defined in the UCC and not otherwise
defined herein have the meaning provided under the UCC, (g) references to a
particular statute or regulation include all rules and regulations thereunder
and any successor statute, regulation or rules, in each case as from time to
time in effect and (h) references to a particular Person include such Person's
successors and assigns to the extent not prohibited by this Agreement and the
other Credit Documents. References to "the date hereof" mean December [16],
1999.

     "Accounts" is defined in Section 10.1.2.
      --------

     "Accumulated Benefit Obligations" means the actuarial present value of the
      -------------------------------
accumulated benefit obligations under any Plan, calculated in accordance with
Statement No. 87 of the Financial Accounting Standards Board.

     "Acquired Party" shall mean any Person, 100% of the outstanding capital
      --------------
stock or beneficial interests or substantially all of the assets of which are
acquired by the Borrower in connection with a Permitted Acquisition.

     "Acquired Party EBITDA Adjustment" means (a) for any calculation made with
      --------------------------------
respect to Sections 6.5.1 or 6.21 of this Agreement in which six or less full
months of the Net Income of an Acquired Party have been included, and only to
the extent not already included in, Consolidated Net Income, an amount equal to
the product of (i) the number of months in the applicable period in which none
of the Net Income of such Acquired Party was included in Consolidated Net
Income, multiplied by (ii) one-twelfth of Pro Forma EBITDA of such Acquired
Party as of the date of the Acquisition of such Acquired Party or (b) for any
calculation made with respect to Section 6.5.1 or 6.21 of this Agreement in
which more than six months but less than one full year of the Net Income of an
Acquired Party have been included, and only to the extent not already included
in, Consolidated Net Income, an amount equal to the product of (X) the number of
months in the applicable period in which none of the Net Income of such Acquired
Party was included in Consolidated Net Income, multiplied by (Y) the amount of
                                               -------------
actual EBITDA of such Acquired Party for each full month following its
Acquisition by the Borrower, divided by (Z) the number of full months for which
                             ----------
EBITDA of the Acquired Party was included in Consolidated Net Income.

     "Acquisition Agreement" means the documentation pursuant to which the
      ---------------------
Borrower commits itself to make a Permitted Acquisition.

     "Acquisition Closing Date" is defined in Section 6.21.1(a).
      ------------------------

     "Affected Lender" is defined in Section 13.3.
      ---------------

     "Affiliate" means, with respect to the Borrower (or any other specified
      ---------
Person), any other Person directly or indirectly controlling, controlled by or
under direct or indirect common control with the Borrower (or such specified
Person), and shall include (a) any officer or director or general partner of the
Borrower (or such specified Person) and (b) any Person of which the Borrower (or
such specified Person) or any Affiliate (as defined in clause (a) above) of the

                                      -2-
<PAGE>

Borrower (or such specified Person) shall, directly or indirectly, beneficially
own either (i) at least 5% of the outstanding equity securities having the
general power to vote or (ii) at least 5% of all equity interests.

     "Agent" means Fleet National Bank in its capacity as administrative agent
      -----
for the Lenders hereunder, as well as its successors and assigns in such
capacity pursuant to Section 12.7.

     "Aggregate Percentage Interest" means, with respect to the Loan, the ratio
      -----------------------------
that the respective Commitments of the Lenders bear to the total Commitments of
all Lenders as from time to time in effect and reflected in the Register.

     "Agreement" means this Agreement as from time to time amended, modified and
      ---------
in effect.

     "Applicable Commitment Fee Rate" means (a) through the date on which the
      ------------------------------
financial statements for the fiscal year of the Borrower ending December 31,
1999 are delivered to the Agent in accordance with Section 6.4.1, the rate for
applicable commitment fees set forth opposite Level II in the Pricing Grid and
(b) at any date thereafter, the rate shown on the Pricing Grid that corresponds
to the ratio of Consolidated Total Debt to Consolidated Adjusted EBITDA for the
most recently completed period of four consecutive fiscal quarters
(notwithstanding any subsequent change in such ratio on any Closing Date due to
the occurrence of a Permitted Acquisition and the resulting inclusion of an
Acquired Party's Pro Forma EBITDA in Consolidated Adjusted EBITDA and additional
Financing Debt in Consolidated Total Debt).  Changes in the Applicable Rate
shall occur on each Pricing Reset Date; provided, however, that in the event
                                        --------  -------
that the financial statements required to be delivered pursuant to Section 6.4.1
or 6.4.2, as applicable, are not delivered by the latest date permissible under
Section 6.4.1 or 6.4.2, as the case may be (the "Late Delivery Date"), and if,
                                                 ------------------
upon delivery of such financial statements, it is determined that delivery of
such financial statements on the Late Delivery Date would have resulted in an
increase in the Applicable Margin on the first Pricing Reset Date after the Late
Delivery Date (the "Late Pricing Reset Date"), such increase will be deemed
                    -----------------------
effective as of the Late Pricing Reset Date.

     "Applicable Rate" means (a) through the date on which the financial
      ---------------
statements for the fiscal year of the Borrower ending December 31, 1999 are
delivered to the Agent in accordance with Section 6.4.1, the rate set forth
opposite Level II in the Pricing Grid and (b) at any date thereafter, the sum
of:

          (x) the rate shown on the Pricing Grid that corresponds to the current
          ratio of Consolidated Total Debt to Consolidated Adjusted EBITDA for
          the most recently completed period of four consecutive fiscal quarters
          (notwithstanding any subsequent change in such ratio on any Closing
          Date due to the occurrence of a Permitted Acquisition and the
          resulting inclusion of an Acquired Party's Pro Forma EBITDA in
          Consolidated Adjusted EBITDA and additional Financing Debt in
          Consolidated Total Debt);

                                      -3-
<PAGE>

     plus (y)  an additional 3.00% effective on the day the Agent notifies the
     ----
          Company that the interest rates hereunder are increasing as a result
          of the occurrence and continuance of an Event of Default until the
          earlier of such time as (i) such Event of Default is no longer
          continuing or (ii) such Event of Default is deemed no longer to exist,
          in each case pursuant to Section 8.3.

          Changes in the Applicable Rate shall occur on each Pricing Reset Date;
          provided, however, that in the event that the financial statements
          --------  -------
          required to be delivered pursuant to Section 6.4.1 or 6.4.2, as
          applicable, are not delivered by the Late Delivery Date and, if upon
          delivery of such financial statements, it is determined that delivery
          of such financial statements on the Late Delivery Date would have
          resulted in an increase in the Applicable Margin on the Late Pricing
          Reset Date such increase will be deemed effective as of the Late
          Pricing Reset Date.

     "Arranger" means BancBoston Robertson Stephens Inc.
      --------

     "Assignee" is defined in Section 13.1.1.
      --------

     "Assignment and Acceptance" is defined in Section 13.1.1.
      -------------------------

     "Banking Day" means any day other than Saturday, Sunday or a day on which
      -----------
banks in Boston, Massachusetts are authorized or required by law or other
governmental action to close and, if such term is used with reference to a LIBOR
Pricing Option, any day on which dealings are effected by first-class banks in
the inter-bank LIBOR markets in London, England.

     "Bankruptcy Code" means Title 11 of the United States Code.
      ---------------

     "Bankruptcy Default" means an Event of Default referred to in Section
      ------------------
8.1.10.

     "Base Rate" means, on any date, the greater of (a) the rate of interest
      ---------
announced by Fleet National Bank at the Boston Office as its Base Rate or (b)
the sum of 1/2% plus the Federal Funds Rate.
                ----

     "Borrower" means the Company.
      --------

     "Boston Office" means the principal banking office of Fleet National Bank
      -------------
in Boston, Massachusetts.

     "By-laws" means all written by-laws, rules, regulations and all other
      -------
documents relating to the management, governance or internal regulation of any
Person other than an individual, or interpretive of the Charter of such Person,
all as from time to time in effect.

     "Capital Expenditures" means, for any period, amounts added or required to
      --------------------
be added to the property, plant and equipment or other fixed assets account on
the Consolidated balance sheet of the Company and its Subsidiaries, prepared in
accordance with GAAP, in respect of

                                      -4-
<PAGE>

(a) the acquisition, construction, improvement or replacement of land,
buildings, machinery, equipment, leaseholds and any other real or personal
property, (b) to the extent not included in clause (a) above, materials,
contract labor and direct labor relating thereto (excluding amounts properly
expensed as repairs and maintenance in accordance with GAAP) and (c) software
development costs to the extent not expensed.

     "Capitalized Lease" means any lease which is required to be capitalized on
      -----------------
the balance sheet of the lessee in accordance with GAAP, including Statement
Nos. 13 and 98 of the Financial Accounting Standards Board.

     "Capitalized Lease Obligations" means the amount of the liability
      -----------------------------
reflecting the aggregate discounted amount of future payments under all
Capitalized Leases calculated in accordance with GAAP, including Statement Nos.
13 and 98 of the Financial Accounting Standards Board.

     "Cash Equivalents" means:
      ----------------

          (a)  negotiable certificates of deposit time deposits (including sweep
     accounts), demand deposits and bankers' acceptances having a maturity of
     nine months or less and issued by any United States financial institution
     having capital and surplus and undivided profits aggregating at least
     $100,000,000 and rated at least Prime-1 by Moody's Investors Service, Inc.
     or A-1 by Standard & Poor's Ratings Group or issued by any Lender;

          (b) corporate obligations having a maturity of nine months or less and
     rated at least Prime-1 by Moody's Investors Service, Inc. or A-1 by
     Standard & Poor's Ratings Group or issued by any Lender;

          (c) any direct obligation of the United States of America or any
     agency or instrumentality thereof, or of any state or municipality thereof,
     (i) which has a remaining maturity at the time of purchase of not more than
     one year or which is subject to a repurchase agreement with any Lender (or
     any other financial institution referred to in clause (a) above)
     exercisable within one year from the time of purchase and (ii) which, in
     the case of obligations of any state or municipality, is rated at least Aa
     by Moody's Investors Service, Inc. or AA by Standard & Poor's Ratings
     Group; and

          (d) any mutual fund or other pooled investment vehicle rated at least
     Aa by Moody's Investors Service, Inc. or AA by Standard & Poor's Ratings
     Group which invests principally in obligations described above.

     "Cash Purchase Price" means the portion of consideration for any Permitted
      -------------------
Acquisition that constitutes the sum of (i) cash or Cash Equivalents plus (ii)
                                                                     ----
any Financing Debt of the Acquired Party that the Borrower or one of its
subsidiaries assumes (except Financing Debt permitted by Section 6.6) minus
                                                                      -----
(iii) cash or Cash Equivalents acquired in such acquisition.

                                      -5-
<PAGE>

     "CERCLA" means the federal Comprehensive Environmental Response,
      ------
Compensation and Liability Act of 1980.

     "CERCLIS" means the federal Comprehensive Environmental Response
      -------
Compensation Liability Information System List (or any successor document)
promulgated under CERCLA.

     "Change of Control" means (i) the acquisition by any Person or group of
      -----------------
Persons acting as a group of beneficial ownership (within the meaning of the
Securities Exchange Act of 1934, as amended), directly or indirectly, of thirty-
five percent (35%) or more of the voting capital stock of the Borrower, (ii) the
board of directors of the Borrower ceasing to consist of at least a majority of
(x) directors of the Borrower in office on the Initial Closing Date plus (y)
                                                                    ----
directors elected since the Initial Closing Date by a majority of directors in
office on the Initial Closing Date or (iii) the President or Chief Financial
Officer who were holding such offices as of the Initial Closing Date shall cease
for any reason to hold such offices and replacements reasonably satisfactory to
the Required Lenders shall not have been elected by the board within 180 days.

     "Charter" means the articles of organization, certificate of incorporation,
      -------
statute, constitution, joint venture agreement, partnership agreement, trust
indenture, limited liability company agreement or other charter document of any
Person other than an individual, each as from time to time in effect.

     "Closing Date" means the Initial Closing Date and each other date on which
      ------------
any extension of credit is made pursuant to Sections 2.1, 2.2 or 2.3.

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

     "Commitment" means, with respect to any Lender, such Lender's obligations
      ----------
to extend the credits contemplated by the Credit Documents; the original
Commitments being set forth in Section 12.1 and the current Commitments being
recorded from time to time in the Register.

     "Company" means AmeriPath, Inc., a Delaware corporation.
      -------

     "Computation Covenants" means Sections 6.5, 6.6.7, 6.6.11, 6.9.5, 6.10,
      ---------------------
6.11, 6.12, 6.17 and 6.21.

     "Consolidated" and "Consolidating", when used with reference to any term,
      ------------       -------------
mean that term as applied to the accounts of the Company (or other specified
Person) and all of its Subsidiaries (or other specified group of Persons), or
such of its Subsidiaries as may be specified, consolidated (or combined) or
consolidating (or combining), as the case may be, in accordance with GAAP and
with appropriate deductions for minority interests in Subsidiaries.

     "Consolidated Adjusted EBITDA" means, for any period, an amount equal to
      ----------------------------
the sum of (a) Consolidated Net Income of the Company and its Subsidiaries for
such period plus (b) all amounts deducted in computing such Consolidated Net
            ----
Income in respect of (i) taxes based upon

                                      -6-
<PAGE>

or measured by income, (ii) Consolidated Interest Expense and (iii) depreciation
and amortization expense plus (c) any Acquired Party EBITDA Adjustment.
                         ----

     "Consolidated EBITDA" means, for any period, an amount equal to the sum of
      -------------------
(a) Consolidated Net Income of the Company and its Subsidiaries for such period

plus (b) all amounts deducted in computing such Consolidated Net Income in
----
respect of (i) taxes based upon or measured by income, (ii) Consolidated
Interest Expense and (iii) depreciation and amortization.

     "Consolidated Interest Expense" means, for any period, the Interest Expense
      -----------------------------
paid and accrued by the Company and its Subsidiaries on a Consolidated basis.

     "Consolidated Net Income" means, for any period, the net income (or loss)
      -----------------------
of the Company and its Subsidiaries, determined in accordance with GAAP on a
Consolidated basis; provided, however, that Consolidated Net Income shall not
                    --------  -------
include the net amount after taxes of:

          (a) the income (or loss) of any other Person accrued prior to the date
     such other Person becomes a Subsidiary or is merged into or consolidated
     with such Person;

          (b) the income (or loss) of any other Person (other than a Subsidiary)
     in which such Person has an ownership interest; provided, however, that (i)
                                                     --------  -------
     Net Income shall include amounts in respect of the income of such other
     Person when actually received in cash by such Person in the form of
     dividends or similar Distributions and (ii) Net Income shall be reduced by
     the aggregate amount of all Investments, regardless of the form thereof,
     made by such Person in such other Person for the purpose of funding any
     deficit or loss of such other Person;

          (c) all amounts included in computing such net income (or loss) in
     respect of the write-up of any asset or the retirement of any Indebtedness
     or equity at less than face value after any acquisition;

          (d) extraordinary and nonrecurring gains;

          (e) the income of any Subsidiary to the extent the payment of such
     income in the form of a Distribution or repayment of Indebtedness to such
     Person is not permitted, whether on account of any Charter or By-law
     restriction, any agreement, instrument, deed or lease or any law, statute,
     judgment, decree or governmental order, rule or regulation applicable to
     such Subsidiary; and

          (f) any after-tax gains or losses attributable to returned surplus
     assets of any Plan.

     "Consolidated Operating Cash Flow" means, for any period, the total of (i)
      --------------------------------
Consolidated EBITDA minus (ii) taxes, based upon or measured by net taxable
                    -----
income, paid in cash by the Company and its Subsidiaries minus (iii) Capital
                                                         -----
Expenditures.

                                      -7-
<PAGE>

     "Consolidated Senior Debt" means all Financing Debt of the Company and the
      ------------------------
Subsidiaries on a Consolidated basis other than in respect of Subordinated
Indebtedness.

     "Consolidated Total Debt" means, at any date, all Financing Debt of the
      -----------------------
Company and its Subsidiaries on a Consolidated basis.

     "Consolidated Total Debt Service" means, for any period, the sum of (i)
      -------------------------------
Consolidated Interest Expense plus (ii) the aggregate amount of all mandatory
                              ----
scheduled payments, prepayments and sinking fund payments paid or accrued by the
Company and its Subsidiaries during such period with respect to Financing Debt,
including contingent obligations under agreements relating to Permitted
Acquisitions (made before or after the date of this Agreement) or with respect
to principal paid or accrued by the Company in respect of Subordinated
Indebtedness and Contingent Notes.

     "Consolidated Total Liabilities" means, at any date, all Indebtedness of
      ------------------------------
the Company and its Subsidiaries on a Consolidated basis.

     "Contingent Notes" means the contingent promissory notes constituting
      ----------------
Subordinated Indebtedness issued to the Sellers in connection with a Permitted
Acquisition made hereunder or under this Agreement prior to its amendment and
restatement on the Initial Closing Date.

     "Credit Documents" means:
      ----------------

          (a) this Agreement, the Notes, each Letter of Credit, each draft
     presented or accepted under a Letter of Credit, each Interest Rate
     Protection Agreement provided by a Lender (or an Affiliate of a Lender) to
     the Borrower or any of its Subsidiaries and the Subordination Agreement,
     each as from time to time in effect;

          (b) all financial statements, reports, notices, mortgages,
     assignments, UCC financing statements or certificates delivered to the
     Agent or any of the Lenders by the Company, any of its Subsidiaries or any
     other Obligor in connection herewith or therewith; and

          (c) any other present or future agreement or instrument from time to
     time entered into among the Company, any of its Subsidiaries or any other
     Obligor, on one hand, and the Agent, any Letter of Credit Issuer or all the
     Lenders, on the other hand, relating to, amending or modifying this
     Agreement or any other Credit Document referred to above or which is stated
     to be a Credit Document, each as from time to time in effect.

     "Credit Obligations" means all present and future liabilities, obligations
      ------------------
and Indebtedness of the Company, any of its Subsidiaries or any other Obligor
owing to the Agent or any Lender under or in connection with this Agreement or
any other Credit Document, including obligations in respect of principal,
interest, reimbursement obligations under Letters of Credit and Interest Rate
Protection Agreements provided by a Lender (or an affiliate of a Lender),
commitment fees,

                                      -8-
<PAGE>

Letter of Credit fees, amounts provided for in Sections 3.2.4, 3.5 and 11 and
other fees, charges, indemnities and expenses from time to time owing hereunder
or under any other Credit Document (whether accruing before or after a
Bankruptcy Default).

     "Credit Participant" is defined in Section 13.2.
      ------------------

     "Credit Security" means all assets now or from time to time hereafter
      ---------------
subjected to a security interest, mortgage or charge (or intended or required so
to be subjected pursuant to this Agreement or any other Credit Document) to
secure the payment or performance of any of the Credit Obligations, including
the assets described in Section 10.1.

     "Default" means any Event of Default and any event or condition which with
      -------
the passage of time or giving of notice, or both, would become an Event of
Default and the filing against the Company, any of its Subsidiaries or any other
Obligor of a petition commencing an involuntary case under the Bankruptcy Code.

     "Delinquency Period" is defined in Section 12.4.4.
      ------------------

     "Delinquent Lender" is defined in Section 12.4.4.
      -----------------

     "Delinquent Payment" is defined in Section 12.4.4.
      ------------------

     "Distribution" means, with respect to the Company (or other specified
      ------------
Person):

          (a) the declaration or payment of any dividend or distribution,
     including dividends payable in shares of capital stock of or other equity
     interests in the Company (or such specified Person), on or in respect of
     any shares of any class of capital stock of or other equity interests in
     the Company (or such specified Person);

          (b) the purchase or redemption of any shares of any class of capital
     stock of or other equity interest in the Company (or such specified Person)
     or of options, warrants or other rights for the purchase of such shares,
     directly, indirectly through a Subsidiary or otherwise;

          (c) any other distribution on or in respect of any shares of any
     class of capital stock of or equity or other beneficial interest in the
     Company (or such specified Person);

          (d) any payment of principal or interest with respect to, or any
     purchase, redemption or defeasance of, any Indebtedness of the Company (or
     such specified Person) which by its terms or the terms of any agreement is
     subordinated to the payment of the Credit Obligations; and

          (e) any payment, loan or advance by the Company (or such specified
     Person) to, or any other Investment by the Company (or such specified
     Person) in, the holder of

                                      -9-
<PAGE>

     any shares of any class of capital stock of or equity interest in the
     Company (or such specified Person), or any Affiliate of such holder;

     provided, however, that the term "Distribution" shall not include (i)
     --------  -------
     dividends payable in perpetual common stock of or other similar equity
     interests in the Company (or such specified Person) or (ii) payments in the
     ordinary course of business in respect of (A) reasonable compensation paid
     to employees, officers and directors, (B) advances to employees for travel
     expenses, drawing accounts and similar expenditures, or (C) rent paid to,
     or accounts payable for services rendered or goods sold by, non-Affiliates
     that own capital stock of or other equity interests in the Company (or such
     specified Person).

     "EBITDA" means, for any period, an amount equal to the sum of (a) the Net
      ------
Income (or loss) of any Person for such period plus (b) all amounts deducted in
                                               ----
computing such Net Income in respect of (i) taxes based upon or measured by
income, (ii) Interest Expense and (iii) depreciation and amortization.

     "Environmental Laws"  means all applicable federal, state or local
      ------------------
statutes, laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to public health and safety
and protection of the environment, including OSHA.

     "Equity Transaction" means any issuance or sale by the Company or any of
      ------------------
its Subsidiaries of any shares of capital stock, other equity interests or
options, warrants or other purchase rights to acquire such capital stock or
other equity interests, of the Company or any of its Subsidiaries, to any
Person; provided, however, that the term "Equity Transaction" shall not include
        --------  -------
such issuances or sales (i) to any of the Obligors or their officers, employees
and directors, (ii) to any Person pursuant to the Company's Amended and Restated
1996 Stock Option Plan or 1996 Director Stock Option Plan or (iii) that comprise
a portion of the Purchase Price in any Permitted Acquisition.

     "ERISA" means the federal Employee Retirement Income Security Act of 1974.
      -----

     "ERISA Group Person" means the Company, any Subsidiary of the Company and
      ------------------
any Person which is a member of the controlled group or under common control
with the Company or any Subsidiary within the meaning of section 414 of the Code
or section 4001(a)(14) of ERISA.

     "Event of Default" is defined in Section 8.1.
      ----------------

     "Exchange Act" means the federal Securities Exchange Act of 1934.
      ------------

     "Federal Funds Rate" means, for any day, the rate equal to the weighted
      ------------------
average (rounded upward to the nearest 1/8%) of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged by
federal funds brokers, (a) as such weighted average is published for such day
(or, if such day is not a Banking Day, for the immediately

                                      -10-
<PAGE>

preceding Banking Day) by the Federal Reserve Bank of New York or (b) if such
rate is not so published for such Banking Day, as determined by the Agent using
any reasonable means of determination. Each determination by the Agent of the
Federal Funds Rate shall, in the absence of manifest error, be conclusive.

     "Final Maturity Date" means the fifth anniversary of the date hereof.
      -------------------

     "Financial Officer" of the Company (or other specified Person) means its
      -----------------
chief executive officer, chief financial officer, chief operating officer,
chairman, president, treasurer or any of its vice presidents whose primary
responsibility is for its financial affairs, all of whose incumbency and
signatures have been certified to the Agent by the secretary or other
appropriate attesting officer of the Company (or such specified Person).

     "Financing Debt" means each of the items described in clauses (a) through
      --------------
(e) of the definition of the term "Indebtedness."

     "Fleet National Bank" means Fleet National Bank, a national banking
      --------------------
association.

     "Foreign Trade Regulations" means (a) any act that prohibits or restricts,
      -------------------------
or empowers the President or any executive agency of the United States of
America to prohibit or restrict, exports to or financial transactions with any
foreign country or foreign national, (b) the regulations with respect to certain
prohibited foreign trade transactions set forth at 22 C.F.R. Parts 120-130 and
31 C.F.R. Parts 500-590 and (c) any order, regulation, ruling, interpretation,
direction, instruction or notice relating to any of the foregoing.

     "Friendly Acquisition" means any acquisition which has received the prior
      --------------------
approval of the board of directors of the Person being acquired.

     "Funding Liability" means (a) any LIBOR deposit which was used (or deemed
      -----------------
by Section 3.2.6 to have been used) to fund any portion of the Loan subject to a
LIBOR Pricing Option, and (b) any portion of the Loan subject to a LIBOR Pricing
Option funded (or deemed by Section 3.2.6 to have been funded) with the proceeds
of any such LIBOR deposit.

     "GAAP" means generally accepted accounting principles as from time to time
      ----
in effect, including the statements and interpretations of the United States
Financial Accounting Standards Board.

     "Guarantee" means, with respect to the Company (or other specified Person):
      ---------

          (a) any guarantee by the Company (or such specified Person) of the
     payment or performance of, or any contingent obligation by the Company (or
     such specified Person) in respect of, any Indebtedness or other obligation
     of any primary obligor;

          (b) any other arrangement whereby credit is extended to a primary
     obligor on the basis of any promise or undertaking of the Company (or such
     specified Person),

                                      -11-
<PAGE>

     including any binding "comfort letter" or "keep well agreement" written by
     the Company (or such specified Person), to a creditor or prospective
     creditor of such primary obligor, to (i) pay the Indebtedness of such
     primary obligor, (ii) purchase an obligation owed by such primary obligor,
     (iii) pay for the purchase or lease of assets or services regardless of the
     actual delivery thereof or (iv) maintain the capital, working capital,
     solvency or general financial condition of such primary obligor;

          (c)  any liability of the Company (or such specified Person), as a
     general partner of a partnership in respect of Indebtedness or other
     obligations of such partnership;

          (d) any liability of the Company (or such specified Person) as a joint
     venturer of a joint venture in respect of Indebtedness or other obligations
     of such joint venture;

          (e) any liability of the Company (or such specified Person) with
     respect to the tax liability of others as a member of a group that is
     consolidated for tax purposes; and

          (f) reimbursement obligations, whether contingent or matured, of the
     Company (or such specified Person) with respect to letters of credit,
     bankers acceptances, surety bonds, other financial guarantees and Interest
     Rate Protection Agreements,

     whether or not any of the foregoing are reflected on the balance sheet of
     the Company (or such specified Person) or in a footnote thereto; provided,
                                                                      --------
     however, that the term "Guarantee" shall not include endorsements for
     -------
     collection or deposit in the ordinary course of business.  The amount of
     any Guarantee and the amount of Indebtedness resulting from such Guarantee
     shall be the maximum amount that the guarantor may become obligated to pay
     in respect of the obligations (whether or not such obligations are
     outstanding at the time of computation).

     "Guarantor" means each Subsidiary of the Borrower listed on the signature
      ---------
page hereto or which subsequently becomes party to this Agreement as a
Guarantor.

     "Hazardous Material" means any pollutant, toxic or hazardous material or
      ------------------
waste, including any "hazardous substance" or "pollutant" or "contaminant" as
defined in section 101(14) of CERCLA or any other Environmental Law or regulated
as toxic or hazardous under RCRA or any other Environmental Law.

     "Historical Average Payment" means, on any date, with respect to any
      --------------------------
Contingent Notes or Restructured Seller Notes, the quotient of (x) the sum of
the amount of principal payments actually made on such notes in respect of all
fiscal years completed before such date and (y) the number of such completed
fiscal years; provided, however, that on any date on or prior to the end of the
              --------  -------
second full fiscal year completed after the issuance of such notes, the
Historical Average Payment for such notes shall be deemed to be $0.

                                      -12-
<PAGE>

     "Impermissible Reference" means, relative to the opinion or certification
      -----------------------
of any independent public accountant as to any financial statement of any
Obligor, any qualification or exception to such opinion or certification

          (a) which expresses concern about whether or not such Obligor will be
     able to meet its obligations as such become due, or otherwise will be able
     to operate or conduct its business in the future;

          (b) which relates to the limited scope of examination of matters
     relevant to such financial statement;

          (c) which relates to the treatment or classification of any item in
     such financial statement and which, as a condition to its removal, would
     require an adjustment to such item the effect of which would be to cause
     there to be a Default under Sections 6.5 through 6.23; or

          (d) which, in the reasonable judgment of the Required Lenders, is not
     acceptable.

     "Indebtedness" means all obligations, contingent or otherwise, which in
      ------------
accordance with GAAP are required to be reported upon the balance sheet of the
Company (or other specified Person) as liabilities, but in any event including
(without duplication):

          (a) borrowed money;

          (b) indebtedness evidenced by notes, debentures or similar
     instruments, including Contingent Notes and Restructured Seller Notes;

          (c) Capitalized Lease Obligations;

          (d) obligations, whether contingent or matured, with respect to
     letters of credit, bankers acceptances, surety bonds, other financial
     guarantees and Interest Rate Protection Agreements (without duplication of
     other Indebtedness supported or guaranteed thereby);

          (e) unfunded pension liabilities;

          (f) mandatory redemption or dividend rights on capital stock (or other
     equity);

          (g) obligations (other than Contingent Notes or Restructured Seller
     Notes) that are immediately and directly due and payable out of the
     proceeds of or production from property;

                                      -13-
<PAGE>

          (h) liabilities secured by any Lien existing on property owned or
     acquired by the Company (or such specified Person), whether or not the
     liability secured thereby shall have been assumed; and

          (i) all Guarantees in respect of Indebtedness of others.

     "Indemnified Party" is defined in Section 11.2.
      -----------------

     "Initial Closing Date" means the first date on or prior to May __, 2001 on
      --------------------
which all the conditions set forth in Section 5.1 have been satisfied.

     "Interest Expense" means, for any period, the aggregate amount of interest,
      ----------------
including commitment fees and payments in the nature of interest under
Capitalized Leases and Interest Rate Protection Agreements (whether such
interest is reflected as an item of expense or capitalized), paid or accrued by
any Person in accordance with GAAP.

     "Interest Rate Protection Agreement" means any interest rate swap, interest
      ----------------------------------
rate cap, interest rate hedge or other contractual arrangement that converts
variable interest rates into fixed interest rates, fixed interest rates into
variable interest rates or other similar arrangements.

     "Investment" means, with respect to the Borrower (or other specified
      ----------
Person):

          (a) any share of capital stock, partnership or other equity interest,
     evidence of Indebtedness or other security issued by any other Person;

          (b) any loan, advance or extension of credit to, or contribution to
     the capital of, any other Person;

          (c) any Guarantee of the Indebtedness of any other Person;

          (d) any acquisition of all or any part of the business of any other
     Person or the assets comprising such business or part thereof; and

          (e) any other similar investment.

     The investments described in the foregoing clauses (a) through (e) shall be
included in the term "Investment" whether they are made or acquired by purchase,
exchange, issuance of stock or other securities, merger, reorganization or any
other method; provided, however, that the term "Investment" shall not include
              --------  -------
(i) trade and customer accounts receivable for property leased, goods furnished
or services rendered in the ordinary course of business and payable in
accordance with customary trade terms, (ii) advances and prepayments to
suppliers for property leased, goods furnished and services rendered in the
ordinary course of business, (iii) advances to employees for travel expenses,
drawing accounts and similar expenditures, (iv) stock or other securities
acquired in connection with the satisfaction or enforcement of Indebtedness or
claims

                                      -14-
<PAGE>

due to the Company (or such specified Person) or as security for any such
Indebtedness or claim or (v) demand deposits in banks or similar financial
institutions.

               In determining the amount of outstanding Investments:

                    (A) the amount of any Investment shall be the cost thereof
                    minus any returns of capital in cash on such Investment
                    -----
                    (determined in accordance with GAAP without regard to
                    amounts realized as income on such Investment);

                    (B) the amount of any Investment in respect of a purchase
                    described in clause (d) above shall include the amount of
                    any Financing Debt assumed in connection with such purchase
                    or secured by any asset acquired in such purchase (whether
                    or not any Financing Debt is assumed) or for which any
                    Person that becomes a Subsidiary is liable on the date on
                    which the securities of such Person are acquired; and

                    (C) no Investment shall be increased as the result of an
                    increase in the undistributed retained earnings of the
                    Person in which the Investment was made or decreased as a
                    result of an equity interest in the losses of such Person.

     "Late Delivery Date" is defined in the definition of Applicable Commitment
      ------------------
Fee Rate.

     "Late Pricing Reset Date" is defined in the definition of Applicable
      -----------------------
Commitment Fee Rate.

     "Legal Requirement" means any present or future requirement imposed upon
      -----------------
any of the Lenders or the Company and its Subsidiaries by any law, statute,
rule, regulation, directive, order, decree, guideline (or any interpretation
thereof by courts or of administrative bodies) of the United States of America,
or any jurisdiction in which any LIBOR Office is located or any state or
political subdivision of any of the foregoing, or by any board, governmental or
administrative agency, central bank or monetary authority of the United States
of America, any jurisdiction in which any LIBOR Office is located, or any
political subdivision of any of the foregoing.  Any such requirement imposed on
any of the Lenders which such Lender reasonably believes has the force of law
shall be deemed to be a Legal Requirement.

     "Lender" means each of the Persons listed as lenders on the signature page
      ------
hereto, including Fleet National Bank in its capacity as a Lender and such other
Persons who may from time to time own an Aggregate Percentage Interest in the
Loan, but the term "Lender" shall not include any Credit Participant.

                                      -15-
<PAGE>

     "Lending Officer" means such individuals whom the Agent may designate by
      ---------------
notice to the Company from time to time as an officer who may receive telephone
requests for borrowings under Section 2.1.3.

     "Letter of Credit" is defined in Section 2.3.1.
      ----------------

     "Letter of Credit Exposure" means, at any date, the sum of (a) the
      -------------------------
aggregate face amount of all drafts that may then or thereafter be presented by
beneficiaries under all Letters of Credit then outstanding, plus (b) the
                                                            ----
aggregate face amount of all drafts that the Letter of Credit Issuer has
previously accepted under Letters of Credit but has not paid.

     "Letter of Credit Issuer" means, for any Letter of Credit, Fleet National
      -----------------------
Bank or, in the event Fleet National Bank does not for any reason issue a
requested Letter of Credit, another Lender with a Percentage Interest in the
Revolving Loan willing to issue such Letter of Credit in accordance with Section
2.3 and who is reasonably acceptable to the Agent.

     "LIBOR Base Rate" means, for any LIBOR Interest Period, the average
      ---------------
(rounded upward to the nearest whole multiple of one sixteenth of one percent
(1/16 of 1%)) of the rate of interest per annum at which deposits in United
States Dollars in a principal amount approximately equal to the principal amount
of the portion of the Loan to be subject to such Interest Period would be quoted
on Telerate page 3750 (or such other page as may replace the 3750 page on the
Telerate Service or such other service or services as may be nominated by the
British Bankers' Association for United States Dollar deposits) as of 11:00
A.M., London time, at least two London banking days prior to the first day of
the LIBOR Interest Period, the determination of which by the Agent shall, in the
absence of manifest error, be conclusive.

     "LIBOR Interest Period" means any period, selected as provided in Section
      ---------------------
3.2.1, of one, two, three or six months, commencing on any Banking Day and
ending on the corresponding date in the subsequent calendar month so indicated
(or, if such subsequent calendar month has no corresponding date, on the last
day of such subsequent calendar month); provided, however, that subject to
                                        --------  -------
Section 3.2.3, if any LIBOR Interest Period so selected would otherwise begin or
end on a date that is not a Banking Day, such LIBOR Interest Period shall
instead begin or end, as the case may be, on the immediately preceding or
succeeding Banking Day as determined by the Agent in accordance with the then
current banking practice in the inter-bank LIBOR market with respect to LIBOR
deposits at the applicable LIBOR Office, which determination by the Agent shall,
in the absence of manifest error, be conclusive.

     "LIBOR Office" means such non-United States office or international banking
      ------------
facility of the Agent as the Agent may from time to time select.

     "LIBOR Pricing Options" means the options granted pursuant to Section 3.2.1
      ---------------------
to have the interest on any portion of the Loan computed on the basis of a LIBOR
Rate.

     "LIBOR Rate" for any LIBOR Interest Period means the rate, rounded upward
      ----------
to the nearest 1/100%, obtained by dividing (a) the LIBOR Base Rate for such
LIBOR Interest Period

                                      -16-
<PAGE>

by (b) an amount equal to 1 minus the LIBOR Reserve Rate; provided, however,
                            -----                         --------  -------
that if at any time during such LIBOR Interest Period the LIBOR Reserve Rate
applicable to any outstanding LIBOR Pricing Option changes, the LIBOR Rate for
such LIBOR Interest Period shall automatically be adjusted to reflect such
change, effective as of the date of such change.

     "LIBOR Reserve Rate" means the stated maximum rate (expressed as a decimal)
      ------------------
of all reserves (including any basic, supplemental, marginal or emergency
reserve or any reserve asset), if any, as from time to time in effect, required
by any Legal Requirement to be maintained by any Lender against (a)
"Eurocurrency liabilities" as specified in Regulation D of the Board of
Governors of the Federal Reserve System applicable to LIBOR Pricing Options, (b)
any other category of liabilities that includes LIBOR deposits by reference to
which the interest rate on portions of the Loan subject to LIBOR Pricing Options
is determined, (c) the principal amount of or interest on any portion of the
Loan subject to a LIBOR Pricing Option or (d) any other category of extensions
of credit, or other assets, that includes loans subject to a LIBOR Pricing
Option by a non-United States office of any of the Lenders to United States
residents, in each case without the benefits of credits for prorations,
exceptions or offsets that may be available to a Lender.

     "Lien" means, with respect to the Company (or any other specified Person):
      ----

          (a) any lien, encumbrance, mortgage, pledge, charge or security
     interest of any kind upon any property or assets of the Company (or such
     specified Person), whether now owned or hereafter acquired, or upon the
     income or profits therefrom;

          (b) the acquisition of, or the agreement to acquire, any property or
     asset upon conditional sale or subject to any other title retention
     agreement, device or arrangement (including a Capitalized Lease);

          (c) the sale, assignment, pledge or transfer for security of any
     accounts, general intangibles or chattel paper of the Company (or such
     specified Person), with or without recourse;

          (d) the transfer of any tangible property or assets for the purpose of
     subjecting such items to the payment of previously outstanding Indebtedness
     in priority to payment of the general creditors of the Company (or such
     specified Person); and

          (e) the existence for a period of more than 120 consecutive days of
     any Indebtedness against the Company (or such specified Person) which if
     unpaid would by law or upon a Bankruptcy Default be given any priority over
     general creditors.

     "Loan" means the Revolving Loan.
      ----

     "Loan Account" is defined in Section 2.1.4.
      ------------

                                      -17-
<PAGE>

     "Management Services Agreements" shall mean the agreements entered into by
      ------------------------------
the Company or any of its Subsidiaries, on the one hand, and a professional
association or corporation which employs physicians engaged in a pathology
practice, on the other hand, for the long-term management of such physician
practice.

     "Mandatory Borrowing" is defined in Section 2.2.4.
      -------------------

     "Margin Stock" means "margin stock" within the meaning of Regulations T, U
      ------------
or X of the Board of Governors of the Federal Reserve System.

     "Material Adverse Change" means, since any specified date or from the
      -----------------------
circumstances existing immediately prior to the happening of any specified
event, a material adverse change in (a) the business, assets, financial
condition, income or prospects of the Company (on an individual basis) or the
Company and its Subsidiaries (on a Consolidated basis), whether as a result of
(i) general economic conditions affecting the industry in which the Company and
its Subsidiaries are engaged, (ii) difficulties in obtaining supplies and raw
materials, (iii) fire, flood or other natural calamities, (iv) environmental
pollution, (v) regulatory changes, judicial decisions, war or other governmental
action or (vi) any other event or development, whether or not related to those
enumerated above or (b) the ability of the Obligors to perform their obligations
under the Credit Documents or (c) the rights and remedies of the Agent and the
Lenders under the Credit Documents.

     "Material Agreements" is defined in Section 7.2.2.
      -------------------

     "Material Plan" means any Plan or Plans, collectively, as to which (a) the
      -------------
excess of (i) the aggregate Accumulated Benefit Obligations under such Plan or
Plans over (ii) the aggregate fair market value of the assets of such Plan or
Plans allocable to such benefits, all determined as of the then most recent
valuation date or dates for such Plan or Plans, is greater than (b) $500,000.

     "Maximum Amount of Revolving Credit" is defined in Section 2.1.2.
      ----------------------------------

     "Multiemployer Plan" means any Plan that is a "multiemployer plan" as
      ------------------
defined in section 4001(a)(3) of ERISA.

     "Net Equity Proceeds" means the cash proceeds received by the Company or
      -------------------
any of its Subsidiaries in connection with any Equity Transaction (net of
related actual out-of-pocket fees and expenses incurred by the Company in the
exercise of the reasonable business judgment of its officers).

     "Net Income" means, for any period, the net income (or loss) of any Person,
      ----------
determined in accordance with GAAP; provided, however, that Net Income shall not
                                    --------  -------
include:

          (a)  all amounts included in computing such net income (or loss) in
     respect of the write-up of any asset or the retirement of any Indebtedness
     or equity at less than face value after any acquisition;

                                      -18-
<PAGE>

          (b)  extraordinary and nonrecurring gains;

          (c)  any after-tax gains or losses attributable to returned surplus
     assets of any Plan.

     "Nonperforming Lender" is defined in Section 12.4.4.
      --------------------

     "Notes" means each of the Revolving Notes.
      -----

     "Obligors" means the Company and each Guarantor, each individually an
      --------
"Obligor".
--------

     "Operating Earnings" means, with respect to any Person, the sum of (a) the
      ------------------
Net Income of such Person plus (b) all amounts deducted in computing such Net
                          ----
Income in respect of (i) taxes based upon or measured by income, (ii) Interest
Expense, (iii) normalized salaries, benefits, and other compensation to be paid
to physicians employed by, or serving as consultants or independent contractors
to, such Person plus (c) in the case of subsidiaries that are not required to
pay 100% of Operating Earnings under a Management Services Agreement, any other
amounts paid to physicians employed by, or serving as consultants or independent
contractors to, such Person.

     "OSHA" means the federal Occupational Health and Safety Act.
      ----

     "Overdue Reimbursement Rate" means, at any date, the highest Applicable
      --------------------------
Rate then in effect.

     "Payment Date" means the first Banking Day of each month, commencing with
      ------------
the first such date after the Initial Closing Date.

     "PBGC" means the Pension Benefit Guaranty Corporation or any successor
      ----
entity.

     "Percentage Interest" means, with respect to the Revolving Loan or Letter
      -------------------
of Credit Exposure, the ratio that the respective Commitments of the Lenders
with respect to such portion of the Loan (or Letter of Credit Exposure) bear to
the total Commitments in respect of such portion of the Loan (or Letter of
Credit Exposure) of all Lenders as from time to time in effect and reflected in
the Register.

     "Performing Lender" is defined in Section 12.4.4.
      -----------------

     "Permitted Acquisition" means an Investment by the Borrower permitted under
      ---------------------
Section 6.9.5.

     "Person" means any present or future natural person or any corporation,
      ------
association, partnership, joint venture, limited liability, joint stock or other
company, business trust, trust, organization, business or government or any
governmental agency or political subdivision thereof.

                                      -19-
<PAGE>

     "Plan" means, at any date, any pension benefit plan subject to Title IV of
      ----
ERISA maintained, or to which contributions have been made or are required to be
made, by any ERISA Group Person within six years prior to such date.

     "Pledged Indebtedness" is defined in Section 10.1.6.
      --------------------

     "Pledged Rights" is defined in Section 10.1.5.
      --------------

     "Pledged Securities" means the Pledged Stock, the Pledged Rights and the
      ------------------
Pledged Indebtedness, collectively.

     "Pledged Stock" is defined in Section 10.1.4.
      -------------

     "Pricing Grid" means the pricing grid matrix set forth on Exhibit 1.
      ------------

     "Pricing Reset Date" means the first Banking Day after annual or quarterly
      ------------------
financial statements have been furnished to the Lenders in accordance with
Sections 6.4.1 and 6.4.2 from time to time.

     "Pro Forma EBITDA" shall mean, for any period, an amount calculated on a
      ----------------
pro forma basis taking into account the Permitted Acquisition equal to (a) the
historical EBITDA of the Acquired Party and (b) any non-GAAP adjustment to Net
Income to the extent that such adjustment is approved by the Required Lenders.

     "Purchase Price" means the amount of the consideration, including, but not
      --------------
limited to, cash or Cash Equivalents, capital stock, assets, debt, including
contingent or other promissory notes, and any other form of payment, for any
Permitted Acquisition; provided, however, that the amount of any Contingent Note
                       --------  -------
included in this definition of Purchase Price shall be one-half of the maximum
principal amount of such Contingent Note.

     "RCRA" means the federal Resource Conservation and Recovery Act, 42 U.S.C.
      ----
(S) 690, et seq.
         -- ---

     "Register" is defined in Section 13.1.3.
      --------

     "Replacement Lender" is defined in Section 13.3.
      ------------------

     "Restructured Seller Notes" means notes issued in exchange for Contingent
      -------------------------
Notes or existing Restructured Seller Notes; provided, however, that,
                                             --------  -------

          (a)  The Company and the holders of such new notes shall, on or prior
     to the date of exchange, have executed and delivered a Subordination
     Agreement in the form attached hereto as Exhibit 6.21.1(a), pursuant to
     which the obligations of the Company and its Subsidiaries to the holders of
     the new notes are subordinated to the Credit Obligations;

                                      -20-
<PAGE>

          (b)  The weighted average life to maturity of such new notes shall be
     equal to or greater than the weighted average life to maturity of the
     outstanding principal of the old notes, in each case calculated as if the
     maximum outstanding principal amount were paid;

          (c)  Immediately before and after such exchange, no Default shall
     exist; and

          (d)  such new notes are either:

               (i)  new contingent notes for which:

             (1)   all payments of principal of the new notes are contingent on
                   the Net Income of a Subsidiary of the Borrower (or a division
                   thereof);

             (2)   The aggregate maximum principal amount does not exceed the
                   aggregate maximum outstanding principal amount of old notes;
                   and

             (3)   The "Minimum Target" for each year (as defined in such new
                   notes) is greater than or equal to such target for such year
                   in the old notes; provided, however, that if the old notes
                                      -------  -------
                   being exchanged have different "Minimum Targets", or dates
                   therefor, then the "Minimum Targets" for each year in the new
                   notes shall not be less than the sum of the "Minimum Targets"
                   for such year under the terms of the old notes; or

               (ii) new non-contingent notes for which the aggregate principal
          amount does not exceed the greater of (x) one-half the remaining
          aggregate maximum principal amount of old notes for which payments of
          principal were contingent on the Net Income of a Subsidiary of the
          Company (or a division thereof) or (y) the Historical Average Payment
          on the old notes multiplied by the number of years remaining.

     "Required Lenders" means, with respect to any approval, consent,
modification, waiver or other action to be taken by the Agent or the Lenders
under the Credit Documents which require action by the Required Lenders, any two
or more Lenders that own at least a majority of the Aggregate Percentage
Interests in the Loan; provided, however, that with respect to any matters
                       --------  -------
referred to in the proviso to Section 12.6, Required Lenders means such Lenders
that own at least the respective portions of the Aggregate Percentage Interests
in the Loan required by such proviso.

     "Revolving Loan" is defined in Section 2.1.4.
      --------------

     "Revolving Notes" is defined in Section 2.1.4.
      ---------------

     "Securities Act" means the federal Securities Act of 1933.
      --------------

                                      -21-
<PAGE>

     "Sellers" means the Person or Persons selling or otherwise transferring the
      -------
capital stock, partnership or other equity interest or assets of the Acquired
Party to the Borrower pursuant to a Permitted Acquisition.

     "Subordinated Indebtedness" means Indebtedness of the Borrower which is
      -------------------------
subordinated to the Credit Obligations pursuant to a Subordination Agreement or
on terms approved by the Required Lenders in writing.

     "Subordination Agreement" shall be an agreement in form and substance
      -----------------------
substantially similar to Exhibit 6.21.1(a).

     "Subsidiary" means any Person of which the Company (or other specified
      ----------
Person) shall at the time, directly or indirectly through one or more of its
Subsidiaries, or through a trust or similar entity controlled by the Company (or
other specified Person) or a Subsidiary, (a) owns at least 50% of the
outstanding capital stock (or other shares of beneficial interest) entitled to
vote generally, (b) holds at least 50% of the partnership, joint venture or
similar interests, (c) is a general partner or joint venturer or (d) with which
the Company or one or more of its Subsidiaries has entered into a Management
Services Agreement.

     "Swingline Borrower" means the Borrower.
      ------------------

     "Swingline Lender" means Fleet National Bank, in its capacity as swingline
      ----------------
lender hereunder.

     "Swingline Loan" is defined in Section 2.2.3.
      --------------

     "Swingline Loan Account" is defined in Section 2.2.3.
      ----------------------

     "Swingline Note" is defined in Section 2.2.3.
      --------------

     "Swingline Rate" means the rate equal to the sum of (a) the Base Rate, plus
      --------------                                                        ----
(b) an additional 3% per annum effective on the Banking Day the Agent notifies
the Company that the interest rates hereunder are increasing as a result of the
occurrence and continuance of an Event of Default until the earlier of such time
as (i) such Event of Default is no longer continuing or (ii) such Event of
Default is deemed no longer to exist, in each case pursuant to Section 8.3.

     "Tax" means any present or future tax, levy, duty, impost, deduction,
      ---
withholding or other charges of whatever nature at any time required by any
Legal Requirement (a) to be paid by any Lender or (b) to be withheld or deducted
from any payment otherwise required hereby to be made to any Lender, in each
case on or with respect to its obligations hereunder, the Loan, any payment in
respect of the Credit Obligations or any Funding Liability not included in the
foregoing; provided, however, that the term "Tax" shall not include taxes
           --------  -------
imposed upon or measured by the net income of such Lender (other than
withholding taxes) or franchise taxes.

                                      -22-
<PAGE>

     "UCC" means the Uniform Commercial Code as in effect in Massachusetts on
      ---
the date hereof; provided, however, that with respect to the perfection of the
                 --------  -------
Agent's Lien in the Credit Security and the effect of nonperfection thereof, the
term "UCC" means the Uniform Commercial Code as in effect in any jurisdiction
the laws of which are made applicable by Section 9-103 of the Uniform Commercial
Code as in effect in Massachusetts.

     "Uniform Customs and Practice" is defined in Section 2.3.7.
      ----------------------------

     "United States Funds" means such coin or currency of the United States of
      -------------------
America as at the time shall be legal tender therein for the payment of public
and private debts.

     "Wholly Owned Subsidiary" means any Subsidiary of which all of the
      -----------------------
outstanding capital stock (or other shares of beneficial interest) entitled to
vote generally (other than directors' qualifying shares) is owned by the Company
(or other specified Person) directly, or indirectly through one or more Wholly
Owned Subsidiaries.

     "Year 2000 Compliant" means, with regard to any entity, that all software,
      -------------------
embedded microchips, and other processing capabilities utilized by, and material
to the business operations or financial condition of such entity, are able to
interpret and manipulate data involving all calendar dates correctly and without
causing and abnormal ending scenario, including dates in and after the year
2000.

2.   The Credits.
     -----------

     2.1.  Revolving Credit.
           ----------------

           2.1.1.  Revolving Loan. Subject to all the terms and conditions of
                   --------------
     this Agreement and so long as no Default then exists, from time to time on
     and after the Initial Closing Date and prior to the Final Maturity Date the
     Lenders will, severally in accordance with their respective Percentage
     Interests in the Revolving Loan, make loans to the Borrower in such amounts
     as may be requested by the Borrower in accordance with Section 2.1.3. The
     sum of the aggregate principal amount of loans made under this Section
     2.1.1 at any one time outstanding plus the Swingline Loan, plus the Letter
                                       ----                     ----
     of Credit Exposure shall in no event exceed the Maximum Amount of Revolving
     Credit. In no event will the principal amount of loans at any one time
     outstanding made by any Lender pursuant to this Section 2.1 exceed such
     Lender's Commitment.

           2.1.2.  Maximum Amount of Revolving Credit. The term "Maximum Amount
                   ----------------------------------            --------------
     of Revolving Credit" means on any date, the lesser of (a) $282,500,000 or
     -------------------
     such higher amount up to $300,000,000 as equals the aggregate amount of the
     Commitments then in effect, or (b) the amount (in an integral multiple of
     $1,000,000) to which the then applicable amount shall have been irrevocably
     reduced from time to time by notice from the Company to the Agent.

                                      -23-
<PAGE>

           2.1.3.  Borrowing Requests. The Borrower may from time to time
                   ------------------
     request a loan under Section 2.1.1 by providing to the Agent a notice
     (which may be given by a telephone call received by a Lending Officer if
     promptly confirmed in writing). Such notice must be not later than noon
     (Boston time) on the first Banking Day (third Banking Day if any portion of
     such loan will be subject to a LIBOR Pricing Option on the requested
     Closing Date) prior to the requested Closing Date for such loan. If such
     notice requested that a loan, or any portion thereof, be made subject to a
     LIBOR Pricing Option, and the Agent shall have notified the Borrower
     pursuant to Section 3.2.2 that such election did not become effective, the
     notice shall be deemed to have been made for a loan at the Base Rate. The
     notice must specify (a) the amount of the requested loan (which shall be
     not less than $100,000 and an integral multiple of $50,000), (b) the
     requested Closing Date therefor (which shall be a Banking Day) and (c) the
     portion of the requested loan that is to be used for working capital. Upon
     receipt of such notice, the Agent will promptly inform each other Lender
     with Percentage Interests in the Revolving Loan (by telephone or
     otherwise). Each such loan will be made at the Boston Office by depositing
     the amount thereof to the general account of the Borrower with the Agent.
     In connection with each such loan, the Borrower shall furnish to the Agent
     a certificate in substantially the form of Exhibit 5.2.1.

           2.1.4.  Loan Account; Notes. The Agent will establish on its books a
                   -------------------
     loan account for the Borrower (the "Loan Account"), which the Agent shall
                                         ------------
     administer as follows: (a) the Agent shall add to the Loan Account, and the
     Loan Account shall evidence, the principal amount of all loans from time to
     time made by the Lenders to the Borrower pursuant to Section 2.1.1 and (b)
     the Agent shall reduce the Loan Account by the amount of all payments made
     on account of the Indebtedness evidenced by the Loan Account. The aggregate
     principal amount of the Indebtedness evidenced by the Loan Account is
     referred to as the "Revolving Loan". The Revolving Loan shall be deemed
                         --------------
     owed to each Lender severally in accordance with such Lender's Percentage
     Interest in the Revolving Loan, and all payments credited to the Loan
     Account shall be for the account of each Lender in accordance with its
     Percentage Interest in the Revolving Loan. The Borrower's obligations to
     pay each Lender's Percentage Interest in the Revolving Loan shall be
     evidenced by a separate note of such Borrower in substantially the form of
     Exhibit 2.1.4 (the "Revolving Notes"), payable to each Lender in maximum
                         ---------------
     principal amount equal to such Lender's Percentage Interest in the
     Revolving Loan.

     2.2.  Swingline Credit.
           ----------------

           2.2.1.  Swingline Loan. Subject to all the terms and conditions of
                   --------------
     this Agreement and so long as no Default exists, from time to time on and
     after the Initial Closing Date and prior to the Final Maturity Date, the
     Swingline Lender will make loans to the Borrower in such amounts as may be
     requested by the Borrower in accordance with Section 2.2.2. The sum of the
     aggregate principal amount of loans made under this Section 2.2 at any one
     time outstanding plus the Revolving Loan plus the Letter of Credit Exposure
                      ----                    ----
     shall in no event exceed the Maximum Amount of Revolving Credit. In no

                                      -24-
<PAGE>

     event will the principal amount of loans made pursuant to this Section 2.2
     at any one time outstanding exceed $10,000,000.

          2.2.2.  Borrowing Requests. The Borrower may from time to time request
                  ------------------
     a loan under Section 2.2.1 by providing to the Swingline Lender a notice
     (which may be given by a telephone call received by a Lending Officer of
     the Swingline Lender). Such notice must be not later than 2:00 P.M. (Boston
     time) on the requested Closing Date (which must be a Banking Day) for such
     loan. The notice must specify the amount of the requested loan. Each such
     loan will be made at the Boston office by depositing the amount thereof to
     the general account of the Borrower with the Swingline Lender. In
     connection with each such loan, the Borrower shall furnish to the Swingline
     Lender a certificate in substantially the form of Exhibit 5.2.1.

          2.2.3.  Swingline Loan Account; Swingline Notes. The Swingline Lender
                  ---------------------------------------
     will establish on its books a loan account for the Borrower (the "Swingline
                                                                       ---------
     Loan Account") which the Swingline Lender shall administer as follows: (a)
     ------------
     the Swingline Lender shall add to the Swingline Loan Account, and the
     Swingline Loan Account shall evidence, the principal amount of all loans
     from time to time made by the Swingline Lender to the Borrower pursuant to
     Section 2.2.1 and (b) the Swingline Lender shall reduce the Swingline Loan
     Account by the amount of all payments made on account of the Indebtedness
     evidenced by the Swingline Loan Account. The aggregate principal amount of
     the Indebtedness evidenced by the Swingline Loan Account is referred to as
     the "Swingline Loan". The Company's obligation to pay the Swingline Loan
          --------------
     shall be evidenced by a note of the Company in substantially the form of
     Exhibit 2.2.3 (the "Swingline Note"), payable to the Swingline Lender in
                         --------------
     maximum principal amount equal to the Swingline Loan.

          2.2.4.  Conversion of Swingline Loan into Revolving Loan. On any
                  ------------------------------------------------
     Banking Day after the occurrence and during the continuance of an Event of
     Default, the Swingline Lender may, in its sole discretion, give notice to
     the other Lenders and the Borrower that the Swingline Loan shall be paid in
     full with a special mandatory borrowing under the Revolving Loan (the
     "Mandatory Borrowing"). Such a notice of a Mandatory Borrowing shall be
      -------------------
     deemed to have been automatically given upon a Bankruptcy Default or upon
     the exercise of any of the remedies provided in Section 8.2. Upon the
     giving of any such notice or deemed notice, a Mandatory Borrowing under the
     Revolving Loan in the amount of the Swingline Loan shall be made on the
     next Banking Day from all Lenders in accordance with their respective
     Percentage Interests in the Revolving Loan, the proceeds thereof shall be
     applied to the Swingline Lender as a repayment of the Swingline Loan and
     the Revolving Loan resulting from such Mandatory Borrowing shall bear
     interest at the rates applicable to Revolving Loans. Each Lender
     irrevocably agrees to make such loan pursuant to each such Mandatory
     Borrowing notice in the amount and in the manner specified above in this
     Section 2.2.4, notwithstanding (a) whether any conditions specified in
     Section 5 have been satisfied, (b) that a Default or an Event of Default
     has occurred and is continuing or (c) the date of such Mandatory Borrowing.

                                      -25-
<PAGE>

     In the event that any Mandatory Borrowing cannot for any reason be made on
     the date required above (including as a result of the commencement of a
     proceeding under the Bankruptcy Code), each Lender shall promptly purchase
     from the Swingline Lender as of the date the Mandatory Borrowing otherwise
     would have occurred such participation in the Swingline Loan as shall be
     necessary to cause the Lenders to share in the Swingline Loan ratably based
     upon their respective Percentage Interests in the Revolving Loan. In the
     event of such participations, all interest payable on the Swingline Loan
     shall be for the account of the Swingline Lender until the date on which
     the participations are required to be purchased and, to the extent
     attributable to the purchased participations, shall be payable to the
     participants from and after such date. At the time any such purchase of
     participations is actually made, the purchasing Lender shall pay the
     Swingline Lender interest on the principal amount of the participation
     purchased at the overnight Federal Funds Rate for each day, commencing with
     the date the Mandatory Borrowing otherwise would have occurred to the date
     of payment for such participation. In no event shall any Lender be required
     to make any Revolving Loan, including, pursuant to a Mandatory Borrowing,
     if the making of such Revolving Loan would cause the outstanding principal
     amount of such Lender's Revolving Loan to exceed such Lender's Commitment.

     2.3.  Letters of Credit.
           -----------------

           2.3.1.  Issuance of Letters of Credit. Subject to all the terms and
                   -----------------------------
     conditions of this Agreement and so long as no Default then exists, from
     time to time on and after the Initial Closing Date and prior to the Final
     Maturity Date, the Letter of Credit Issuer will issue for the account of
     the Borrower one or more irrevocable documentary or standby letters of
     credit (the "Letters of Credit"). Letter of Credit Exposure shall in no
                  -----------------
     event exceed $10,000,000.

          2.3.2.   Requests for Letters of Credit. The Borrower may from time to
                   ------------------------------
     time request a Letter of Credit to be issued by providing to the Letter of
     Credit Issuer (and the Agent if the Letter of Credit Issuer is not the
     Agent) a notice which is actually received not less than five Banking Days
     prior to the requested Closing Date for such Letter of Credit specifying
     (a) the amount of the requested Letter of Credit, (b) the beneficiary
     thereof, (c) the requested Closing Date and (d) the principal terms of the
     text for such Letter of Credit. Each Letter of Credit will be issued by
     forwarding it to the Borrower or to such other Person as directed in
     writing by the Borrower. In connection with the issuance of any Letter of
     Credit, the Borrower shall furnish to the Letter of Credit Issuer (and the
     Agent if the Letter of Credit Issuer is not the Agent) a certificate in
     substantially the form of Exhibit 5.2.1 and any customary application forms
     required by the Letter of Credit Issuer.

          2.3.3.   Form and Expiration of Letters of Credit. Each Letter of
                   ----------------------------------------
     Credit issued under this Section 2.3 and each draft accepted or paid under
     such a Letter of Credit shall be issued, accepted or paid, as the case may
     be, by the Letter of Credit Issuer at its

                                      -26-
<PAGE>

     principal office. No Letter of Credit shall provide for the payment of
     drafts drawn thereunder, and no draft shall be payable, at a date which is
     later than the Final Maturity Date. Each Letter of Credit and each draft
     accepted under a Letter of Credit shall be in such form and minimum amount,
     and shall contain such terms, as the Letter of Credit Issuer and the
     Borrower may agree upon at the time such Letter of Credit is issued,
     including a requirement of not less than three Banking Days after
     presentation of a draft before payment must be made thereunder.

          2.3.4.   Lenders' Participation in Letters of Credit. Upon the
                   -------------------------------------------
     issuance of any Letter of Credit, a participation therein, in an amount
     equal to each Lender's Percentage Interest in the Revolving Loan, shall
     automatically be deemed granted by the Letter of Credit Issuer to each
     Lender with a Percentage Interest in the Revolving Loan on the date of such
     issuance and the Lenders shall automatically be obligated, as set forth in
     Section 12.4, to reimburse the Letter of Credit Issuer to the extent of
     their respective Percentage Interests in the Revolving Loan for all
     obligations incurred by the Letter of Credit Issuer to third parties in
     respect of such Letter of Credit not reimbursed by the Company. The Letter
     of Credit Issuer will send to each Lender with a Percentage Interest in the
     Revolving Loan (and the Agent if the Letter of Credit Issuer is not the
     Agent) a confirmation regarding the participations in Letters of Credit
     outstanding during such month.

          2.3.5.   Presentation. The Letter of Credit Issuer may accept or pay
                   ------------
     any draft presented to it, regardless of when drawn and whether or not
     negotiated, if such draft, the other required documents and any transmittal
     advice are presented to the Letter of Credit Issuer and dated on or before
     the expiration date of the Letter of Credit under which such draft is
     drawn. Except insofar as instructions actually received may be given by the
     Borrower in writing expressly to the contrary with regard to, and prior to,
     the Letter of Credit Issuer's issuance of any Letter of Credit for the
     account of the Borrower and such contrary instructions are reflected in
     such Letter of Credit, the Letter of Credit Issuer may honor as complying
     with the terms of the Letter of Credit and with this Agreement any drafts
     or other documents otherwise in order signed or issued by an administrator,
     executor, conservator, trustee in bankruptcy, debtor in possession,
     assignee for benefit of creditors, liquidator, receiver or other legal
     representative of the party authorized under such Letter of Credit to draw
     or issue such drafts or other documents.

          2.3.6.   Payment of Drafts. At such time as a Letter of Credit Issuer
                   -----------------
     makes any payment on a draft presented or accepted under a Letter of
     Credit, the Borrower will on demand pay to such Letter of Credit Issuer in
     immediately available funds the amount of such payment. Unless the Borrower
     shall otherwise pay to the Letter of Credit Issuer the amount required by
     the foregoing sentence, such amount shall be considered a loan under
     Section 2.1.1 to the Borrower and part of the Revolving Loan.

          2.3.7.   Uniform Customs and Practice. The Uniform Customs and
                   ----------------------------
     Practice for Documentary Credits (1993 Revision), International Chamber of
     Commerce Publication

                                      -27-
<PAGE>

     No. 500, and any subsequent revisions thereof approved by a Congress of the
     International Chamber of Commerce and adhered to by the Letter of Credit
     Issuer (the "Uniform Customs and Practice"), shall be binding on the
                  ----------------------------
     Company and the Letter of Credit Issuer except to the extent otherwise
     provided herein, in any Letter of Credit or in any other Credit Document.
     Anything in the Uniform Customs and Practice to the contrary
     notwithstanding:

          (a)  Neither the Borrower nor any beneficiary of any Letter of Credit
     shall be deemed an agent of any Letter of Credit Issuer.

          (b)  With respect to each Letter of Credit, neither the Letter of
     Credit Issuer nor its correspondents shall be responsible for or shall have
     any duty to ascertain:

               (i)    the genuineness of any signature;

               (ii)   the validity, form, sufficiency, accuracy, genuineness or
          legal effect of any endorsements;

               (iii)  delay in giving, or failure to give, notice of arrival,
          notice of refusal of documents or of discrepancies in respect of which
          any Letter of Credit Issuer refuses the documents or any other notice,
          demand or protest;

               (iv)   the performance by any beneficiary under any Letter of
          Credit of such beneficiary's obligations to the Borrower;

               (v)    inaccuracy in any notice received by the Letter of Credit
          Issuer; or

               (vi)   the validity, form, sufficiency, accuracy, genuineness or
          legal effect of any instrument, draft, certificate or other document
          required by such Letter of Credit to be presented before payment of a
          draft, or the office held by or the authority of any Person signing
          any of the same.

          (c)  The occurrence of any of the events referred to in the Uniform
     Customs and Practice or in the preceding clauses of this Section 2.3.7
     shall not affect or prevent the vesting of any of the Letter of Credit
     Issuer's rights or powers hereunder or the Borrower's obligation to make
     reimbursement of amounts paid under any Letter of Credit or any draft
     accepted thereunder.

          (d)  The Borrower will promptly examine (i) each Letter of Credit (and
     any amendments thereof) sent to it by the Letter of Credit Issuer and (ii)
     all instruments and documents delivered to it from time to time by the
     Letter of Credit Issuer. The Borrower will notify the Letter of Credit
     Issuer of any claim of noncompliance by notice actually received within
     three Banking Days after receipt of any of the foregoing documents, the
     Borrower being conclusively deemed to have waived any such claim against
     such Letter of Credit Issuer and its correspondents unless such notice is
     given. The Letter of Credit

                                      -28-
<PAGE>

     Issuer shall have no obligation or responsibility to send any such Letter
     of Credit or any such instrument or document to the Borrower.

          (e)  In the event of any conflict between the provisions of this
     Agreement and the Uniform Customs and Practice, the provisions of this
     Agreement shall govern.

          2.3.8.  Subrogation. Upon any payment by a Letter of Credit Issuer
                  -----------
     under any Letter of Credit and until the reimbursement of such Letter of
     Credit Issuer by the Borrower with respect to such payment, the Letter of
     Credit Issuer shall be entitled to be subrogated to, and to acquire and
     retain, the rights which the Person to whom such payment is made may have
     against the Borrower, all for the benefit of the Lenders.

          2.3.9.    Modification, Consent, etc. If the Borrower requests or
                    --------------------------
     consents in writing to any modification or extension of any Letter of
     Credit, or waives any failure of any draft, certificate or other document
     to comply with the terms of such Letter of Credit, and if the Letter of
     Credit Issuer consents thereto, the Letter of Credit Issuer shall be
     entitled to rely on such request, consent or waiver. This Agreement shall
     be binding upon the Borrower with respect to such Letter of Credit as so
     modified or extended, and with respect to any action taken or omitted by
     such Letter of Credit Issuer pursuant to any such request, consent or
     waiver.

     2.4.  Application of Proceeds.
           -----------------------

           2.4.1.   Revolving Loan. Subject to Section 2.4.4, the Borrower will
                    --------------
     apply the proceeds of the Revolving Loan (a) to fund Permitted
     Acquisitions, (b) to refinance existing indebtedness, and (c) for working
     capital to the extent of the Borrowing Base.

           2.4.2.   Swingline Loan. Subject to Section 2.4.4, the Borrower will
                    --------------
     apply the proceeds of the Swingline Loan for working capital and other
     lawful corporate purposes.

           2.4.3.   Letters of Credit. Letters of Credit shall be issued only
                    -----------------
     for such lawful corporate purposes as the Borrower has requested in writing
     and to which the Letter of Credit Issuer agrees.

           2.4.4.   Specifically Prohibited Applications. The Borrower will not,
                    ------------------------------------
     directly or indirectly, apply any part of the proceeds of any extension of
     credit made pursuant to the Credit Documents to purchase or to carry Margin
     Stock or to any transaction prohibited by the Foreign Trade Regulations, by
     other Legal Requirements applicable to the Lenders or by the Credit
     Documents.

     2.5.  Nature of Obligations of Lenders to Make Extensions of Credit.  The
           -------------------------------------------------------------
Lenders' obligations to extend credit under this Agreement are several and are
not joint or joint and several.  If on any Closing Date any Lender shall fail to
perform its obligations under this Agreement, the aggregate amount of
Commitments to make the extensions of credit under this Agreement shall be
reduced by the amount of unborrowed Commitment of the Lender so failing

                                      -29-
<PAGE>

to perform and the Percentage Interests in the portion of the Loan to which such
Commitment relates shall be appropriately adjusted. Lenders that have not failed
to perform their obligations to make the extensions of credit contemplated by
Section 2 may, if any such Lender so desires, assume, in such proportions as the
Required Lenders may agree, the obligations of any Lender who has so failed and
the Percentage Interests in the portion of the Loan to which such obligations
relate shall be appropriately adjusted. The provisions of this Section 2.5 shall
not affect the rights of the Borrower against any Lender failing to perform its
obligations hereunder. The obligation to make a Swingline Loan shall be an
obligation solely of the Swingline Lender.

3.  Interest; LIBOR Pricing Options; Fees.
    -------------------------------------

    3.1.  Interest.  The Loan shall accrue and bear interest at a rate per annum
          --------
which shall at all times equal the Applicable Rate.  Prior to any stated or
accelerated maturity of any portion of the Loan, the Borrower will, on each
Payment Date, pay the accrued and unpaid interest on the portions of the Loan
which were not subject to a LIBOR Pricing Option.  On the last day of each LIBOR
Interest Period or on any earlier termination of any LIBOR Pricing Option, the
Borrower will pay the accrued and unpaid interest on the portions of the Loan
that were subject to the LIBOR Pricing Option, which expired or terminated on
such date.  In the case of any LIBOR Interest Period longer than three months,
the Borrower will also pay the accrued and unpaid interest on the portion of the
Loan subject to the LIBOR Pricing Option having such LIBOR Interest Period at
three-month intervals, the first such payment to be made on the last Banking Day
of the three-month period that begins on the first day of such LIBOR Interest
Period.  On the stated or any accelerated maturity of the Loan, the Borrower
will pay all accrued and unpaid interest on the portion of the Loan evidenced by
its Loan Account, including any accrued and unpaid interest on any portion of
such Loan which is subject to a LIBOR Pricing Option.  Upon the occurrence and
during the continuance of an Event of Default, the Required Lenders may require
accrued interest to be payable on demand or at regular intervals more frequent
than each Payment Date.  All payments of interest hereunder for each portion of
the Loan shall be made to the Agent for the account of each Lender in accordance
with such Lender's Percentage Interest in such portion of the Loan.

     3.2. LIBOR Pricing Options.
          ---------------------

          3.2.1.  Election of LIBOR Pricing Options. Subject to all of the
                  ----------------------------------
     terms and conditions hereof and so long as no Default exists, the Borrower
     may from time to time, by irrevocable notice to the Agent actually received
     not less than three Banking Days prior to the commencement of the LIBOR
     Interest Period selected in such notice, elect to have such portion of the
     Loan as the Borrower may specify in such notice accrue and bear interest
     during the LIBOR Interest Period so selected at the Applicable Rate
     computed on the basis of the LIBOR Rate. No such election shall become
     effective:

          (a)  if, prior to the commencement of any such LIBOR Interest Period,
     the Agent determines that (i) the electing or granting of the LIBOR Pricing
     Option in question would violate a Legal Requirement, (ii) LIBOR deposits
     in an amount

                                      -30-
<PAGE>

     comparable to the principal amount of the Loan as to which
     such LIBOR Pricing Option has been elected and which have a term
     corresponding to the proposed LIBOR Interest Period are not readily
     available in the inter-bank LIBOR market, or (iii) by reason of
     circumstances affecting the inter-bank LIBOR market, adequate and
     reasonable methods do not exist for ascertaining the interest rate
     applicable to such deposits for the proposed LIBOR Interest Period; or

          (b)  if any Lender shall have advised the Agent by telephone or
     otherwise at or prior to noon (Boston time) on the second Banking Day prior
     to the commencement of such proposed LIBOR Interest Period (and shall have
     subsequently confirmed in writing) that, after reasonable efforts to
     determine the availability of such LIBOR deposits, such Lender reasonably
     anticipates that LIBOR deposits in an amount equal to the Percentage
     Interest of such Lender in the portion of the Loan as to which such LIBOR
     Pricing Option has been elected and which have a term corresponding to the
     LIBOR Interest Period in question will not be offered in the LIBOR market
     to such Lender at a rate of interest that does not exceed the anticipated
     LIBOR Base Rate.

          3.2.2.  Notice to Lenders and the Borrower. The Agent will promptly
                  ----------------------------------
     inform each Lender (by telephone or otherwise) of each notice received by
     it from the Borrower pursuant to Section 3.2.1 and of the LIBOR Interest
     Period specified in such notice. Upon determination by the Agent of the
     LIBOR Rate for such LIBOR Interest Period or in the event such election
     shall not become effective, the Agent will promptly notify the Borrower and
     each Lender (by telephone or otherwise) of the LIBOR Rate so determined or
     why such election did not become effective, as the case may be.

          3.2.3.  Selection of LIBOR Interest Periods. LIBOR Interest Periods
                  -----------------------------------
     shall be selected so that:

          (a)     the minimum portion of the Loan subject to any LIBOR Pricing
     Option shall be $500,000 and an integral multiple of $100,000;

          (b)     no more than 6 LIBOR Pricing Options shall be outstanding at
     any one time;

          (c)     no LIBOR Interest Period with respect to any part of the Loan
     subject to a LIBOR Pricing Option shall expire later than the Final
     Maturity Date.

          3.2.4.  Additional Interest. If any portion of the Loan subject to a
                  -------------------
     LIBOR Pricing Option is repaid, or any LIBOR Pricing Option is terminated
     for any reason (including acceleration of maturity), on a date which is
     prior to the last Banking Day of the LIBOR Interest Period applicable to
     such LIBOR Pricing Option, the Borrower will pay to the Agent for the
     account of each Lender in accordance with such Lender's Percentage Interest
     in such portion of the Loan, in addition to any amounts of interest
     otherwise payable hereunder, an amount equal to the present value
     (calculated in accordance with this Section 3.2.4) of interest for the
     unexpired portion of such LIBOR Interest Period on

                                      -31-
<PAGE>

     the portion of the Loan so repaid, or as to which a LIBOR Pricing Option
     was so terminated, at a per annum rate equal to the excess, if any, of (a)
     the LIBOR Rate applicable to such LIBOR Pricing Option minus (b) the lowest
                                                            -----
     rate of interest obtainable by the Agent upon the purchase of debt
     securities customarily issued by the Treasury of the United States of
     America which have a maturity date approximating the last Banking Day of
     such LIBOR Interest Period. The present value of such additional interest
     shall be calculated by discounting the amount of such interest for each day
     in the unexpired portion of such LIBOR Interest Period from such day to the
     date of such repayment or termination at a per annum interest rate equal to
     the interest rate determined pursuant to clause (b) of the preceding
     sentence, and by adding all such amounts for all such days during such
     period. The determination by the Agent of such amount of interest shall, in
     the absence of manifest error, be conclusive. For purposes of this Section
     3.2.4, if any portion of the Loan which was to have been subject to a LIBOR
     Pricing Option is not outstanding on the first day of the LIBOR Interest
     Period applicable to such LIBOR Pricing Option other than for reasons
     described in Section 3.2.1, the Borrower shall be deemed to have terminated
     such LIBOR Pricing Option.

          3.2.5.  Violation of Legal Requirements. If any Legal Requirement
                  -------------------------------
     shall prevent any Lender from funding or maintaining through the purchase
     of deposits in the interbank LIBOR market any portion of the Loan subject
     to a LIBOR Pricing Option or otherwise from giving effect to such Lender's
     obligations as contemplated by Section 3.2, (a) the Agent may by notice to
     the Borrower terminate all of the affected LIBOR Pricing Options, (b) the
     portion of the Loan subject to such terminated LIBOR Pricing Options shall
     immediately bear interest thereafter at the Applicable Rate computed on the
     basis of the Base Rate and (c) the Borrower shall make any payment required
     by Section 3.2.4.

          3.2.6.  Funding Procedure. The Lenders may fund any portion of the
                  -----------------
     Loan subject to a LIBOR Pricing Option out of any funds available to the
     Lenders. Regardless of the source of the funds actually used by any of the
     Lenders to fund any portion of the Loan subject to a LIBOR Pricing Option,
     however, all amounts payable hereunder, including the interest rate
     applicable to any such portion of the Loan and the amounts payable under
     Sections 3.2.4 or 3.5, shall be computed as if each Lender had actually
     funded such Lender's Percentage Interest in such portion of the Loan
     through the purchase of deposits in such amount of the type by which the
     LIBOR Base Rate was determined with a maturity the same as the applicable
     LIBOR Interest Period relating thereto and through the transfer of such
     deposits from an office of the Lender having the same location as the
     applicable LIBOR Office to one of such Lender's offices in the United
     States of America.

          3.3.  Interest on Swingline Loan. The Swingline Loan shall accrue and
                --------------------------
bear interest at a rate per annum which shall at all times equal the Swingline
Rate. Interest on the Swingline Loan shall be calculated on a daily basis and on
the basis of a year of 360 days. Prior to any stated or accelerated maturity of
the Swingline Loan, the Swingline Borrower will on each Payment Date, beginning
on the first Payment Date after the Initial Closing Date, pay the accrued and
unpaid interest on such Indebtedness. On any stated or accelerated maturity of
the

                                      -32-
<PAGE>

Swingline Loan all accrued and unpaid interest thereon shall be forthwith due
and payable. All payments of interest hereunder in respect of the Swingline Loan
shall be made by the Swingline Borrower to the Agent for the account of the
Swingline Lender.

     3.4.  Commitment Fees. In consideration of the Lenders' commitments to make
           ---------------
the extensions of credit provided for in Section 2.1, while such commitments are
outstanding, the Borrower will pay to the Agent for the account of the Lenders
in accordance with the Lenders' respective Percentage Interests in the Revolving
Loan, on the first Banking Day of each fiscal quarter, an amount equal to
interest computed at the Applicable Commitment Fee Rate on the amount by which
(a) the average daily Maximum Amount of Revolving Credit during the fiscal
quarter or portion thereof most recently ended exceeded (b) the sum of (i) the
average daily Revolving Loan during such period or portion thereof plus (ii) the
                                                                   ----
average daily Letter of Credit Exposure during such period or portion
thereof.

     3.5.  Letter of Credit Fees. The Borrower will pay to the Agent for the
           ---------------------
account of each of the Lenders, in accordance with the Lenders' respective
Percentage Interests, on each Payment Date, a Letter of Credit fee equal to
interest at a rate per annum equal to the applicable margin added to the LIBOR
Rate indicated on Exhibit 1 applicable to a Revolving Loan on the average daily
Letter of Credit exposure during the monthly period or portion thereof ending on
such Payment Date. In addition, the Borrower will pay to the Letter of Credit
Issuer (a) on each Payment Date a fronting fee equal to interest at a rate per
annum of 0.125% on the aggregate face amount of each Letter of Credit
outstanding during the three-month period or portion thereof ending on such
Payment Date; and (b) customary service charges and expenses for its services in
connection with the Letters of Credit at the times and in the amounts from time
to time in effect in accordance with its general rate structure, including
reasonable fees and expenses relating to issuance, amendment, negotiation,
cancellation and similar operations.

     3.6.  Changes in Circumstances; Yield Protection.
           ------------------------------------------

           3.6.1.  Reserve Requirements, etc. If any Legal Requirement shall (a)
                   -------------------------
     impose, modify, increase or deem applicable any insurance assessment,
     reserve, special deposit or similar requirement against any Funding
     Liability or the Letters of Credit, (b) impose, modify, increase or deem
     applicable any other requirement or condition with respect to any Funding
     Liability or the Letters of Credit, or (c) change the basis of taxation of
     Funding Liabilities or payments in respect of any Letter of Credit (other
     than changes in the rate of taxes measured by the overall net income of
     such Lender) and the effect of any of the foregoing shall be to increase
     the cost to any Lender of issuing, making, funding or maintaining its
     respective Percentage Interest in any portion of the Loan subject to a
     LIBOR Pricing Option or any Letter of Credit, to reduce the amounts
     received or receivable by such Lender under this Agreement or to require
     such Lender to make any payment or forego any amounts otherwise payable to
     such Lender under this Agreement, then, the Lender may claim compensation
     under Section 3.6.5; provided, however, that the foregoing provisions shall
                          --------  -------
     not apply to any Tax or to any reserves which are included in computing the
     LIBOR Reserve Rate.

                                      -33-
<PAGE>

          3.6.2.  Taxes. All payments of the Credit Obligations shall be made
                  -----
     without set-off or counterclaim and free and clear of any deductions,
     including deductions for Taxes, unless the Borrower is required by law to
     make such deductions. If (a) any Lender shall be subject to any Tax with
     respect to any payment of the Credit Obligations or its obligations
     hereunder or (b) the Borrower shall be required to withhold or deduct any
     Tax on any payment on the Credit Obligations, then, the Lender may claim
     compensation under Section 3.6.5. Whenever Taxes must be withheld by the
     Borrower with respect to any payments of the Credit Obligations, the
     Borrower shall promptly furnish to the Agent for the account of the
     applicable Lender official receipts (to the extent that the relevant
     governmental authority delivers such receipts) evidencing payment of any
     such Taxes so withheld. If the Borrower fails to pay any such Taxes when
     due or fails to remit to the Agent for the account of the applicable Lender
     the required receipts evidencing payment of any such Taxes so withheld or
     deducted, the Borrower shall indemnify the affected Lender for any
     incremental Taxes and interest or penalties that may become payable by such
     Lender as a result of any such failure.

          3.6.3.  Capital Adequacy. If any Lender shall determine that
                  ----------------
     compliance by such Lender with any Legal Requirement regarding capital
     adequacy of banks or bank holding companies has or would have the effect of
     reducing the rate of return on the capital of such Lender and its
     Affiliates as a consequence of such Lender's commitment to make the
     extensions of credit contemplated hereby, or such Lender's maintenance of
     the extensions of credit contemplated hereby, to a level below that which
     such Lender could have achieved but for such compliance (taking into
     consideration the policies of such Lender and its Affiliates with respect
     to capital adequacy immediately before such compliance and assuming that
     the capital of such Lender and its Affiliates was fully utilized prior to
     such compliance) by an amount deemed by such Lender to be material, then,
     the Lender may claim compensation under Section 3.6.5.

          3.6.4.  Regulatory Changes. If any Lender shall determine that (a) any
                  ------------------
     change in any Legal Requirement (including any new Legal Requirement) after
     the date hereof shall directly or indirectly (i) reduce the amount of any
     sum received or receivable by such Lender with respect to the Loan or the
     Letters of Credit or the return to be earned by such Lender on the Loan or
     the Letters of Credit, (ii) impose a cost on such Lender or any Affiliate
     of such Lender that is attributable to the making or maintaining of, or
     such Lender's commitment to make, its portion of the Loan or the Letters of
     Credit, or (iii) require such Lender or any Affiliate of such Lender to
     make any payment on, or calculated by reference to, the gross amount of any
     amount received by such Lender under any Credit Document, and (b) such
     reduction, increased cost or payment shall not be fully compensated for by
     an adjustment in the Applicable Rate or the Letter of Credit fees, then,
     the Lender may claim compensation under Section 3.6.5.

          3.6.5.  Compensation Claims. If a Lender makes a determination that it
                  -------------------
     will seek compensation pursuant to any of Sections 3.6.1, 3.6.2, 3.6.3 and
     3.6.4, such Lender shall promptly thereafter give notice thereof to the
     Company. Promptly after the receipt by the

                                      -34-
<PAGE>

     Company of any such notice, the Company and the Lender shall attempt to
     negotiate in good faith an adjustment to the amount payable by the Borrower
     to the Lender under the relevant Section, which amount shall be sufficient
     to compensate the Lender for such reduced return. If the Company and the
     Lender are unable to agree to such adjustment within thirty days of the
     date upon which the Company receives such notice, then the Borrower will,
     on demand by the Lender, pay to the Lender such additional amount as shall
     be sufficient, in the Lender's reasonable determination, to compensate the
     Lender for such reduced return, together with interest at the Overdue
     Reimbursement Rate from the 30th day until payment in full thereof. The
     determination by such Lender of the amount to be paid to it and the basis
     for computation thereof shall, in the absence of manifest error, be
     conclusive. In determining such amount, such Lender may use any reasonable
     averaging, allocation and attribution methods. The Borrower shall be
     entitled to replace any such Lender in accordance with Section 13.3.

     3.7.  Computations of Interest and Fees.  For purposes of this Agreement,
           ---------------------------------
interest, commitment fees and Letter of Credit fees (and any other amount
expressed as interest or such fees) shall be computed on the basis of a 360-day
year for actual days elapsed.  If any payment required by this Agreement becomes
due on any day that is not a Banking Day, such payment shall, except as
otherwise provided in the LIBOR Interest Period, be made on the next succeeding
Banking Day.  If the due date for any payment of principal is extended as a
result of the immediately preceding sentence, interest shall be payable for the
time during which payment is extended at the Applicable Rate or the applicable
commitment fee or letter of credit fee rate.

4.   Payment.
     -------

     4.1.  Payment at Maturity.  On the Final Maturity Date or any accelerated
           -------------------
maturity of the Loan, the Borrower will pay to the Agent for the account of the
Lenders an amount equal to the portion of the Loan then due, together with all
accrued and unpaid interest thereon and all other Credit Obligations then
outstanding.

     4.2.  Contingent Required Prepayments.
           -------------------------------

           4.2.1.  Excess Credit Exposure. If at any time the Revolving Loan
                   ----------------------
     exceeds the limits set forth in Section 2.1, the Borrower shall within
     three Banking Days pay the amount of such excess to the Agent for the
     account of the Lenders.

           4.2.2.  Letter of Credit Exposure. If at any time the Letter of
                   -------------------------
     Credit Exposure exceeds the limits set forth in Section 2.3, the Borrower
     shall within three Banking Days pay the amount of such excess to the Agent
     for the account of the Lenders to be applied as provided in Section 4.5.

           4.2.3.  Net Equity Proceeds. Within three Banking Days after the
                   -------------------
     receipt of Net Equity Proceeds, the Borrower shall pay to the Agent as a
     prepayment of the Loan, to be applied as provided in Section 4.5, the
     lesser of (a) the amount of Net Equity Proceeds or (b) the amount of the
     Loan. The Company shall give the Agent at least five Banking

                                      -35-
<PAGE>

     Days' prior notice of its intention to prepay the Loans, or any portion
     thereof, under this Section 4.3.3.

     4.3.  Voluntary Prepayments. In addition to the prepayments required by
           ---------------------
Section 4.2, the Borrower may from time to time prepay all or any portion of the
Loan (in a minimum amount of $100,000 and an integral multiple of $100,000),
without premium or penalty of any type (except as provided in Section 3.2.4 with
respect to the early termination of LIBOR Pricing Options). The Borrower shall
give the Agent at least one Banking Day prior notice of its intention to prepay,
specifying the date of payment, the total amount of the Loan to be paid on such
date and the amount of interest to be paid with such prepayment. At any time or
from time to time upon telephone notice to the Swingline Lender, given not later
than 3:00 P.M. (Boston time) on any Banking Day, the Swingline Borrower shall
have the right to prepay, without premium or penalty of any type, all or any
part of the outstanding principal amount of its Swingline Loan in such amounts
as are not less than $100,000 and in integral multiples of $50,000, unless such
payment is equal to the entire outstanding principal amount of the Swingline
Loan.

     4.4.  Letters of Credit. If on the stated or any accelerated maturity of
           -----------------
the Credit Obligations the Lenders shall be obligated in respect of a Letter of
Credit or a draft accepted under a Letter of Credit, the Borrower will either:

           (a)  prepay such obligation by depositing with the Agent an amount of
     cash, or

           (b)  deliver to the Agent a standby letter of credit (designating the
     Agent as beneficiary and issued by a bank and on terms reasonably
     acceptable to the Agent),

in each case in an amount equal to the portion of the then Letter of Credit
Exposure issued for the account of the Borrower.  Any such cash so deposited and
the cash proceeds of any draw under any standby letter of credit so furnished,
including any interest thereon, shall be returned by the Agent to the Borrower
only when, and to the extent that, the amount of such cash held by the Agent
exceeds the Letter of Credit Exposure at a time when no Default exists;
provided, however, that if an Event of Default occurs and the Credit Obligations
--------  -------
become or are declared immediately due and payable, the Agent may apply such
cash, including any interest thereon, to the payment of any of the Credit
Obligations as provided in Section 10.5.6.

     4.5.  Reborrowing; Application of Payments, etc. The amounts of the
           -----------------------------------------
Revolving Loan prepaid pursuant to Section 4.4 may be reborrowed from time to
time prior to the Final Maturity Date in accordance with Section 2.1, subject to
the limits set forth therein. Any prepayment of a portion of the Loan shall be
applied first to the portion of the Loan not then subject to LIBOR Pricing
Options, then the balance of any such prepayment shall be applied to the portion
of the Loan then subject to LIBOR Pricing Options, in the chronological order of
the respective maturities thereof, together with any payments required by
Section 3.2.4. All payments of principal of a portion of the Loan shall be made
to the Agent for the account of the Lenders in accordance with the Lenders'
respective Percentage Interests in such portion of the Loan.

                                      -36-
<PAGE>

5.   Conditions to Extending Credit.
     ------------------------------

     5.1.  Conditions on Initial Closing Date. The obligations of the Lenders to
           ----------------------------------
make any extension of credit pursuant to Section 2 shall be subject to the
satisfaction, on or before the Initial Closing Date, of the conditions set forth
in this Section 5.1 as well as the further conditions in Section 5.2. If the
conditions set forth in this Section 5.1 and 5.2 are not met on or prior to the
Initial Closing Date, the Lenders shall have no obligation to make any
extensions of credit hereunder.

           5.1.1.   Notes. The Borrower shall have duly executed and delivered
                    -----
     to the Agent a Revolving Note for each Lender.

           5.1.2.   Perfection of Security. Each Obligor shall have duly
                    ----------------------
     authorized, executed, acknowledged, delivered, filed, registered and
     recorded such security agreements, notices, financing statements and other
     instruments as the Agent may have requested in order to perfect the Liens
     contemplated pursuant to the Credit Documents to be created in the Credit
     Security. To the extent requested by the Agent, each Obligor shall have
     duly authorized, executed, acknowledged and delivered to the Agent a
     mortgage on each parcel of real property owned by such Obligor in form and
     substance satisfactory to the Agent, together with, for each such parcel of
     real property: (a) mortgage title insurance with such insurer, in such
     amount, in such form and with such exceptions as are reasonably
     satisfactory to the Agent and (b) an environmental site assessment report
     in such form, with such conclusions and from such environmental engineering
     firm as are reasonably satisfactory to the Agent.

           5.1.3.   Legal Opinions. On the Initial Closing Date, the Lenders
                    --------------
     shall have received from the following counsel their respective opinions
     with respect to the transactions contemplated by the Credit Documents,
     which opinions shall be in form and substance satisfactory to the Required
     Lenders:

           (a)      Greenberg Traurig, P.A., special counsel for the Obligors.

           (b)      Ropes & Gray, special counsel for the Agent.

     The Obligors authorize and direct their counsel to furnish the foregoing
     opinions.

           5.1.4.   Payment of Fee. The Borrower shall have paid to the Agent
                    --------------
     (a) for the Lenders' accounts a facility fee in accordance with the
     separate letter agreements with the Lenders and (b) the reasonable fees and
     disbursements of the Agent's special counsel for which statements have been
     rendered on or prior to the Initial Closing Date.

           5.1.5.   Adverse Market Change. Since September 29, 1999, no
                    ---------------------
     material adverse change shall have occurred in the syndication markets for
     credit facilities similar in nature to this Agreement, and no material
     disruption for or material adverse change in the financial, banking or
     capital markets that would have an adverse effect on such

                                      -37-
<PAGE>

     syndication market shall have occurred, in each case as determined by the
     Agent and the Arranger in their sole discretion.

     5.2.  Conditions to Each Extension of Credit. The obligations of the
           --------------------------------------
Lenders to make any extension of credit pursuant to Section 2 shall be subject
to the satisfaction, on or before the Closing Date for such extension of credit,
of the following conditions:

           5.2.1.   Officer's Certificate. The representations and warranties
                    ---------------------
     contained in Sections 7 and 10.3 shall be true and correct on and as of
     such Closing Date with the same force and effect as though made on and as
     of such date (except as to any representation or warranty which refers to a
     specific earlier date); no Default shall exist on such Closing Date prior
     to or immediately after giving effect to the requested extension of credit;
     no Material Adverse Change shall have occurred since December 31, 1998 or
     the date of the most recent audited financial statements provided pursuant
     to Section 6.4.1; and the Borrower shall have furnished to the Agent in
     connection with the requested extension of credit a certificate to these
     effects, in substantially the form of Exhibit 5.2.1, signed by a Financial
                                           -------------
     Officer.

           5.2.2.   Legality, etc. The making of the requested extension of
                    -------------
     credit shall not (a) subject any Lender to any penalty or special tax
     (other than a Tax for which the Borrower is required to reimburse the
     Lenders under Section 3.5.2, (b) be prohibited by any Legal Requirement or
     (c) violate any credit restraint program of the executive branch of the
     government of the United States of America, the Board of Governors of the
     Federal Reserve System or any other governmental or administrative agency
     so long as any Lender reasonably believes that compliance is required by
     law.

           5.2.3.   Proper Proceedings. This Agreement, each other Credit
                    ------------------
     Document and the transactions contemplated hereby and thereby shall have
     been authorized by all necessary corporate or other proceedings of the
     Obligors. All necessary consents, approvals and authorizations of any
     governmental or administrative agency or any other Person of any of the
     transactions contemplated hereby or by any other Credit Document shall have
     been obtained and shall be in full force and effect.

           5.2.4.   Conditions to Making Each Permitted Acquisition Advance. In
                    -------------------------------------------------------
     the case of any loan contemplated by Section 2.1 to fund a Permitted
     Acquisition, the Borrower shall have complied with all of the requirements
     of Section 6.21 with respect to the Permitted Acquisition.

           5.2.5.   General. All legal and corporate proceedings in connection
                    -------
     with the transactions contemplated by this Agreement shall be satisfactory
     in form and substance to the Agent and the Agent shall have received copies
     of all documents, including certified copies of the Charter and By-Laws of
     the Borrower and the other Obligors, records of corporate proceedings,
     certificates as to signatures and incumbency of officers and opinions of
     counsel, which the Agent may have reasonably requested in connection

                                      -38-
<PAGE>

     therewith, such documents where appropriate to be certified by proper
     corporate or governmental authorities.

6.   General Covenants. Each of the Borrower and the Guarantors covenants that,
     -----------------
until all of the Credit Obligations shall have been paid in full and until the
Lenders' commitments to extend credit under this Agreement and any other Credit
Document shall have been irrevocably terminated, it will comply, and will cause
its Subsidiaries (including such Subsidiaries as are not Guarantors) to comply,
with the following provisions:

     6.1.  Taxes and Other Charges; Accounts Payable.
           -----------------------------------------

           6.1.1.   Taxes and Other Charges. Each of the Borrower and its
                    -----------------------
     Subsidiaries shall duly pay and discharge, or cause to be paid and
     discharged, before the same become in arrears, all taxes, assessments and
     other governmental charges imposed upon such Person and its properties,
     sales or activities, or upon the income or profits therefrom, as well as
     all claims for labor, materials or supplies which if unpaid might by law
     become a Lien upon any of its property; provided, however, that any such
                                             --------  -------
     tax, assessment, charge or claim need not be paid if the validity or amount
     thereof shall at the time be contested in good faith by appropriate
     proceedings and if such Person shall, in accordance with GAAP, have set
     aside on its books adequate reserves with respect thereto; and provided,
                                                                    --------
     further, that each of the Borrower and its Subsidiaries shall pay or bond,
     -------
     or cause to be paid or bonded, all such taxes, assessments, charges or
     other governmental claims immediately upon the commencement of proceedings
     to foreclose any Lien which may have attached as security therefor (except
     to the extent such proceedings have been dismissed or stayed).

           6.1.2.   Accounts Payable. Each of the Borrower and its Subsidiaries
                    ----------------
     shall promptly pay when due, or in conformity with customary trade terms,
     all other Indebtedness, including accounts payable, incident to the
     operations of such Person not referred to in Section 6.1.1; provided,
                                                                 --------
     however, that any such Indebtedness need not be paid if the validity or
     -------
     amount thereof shall at the time be contested in good faith and if such
     Person shall, in accordance with GAAP, have set aside on its books adequate
     reserves with respect thereto.

     6.2.  Conduct of Business, etc.
           ------------------------

           6.2.1.   Types of Business. The Borrower and its Subsidiaries shall
                    -----------------
     engage only in the business of (a) providing pathology services, laboratory
     services (including full service clinical and anatomical pathology
     laboratory services) and (b) other activities and services incident
     thereto.

           6.2.2.   Maintenance of Properties. Each of the Borrower and its
                    -------------------------
     Subsidiaries:

           (a)      shall keep its properties in such repair, working order and
     condition, and shall from time to time make such repairs, replacements,
     additions and improvements

                                      -39-
<PAGE>

     thereto as are necessary for the efficient operation of its businesses and
     shall comply at all times in all material respects with all franchises,
     licenses, leases and other material agreements to which it is party so as
     to prevent any loss or forfeiture thereof or thereunder, except where (i)
     compliance is at the time being contested in good faith by appropriate
     proceedings or (ii) failure to comply with the provisions being contested
     has not resulted, or does not create a material risk of resulting, in the
     aggregate in any Material Adverse Change; provided, however, that this
                                               --------  -------
     Section 6.2.2(a) shall not apply to assets or entities disposed of in
     transactions permitted by Section 6.11; and

           (b)      shall do all things necessary to preserve, renew and keep in
     full force and effect and in good standing its legal existence and
     authority necessary to continue its business; provided, however, that this
                                                    --------  -------
     Section 6.2.2(b) shall not prevent the merger, consolidation or liquidation
     of Subsidiaries permitted by Section 6.11.

           6.2.3.   Statutory Compliance. Each of the Borrower and its
                    --------------------
     Subsidiaries shall comply in all material respects with all valid and
     applicable statutes, laws, ordinances, zoning and building codes and other
     rules and regulations of the United States of America, of the states and
     territories thereof and their counties, municipalities and other
     subdivisions and of any foreign country or other jurisdictions applicable
     to such Person, except where (a) compliance therewith shall at the time be
     contested in good faith by appropriate proceedings or (b) failure so to
     comply with the provisions being contested has not resulted, or does not
     create a material risk of resulting, in the aggregate in any Material
     Adverse Change.

           6.2.4.   No Subsidiaries. The Borrower shall not form or suffer to
                    ---------------
     exist any Subsidiary, except for such Subsidiaries as shall have executed
     and delivered to the Agent either (a) this Agreement and each other
     applicable Credit Document as of the Initial Closing Date or (b) a Joinder
     Agreement in the form of Exhibit 6.21.1(b) pursuant to which such
     Subsidiary shall have become a Guarantor hereunder; provided, however, that
                                                         --------  -------
     in the event that applicable state law or regulation prohibits any
     Subsidiary of the Company from guaranteeing the Credit Obligations, such
     Subsidiary shall not be required to execute this Agreement or such a
     Joinder Agreement.

           6.2.5.   Compliance with Material Agreements. Each of the Borrower
                    -----------------------------------
     and its Subsidiaries shall comply in all material respects with the
     Material Agreements (to the extent not in violation of the other provisions
     of this Agreement or any other Credit Document). Except with respect to
     Acquisition Agreements, without the prior written consent of the Required
     Lenders, which consent shall not be unreasonably withheld, no Material
     Agreement shall be amended, modified, waived or terminated in any manner
     that would have in any material respect an adverse effect on the interests
     of the Lenders.

     6.3.  Insurance.
           ---------

           6.3.1.   Property Insurance. Each of the Borrower and its
                    ------------------
     Subsidiaries shall keep its assets which are of an insurable character
     insured by financially sound and reputable

                                      -40-
<PAGE>

     insurers against theft and fraud and against loss or damage by fire,
     explosion and hazards and such other extended coverage risks insured
     against by extended coverage to the extent, in amounts and with deductibles
     at least as favorable as those generally maintained by businesses of
     similar size engaged in similar activities in similar localities.

           6.3.2.   Liability Insurance. Each of the Borrower and its
                    -------------------
     Subsidiaries shall maintain with financially sound and reputable insurers
     insurance against liability for hazards, risks and liability to persons
     (for both death and bodily injury) and property, including product
     liability insurance and medical malpractice insurance, to the extent, in
     amounts and with deductibles at least as favorable as those generally
     maintained by businesses of similar size engaged in similar activities in
     similar localities; provided, however, that it may affect workers'
                         --------  -------
     compensation insurance or similar coverage with respect to operations in
     any particular state or other jurisdiction through an insurance fund
     operated by such state or jurisdiction or by meeting the self-insurance
     requirements of such state or jurisdiction.

           6.3.3.   Key Executive Life Insurance. The Borrower and its
                    ----------------------------
     Subsidiaries shall collaterally assign to the Agent for the benefit of the
     Lenders all life insurance policies for which any of the Borrower and its
     Subsidiaries are the beneficiary, on each officer or doctor employed by the
     Borrower or any of its Subsidiaries.

           6.3.4.   Flood Insurance. Each of the Borrower and its Subsidiaries
                    ---------------
     shall at all times keep each parcel of real property owned or leased by it
     which is (a) included in the Credit Security, (b) in an area determined by
     the Director of the Federal Emergency Management Agency to be subject to
     special flood hazard and (c) in a community participating in the National
     Flood Insurance Program, insured against such special flood hazards in an
     amount equal to the maximum limit of coverage available for the particular
     type of property under the federal National Flood Insurance Act of 1968.

     6.4.  Financial Statements and Reports.  Each of the Borrower and its
           --------------------------------
Subsidiaries shall maintain a system of accounting in which correct entries
shall be made of all transactions in relation to their business and affairs in
accordance with generally accepted accounting practice.  The fiscal year of the
Borrower and its Subsidiaries shall end on December 31 in each year and the
fiscal quarters of such Persons shall end on March 31, June 30, September 30 and
December 31 in each year.

           6.4.1.   Annual Reports. The Borrower shall furnish to the Agent as
                    --------------
     soon as available, and in any event within 95 days after the end of each
     fiscal year, the Form 10-K of the Borrower for such year. The Borrower
     shall furnish to the Agent as soon as available, and in any event within
     120 days after the end of each fiscal year, the Consolidated and
     Consolidating balance sheets of the Obligors as at the end of such fiscal
     year, the Consolidated and Consolidating statements of income and
     Consolidated statements of changes in shareholders' equity and of cash
     flows of the Obligors for such fiscal year (all in reasonable detail) and
     together, in the case of Consolidated financial

                                      -41-
<PAGE>

     statements, with comparative figures for the immediately preceding fiscal
     year, all accompanied by:

           (a)      Unqualified reports of independent certified public
     accountants of recognized national standing reasonably satisfactory to the
     Agent, containing no material uncertainty and without any Impermissible
     Reference, to the effect that they have audited the foregoing Consolidated
     financial statements in accordance with generally accepted auditing
     standards and that such Consolidated financial statements present fairly,
     in all material respects, the financial position of the Obligors covered
     thereby at the dates thereof and the results of their operations for the
     periods covered thereby in conformity with GAAP.

           (b)      The statement of such accountants that they have caused this
     Agreement to be reviewed and that in the course of their audit of the
     Borrower and its Subsidiaries no facts have come to their attention that
     cause them to believe that any Default exists and in particular that they
     have no knowledge of any Default under Sections 6.5 through 6.23 or, if
     such is not the case, specifying such Default and the nature thereof. This
     statement is furnished by such accountants with the understanding that the
     examination of such accountants cannot be relied upon to give such
     accountants knowledge of any such Default except as it relates to
     accounting or auditing matters within the scope of their audit.

           (c)      A certificate of the Borrower signed by a Financial Officer
     to the effect that such officer has caused this Agreement to be reviewed
     and has no knowledge of any Default, or if such officer has such knowledge,
     specifying such Default and the nature thereof, and what action the
     Borrower has taken, is taking or proposes to take with respect thereto.

           (d)      Computations by the Borrower comparing the financial
     statements referred to above with the most recent budget for such fiscal
     year furnished to the Agent in accordance with Section 6.4.3.

           (e)      Computations by the Borrower demonstrating, as of the end of
     such fiscal year, compliance with the Computation Covenants, certified by a
     Financial Officer.

           (f)      Calculations, as at the end of such fiscal year, of (i) the
     Accumulated Benefit Obligations for each Plan covered by Title IV of ERISA
     (other than Multiemployer Plans) and (ii) the fair market value of the
     assets of such Plan allocable to such benefits.

           (g)      Supplements to Exhibits 7.1, 7.3 and 10.4.2 showing any
     changes in the information set forth in such Exhibits not previously
     furnished to the Agent in writing, as well as any changes in the Charter,
     Bylaws or incumbency of officers of the Obligors from those previously
     certified to the Agent.

                                      -42-
<PAGE>

          (h)  In the event of a change in GAAP after the Initial Closing Date,
computations by the Borrower, certified by a Financial Officer, reconciling the
financial statements referred to above with financial statements prepared in
accordance with GAAP as applied to the other covenants in Section 6 and related
definitions.

          6.4.2.   Quarterly Reports.  The Borrower shall furnish to the Agent
                   ------------------
as soon as available and, in any event, within 45 days after the end of each of
the first three fiscal quarters of the Borrower, the internally prepared
Consolidated and Consolidating balance sheets of the Obligors as of the end of
such fiscal quarter, the Consolidated and Consolidating statements of income and
Consolidated statements of changes in shareholders' equity and of cash flows of
the Obligors for such fiscal quarter and for the portion of the fiscal year then
ended (all in reasonable detail) and together, in the case of Consolidated
statements, with comparative figures for the same period in the preceding fiscal
year, all accompanied by:

          (a)  A certificate of the Borrower signed by a Financial Officer to
the effect that such financial statements have been prepared in accordance with
GAAP and present fairly, in all material respects, the financial position of the
Obligors covered thereby at the dates thereof and the results of their
operations for the periods covered thereby, subject only to normal year-end
audit adjustments and the addition of footnotes.

          (b)  A certificate of the Borrower signed by a Financial Officer to
the effect that such officer has caused this Agreement to be reviewed and has no
knowledge of any Default, or if such officer has such knowledge, specifying such
Default and the nature thereof and what action the Borrower has taken, is taking
or proposes to take with respect thereto.

          (c)  Computations by the Borrower comparing the financial statements
referred to above with the most recent budget for the period covered thereby
furnished to the Agent in accordance with Section 6.4.3.

          (d)  Computations by the Borrower demonstrating, as of the end of such
quarter, compliance with the Computation Covenants, certified by a Financial
Officer.

          (e)  Supplements to Exhibits 7.1, 7.3 and 10.4.2 showing any changes
in the information set forth in such Exhibits not previously furnished to the
Agent in writing, as well as any changes in the Charter, Bylaws or incumbency of
officers of the Borrower or its Subsidiaries from those previously certified to
the Agent.

          (f)  In the event of a change in GAAP after the Initial Closing Date,
computations by the Borrower, certified by a Financial Officer, reconciling the
financial statements referred to above with financial statements prepared in
accordance with GAAP as applied to the other covenants in Section 6 and related
definitions.

          6.4.3.  Other Reports. The Borrower shall promptly furnish to the
                  -------------
Agent:

                                      -43-
<PAGE>

          (a)  As soon as prepared and in any event prior to the beginning of
each fiscal year, an annual budget and operating projections for such fiscal
year of the Borrower and its Subsidiaries, prepared in a manner consistent with
the manner in which the financial projections described in Section 7.2.1 were
prepared.

          (b)  Any material updates of such budget and projections.

          (c)  Any management letters furnished to the Borrower or any of its
Subsidiaries by the Company's auditors.

          (d)  All budgets, projections, statements of operations and other
reports furnished generally to the shareholders of the Borrower.

          (e)  As soon as practicable but, in any event, within 20 Banking Days
after the filing thereof, such registration statements, proxy statements and
reports, including, to the extent applicable, Forms S-1, S-2, S-3, S-4, 10-K,
10-Q and 8-K, as may be filed by the Borrower or any of its Subsidiaries with
the Securities and Exchange Commission.

          (f)  Any 90-day letter or 30-day letter from the federal Internal
Revenue Service (or the equivalent notice received from state or other taxing
authorities) asserting tax deficiencies against the Borrower or any of its
Subsidiaries.

          (g)  Any material information relating to (i) a material audit or
investigation of the Borrower or any of its Subsidiaries in its capacity as a
Medicare or Medicaid provider by a governmental or administrative agency, (ii)
any claim against the Borrower or any of its Subsidiaries under the Federal
False Claims Act, (iii) any self reporting of any violation by the Borrower or
any of its Subsidiaries and (iv) any request by the Borrower or any of its
Subsidiaries for an Advisory Opinion from the Office of the Inspector General of
the Department of Health and Human Services.

          (h)  The financial and operational projections for the Obligors on a
Consolidated and Consolidating basis.

          6.4.4. Notice of Litigation, Defaults, etc.  Each of the Borrower and
                 ------------------------------------
its Subsidiaries shall promptly furnish to the Agent notice of any litigation or
any administrative or arbitration proceeding including the impanneling of a
grand jury, (a) which creates a material risk of resulting, after giving effect
to any applicable insurance, in the payment by the Borrower or any of its
Subsidiaries of more than $100,000 or (b) which results, or creates a material
risk of resulting, in a Material Adverse Change. Within five Banking Days after
acquiring knowledge thereof, the Borrower shall notify the Lenders of the
existence of any Default or Material Adverse Change, specifying the nature
thereof and what action the Borrower or such Subsidiary has taken, is taking or
proposes to take with respect thereto.

                                      -44-
<PAGE>

          6.4.5. ERISA Reports.  Each of the Borrower and its Subsidiaries shall
                 -------------
furnish to the Agent promptly after the same shall become available the
following items with respect to any Plan:

          (a)  any request for a waiver of the funding standards or an extension
of the amortization period,

          (b)  any reportable event (as defined in section 4043 of ERISA),
unless the notice requirement with respect thereto has been waived by
regulation,

          (c)  any notice received by any ERISA Group Person that the PBGC has
instituted or intends to institute proceedings to terminate any Plan, or that
any Multiemployer Plan is insolvent or in reorganization,

          (d)  notice of the possibility of the termination of any Plan by its
administrator pursuant to section 4041 of ERISA, and

          (e)  notice of the intention of any ERISA Group Person to withdraw, in
whole or in part, from any Multiemployer Plan.

          6.4.6.  Other Information; Audit. From time to time at reasonable
                  -------------------------
intervals upon request of any authorized officer of the Agent or any Lender,
each of the Borrower and its Subsidiaries shall furnish to the Agent or such
Lender such other information regarding the business, assets, financial
condition, income or prospects of the Borrower and its Subsidiaries as such
officer may reasonably request, including copies of all tax returns, licenses,
agreements, leases and instruments to which any of the Borrower and its
Subsidiaries is party. The Agent's, or such Lender's authorized officers and
representatives shall have the right during normal business hours upon
reasonable notice and at reasonable intervals to examine the books and records
of the Borrower and its Subsidiaries, to make copies and notes therefrom for the
purpose of ascertaining compliance with or obtaining enforcement of this
Agreement or any other Credit Document. Any Lender requesting any such
information or examination shall coordinate with the Agent the frequency and
timing of such requests and examinations so as to reasonably minimize the burden
imposed on the Borrower and its Subsidiaries. The Agent, upon reasonable advance
notice, may undertake to have the Borrower and its Subsidiaries reviewed by the
Agent's commercial financial examiners and fixed asset appraisers. The Borrower
shall bear the reasonable expenses related to one such review annually unless an
Event of Default has occurred and is continuing in which event the Borrower
shall bear all reasonable expenses of any reasonable number of reviews.

6.5.  Certain Financial Tests.
      -----------------------

          6.5.1.  Consolidated Total Debt Coverage. At all times, the amount of
                  --------------------------------
(a) Consolidated Total Debt minus (b) that portion of the outstanding principal
                            -----
amount of any Contingent Notes and Restructured Seller Notes to the extent that
such portion is not

                                      -45-
<PAGE>

required to be reflected on the financial statements of the Borrower in
accordance with GAAP, shall not exceed 250% of the Consolidated Adjusted EBITDA
for the period of four consecutive fiscal quarters most recently ended.

          6.5.2.  Consolidated Interest Expense. On the last day of each fiscal
                  -----------------------------
quarter of the Borrower, Consolidated EBITDA for the period of four consecutive
fiscal quarters then ending shall be at least 250% of the Consolidated Interest
Expense for such period.

          6.5.3.  Consolidated Operating Cash Flow.  On the last day of each
                  --------------------------------
fiscal quarter of the Borrower, Consolidated Operating Cash Flow for the period
of four consecutive fiscal quarters then ending shall equal or exceed the
percentage specified in the table below of the sum of (i) Consolidated Total
Debt Service for such period minus (ii) voluntary prepayments of the Loan:
                             -----

          Period Ending                      Percentage
          -------------                      ----------

          Initial Closing Date through
          September 30, 2000                 125%

          December 31, 2000                  120%

          March 31, 2001 through
           June 30, 2001                     115%

          September 30, 2001 through
           December 31, 2001                 120%

          March 31, 2002 through
           December 30, 2003                 130%

          December 31, 2003 and thereafter   145%

          Notwithstanding the foregoing, in calculating Consolidated Operating
          Cash Flow for purposes of this Section 6.5.3, for periods ending June
          30, 2000 through March 31, 2001, charges totaling $5,240,000 in
          connection with the impairment of assets and related charges for
          AmeriPath PCC, Inc. shall not be subtracted from Consolidated
          Operating Cash Flow.

          Notwithstanding the foregoing, in calculating Consolidated Operating
          Cash Flow for purposes of this Section 6.5.3, charges of up to
          $22,900,000 (comprised of one time cash transaction and restructuring
          charges of up to $12,800,000 in connection with the acquisition of
          Pathology Consultants of America Inc., and nonrecurring non-cash
          charges of up to $10,100,000, including charges resulting from an
          increase in the accounts receivable reserve in connection with the

                                      -46-
<PAGE>

          acquisition of Pathology Consultants of America Inc., and potential
          unidentified impairment charges relating to good will and other
          intangibles of not more than $5,000,000) shall not be subtracted from
          Consolidated Operating Cash Flow; provided, however, that no such
                                            --------  -------
          amount shall be subtracted from Consolidated Operating Cash Flow for
          longer than the fiscal quarter in which such amount is first
          subtracted and the three consecutive fiscal quarters immediately
          following the first fiscal quarter in which such amount is first
          subtracted."

     6.6. Indebtedness.  Neither the Borrower nor any of its Subsidiaries shall
          ------------
create, incur, assume or otherwise become or remain liable with respect to any
Indebtedness except the following:

          6.6.1.  Indebtedness in respect of the Credit Obligations.

          6.6.2.  Guarantees permitted by Section 6.7.

          6.6.3.  Current liabilities, other than Financing Debt, incurred in
     the ordinary course of business.

          6.6.4.  To the extent that payment thereof shall not at the time be
     required by Section 6.1, Indebtedness in respect of taxes, assessments,
     governmental charges and claims for labor, materials and supplies.

          6.6.5.  Indebtedness secured by Liens of carriers, warehouses,
     mechanics and landlords permitted by Sections 6.8.5 and 6.8.6.

          6.6.6.  Indebtedness in respect of judgments or awards (a) which have
     been in force for less than the applicable appeal period or (b) in respect
     of which the Borrower or any of its Subsidiaries shall at the time in good
     faith be prosecuting an appeal or proceedings for review and, in the case
     of each of clauses (a) and (b), the Borrower or such Subsidiary shall have
     taken appropriate reserves therefor in accordance with GAAP and execution
     of such judgment or award shall not be levied.

          6.6.7.  To the extent permitted by Section 6.8.9, Indebtedness in
     respect of Capitalized Lease Obligations or secured by purchase money
     security interests; provided, however, that the aggregate principal amount
                         --------  -------
     of all Indebtedness permitted by this Section 6.6.7 at any one time
     outstanding shall not exceed $3,000,000.

          6.6.8.  Indebtedness with respect to deferred compensation in the
     ordinary course of business and Indebtedness with respect to employee
     benefit programs (including liabilities in respect of deferred
     compensation, pension or severance benefits, early termination benefits,
     disability benefits, vacation benefits and tuition benefits) incurred in
     the ordinary course of business so long as the Borrower and its
     Subsidiaries is in compliance with Section 6.17.

                                      -47-
<PAGE>

          6.6.9.   Indebtedness in respect of customer advances and deposits,
     deferred income, deferred taxes and other deferred credits arising in the
     ordinary course of business.

          6.6.10.  Indebtedness relating to deferred gains and deferred taxes
     arising in connection with sale of assets permitted under Section 6.11.

          6.6.11.  Indebtedness in respect of inter-company loans and advances
     among the Borrower and its Subsidiaries which are not prohibited by Section
     6.9.

          6.6.12.  Contingent Notes and Restructured Seller Notes.

          6.6.13.  Indebtedness to the extent set forth on Exhibit 6.6.
                                                           -----------

     6.7. Guarantees; Letters of Credit. Neither the Borrower nor any of its
          -----------------------------
Subsidiaries, shall become or remain liable with respect to any Guarantee,
including reimbursement obligations, whether contingent or matured, under
letters of credit or other financial guarantees by third parties, except the
following:

          6.7.1.  Letters of Credit and Guarantees of the Credit Obligations.

          6.7.2.  Guarantees by the Borrower of Indebtedness incurred by its
     Subsidiaries and permitted by Section 6.6.

          6.7.3.  Guarantees by the Borrower of the obligations of its
     Subsidiaries under employment agreements between such Subsidiary and its
     employees.

     6.8. Liens.  Neither the Borrower nor any of its Subsidiaries shall create,
          -----
incur or enter into, or suffer to be created or incurred or to exist, any Lien,
except the following:

          6.8.1.  Liens on the Credit Security that secure the Credit
     Obligations.

          6.8.2.  Liens to secure taxes, assessments and other governmental
charges, to the extent that payment thereof shall not at the time be required by
Section 6.1.

          6.8.3.  Deposits or pledges made (a) in connection with, or to secure
     payment of, workers' compensation, unemployment insurance, old age pensions
     or other social security, (b) in connection with casualty insurance
     maintained in accordance with Section 6.3, (c) to secure the performance of
     bids, tenders, contracts (other than contracts relating to Financing Debt)
     or leases, (d) to secure statutory obligations or surety or appeal bonds,
     (e) to secure indemnity, performance or other similar bonds in the ordinary
     course of business or (f) in connection with contested amounts to the
     extent that payment thereof shall not at that time be required by Section
     6.1.

                                      -48-
<PAGE>

          6.8.4.  Liens in respect of judgments or awards, to the extent that
     such judgments or awards are permitted by Section 6.6.6.

          6.8.5.  Liens of carriers, warehouses, mechanics and similar Liens, in
     each case (a) in existence less than 120 days from the date of creation
     thereof or (b) being contested in good faith by the Borrower or any
     Subsidiary in appropriate proceedings (so long as the Borrower or such
     Subsidiary shall, in accordance with GAAP, have set aside on its books
     adequate reserves with respect thereto).

          6.8.6.  Encumbrances in the nature of (a) zoning restrictions, (b)
     easements, (c) restrictions of record on the use of real property, (d)
     landlords' and lessors' Liens on rented premises and (e) restrictions on
     transfers or assignment of leases, which in each case do not materially
     detract from the value of the encumbered property or impair the use thereof
     in the business of the Borrower or any Subsidiary.

          6.8.7.  Restrictions under federal and state securities laws on the
     transfer of securities.

          6.8.8.  Restrictions under Foreign Trade Regulations on the transfer
     or licensing of certain assets of the Borrower and its Subsidiaries.

          6.8.9.  Liens constituting (a) purchase money security interests
     (including mortgages, conditional sales, Capitalized Leases and any other
     title retention or deferred purchase devices) in real property, interests
     in leases or tangible personal property (other than inventory) existing or
     created on the date on which such property is acquired, and (b) the
     renewal, extension or refunding of any security interest referred to in the
     foregoing clause (a) in an amount not to exceed the amount thereof
     remaining unpaid immediately prior to such renewal, extension or refunding;
     provided, however, that (i) each such security interest shall attach solely
     --------  -------
     to the particular item of property so acquired, and the principal amount of
     Indebtedness (including Indebtedness in respect of Capitalized Lease
     Obligations) secured thereby shall not exceed the cost (including all such
     Indebtedness secured thereby, whether or not assumed) of such item of
     property, and (ii) the aggregate principal amount of all Indebtedness
     secured by Liens permitted by this Section 6.8.9 shall not exceed the
     amount permitted by Section 6.6.7.

          6.8.10. Other Liens and Capitalized Lease Obligations on the property
     secured by such Liens or the subject of such Capitalized Lease as set forth
     on Exhibit 6.8 and any renewals thereof, but not any increase in the amount
        -----------
     thereof.

     6.9.  Investments and Permitted Acquisitions. either the Borrower nor any
           ---------------------------------------
of its Subsidiaries shall have outstanding, acquire, commit itself to acquire or
hold any Investment (including any Investment consisting of the Permitted
Acquisition of any business) except for the following:

          6.9.1.  Cash Investments of the Borrower in its Subsidiaries.

                                      -49-
<PAGE>

            6.9.2.  Intercompany loans and advances from the Borrower and its
     Subsidiaries to any Subsidiary but in each case only to the extent
     reasonably necessary for Consolidated tax planning and working capital
     management.

            6.9.3.  Investments in Cash Equivalents.

            6.9.4.  Guarantees permitted by Section 6.7.

            6.9.5.  Acquisitions permitted by Section 6.21 (each a "Permitted
                    Acquisition").

            6.9.6.  Investments representing Indebtedness of any Person owing as
     a result of the sale by the Borrower in the ordinary course of business to
     such Person of products, services or tangible property no longer required
     in the Borrower's business.

            6.9.7.  Promissory Note payable to the Borrower issued in March,
     1999 by Dr. A. Bernard Ackerman, M.D. in the amount of $600,000 at an
     annual interest rate of 6%, due March, 2003.

            6.9.8.  Minority equity Investment of up to $3,000,000 in Genomics
     Collaborative, Inc.

     6.10.  Distributions.  Neither the Borrower nor any of its Subsidiaries
            -------------
shall make any Distribution except for the following:

            6.10.1. Subsidiaries of the Borrower may make Distributions to the
     Borrower or any other Subsidiary of the Borrower.

            6.10.2. Distributions consisting of Investments permitted by
     Sections 6.9.1 and 6.9.2.

            6.10.3. Distributions in respect of the redemption of capital
     stock of the Company from employees of the Borrower or any of its
     Subsidiaries; provide however, that the amount of all such Distributions
                   ------- -------
     shall not exceed $50,000 in the aggregate in any fiscal year.

            6.10.4. Distributions on Subordinated Indebtedness to the extent
     permitted by a Subordination Agreement or such other documentation relating
     to Subordinated Indebtedness that has been approved by the Required
     Lenders.

     6.11.  Asset Dispositions and Mergers.  Except as otherwise set forth in
            ------------------------------
Exhibit 6.11, neither the Borrower nor any of its Subsidiaries shall merge or
------------
enter into a consolidation or sell, lease, sell and lease back, sublease or
otherwise dispose of any of its assets, except the following:

                                      -50-
<PAGE>

            6.11.1.   So long as immediately prior to and after giving effect
     thereto there shall exist no Default, the Borrower and any of its
     Subsidiaries may sell or otherwise dispose of: (a) inventory in the
     ordinary course of business; (b) tangible assets to be replaced in the
     ordinary course of business within 12 months by other assets of equal or
     greater value; and (c) tangible assets no longer used or useful in the
     business of the Borrower or such Subsidiary; provided, however, that the
                                                  --------  -------
     aggregate fair market value (or book value, if greater) of the assets sold
     or disposed of pursuant to this clause (c) shall not exceed $500,000 in any
     fiscal year.

            6.11.2.   Any Subsidiary may merge or be liquidated into the
     Borrower or any other Subsidiary of the Borrower so long as after giving
     effect to any such merger to which an Obligor is a party, an Obligor shall
     be the surviving or resulting Person.

     6.12.  Lease Obligations.  Neither the Borrower nor any of its Subsidiaries
            -----------------
shall be or become obligated as lessee under any lease except:

            6.12.1.   Capitalized Leases permitted by Sections 6.6.7 and 6.8.9.

            6.12.2.   Leases other than Capitalized Leases; provided, however,
                                                            --------  -------
     that the aggregate fixed rental obligations for any year (excluding
     payments required to be made by the lessee in respect of taxes and
     insurance whether or not denominated as rent) shall not exceed $5,000,000.

     6.13.  Issuance of Stock by Subsidiaries; Subsidiary Distributions.
            -----------------------------------------------------------

            6.13.1.   Issuance of Stock by Subsidiaries of the Company. No
                      ------------------------------------------------
     Subsidiary shall issue or sell any shares of its capital stock or other
     evidence of beneficial ownership to any Person other than the Borrower or
     any other Wholly-Owned Subsidiary of the Borrower, which shares shall have
     been pledged to the Agent as part of the Credit Security; provided,
                                                               --------
     however, that (i) in the event that applicable state law or regulation
     -------
     prohibits the Company from directly holding the capital stock of a medical
     practice that is a Subsidiary of the Company, such shares may be issued or
     sold to a trust or similar entity controlled solely by the Borrower or a
     Wholly-Owned Subsidiary of the Borrower, (ii) James E. Dunnington, M.D. may
     hold one share of AmeriPath Kentucky, Inc., so long as the Shareholders'
     Agreement among James E. Dunnington, M.D., the Company and AmeriPath
     Kentucky, Inc. remains in full force and effect, (iii) Alan Levin, M.D. may
     hold all the issued and outstanding Shares of AmeriPath Pittsburgh, P.C. so
     long as the Shareholder's Agreement among Alan Levin, M.D., the Company and
     AmeriPath Pittsburgh, P.C. remains in full force and

                                      -51-
<PAGE>

     effect, (iv) H. Michael Jones, M.D. may hold all the issued and outstanding
     Shares of AmeriPath Consulting Pathology Services, P.A. so long as the
     Shareholders' Agreement among H. Michael Jones, M.D., the Company and
     AmeriPath Consulting Pathology Services, P.A. remains in full force and
     effect, (v) Alan Levin, M.D. may hold all the issued and outstanding Shares
     of Consulting Pathologists of Pennsylvania, P.C. so long as the
     Shareholders' Agreement among Alan Levin, M.D., the Company and Consulting
     Pathologists of Pennsylvania, P.C. remains in full force and effect, (vi)
     Winston N. Hollister, M.D. may hold all the issued and outstanding Shares
     of AmeriPath Milwaukee, S.C. so long as the Shareholders' Agreement among
     Winston N. Hollister, M.D., the company and AmeriPath Milwaukee, S.C.
     remains in full force and effect, and (vii) Alan Levin, M.D. may hold all
     the issued and outstanding Shares of JJ Humes M.D. and
     Associates/AmeriPath, P.C. so long as the Shareholders' Agreement among
     Alan Levin, M.D., the Company and JJ Humes M.D. and Associates/AmeriPath,
     P.C. remains in full force and effect.

            6.13.2.  No Restrictions on Subsidiary Distributions.  Except for
                     -------------------------------------------
     this Agreement ad the Credit Documents, neither the Borrower nor any of its
     Subsidiaries shall enter into or be bound by any agreement (including
     covenants requiring the maintenance of specified amounts of net worth or
     working capital) restricting the right of any Subsidiary to make
     Distributions or extensions of credit to the Borrower (directly or
     indirectly through another Subsidiary).

     6.14.  Voluntary Prepayments of Other Indebtedness.  Neither the Borrower
            -------------------------------------------
nor any of its Subsidiaries shall make any voluntary prepayment of principal of
or interest on any Financing Debt (other than the Credit Obligations) or make
any voluntary redemptions or repurchases of Financing Debt (other than the
Credit Obligations) without the prior written consent of the Required Lenders.

     6.15.  Derivative Contracts.  Neither the Borrower nor any of its
            --------------------
Subsidiaries shall enter into any Interest Rate Protection Agreement, foreign
currency exchange contract or other financial or commodity derivative contracts
except (i) to provide hedge protection for an underlying economic transaction in
the ordinary course of business, or (ii) as required by Section 6.19.

     6.16.  Negative Pledge Clauses.  Neither the Borrower nor any of its
            -----------------------
Subsidiaries shall enter into any agreement, instrument, deed or lease which
prohibits or limits the ability of such Person to create, incur, assume or
suffer to exist any Lien upon any of their respective properties, assets or
revenues, whether now owned or hereafter acquired, or which requires the grant
of any collateral for such obligation if collateral is granted for another
obligation, except the following:

            6.16.1.  This Agreement and the other Credit Documents.

            6.16.2.  Covenants in documents creating Liens permitted by Section
     6.8 prohibiting further Liens on the assets encumbered thereby.

     6.17.  ERISA, etc.  Each of the Borrower and its Subsidiaries shall
            ----------
comply, and shall cause all ERISA Group Persons to comply, in all material
respects, with the provisions of ERISA and the Code applicable to each Plan.
Each of the Borrower and its Subsidiaries shall meet, and shall cause all ERISA
Group Persons to meet, all minimum funding requirements applicable to them with
respect to any Plan pursuant to section 302 of ERISA or section 412 of the Code,
without giving effect to any waivers of such requirements or extensions of the
related amortization periods which may be granted. At no time shall the
Accumulated Benefit

                                      -52-
<PAGE>

Obligations under any Plan that is not a Multiemployer Plan exceed the fair
market value of the assets of such Plan allocable to such benefits by more than
$250,000. The Borrower and its Subsidiaries shall not withdraw, and shall cause
all other ERISA Group Persons not to withdraw, in whole or in part, from any
Multiemployer Plan so as to give rise to withdrawal liability exceeding $250,000
in the aggregate. At no time shall the actuarial present value of unfunded
liabilities for post-employment health care benefits, whether or not provided
under a Plan, calculated in a manner consistent with Statement No. 106 of the
Financial Accounting Standards Board, exceed $500,000.

     6.18.  Transactions with Affiliates.  Except with respect to Management
            ----------------------------
Services Agreements and transactions set forth on Exhibit 6.18, neither the
                                                  ------------
Borrower nor any of its Subsidiaries shall effect any transaction with any of
their respective Affiliates (except for the Borrower and its Subsidiaries) on a
basis less favorable to the Borrower and its Subsidiaries than would be the case
if such transaction had been effected with a non-Affiliate.

     6.19.  Interest Rate Protection.  The Borrower shall keep in effect the
            ------------------------
existing Interest Rate Protection Agreements.

     6.20.  Environmental Laws.
            ------------------

            6.20.1.  Compliance with Law and Permits.  Each of the Borrower and
                     -------------------------------
     its Subsidiaries shall use and operate all of their respective facilities
     and properties in material compliance with all Environmental Laws, keep all
     necessary permits, approvals, certificates, licenses and other
     authorizations relating to environmental matters in effect and remain in
     material compliance therewith, and handle all Hazardous Materials in
     material compliance with all applicable Environmental Laws.

            6.20.2.  Notice of Claims, etc.  Each of the Borrower and its
                     ----------------------
     Subsidiaries shall immediately notify the Agent, and provide copies upon
     receipt, of all written claims, complaints, notices or inquiries from
     governmental authorities relating to the condition of its facilities and
     properties or compliance with Environmental Laws, and shall promptly cure
     and have dismissed with prejudice to the satisfaction of the Agent any
     actions and proceedings relating to compliance with Environmental Laws.

     6.21.  Permitted Acquisitions; General.  Any Obligor may make any
            -------------------------------
acquisition of all of the capital stock, equity, partnership interests, limited
liability company membership or other beneficial interests in, or a purchase of
substantially all of the assets of any Person if (a) that acquisition is a
Friendly Acquisition and (b) that Person derives substantially all of its
revenues from, a business that the Borrower would be permitted to engage in
under Section 6.2.1; provided, however, that
                     --------  -------

            6.21.1.  In the case of any such acquisition for which the Purchase
     Price is less than $5,000,000:

                                      -53-
<PAGE>

          (a)  Subordination Agreement.  If any Person is being issued a
               -----------------------
     Contingent Note in connection with the acquisition, no later than the
     closing date of such acquisition (the "Acquisition Closing Date"), the
     Borrower and any such Person shall execute and deliver to the Agent a
     subordination agreement substantially in the form of Exhibit 6.21.1(a);
                                                          -----------------

          (b)  Joinder Agreement and Corporate Documents.  Not later than five
               -----------------------------------------
     days after the Acquisition Closing Date the Borrower and the Guarantors
     shall (A) execute and deliver a Joinder Agreement substantially in the form
     of Exhibit 6.21.1(b), making any new subsidiary created or acquired in
        -----------------
     connection with such acquisition a Guarantor under this Agreement and (B)
     deliver to the Agent a certificate of the Secretary of any new Subsidiary
     with respect to the incumbency of the officers of the new Subsidiary, the
     Charter and By-laws of such new Subsidiary, and the votes taken by such
     Subsidiary to authorize its joinder to this Agreement;

          (c)  Credit Security.  Not later than five days after the Acquisition
               ---------------
     Closing Date, the Borrower shall (A) deliver to the Agent such financing
     statements, mortgages and other documentation as the Agent shall request to
     attach a security interest to the assets of such new Subsidiary and to
     perfect such security interests and (B) deliver to the Agent all of the
     capital stock of such new Subsidiary (or make other arrangement reasonably
     satisfactory to the Agent to perfect the security interest of the Lenders
     in any equity interest in such new Subsidiary).  The failure of the
     Borrower to comply with this Section 6.21.1(c) shall constitute an Event of
     Default; and

          (d)  No Default.  Immediately before and after giving effect to such
               ----------
     acquisition, no Default shall exist.

          (e)  Management Services Agreement. The Management Services Agreement,
               -----------------------------
     if any, executed and delivered in connection with such acquisition shall
     provide that 100% of Operating Earnings of a physician practice be payable
     to the Borrower or a Guarantor.

          (f)  Acquisition Compliance Certificate.  The Borrower provides to
               ----------------------------------
     the Agent, not later than 5 days after the Acquisition Closing Date, a
     certificate in the form of Exhibit 6.21.1(f) certifying compliance with
                                -----------------
     this Section 6.21.1.

          6.21.2.  In the case of any such acquisition for which the Purchase
     Price is greater than or equal to $5,000,000 and the Cash Purchase Price is
     less than $10,000,000, the Borrower shall comply with all the requirements
     of Section 6.21.1, with the exception of 6.21.1(f), and:

          (a)  Purchase Price Limitation.  The Financing Debt component of the
               -------------------------
     consideration for such acquisition (i) shall not exceed the sum of 450% of
     the Pro Forma EBITDA of the Acquired Party for the most recently completed
     period of four consecutive fiscal quarters plus the cash and Cash
     Equivalents of the Acquired Party that

                                      -54-
<PAGE>

     are being purchased and (ii) shall not exceed 70% of the Purchase Price. In
     addition, no less than 30% of the total Purchase Price shall consist of
     common stock of the Company and no more than 20% of the total Purchase
     Price shall consist of Contingent Notes.

          (b)  Acquisition Documents.  The Borrower shall provide to the Agent:
               ---------------------

               (i)   not later than five days prior to the Acquisition Closing
          Date, a copy of the due diligence report provided to the board of
          directors of the Company with respect to such acquisition;

               (ii)  not later than three days prior to the Acquisition Closing
          Date, a copy of a draft of the Acquisition Agreement, together with
          all amendments, exhibits and schedules thereto, for such acquisition;
          and from such time until the Acquisition Closing Date, the Borrower
          shall provide to the Agent all changes and additions to the foregoing;

               (iii) not later than five days after the Acquisition Closing
          Date, a final executed copy of the Acquisition Agreement and all
          exhibits and schedules thereto.

          (c)  Pro Forma Covenant Compliance.  Not later than five Banking Days
               -----------------------------
     before the Acquisition Closing Date, the Borrower shall provide to the
     Agent, a computation, certified by a Financial Officer of the Borrower,
     showing pro forma compliance as of the date of such acquisition with the
     financial tests set forth in Section 6.5, after giving effect to any
     increases in Financing Debt incurred in connection with such acquisition
     and adding to the financial statements most recently delivered to the Agent
     the Pro Forma EBITDA of the Acquired Party for the most recently completed
     period of four consecutive fiscal quarters;

     Each Lender shall be deemed to have approved any non-GAAP adjustments used
     in such certified calculation of the Pro Forma EBITDA (as shown in the due
     diligence report sent to the Lenders) unless, within five Banking Days
     after the Company (via the Agent) gives notice to such Lender of the
     proposed Pro Forma EBITDA calculations showing such non-GAAP adjustments,
     such Lender has given notice to the Company and the Agent of its objection
     to such non-GAAP adjustments.

          (d)  Acquisition Compliance Certificate.  The Borrower provides to
               ----------------------------------
     the Agent, not later than 5 days after the Acquisition Closing Date, a
     certificate in the form of Exhibit 6.21.2(d) certifying compliance with
                                -----------------
     Section 6.21.1 and Section 6.21.2 hereof, and further certifying that (a)
     the Acquisition has been consummated, (b) the representations and
     warranties of the Sellers were true and correct as of the Acquisition
     Closing Date and (c) any material consent, authorization, order or approval
     of any Person required in connection with the transactions contemplated by
     the Acquisition Agreement has been obtained and is in full force and
     effect.

                                      -55-
<PAGE>

          6.21.3.    In the case of any such acquisition for which the Cash
     Purchase Price is equal to or exceeds $10,000,000, in addition to meeting
     the requirements of Sections 6.21.1 and 6.21.2 the Borrower shall receive
     prior written consent of the Required Lenders and provide all further
     documentation and meet all further requirements reasonably requested by the
     Agent.

     6.22.  Year 2000 Compliant.  In a timely manner, but not later than the
            -------------------
Initial Closing Date, the Borrower shall certify to the Agent in writing that
its and its Subsidiaries' material critical systems are Year 2000 Compliant.

7.   Representations and Warranties.  In order to induce the Lenders to extend
     ------------------------------
credit to the Borrower hereunder, each of the Obligors jointly and severally
represents and warrants as follows:

     7.1.  Organization and Business.
           -------------------------

           7.1.1.  The Borrower.  The Borrower is a duly organized and validly
                   ------------
     existing corporation, in good standing under the laws of Delaware with all
     power and authority, corporate or otherwise, necessary to (a) enter into
     and perform this Agreement and each other Credit Document to which it is
     party, (b) grant the Agent for the benefit of the Lenders the security
     interests in the Credit Security owned by it to secure the Credit
     Obligations and (c) own its properties and carry on the business now
     conducted or proposed to be conducted by it. Certified copies of the
     Charter and By-laws of the Borrower have been previously delivered to the
     Agent and are correct and complete. Exhibit 7.1, as from time to time
     hereafter supplemented in accordance with Sections 6.4.1 and 6.4.2, sets
     forth, as of the later of the date hereof or as of the end of the most
     recent fiscal quarter for which financial statements are required to be
     furnished in accordance with such Sections, (i) the jurisdiction of
     incorporation of the Borrower, (ii) the address of the Borrower's principal
     executive office and chief place of business, (iii) each name, including
     any trade name, under which the Borrower conducts its business and (iv) the
     jurisdictions in which the Borrower keeps tangible personal property.

           7.1.2.  Subsidiaries.  Each Subsidiary of the Borrower is duly
                   ------------
     organized, validly existing and in good standing under the laws of the
     jurisdiction in which it is organized, with all power and authority,
     corporate or otherwise, necessary to (a) enter into and perform this
     Agreement and each other Credit Document to which it is party, (b)
     guarantee the Credit Obligations, (c) grant the Lenders the security
     interest in the Credit Security owned by such Subsidiary to secure the
     Credit Obligations and (d) own its properties and carry on the business now
     conducted or proposed to be conducted by it; provided, however, that the
                                                  --------  -------
     foregoing clauses (a), (b) and (c) shall not apply to any such Subsidiary
     that is not a Guarantor. Certified copies of the Charter and By-laws of
     each Subsidiary of the Borrower have been previously delivered to the Agent
     and are correct and complete. Exhibit 7.1, as from time to time hereafter
     supplemented in accordance

                                      -56-
<PAGE>

     with Sections 6.4.1 and 6.4.2, sets forth, as of the later of the date
     hereof or as of the end of the most recent fiscal quarter for which
     financial statements are required to be furnished in accordance with such
     Sections, (i) the name and jurisdiction of organization of each Subsidiary
     of the Borrower, (ii) the address of the chief executive office and
     principal place of business of each such Subsidiary, (iii) each name under
     which each such Subsidiary conducts its business; (iv) each jurisdiction in
     which each such Subsidiary keeps tangible personal property, and (v) the
     number of authorized and issued shares and ownership of each such
     Subsidiary.

          7.1.3. Qualification.  Each of the Borrower and its Subsidiaries is
                 -------------
     duly and legally qualified to do business as a foreign corporation or other
     entity and is in good standing in each state or jurisdiction in which such
     qualification is required and is duly authorized, qualified and licensed
     under all laws, regulations, ordinances or orders of public authorities, or
     otherwise, to carry on its business in the places and in the manner in
     which it is conducted, except for failures to be so qualified, authorized
     or licensed which would not in the aggregate result, or create a material
     risk of resulting, in any Material Adverse Change.

          7.1.4. Capitalization.  No options, warrants, conversion rights,
                 --------------
     preemptive rights or other statutory or contractual rights to purchase
     shares of capital stock or other securities of any Subsidiary now exist,
     nor has any Subsidiary authorized any such right, nor is any Subsidiary
     obligated in any other manner to issue shares of its capital stock or other
     securities. Attached as Exhibit 7.1.4. is a list of all Persons who,
     together with such Person's Affiliates, hold greater than 5% of the
     outstanding capital stock of the Borrower, together with the number of
     shares held by each such Person.

     7.2. Financial Statements and Other Information; Material Agreements.
          ---------------------------------------------------------------

          7.2.1. Financial Statements and Other Information.  The Borrower has
                 ------------------------------------------
     previously furnished to the Lenders copies of the following:

          (a)  The audited Consolidated balance sheets of the Obligors as of
     December 31, 1998 and the audited statements of income, of changes in
     shareholders' equity and of cash flows of the Obligors for the fiscal year
     of the Borrower then ended.

          (b)  The unaudited balance sheets of the Obligors on a Consolidated
     basis as of September 30, 1999 and the unaudited statements of income, of
     changes in shareholders' equity and of cash flows of the Company and its
     Subsidiaries on a Consolidated basis for the portion of the fiscal year
     then ended.

          (c)  Calculations demonstrating pro forma compliance with the
     Computation Covenants as of the end of the most recent quarter, as
     applicable, preceding the date hereof.

                                      -57-
<PAGE>

          (d)  The three-year financial and operational projections for the
     Borrower and its Subsidiaries provided in the Confidential Information
     Memorandum dated September 1999.

          The audited financial statements (including the notes thereto)
     referred to in clause (a) above were prepared in accordance with GAAP and
     fairly present the financial position of the Borrower and its Subsidiaries
     on a Consolidated basis at the date thereof and the results of their
     operations for the periods covered thereby.  The unaudited financial
     statements referred to in clause (b) above were prepared in accordance with
     GAAP and fairly present the financial position of the Borrower and its
     Subsidiaries on a Consolidated basis at the respective dates thereof and
     the results of their operations for the periods covered thereby, subject to
     normal year-end audit adjustment and the addition of footnotes in the case
     of interim financial statements.  Neither the Borrower nor any of its
     Subsidiaries has any known contingent liability material to the Borrower
     and its Subsidiaries on a Consolidated basis which is not reflected in the
     balance sheets referred to in clauses (a) or (b) above (or delivered
     pursuant to Sections 6.4.1 or 6.4.2) or in the notes thereto.

          In the Borrower's judgment, the financial and operational projections
     referred to in clause (d) above constitute a reasonable basis as of the
     Initial Closing Date for the assessment of the future performance of the
     Borrower and its Subsidiaries during the periods indicated therein, it
     being understood that any projected financial information represents an
     estimate, based on various assumptions, of future results of operations
     which may or may not in fact occur.

          7.2.2.  Material Agreements.  The Borrower has previously furnished
                  -------------------
     to the Lenders correct and complete copies, including all exhibits,
     schedules and amendments thereto, of the agreements, each as in effect on
     the date hereof, listed in Exhibit 7.2.2 (the "Material Agreements").
                                -------------       -------------------

     7.3. Agreements Relating to Financing Debt, Investments, etc. Exhibit 7.3,
          -------------------------------------------------------  ------------
from time to time hereafter supplemented in accordance with Sections 6.4.1 and
6.4.2, sets forth (a) the amounts (as of the dates indicated in Exhibit 7.3, as
                                                                -----------
so supplemented) of all Financing Debt of the Borrower and its Subsidiaries and
all agreements which relate to such Financing Debt, (b) all Liens and Guarantees
with respect to such Financing Debt and (c) all agreements which directly or
indirectly require the Borrower or any Subsidiary to make any Investment.  The
Borrower has furnished the Lenders with correct and complete copies of any
agreements described in clauses (a), (b) and (c) above requested by the Required
Lenders.

     7.4. Changes in Condition.  Since December 31, 1998 no Material Adverse
          --------------------
Change has occurred and since such date, except as set forth in Exhibit 7.4,
                                                                -----------
neither the Borrower nor any of its Subsidiaries has entered into any material
transaction outside the ordinary course of business except for the transactions
contemplated by or otherwise permitted or authorized pursuant to this Agreement
and the Material Agreements.

                                      -58-
<PAGE>

     7.5. Title to Assets.  The Borrower and its Subsidiaries have good and
          ---------------
marketable title to, or rights to use under lease all assets necessary for or
used in the operations of their business as now conducted by them and reflected
in the most recent balance sheet referred to in Section 7.2.1 (or the balance
sheet most recently furnished to the Lenders pursuant to Sections 6.4.1 or
6.4.2), and to all assets acquired subsequent to the date of such balance sheet,
subject to no Liens except for Liens permitted by Section 6.8 and except for
assets disposed of as permitted by Section 6.11.

     7.6. Operations in Conformity With Law, etc.  The operations of the
          ---------------------------------------
Borrower and its Subsidiaries as now conducted or proposed to be conducted are
not in violation of, nor is the Borrower or any of its Subsidiaries in default
under, any Legal Requirement presently in effect, except for such violations and
defaults as do not and will not, in the aggregate, result, or create a material
risk of resulting, in any Material Adverse Change. Neither the Borrower nor any
of its Subsidiaries has received notice of any such violation or default or has
knowledge of any basis on which the operations of the Borrower or its
Subsidiaries, as now conducted and as currently proposed to be conducted after
the date hereof, would be held so as to violate or to give rise to any such
violation or default.

     7.7. Litigation.  Except as otherwise set forth in Exhibit 7.7, no
          ----------                                    -----------
litigation, at law or in equity, or any proceeding before any court, board or
other governmental or administrative agency or any arbitrator is pending or, to
the knowledge of the Borrower or any of its Subsidiaries, threatened which may
involve any material risk of any final judgment, order or liability which, after
giving effect to any applicable insurance, has resulted, or creates a material
risk of resulting, in any Material Adverse Change or which seeks to enjoin the
consummation, or which questions the validity, of any of the transactions
contemplated by this Agreement or any other Credit Document. No judgment, decree
or order of any court, board or other governmental or administrative agency or
any arbitrator has been issued against or binds the Borrower or any of
Subsidiaries which has resulted, or creates a material risk of resulting, in any
Material Adverse Change.

     7.8. Authorization and Enforceability.  Each of the Obligors has taken all
          --------------------------------
corporate action required to execute, deliver and perform this Agreement and
each other Credit Document to which it is party.  No consent of stockholders of
any Obligor is necessary in order to authorize the execution, delivery or
performance of this Agreement or any other Credit Document to which such Obligor
is party.  Each of this Agreement and each other Credit Document constitutes the
legal, valid and binding obligation of each Obligor party thereto and is
enforceable against such Obligor in accordance with its terms.

     7.9. No Legal Obstacle to Agreements.  Neither the execution and delivery
          -------------------------------
of this Agreement or any other Credit Document, nor the making of any borrowings
hereunder, nor the guaranteeing of the Credit Obligations, nor the securing of
the Credit Obligations with the Credit Security, nor the consummation of any
transaction referred to in or contemplated by this Agreement or any other Credit
Document, nor the fulfillment of the terms hereof or thereof or of

                                      -59-
<PAGE>

any other agreement, instrument, deed or lease contemplated by this Agreement or
any other Credit Document, has constituted or resulted in or will constitute or
result in:

            (a)  any breach or termination of the provisions of any agreement,
     instrument, deed or lease to which the Borrower, any of its Subsidiaries or
     any other Obligor is a party or by which it is bound, or of the Charter or
     By-laws of the Borrower, any of its Subsidiaries or any other Obligor;

            (b)  the violation of any law, statute, judgment, decree or
     governmental order, rule or regulation applicable to the Borrower, any of
     its Subsidiaries or any other Obligor;

            (c)  the creation under any agreement, instrument, deed or lease of
     any Lien (other than Liens on the Credit Security which secure the Credit
     Obligations) upon any of the assets of the Borrower, any of its
     Subsidiaries or any other Obligor; or

            (d)  any redemption, retirement or other repurchase obligation of
     the Borrower, any of its Subsidiaries or any other Obligor under any
     Charter, By-law, agreement, instrument, deed or lease.

No approval, authorization or other action by, or declaration to or filing with,
any governmental or administrative authority or any other Person is required to
be obtained or made by the Borrower, any of its Subsidiaries or any other
Obligor in connection with the execution, delivery and performance of this
Agreement, the Notes or any other Credit Document, the transactions contemplated
hereby or thereby, the making of any borrowing hereunder, the guaranteeing of
the Credit Obligations or the securing of the Credit Obligations with the Credit
Security.

     7.10.  Defaults.  Neither the Borrower nor any of its Subsidiaries is in
            --------
default under any provision of its Charter or By-laws or of this Agreement or
any other Credit Document. Neither the Borrower nor any of its Subsidiaries is
in default under any provision of any agreement, instrument, deed or lease to
which it is party or by which it or its property is bound. Neither the Borrower
nor any of its Subsidiaries has violated any law, judgment, decree or
governmental order, rule or regulation, in each case so as to result, or create
a material risk of resulting, in any Material Adverse Change.

     7.11.  Licenses, etc.  The Borrower and its Subsidiaries have all patents,
            -------------
patent applications, patent licenses, patent rights, trademarks, trademark
rights, trade names, trade name rights, copyrights, licenses, franchises,
permits, authorizations and other rights as are necessary for the conduct of the
business of the Borrower and its Subsidiaries as now conducted by them.  All of
the foregoing are in full force and effect in all material respects, and each of
the Borrower and its Subsidiaries is in substantial compliance with the
foregoing without any known conflict with the valid rights of others which has
resulted, or creates a material risk of resulting, in any Material Adverse
Change.  No event has occurred which permits, or after notice or lapse of time
or both would permit, the revocation or termination of any such license,
franchise or other right or which affects the rights of any of the Borrower and
its Subsidiaries thereunder so as to result, or to create a material risk of
resulting, in any Material Adverse Change.  No litigation or other

                                      -60-
<PAGE>

proceeding or dispute exists with respect to the validity or, where applicable,
the extension or renewal, of any of the foregoing which has resulted, or creates
a material risk of resulting, in any Material Adverse Change.

     7.12.  Tax Returns.  Each of the Borrower and its Subsidiaries has filed
            -----------
all material tax and information returns which are required to be filed by it
and has paid, or made adequate provision for the payment of, all taxes which
have or may become due pursuant to such returns or to any assessment received by
it. Neither the Borrower nor any of its Subsidiaries knows of any material
additional assessments or any basis therefor. Neither the Borrower nor any of
its Subsidiaries reasonably believes that the charges, accruals and reserves on
the books of the Borrower and its Subsidiaries in respect of taxes or other
governmental charges are adequate.

     7.13.  Certain Business Representations.
            --------------------------------

            7.13.1.   Labor Relations.  No dispute or controversy between the
                      ---------------
     Borrower or any of its Subsidiaries and any of their respective employees
     has resulted, or is reasonably likely to result, in any Material Adverse
     Change, and neither the Borrower nor any of its Subsidiaries anticipates
     that its relationships with its unions or employees will result, or are
     reasonably likely to result, in any Material Adverse Change. Each of the
     Borrower and its Subsidiaries is in compliance in all material respects
     with all federal and state laws with respect to (a) non-discrimination in
     employment with which the failure to comply, in the aggregate, has
     resulted, or creates a material risk of resulting, in a Material Adverse
     Change and (b) the payment of wages.

            7.13.2.   Antitrust.  Each of the Borrower and its Subsidiaries is
                      ---------
     in compliance in all material respects with all federal and state antitrust
     laws relating to its business and the geographic concentration of its
     business.

            7.13.3.   Consumer Protection.  Neither the Borrower nor any of its
                      -------------------
     Subsidiaries is in violation of any rule, regulation, order, or
     interpretation of any rule, regulation or order of the Federal Trade
     Commission (including truth-in-lending), with which the failure to comply,
     in the aggregate, has resulted, or creates a material risk of resulting, in
     a Material Adverse Change.

            7.13.4.   Burdensome Obligations.  Neither the Borrower nor any of
                      ----------------------
     its Subsidiaries is party to or bound by any agreement, instrument, deed or
     lease or is subject to any Charter, By-law or other restriction, commitment
     or requirement which, in the opinion of the management of such Person, is
     so unusual or burdensome as in the foreseeable future to result, or create
     a material risk of resulting, in a Material Adverse Change.

            7.13.5.   Future Expenditures.  Neither the Borrower nor any of its
                      -------------------
     Subsidiaries anticipate that the future expenditures, if any, by the
     Borrower and its Subsidiaries needed to meet the provisions of any federal,
     state or foreign governmental statutes,

                                      -61-
<PAGE>

orders, rules or regulations will be so burdensome as to result, or create a
material risk of resulting, in any Material Adverse Change.

7.14.  Environmental Regulations.
       -------------------------

       7.14.1. Environmental Compliance.  Each of the Borrower and its
               ------------------------
Subsidiaries is in compliance in all material respects with the Clean Air Act,
the Federal Water Pollution Control Act, the Marine Protection Research and
Sanctuaries Act, RCRA, CERCLA and any other Environmental Law in effect in any
jurisdiction in which any properties of the Borrower and its Subsidiaries are
located or where any of them conducts its business, and with all applicable
published rules and regulations (and applicable standards and requirements) of
the federal Environmental Protection Agency and of any similar agencies in
states or foreign countries in which the Borrower and its Subsidiaries conduct
their businesses other than those which in the aggregate have not resulted, and
do not create a material risk of resulting, in a Material Adverse Change.

       7.14.2. Environmental Litigation. No suit, claim, action or proceeding of
               ------------------------
which any Obligor has been given notice or otherwise has knowledge is now
pending before any court, governmental agency or board or other forum, or to the
knowledge of any of the Borrower and its Subsidiaries, threatened by any Person
(nor to the knowledge of any of the Borrower and its Subsidiaries, does any
factual basis exist therefor) for, and none of the Borrower and its Subsidiaries
have received written correspondence from any federal, state or local
governmental authority with respect to:

       (a)     noncompliance by the Borrower or any Subsidiary thereof with any
Environmental Law;

       (b)     personal injury, wrongful death or other tortious conduct
relating to materials, commodities or products used, generated, sold,
transferred or manufactured by the Borrower or any Subsidiary thereof (including
products made of, containing or incorporating asbestos, lead or other hazardous
materials, commodities or toxic substances); or

       (c)     the release into the environment by the Borrower or any
Subsidiary thereof of any Hazardous Material generated by the Borrower or any
Subsidiary thereof whether or not occurring at or on a site owned, leased or
operated by the Borrower or any Subsidiary thereof.

       7.14.3. Environmental Condition of Properties. None of the properties
               -------------------------------------
owned or leased by the Borrower or any Subsidiary thereof has been used as a
treatment, storage or disposal site, other than as disclosed in Exhibit 7.14.
                                                                ------------
No Hazardous Material is present in any real property currently or formerly
owned or operated by the Borrower or any Subsidiary thereof except that which
has not resulted, and does not create a material risk of resulting, in a
Material Adverse Change.

                                      -62-
<PAGE>

     7.15. Pension Plans. Each Plan (other than a Multiemployer Plan) and, to
           -------------
the knowledge of each of the Borrower and its Subsidiaries, each Multiemployer
Plan is in material compliance with the applicable provisions of ERISA and the
Code. Each Multiemployer Plan and each Plan that constitutes a "defined benefit
plan" (as defined in ERISA) are set forth in Exhibit 7.15. Each ERISA Group
                                             ------------
Person has met all of the funding standards applicable to all Plans that are not
Multiemployer Plans, and no condition exists which would permit the institution
of proceedings to terminate any Plan that is not a Multiemployer Plan under
section 4042 of ERISA. To the best knowledge of the Borrower and each of its
Subsidiaries, no Plan that is a Multiemployer Plan is currently insolvent or in
reorganization or has been terminated within the meaning of ERISA.

     7.16. Acquisition Agreement, etc. Each Acquisition Agreement is a valid and
           --------------------------
binding contract as to the Borrower and each Subsidiary party thereto and, to
the best of the Borrower's knowledge, as to the Sellers party thereto. The
Borrower and its Subsidiaries are not in default in any material respect of its
obligations under any Acquisition Agreement and, to the best of the Borrower's
knowledge, the Sellers party thereto are not in default in any material respect
of any of their obligations thereunder. The representations and warranties of
the Borrower set forth in each Acquisition Agreement are true and correct in all
material respect as of the date hereof with the same force and effect as though
made on and as of the date hereof. To the best of the Borrower's knowledge all
of the representations and warranties of the Sellers set forth in each
Acquisition Agreement are true and correct in all material respects as of the
date hereof with the same force and effect as though made on and as of the date
hereof.

     7.17. Foreign Trade Regulations; Government Regulation; Margin Stock.
           --------------------------------------------------------------

           7.17.1. Foreign Trade Regulations. Neither the execution and delivery
                   -------------------------
     of this Agreement or any other Credit Document, nor the making by the
     Borrower of any borrowings hereunder, nor the guaranteeing of the Credit
     Obligations by any Guarantor, nor the securing of the Credit Obligations
     with the Credit Security, has constituted or resulted in or will constitute
     or result in the violation of any Foreign Trade Regulation.

           7.17.2. Government Regulation. Neither the Borrower nor any
                   ---------------------
     Subsidiary, nor any Person controlling the Borrower or any of its
     Subsidiaries or under common control with the Borrower or any of its
     Subsidiaries, is subject to regulation under the Public Utility Holding
     Company Act of 1935, the Federal Power Act, the Investment Company Act, the
     Interstate Commerce Act or any statute or regulation which regulates the
     incurring by the Borrower or any of its Subsidiaries of Financing Debt as
     contemplated by this Agreement and the other Credit Documents.

           7.17.3. Margin Stock. Neither the Borrower nor any of its
                   ------------
     Subsidiaries owns any Margin Stock.

     7.18. Disclosure. Neither this Agreement nor any other Credit Document to
           ----------
be furnished to the Lenders by or on behalf of the Borrower or any of its
Subsidiaries in connection with the transactions contemplated hereby or by such
Credit Document contains any untrue

                                      -63-
<PAGE>

statement of material fact or omits to state a material fact necessary in order
to make the statements contained herein or therein not misleading in light of
the circumstances under which they were made. No fact is actually known to
Borrower or any of its Subsidiaries which has resulted, or in the future (so far
as the Borrower or any of its Subsidiaries can reasonably foresee) will result,
or creates a material risk of resulting, in any Material Adverse Change, except
to the extent that present or future general economic conditions may result in a
Material Adverse Change.

     7.19. Year 2000 Compliance.
           --------------------

           7.19.1. Borrower and its Subsidiaries have (i) undertaken a detailed
     inventory, review and assessment of all areas within its business and
     operations that could be adversely affected by the failure of the Borrower
     or its Subsidiaries to be Year 2000 Compliant on a timely basis, (ii)
     developed a detailed plan and timeline for becoming Year 2000 Compliant on
     a timely basis, and (iii) implemented that plan in accordance with that
     timetable in all material respects.

           7.19.2. Borrower and its Subsidiaries have developed a plan and
     timeline for making written inquiry of their key suppliers, vendors and
     customers as to whether such persons will be Year 2000 Compliant in all
     material respects and have materially implemented that plan in accordance
     with that timetable. For purposes hereof, "key suppliers, vendors and
     customers" refers to those suppliers, vendors and customers of Borrower and
     its Subsidiaries whose business failure or significant disruption would,
     with reasonable probability, result in a material adverse change in the
     business, properties or financial condition of the Borrower or its
     Subsidiaries.

           7.19.3. Based on the foregoing, Borrower reasonably believes that its
     and its Subsidiaries' material critical systems are Year 2000 Compliant as
     of the Initial Closing Date.

8.   Defaults.
     --------

     8.1.  Events of Default. The following events are referred to as "Events of
           -----------------                                           ---------
Default":
-------

           8.1.1. Payment. The Borrower shall fail to make any payment in
                  -------
     respect of: (a) any interest or any fee on or in respect of any of the
     Credit Obligations owed by it as the same shall become due and payable, and
     such failure shall continue for a period of three Banking Days, or (b) any
     Credit Obligation with respect to payments made by any Letter of Credit
     Issuer under any Letter of Credit or any draft drawn thereunder within
     three Banking Days after demand therefor by such Letter of Credit Issuer or
     (c) principal of any of the Credit Obligations owed by it as the same shall
     become due, whether at maturity or by acceleration or otherwise.

           8.1.2. Specified Covenants. The Borrower or any of its Subsidiaries
                  -------------------
     shall fail to perform or observe any of the provisions of Section 6.4.5 or
     Sections 6.5 through 6.22.

                                      -64-
<PAGE>

           8.1.3. Other Covenants. The Borrower, any of its Subsidiaries or any
                  ---------------
     other Obligor shall fail to perform or observe any other covenant,
     agreement or provision to be performed or observed by it under this
     Agreement or any other Credit Document, and such failure shall not be
     rectified or cured to the written satisfaction of the Required Lenders
     within 30 days after the earlier of (a) notice thereof by the Agent to the
     Borrower or (b) a Financial Officer shall have actual knowledge thereof.

           8.1.4. Representations and Warranties. Any representation or warranty
                  ------------------------------
     of or with respect to the Borrower or any of its Subsidiaries or any other
     Obligor made to the Lenders or the Agent in, pursuant to or in connection
     with this Agreement or any other Credit Document shall be materially false
     on the date as of which it was made.

           8.1.5. Cross Default, etc.
                  ------------------

           (a)    The Borrower or any of Subsidiaries shall fail to make any
     payment when due (after giving effect to any applicable grace periods) in
     respect of any Capitalized Lease or in respect of any Financing Debt (other
     than the Credit Obligations) outstanding in an aggregate amount of
     principal (whether or not due) and accrued interest exceeding $250,000;

           (b)    the Borrower or any of its Subsidiaries shall fail to perform
     or observe the terms of any agreement or instrument relating to any
     Capitalized Lease or any Financing Debt (other than the Credit Obligations)
     outstanding in an aggregate amount of principal (whether or not due) and
     accrued interest exceeding $250,000, and such failure shall continue,
     without having been duly cured, waived or consented to, beyond the period
     of grace, if any, specified in such agreement or instrument, and such
     failure shall permit the acceleration of such Financing Debt or Capitalized
     Lease;

           (c)    all or any part of any Financing Debt (other than the Credit
     Obligations) outstanding in an aggregate amount of principal (whether or
     not due) and accrued interest exceeding $250,000 of the Borrower or any of
     its Subsidiaries shall be accelerated or shall become due or payable prior
     to its stated maturity (except with respect to voluntary prepayments
     thereof) for any reason whatsoever;

           (d)    any Lien on any property of the Borrower or any of its
     Subsidiaries securing any Financing Debt (other than the Credit
     Obligations) outstanding in an aggregate amount of principal (whether or
     not due) and accrued interest exceeding $250,000 shall be enforced by
     foreclosure or similar action; or

           (e)    any holder of any Financing Debt (other than the Credit
     Obligations) outstanding in an aggregate amount of principal (whether or
     not due) and accrued interest exceeding $250,000 shall exercise any right
     of rescission or put right with respect thereto.

           8.1.6. Ownership; Liquidation; etc. Except as permitted by either
                  ---------------------------
     Section 6.11 or Section 6.13:

                                      -65-
<PAGE>

           (a)     the Borrower shall cease to own, directly or indirectly, all
     the capital stock or other beneficial interests of each of the Guarantors;

           (b)     any Change of Control shall occur; or

           (c)     the Borrower, any of its Subsidiaries or any other Obligor
     shall initiate any action to dissolve, liquidate or otherwise terminate its
     existence.

           8.1.7.  Enforceability, etc. Any Credit Document shall cease for any
                   -------------------
     reason (other than the scheduled termination thereof in accordance with its
     terms) to be enforceable in accordance with its terms or in full force and
     effect; or the Borrower, any of its Subsidiaries or any other Obligor in
     respect of any Credit Document shall so assert in a judicial or similar
     proceeding; or the security interests created by this Agreement or any
     other Credit Documents shall cease to be enforceable and of the same effect
     and priority purported to be created hereby.

           8.1.8.  Judgments. A final judgment (a) which, with other outstanding
                   ---------
     final judgments against the Borrower or any of its Subsidiaries, exceeds an
     aggregate of $250,000 in excess of applicable insurance coverage shall be
     rendered against the Borrower or any of its Subsidiaries, or (b) which
     grants injunctive relief that results, or creates a material risk of
     resulting, in a Material Adverse Change and in either case if, (i) within
     60 days after entry thereof, such judgment shall not have been discharged
     or execution thereof stayed pending appeal or (ii) within 60 days after the
     expiration of any such stay, such judgment shall not have been discharged.

           8.1.9.  ERISA. Any "reportable event" (as defined in section 4043 of
                   -----
     ERISA) shall have occurred that reasonably could be expected to result in
     termination of a Material Plan or the appointment by the appropriate United
     States District Court of a trustee to administer any Material Plan or the
     imposition of a Lien in favor of a Material Plan; or any ERISA Group Person
     shall fail to pay when due amounts aggregating in excess of $100,000 which
     it shall have become liable to pay to the PBGC or to a Material Plan under
     Title IV of ERISA; or notice of intent to terminate a Material Plan shall
     be filed under Title IV of ERISA by any ERISA Group Person or
     administrator; or the PBGC shall institute proceedings under Title IV of
     ERISA to terminate or to cause a trustee to be appointed to administer any
     Material Plan or a proceeding shall be instituted by a fiduciary of any
     Material Plan against any ERISA Group Person to enforce section 515 or
     4219(c)(5) of ERISA and such proceeding shall not have been dismissed
     within 30 days thereafter; or a condition shall exist by reason of which
     the PBGC would be entitled to obtain a decree adjudicating that any
     Material Plan must be terminated.

           8.1.10. Bankruptcy, etc. The Borrower, any of its Subsidiaries or any
                   ----------------
     other Obligor shall:

                                      -66-
<PAGE>

           (a)     commence a voluntary case under the Bankruptcy Code or
     authorize, by appropriate proceedings of its board of directors or other
     governing body, the commencement of such a voluntary case;

           (b)     (i) have filed against it a petition commencing an
     involuntary case under the Bankruptcy Code that shall not have been
     dismissed within 60 days after the date on which such petition is filed, or
     (ii) file an answer or other pleading within such 60-day period admitting
     or failing to deny the material allegations of such a petition or seeking,
     consenting to or acquiescing in the relief therein provided, or (iii) have
     entered against it an order for relief in any involuntary case commenced
     under the Bankruptcy Code;

           (c)     seek relief as a debtor under any applicable law, other than
     the Bankruptcy Code, of any jurisdiction relating to the liquidation or
     reorganization of debtors or to the modification or alteration of the
     rights of creditors, or consent to or acquiesce in such relief;

           (d)     have entered against it an order by a court of competent
     jurisdiction (i) finding it to be bankrupt or insolvent, (ii) ordering or
     approving its liquidation or reorganization as a debtor or any modification
     or alteration of the rights of its creditors or (iii) assuming custody of,
     or appointing a receiver or other custodian for, all or a substantial
     portion of its property; or

           (e)     make an assignment for the benefit of, or enter into a
     composition with, its creditors, or appoint, or consent to the appointment
     of, or suffer to exist a receiver or other custodian for, all or a
     substantial portion of its property.

           8.1.11. Acquisitions.  The Borrower shall fail to comply with the
                   ------------
     requirements of Section 6.21.1(c) with respect to any Permitted
     Acquisition.

     8.2.  Certain Actions Following an Event of Default. If any one or more
           ---------------------------------------------
Events of Default shall occur and be continuing, then in each and every such
case:

           8.2.1.  Terminate Obligation to Extend Credit. The Agent on behalf of
                   -------------------------------------
     the Lenders may (and upon written request of the Required Lenders the Agent
     shall) terminate the obligations of the Lenders to make any further
     extensions of credit under the Credit Documents by furnishing notice of
     such termination to the Borrower; provided, however, that if a Bankruptcy
                                       --------  -------
     Default shall have occurred, the obligations of the Lenders to make any
     further extensions of credit under the Credit Documents shall immediately
     terminate..

           8.2.2.  Specific Performance; Exercise of Rights. The Agent on behalf
                   ----------------------------------------
     of the Lenders may (and upon written request of the Required Lenders the
     Agent shall) proceed to protect and enforce the Lenders' rights by suit in
     equity, action at law and/or other appropriate proceeding, either for
     specific performance of any covenant or condition contained in this
     Agreement or any other Credit Document or in any instrument or

                                      -67-
<PAGE>

     assignment delivered to the Lenders pursuant to this Agreement or any other
     Credit Document, or in aid of the exercise of any power granted in this
     Agreement or any other Credit Document or any such instrument or
     assignment.

           8.2.3. Acceleration. The Agent on behalf of the Lenders may (and upon
                  ------------
     written request of the Required Lenders the Agent shall) by notice in
     writing to the Borrower (a) declare all or any part of the unpaid balance
     of the Credit Obligations then outstanding to be immediately due and
     payable, and (b) require the Borrower immediately to deposit with the Agent
     in cash an amount equal to the then Letter of Credit Exposure (which cash
     shall be held and applied as provided in Section 4.5), and thereupon such
     unpaid balance or part thereof and such amount equal to the Letter of
     Credit Exposure shall become so due and payable without presentation,
     protest or further demand or notice of any kind, all of which are hereby
     expressly waived; provided, however, that if a Bankruptcy Default shall
                       --------  -------
     have occurred, the unpaid balance of the Credit Obligations shall
     automatically become immediately due and payable.

           8.2.4. Enforcement of Payment; Credit Security; Setoff. The Agent on
                  -----------------------------------------------
     behalf of the Lenders may (and upon written request of the Required Lenders
     the Agent shall) proceed to enforce payment of the Credit Obligations in
     such manner as it may elect, to cancel, or instruct other Letter of Credit
     Issuers to cancel, any outstanding Letters of Credit which permit the
     cancellation thereof and to realize upon any and all rights in the Credit
     Security. The Lenders may offset and apply toward the payment of the Credit
     Obligations (and/or toward the curing of any Event of Default) any
     Indebtedness from the Lenders to the respective Obligors, including any
     Indebtedness represented by deposits in any account maintained with the
     Lenders, regardless of the adequacy of any security for the Credit
     Obligations. The Lenders shall have no duty to determine the adequacy of
     any such security in connection with any such offset.

           8.2.5. Cumulative Remedies. To the extent not prohibited by
                  -------------------
     applicable law which cannot be waived, all of the Lenders' rights hereunder
     and under each other Credit Document shall be cumulative.

           8.2.6. Exercise of Call Right. The Company shall, upon the reasonable
                  ----------------------
     request of the Agent, exercise its rights (i) to purchase the share of
     stock of AmeriPath Kentucky, Inc. owned by James E. Dunnington, M.D.
     pursuant to Section 3 of the Shareholders' Agreement among AmeriPath
     Kentucky, Inc., James E. Dunnington, M.D. and the Company, (ii) to purchase
     the shares of stock of AmeriPath Pittsburgh, P.C. owned by Alan Levin, M.D.
     pursuant to the Shareholders Agreement among AmeriPath Pittsburgh, P.C.,
     Alan Levin, M.D. and the Company, (iii) to purchase the shares of stock of
     AmeriPath Consulting Pathology Services, P.A. owned by H. Michael Jones,
     M.D. pursuant to the Shareholders' Agreement among AmeriPath Consulting
     Pathology Services, P.A., H. Michael Jones, M.D. and the Company, (iv) to
     purchase the shares of consulting Pathologists of Pennsylvania, P.C. owned
     by Alan Levin, M.D. pursuant to the Shareholders' Agreement among
     Consulting Pathologists of Pennsylvania, P.C., Alan

                                      -68-
<PAGE>

     Levin, M.D. and the Company, (v) to purchase the shares of stock of
     AmeriPath Milwaukee, S.C. owned by Winston N. Hollister, M.D. pursuant to
     the Shareholders' Agreement among AmeriPath Milwaukee, S.C., Winston N.
     Hollister, M.D. and the Company, and (vi) to purchase the shares of stock
     of JJ Humes M.D. and Associates/AmeriPath, P.C. owned by Alan Levin, M.D.
     pursuant to the Shareholders' Agreement among JJ Humes M.D. and
     Associates/AmeriPath, P.C., Alan Levin, M.D. and the Company

     8.3. Annulment of Defaults.  Any Default or Event of Default shall be
          ---------------------
deemed not to exist or to have occurred for any purpose of the Credit Documents
if the Required Lenders or the Agent (with the consent of the Required Lenders)
shall have waived such Default or Event of Default in writing, stated in writing
that the same has been cured to such Lenders' reasonable satisfaction or entered
into an amendment to this Agreement which by its express terms cures such Event
of Default, at which time such Event of Default shall no longer be deemed to
exist or to have continued. No such action by the Lenders or the Agent shall
extend to or affect any subsequent Event of Default or impair any rights of the
Lenders upon the occurrence thereof. The making of any extension of credit
during the existence of any Default or Event of Default shall not constitute a
waiver thereof.

     8.4. Waivers.  To the extent that such waiver is not prohibited by the
          -------
provisions of applicable law that cannot be waived, each of the Borrower and the
other Obligors waives:

          (a)  all presentments, demands for performance, notices of
     nonperformance (except to the extent required by this Agreement or any
     other Credit Document), protests, notices of protest and notices of
     dishonor;

          (b)  any requirement of diligence or promptness on the part of any
     Lender in the enforcement of its rights under this Agreement, the Notes or
     any other Credit Document;

          (c)  any and all notices of every kind and description which may be
     required to be given by any statute or rule of law; and

          (d)  any defense (other than indefeasible payment in full), which it
     may now or hereafter have with respect to its liability under this
     Agreement, the Notes or any other Credit Document or with respect to the
     Credit Obligations.

9.   Guarantees.
     ----------

     9.1. Guarantees of Credit Obligations.  Each Guarantor unconditionally
          --------------------------------
jointly and severally guarantees that the Credit Obligations will be performed
and will be paid in full in immediately available funds when due and payable,
whether at the stated or accelerated maturity thereof or otherwise, this
guarantee being a guarantee of payment and not of collectability and being
absolute and in no way conditional or contingent. In the event any part of the
Credit Obligations shall not have been so paid in full when due and payable,
each Guarantor will,

                                      -69-
<PAGE>

immediately upon notice by the Agent or, without notice, immediately upon the
occurrence of a Bankruptcy Default, pay or cause to be paid to the Agent for the
account of each Lender in accordance with the Lenders' respective Aggregate
Percentage Interests in the Loan the amount of such Credit Obligations which are
then due and payable and unpaid.  The obligations of each Guarantor hereunder
shall not be affected by the invalidity, unenforceability or irrecoverability of
any of the Credit Obligations as against any other Obligor, any other guarantor
thereof or any other Person.  For purposes hereof, the Credit Obligations shall
be due and payable when and as the same shall be due and payable under the terms
of this Agreement or any other Credit Document notwithstanding the fact that the
collection or enforcement thereof may be stayed or enjoined under the Bankruptcy
Code or other applicable law.

     9.2. Continuing Obligation.  Each Guarantor acknowledges that the Lenders
          ---------------------
and the Agent have entered into this Agreement (and, to the extent that the
Lenders or the Agent may enter into any future Credit Document, will have
entered into such agreement) in reliance on this Section 9 being a continuing
irrevocable agreement, and such Guarantor agrees that its guarantee may not be
revoked in whole or in part. The obligations of the Guarantors hereunder shall
terminate when the commitment of the Lenders to extend credit under this
Agreement shall have terminated and all of the Credit Obligations have been
indefeasibly paid in full in immediately available funds and discharged;
provided, however, that:
--------  -------

          (a)  if a claim is made upon the Lenders at any time for repayment or
     recovery of any amounts or any property received by the Lenders from any
     source on account of any of the Credit Obligations and the Lenders repay or
     return any amounts or property so received (including interest thereon to
     the extent required to be paid by the Lenders) or

          (b)  if the Lenders become liable for any part of such claim by reason
     of (i) any judgment or order of any court or administrative authority
     having competent jurisdiction, or (ii) any settlement or compromise of any
     such claim,

then the Guarantors shall remain liable under this Agreement for the amounts so
repaid or property so returned or the amounts for which the Lenders become
liable (such amounts being deemed part of the Credit Obligations) to the same
extent as if such amounts or property had never been received by the Lenders,
notwithstanding any termination hereof or the cancellation of any instrument or
agreement evidencing any of the Credit Obligations.  Not later than five days
after receipt of notice from the Agent, the Guarantors shall jointly and
severally pay to the Agent an amount equal to the amount of such repayment or
return for which the Lenders have so become liable.  Payments hereunder by a
Guarantor may be required by the Agent on any number of occasions.

     9.3. Waivers with Respect to Credit Obligations.  Except to the extent
          ------------------------------------------
expressly required by this Agreement or any other Credit Document, each
Guarantor waives, to the fullest extent permitted by the provisions of
applicable law, all of the following (including all defenses, counterclaims and
other rights of any nature based upon any of the following):

                                      -70-
<PAGE>

          (a)  presentment, demand for payment and protest of nonpayment of any
     of the Credit Obligations, and notice of protest, dishonor or
     nonperformance;

          (b)  notice of acceptance of this guarantee and notice that credit has
     been extended in reliance on the Guarantor's guarantee of the Credit
     Obligations;

          (c)  notice of any Default or of any inability to enforce performance
     of the obligations of the Company or any other Person with respect to any
     Credit Document, or notice of any acceleration of maturity of any Credit
     Obligations;

          (d)  demand for performance or observance of, and any enforcement of
     any provision of, the Credit Obligations, this Agreement or any other
     Credit Document or any pursuit or exhaustion of rights or remedies with
     respect to any Credit Security or against the Company or any other Person
     in respect of the Credit Obligations or any requirement of diligence or
     promptness on the part of the Agent or the Lenders in connection with any
     of the foregoing;

          (e)  any act or omission on the part of the Agent or the Lenders which
     may impair or prejudice the rights of the Guarantor, including rights to
     obtain subrogation, exoneration, contribution, indemnification or any other
     reimbursement from the Company or any other Person, or otherwise operate as
     a deemed release or discharge;

          (f)  failure or delay to perfect or continue the perfection of any
     security interest in any Credit Security or any other action which harms or
     impairs the value of, or any failure to preserve or protect the value of,
     any Credit Security;

          (g)  any statute of limitations or any statute or rule of law which
     provides that the obligation of a surety must be neither larger in amount
     nor in other respects more burdensome than the obligation of the principal;

          (h)  any "single action" or "anti-deficiency" law which would
     otherwise prevent the Lenders from bringing any action, including any claim
     for a deficiency, against the Guarantor before or after the Agent's or the
     Lenders' commencement or completion of any foreclosure action, whether
     judicially, by exercise of power of sale or otherwise, or any other law
     which would otherwise require any election of remedies by the Agent or the
     Lenders;

          (i)  all demands and notices of every kind with respect to the
     foregoing; and

          (j)  to the extent not referred to above, all defenses (other than
     payment) which the Company may now or hereafter have to the payment of the
     Credit Obligations, together with all suretyship defenses, which could
     otherwise be asserted by such Guarantor.

                                      -71-
<PAGE>

Each Guarantor represents that it has obtained the advice of counsel as to the
extent to which suretyship and other defenses may be available to it with
respect to its obligations hereunder in the absence of the waivers contained in
this Section 9.3.

     No delay or omission on the part of the Agent or the Lenders in exercising
any right under this Agreement or any other Credit Document or under any
guarantee of the Credit Obligations or with respect to the Credit Security shall
operate as a waiver or relinquishment of such right.  No action which the Agent
or the Lenders or the Company may take or refrain from taking with respect to
the Credit Obligations, including any amendments thereto or modifications
thereof or waivers with respect thereto, shall affect the provisions of this
Agreement or the obligations of the Guarantor hereunder.  None of the Lenders'
or the Agent's rights shall at any time in any way be prejudiced or impaired by
any act or failure to act on the part of any Obligor, or by any noncompliance by
the Company with the terms, provisions and covenants of this Agreement,
regardless of any knowledge thereof which the Agent or the Lenders may have or
otherwise be charged with.

     9.4. Lenders' Power to Waive, etc.  Each Guarantor grants to the Lenders
          ----------------------------
full power in their discretion, without notice to or consent of such Guarantor,
such notice and consent being expressly waived to the fullest extent permitted
by applicable law, and without in any way affecting the liability of the
Guarantor under its guarantee hereunder:

          (a)  To waive compliance with, and any Default under, and to consent
     to any amendment to or modification or termination of any terms or
     provisions of, or to give any waiver in respect of, this Agreement, any
     other Credit Document, the Credit Security, the Credit Obligations or any
     guarantee thereof (each as from time to time in effect);

          (b)  To grant any extensions of the Credit Obligations (for any
     duration), and any other indulgence with respect thereto, and to effect any
     total or partial release (by operation of law or otherwise), discharge,
     compromise or settlement with respect to the obligations of the Obligors or
     any other Person in respect of the Credit Obligations, whether or not
     rights against the Guarantor under this Agreement are reserved in
     connection therewith;

          (c)  To take security in any form for the Credit Obligations, and to
     consent to the addition to or the substitution, exchange, release or other
     disposition of, or to deal in any other manner with, any part of any
     property contained in the Credit Security whether or not the property, if
     any, received upon the exercise of such power shall be of a character or
     value the same as or different from the character or value of any property
     disposed of, and to obtain, modify or release any present or future
     guarantees of the Credit Obligations and to proceed against any of the
     Credit Security or such guarantees in any order;

          (d)  To collect or liquidate or realize upon any of the Credit
     Obligations or the Credit Security in any manner or to refrain from
     collecting or liquidating or realizing upon any of the Credit Obligations
     or the Credit Security; and

                                      -72-
<PAGE>

          (e)  To extend credit under this Agreement, any other Credit Document
     or otherwise in such amount as the Lenders may determine, including
     increasing the amount of credit and the interest rate and fees with respect
     thereto, even though the condition of the Obligors (financial or otherwise
     on an individual or Consolidated basis) may have deteriorated since the
     date hereof.

     9.5. Information Regarding the Borrower, etc.  Each Guarantor has made such
          ---------------------------------------
investigation as it deems desirable of the risks undertaken by it in entering
into this Agreement and is fully satisfied that it understands all such risks.
Each Guarantor waives any obligation which may now or hereafter exist on the
part of the Agent or the Lenders to inform it of the risks being undertaken by
entering into this Agreement or of any changes in such risks and, from and after
the date hereof, each Guarantor undertakes to keep itself informed of such risks
and any changes therein.  Each Guarantor expressly waives any duty which may now
or hereafter exist on the part of the Agent or the Lenders to disclose to the
Guarantor any matter related to the business, operations, character, collateral,
credit, condition (financial or otherwise), income or prospects of the Borrower
or its Affiliates or their properties or management, whether now or hereafter
known by the Agent or the Lenders.  Each Guarantor represents, warrants and
agrees that it assumes sole responsibility for obtaining from the Borrower all
information concerning this Agreement and all other Credit Documents and all
other information as to the Borrower and its Affiliates or their properties or
management as such Guarantor deems necessary or desirable.

     9.6. Certain Guarantor Representations.  Each Guarantor represents that:
          ---------------------------------

          (a)  it is in its best interest and in pursuit of the purposes for
     which it was organized as an integral part of the business conducted and
     proposed to be conducted by the Borrower and its Subsidiaries, and
     reasonably necessary and convenient in connection with the conduct of the
     business conducted and proposed to be conducted by them, to induce the
     Lenders to enter into this Agreement and to extend credit to the Borrower
     by making the Guarantees contemplated by this Section 9,

          (b)  the credit available hereunder will directly or indirectly inure
     to its benefit,

          (c)  by virtue of the foregoing it is receiving at least reasonably
     equivalent value from the Lenders for its Guarantee,

          (d)  it will not be rendered insolvent as a result of entering into
     this Agreement,

          (e)  after giving effect to the transactions contemplated by this
     Agreement, it will have assets having a fair saleable value in excess of
     the amount required to pay its probable liability on its existing debts as
     they become absolute and matured,

          (f)  it has, and will have, access to adequate capital for the conduct
     of its business,

                                      -73-
<PAGE>

           (g)  it has the ability to pay its debts from time to time incurred
     in connection with its business as such debts mature, and

           (h)  it has been advised by the Agent that the Lenders are unwilling
     to enter into this Agreement unless the Guarantees contemplated by this
     Section 9 are given by it.

     9.7.  Subrogation.  Each Guarantor agrees that, until the Credit
           -----------
Obligations are paid in full, it will not exercise any right of reimbursement,
subrogation, contribution, offset or other claims against the other Obligors
arising by contract or operation of law in connection with any payment made or
required to be made by such Guarantor under this Agreement. After the payment in
full of the Credit Obligations, each Guarantor shall be entitled to exercise
against the Borrower and the other Obligors all such rights of reimbursement,
subrogation, contribution and offset, and all such other claims, to the fullest
extent permitted by law.

     9.8.  Subordination.  Each Guarantor covenants and agrees that, after the
           -------------
occurrence of an Event of Default, all Indebtedness, claims and liabilities then
or thereafter owing by the Borrower or any other Obligor to such Guarantor
whether arising hereunder or otherwise are subordinated to the prior payment in
full of the Credit Obligations and are so subordinated as a claim against such
Obligor or any of its assets, whether such claim be in the ordinary course of
business or in the event of voluntary or involuntary liquidation, dissolution,
insolvency or bankruptcy, so that no payment with respect to any such
Indebtedness, claim or liability will be made or received while any Event of
Default exists.

     9.9.  Further Assurances.  Each Guarantor will, promptly upon the request
           ------------------
of the Agent from time to time, execute, acknowledge and deliver, and file and
record, all such instruments, and take all such action, as the Agent deems
necessary or advisable to carry out the intent and purposes of this Section 9.

10.  Security.
     --------

     10.1. Credit Security.  As security for the payment and performance of the
           ---------------
Credit Obligations, each Obligor mortgages, pledges and collaterally grants and
assigns to the Agent for the benefit of the Lenders and the holders from time to
time of any Credit Obligation, and creates a security interest in favor of the
Agent for the benefit of the Lenders and such holders in, all of such Obligor's
right, title and interest in and to (but none of its obligations or liabilities
with respect to) the items and types of present and future property described in
Sections 10.1.1 through 10.1.15 (subject, however, to Section 10.1.16), whether
now owned or hereafter acquired, all of which shall be included in the term
"Credit Security":
 ---------------

           10.1.1.    Tangible Personal Property.  All goods, machinery,
                      --------------------------
     equipment, inventory and all other tangible personal property of any nature
     whatsoever, wherever located, including raw materials, work in process,
     finished parts and products, supplies, spare parts, replacement parts,
     merchandise for resale, computers, tapes, disks and computer equipment.

                                      -74-
<PAGE>

            10.1.2.    Rights to Payment of Money.  All rights to receive the
                       --------------------------
     payment of money, including accounts (as defined in the UCC) and
     receivables, rights to receive the payment of money under contracts,
     franchises, licenses, permits, subscriptions or other agreements (whether
     or not earned by performance), and rights to receive payments from any
     other source (all such rights, other than Financing Debt, being referred to
     herein as "Accounts").
                --------
            10.1.3.    Intangibles.  All of the following (to the extent not
                       -----------
     included in Section 10.1.2): (a) contracts (including the Management
     Services Agreements), franchises, licenses, permits, subscriptions and
     other agreements and all rights thereunder; (b) rights granted by others
     which permit the Obligor to sell or market items of personal property; (c)
     United States and foreign common law and statutory copyrights and rights in
     literary property and rights and licenses thereunder; (d) trade names,
     United States and foreign trademarks, service marks, any registrations
     thereof and any related good will; (e) United States and foreign patents
     and patent applications; (f) computer software, designs, models, know-how,
     trade secrets, rights in proprietary information, formulae, customer lists,
     backlog, orders, subscriptions, royalties, catalogues, sales material,
     documents, good will, inventions and processes; (g) judgments, causes in
     action and claims, whether or not inchoate, and (h) all other general
     intangibles (as defined in the UCC) and intangible property and all rights
     thereunder.

            10.1.4.    Pledged Stock.  (a) All shares of capital stock or other
                       -------------
     evidence of beneficial interest in any corporation, business trust or
     limited liability company, (b) all limited partnership interests in any
     limited partnership, (c) all general partnership interests in any general
     partnership, (d) all joint venture interests in any joint venture and (e)
     all options, warrants and similar rights to acquire such capital stock or
     such interests. All such capital stock, interests, options, warrants and
     other rights are collectively referred to as the "Pledged Stock".
                                                       -------------

            10.1.5.    Pledged Rights.  All rights to receive profits or surplus
                       --------------
     of, or other Distributions (including income, return of capital and
     liquidating distributions) from, any partnership, limited liability company
     or joint venture, including any distributions by any such Person to
     partners or joint venturers. All such rights are collectively referred to
     as the "Pledged Rights".
             --------------

            10.1.6.    Pledged Indebtedness.  All Financing Debt from time to
                       --------------------
     time owing to such Obligor from any Person (all such Financing Debt being
     referred to as the "Pledged Indebtedness").
                         --------------------

            10.1.7.    Chattel Paper, Instruments and Documents.  All chattel
                       ----------------------------------------
     paper (as defined in the UCC), non-negotiable instruments, negotiable
     instruments (as defined in the UCC) and documents (as defined in the UCC).

            10.1.8.    Leases.  All leases of personal property, whether the
                       ------
     Obligor is lessor or the lessee thereunder.

                                      -75-
<PAGE>

            10.1.9.     Deposit Accounts.  All general or special deposit
                        ----------------
     accounts, including any demand, time, savings, passbook or similar account
     maintained by the Obligor with any bank, trust company, savings and loan
     association, credit union or similar organization, and all money, cash and
     cash equivalents of the Obligor, whether or not deposited in any such
     deposit account.

            10.1.10.    Collateral.  All collateral granted by third party
                        ----------
     obligors to, or held by, the Obligor with respect to the Accounts, Pledged
     Securities, chattel paper, instruments, leases and other items of Credit
     Security.

            10.1.11.    Books and Records.  All books and records, including
                        -----------------
     books of account and ledgers of every kind and nature, all electronically
     recorded data (including all computer programs, disks, tapes, electronic
     data processing media and software used in connection with maintaining the
     Obligor's books and records), all files and correspondence and all
     receptacles and containers for the foregoing.

            10.1.12.    Insurance.  All insurance policies which insure against
                        ---------
     any loss or damage to any other Credit Security and any key executive life
     insurance policies.

            10.1.13.    Investment Property. All of the following (to the extent
                        -------------------
     not included in Sections 10.1.1 through 10.1.12): (i) securities, whether
     certificated or uncertificated; (ii) security entitlements; (iii)
     securities accounts; (iv) commodities contracts; and (v) commodities
     accounts.

            10.1.14.    All Other Property.  All other property, assets and
                        ------------------
     items of value of every kind and nature, tangible, or intangible, absolute
     or contingent, legal or equitable, including the rights of any Obligors
     under the Material Agreements set forth in Exhibit 7.2.2.

            10.1.15.    Proceeds and Products.  All proceeds, including
                        ---------------------
     insurance proceeds, and products of the items of Credit Security described
     or referred to in Sections 10.1.1 through 10.1.14 and, to the extent not
     included in the foregoing, all Distributions with respect to the Pledged
     Securities.

            10.1.16.    Excluded Property.  Notwithstanding Sections 10.1.1
                        -----------------
     through 10.1.15, the payment and performance of the Credit Obligations
     shall not be secured by:

            (a)  any rights arising under, and any property, tangible or
     intangible, acquired under, any agreement which validly prohibits the
     creation by such Obligor of a security interest in such rights or property;

            (b)  any rights or property to the extent that any valid and
     enforceable law or regulation applicable to such rights or property
     prohibits the creation of a security interest therein;

                                      -76-
<PAGE>

            (c)  more than 66% of the outstanding stock or other equity in any
     foreign Subsidiary; or

            (d)  the items described in Section 10.2 (but only in the event and
     to the extent the Agent has not specified that such items be included in
     the Credit Security pursuant thereto).

     In addition, in the event an Obligor disposes of assets to third parties in
a transaction permitted by Section 6.11, such assets, but not the proceeds or
products thereof, shall automatically be released from the Lien of the Credit
Security.

     10.2.  Additional Credit Security.  As additional Credit Security, each
            --------------------------
Obligor covenants that it will mortgage, pledge and collaterally grant and
assign to the Agent for the benefit of the Lenders and the holders from time to
time of any Credit Obligation, and will create a security interest in favor of
the Agent for the benefit of the Lenders and such holders in, all of its right,
title and interest in and to (but none of its obligations with respect to) such
of the following present or future items as the Agent may from time to time
specify by notice to the Borrower, whether now owned or hereafter acquired, and
the proceeds and products thereof, except to the extent consisting of rights or
property of the types referred to in Section 10.1.16(a) through (d), subject
only to Liens permitted by Section 10.3.4, all of which shall thereupon be
included in the term "Credit Security" .
                      ---------------

            10.2.1. Real Property.  All real property and immovable property
                    -------------
     and fixtures, leasehold interests and easements, owned by any Obligor,
     wherever located, together with any and all estates and interests of the
     Obligor therein, including lands, buildings, stores, manufacturing
     facilities and other structures erected on such property, fixed plant,
     fixed equipment and all permits, rights, licenses, benefits and other
     interests of any kind or nature whatsoever in respect of such real and
     immovable property.

            10.2.2. Motor Vehicles and Aircraft.  All motor vehicles and
                    ---------------------------
     aircraft.

     10.3.   Representations, Warranties and Covenants with Respect to
             ---------------------------------------------------------
Credit Security.  Each Obligor represents, warrants and covenants that:
---------------

            10.3.1. Pledged Stock.  All shares of capital stock, limited
                    -------------
     partnership interests and similar securities included in the Pledged Stock
     are and shall be at all times duly authorized, validly issued, fully paid
     and (in the case of capital stock and limited partnership interests)
     nonassessable. Each Obligor will deliver to the Agent certificates
     representing the Pledged Stock, registered, if the Agent so requests, in
     the name of the Agent or its nominee, as pledgee, or accompanied by a stock
     transfer power executed in blank and, if the Agent so requests, with the
     signature guaranteed, all in form and manner satisfactory to the Agent.
     Pledged Stock that is not evidenced by a certificate will be registered in
     the Agent's name as pledgee on the issuer's records, all in form and
     substance satisfactory to the Agent. The Agent may at any time following
     and during the continuation of the occurrence of an Event of Default (but
     shall not be obligated to)

                                      -77-
<PAGE>

     transfer into its name or the name of its nominee, as pledgee, any Pledged
     Securities. In the event the Pledged Stock includes any Margin Stock, the
     Obligors will furnish to the Lenders Federal Reserve Form U-1 and take such
     other action as the Agent may request to ensure compliance with applicable
     laws.

          10.3.2.    Accounts and Pledged Indebtedness.  All Accounts and
                     ---------------------------------
     Pledged Indebtedness owed by any Affiliate of the Obligors shall be on open
     account and shall not be evidenced by any note or other instrument;
     provided, however, that all Pledged Indebtedness owed by any Affiliate of
     --------  -------
     any Obligor shall, if the Agent requests, be evidenced by a promissory
     note, which note shall be delivered to the Agent after having been endorsed
     in blank. Each Obligor will, immediately upon the receipt thereof, deliver
     to the Agent any promissory note or similar instrument representing any
     Pledged Indebtedness, after having endorsed such promissory note or
     instrument in blank.

          10.3.3.    No Liens or Restrictions on Transfer or Change of Control.
                     ---------------------------------------------------------
     All Credit Security shall be free and clear of any Liens and restrictions
     on the transfer thereof, including contractual provisions which prohibit
     the assignment of rights under contracts, except for Liens permitted by
     Section 6.8 and except for restrictions on transfer under the Securities
     Act and under applicable state securities laws. Without limiting the
     generality of the foregoing, each Obligor will exclude from contracts to
     which it becomes a party after the date hereof provisions that would
     prevent such Obligor from creating a security interest in such contract or
     any property acquired thereunder as contemplated hereby. None of the
     Pledged Stock is subject to any option to purchase or similar rights of any
     Person. Except with the written consent of the Agent, no Obligor is, and
     none of them will be, party to or bound by any agreement, instrument, deed
     or lease that restricts the change of control or ownership, or the creation
     of a security interest in the ownership, of the Company or any of its
     Subsidiaries.

          10.3.4.    Location of Credit Security.  Each Obligor shall at all
                     ---------------------------
     times keep its records concerning the Accounts at its chief executive
     office and principal place of business, which office and place of business
     shall be set forth in Exhibit 7.1, or, so long as such Obligor shall have
     taken all steps reasonably necessary to perfect the Lenders' security
     interest in the Credit Security with respect to such new address, at such
     other address as such Obligor may specify by notice actually received by
     the Agent not less than 10 Banking Days prior to such change of address. No
     Obligor shall at any time keep tangible personal property of the type
     referred to in Section 10.1.1 in any jurisdiction other than the
     jurisdictions specified in Exhibit 7.1, or, so long as such Obligor shall
     have taken all steps reasonably necessary to perfect the Lenders' security
     interest in the Credit Security with respect to such other jurisdiction,
     other jurisdictions as such Obligor may specify by notice actually received
     by the Agent not less than 10 days prior to moving such tangible personal
     property into such other jurisdiction.

          10.3.5.    Trade Names.  No Obligor will adopt or do business under
                     -----------
     any name other than its name or names designated in Exhibit 7.1 or any
     other name specified by

                                      -78-
<PAGE>

     notice actually received by the Agent not less than 10 days prior to the
     conduct of business under such additional name. Since its incorporation, no
     Obligor has changed its corporate name or adopted or conducted business
     under any trade name other than a name specified on Exhibit 7.1.

          10.3.6.    Insurance.  Each insurance policy included in, or insuring
                     ---------
     against loss or damage to, the Credit Security shall name the Agent as
     additional insured party or as loss payee. No such insurance policy shall
     be cancelable or subject to termination or reduction in amount or scope of
     coverage until after at least 30 days' prior written notice from the
     insurer to the Agent. At least 10 days prior to the expiration of any such
     insurance policy for any reason, each Obligor shall furnish the Agent with
     a renewal or replacement policy and evidence of payment of the premiums
     therefor when due. Each Obligor grants to the Agent full power and
     authority as its attorney-in-fact, effective upon notice to such Obligor
     after the occurrence of an Event of Default to obtain, cancel, transfer,
     adjust and settle any such insurance policy and to endorse any drafts
     thereon. Any amounts that the Agent receives under any such policy
     (including return of unearned premiums) insuring against loss or damage to
     the Credit Security prior to the occurrence of an Event of Default shall be
     delivered to the Obligors for the replacement, restoration and maintenance
     of the Credit Security. Any such amounts that the Agent receives after the
     occurrence of an Event of Default shall, at the Agent's option, be applied
     to payment of the Credit Obligations or to the replacement, restoration and
     maintenance of the Credit Security. If any Obligor fails to provide
     insurance as required by this Agreement, the Agent may, at its option,
     purchase such insurance, and such Obligor will on demand pay to the Agent
     the amount of any payments made by the Agent or the Lenders for such
     purpose, together with interest on the amounts so disbursed from five
     Banking Days after the date demanded until payment in full thereof at the
     Overdue Reimbursement Rate.

          10.3.7.    Modifications to Credit Security.  Except with the
                     --------------------------------
     prior written consent of the Required Lenders, no Obligor shall amend or
     modify, or waive any of its rights under or with respect to, any material
     Accounts, general intangibles, Pledged Securities or leases if the effect
     of such amendment, modification or waiver would be to reduce the amount of
     any such items or to extend the time of payment thereof, to waive any
     default by any other party thereto, or to waive or impair any remedies of
     the Obligors or the Lenders under or with respect to any such Accounts,
     general intangibles, Pledged Securities or leases, in each case other than
     consistent with past practice in the ordinary course of business and on an
     arm's-length basis. Each Obligor will promptly give the Agent written
     notice of any request by any Person for any material credit or adjustment
     with respect to any Account, general intangible, Pledged Securities or
     leases.

          10.3.8.    Delivery of Documents.  At the Agent's request, each
                     ---------------------
     Obligor shall deliver to the Agent, promptly upon such Obligor's receipt
     thereof, copies of any agreements, instruments, documents or invoices
     comprising or relating to the Credit Security. Pending such request, such
     Obligor shall keep such items at its chief executive office and principal
     place of business (as specified pursuant to Section 10.3.5).

                                      -79-
<PAGE>

            10.3.9.    Perfection of Credit Security.  Upon the Agent's request
                       -----------------------------
     from time to time, the Obligors will execute and deliver, and file and
     record in the proper filing and recording places, all such instruments,
     including financing statements, collateral assignments of copyrights,
     trademarks and patents, mortgages or deeds of trust, and notations on
     certificates of title and will take all such other action, as the Agent
     deems advisable for confirming to it the Credit Security or to carry out
     any other purposes of this Agreement or any other Credit Document.

     10.4.  Administration of Credit Security.  The Credit Security shall be
            ---------------------------------
administered as follows, and if an Event of Default shall have occurred,
Section 10.5 shall also apply.

            10.4.1.    Use of Credit Security.  Until the Agent provides written
                       ----------------------
     notice to the contrary, each Obligor may use, commingle and dispose of any
     part of the Credit Security in the ordinary course of its business, all
     subject to Section 6.11.

            10.4.2.    Deposits; Accounts.
                       ------------------
            (a)  Unless the Agent shall otherwise consent in writing, which
     consent shall not be unreasonably withheld, each Obligor shall keep all its
     bank and deposit accounts only with the Agent, other Lenders, financial
     institutions designated on Exhibit 10.4.2 or any financial institution
                                --------------
     approved by the Agent.

            (b)  To the extent specified by prior written notice from the Agent,
     whether prior to or after the occurrence of an Event of Default, all sums
     collected or received and all property recovered or possessed by any
     Obligor in connection with any Credit Security shall be received and held
     by such Obligor in trust for and on the Lenders' behalf, shall be
     segregated from the assets and funds of such Obligor, and shall be
     delivered to the Agent for the benefit of the Lenders.

            (c)  In addition, the Obligors shall direct that all Accounts
     payable by Medicare or Medicaid and all Accounts payable in an amount
     greater than $50 be paid directly into a locked box account maintained with
     any financial institution designated on Exhibit 10.4.2 or such other
     financial institution as approved by the Agent (which, in the event such
     financial institution is not a Lender, must be party to an Assignment
     Agreement in form and substance satisfactory to the Agent).

            10.4.3.   Pledged Securities.
                      ------------------
            (a)  Distributions.
                 -------------
                 (i)  Until an Event of Default shall occur, and thereafter once
          such Event of Default has ceased to exist, the respective Obligors
          shall be entitled, to the extent permitted by the Credit Documents, to
          receive all Distributions on or with respect to the Pledged Securities
          (other than Distributions constituting additional Pledged Securities).
          All Distributions constituting additional Pledged

                                      -80-
<PAGE>

            Securities will be retained by the Agent (or if received by any
            Obligor shall be held by such Person in trust and shall be
            immediately delivered by such Person to the Agent in the original
            form received, endorsed in blank) and held by the Agent as part of
            the Credit Security.

                   (ii) If an Event of Default shall have occurred and be
            continuing, all Distributions on or with respect to the Pledged
            Securities shall be retained by the Agent (or if received by any
            Obligor shall be held by such Person in trust and shall be
            immediately delivered by it to the Agent in the original form
            received, endorsed in blank) and held by the Agent as part of the
            Credit Security or applied by the Agent to the payment of the Credit
            Obligations in accordance with Section 10.5.6.

            (b)  Voting.
                 ------

                 (i)  Until an Event of Default shall occur, the respective
            Obligors shall be entitled to vote or consent with respect to the
            Pledged Securities in any manner not inconsistent with the terms of
            any Credit Document, and the Agent will, if so requested, execute
            appropriate revocable proxies therefor.

                 (ii) If an Event of Default shall have occurred, if and to the
            extent that the Agent shall so notify in writing the Obligor
            pledging the Pledged Securities in question, only the Agent shall be
            entitled to vote or consent or take any other action with respect to
            the Pledged Securities (and any Obligor will, if so requested,
            execute or cause to be executed appropriate proxies therefor).

     10.5.  Right to Realize upon Credit Security.  Except to the extent
            -------------------------------------
prohibited by applicable law that cannot be waived, this Section 10.5 shall
govern the Lenders' right to realize upon the Credit Security if any Event of
Default shall have occurred and be continuing. The provisions of this Section
10.5 are in addition to any rights and remedies available at law or in equity
and in addition to the provisions of any other Credit Document. In the case of a
conflict between this Section 10.5 and any other Credit Document, this Section
10.5 shall govern. If any Event of Default shall have occurred and be
continuing:

            10.5.1.    Assembly of Credit Security; Receiver.  Each of the
                       -------------------------------------
Obligors shall, upon the Agent's request, assemble the Credit Security and
otherwise make it available to the Agent. The Agent may have a receiver
appointed for all or any portion of the Obligor's assets or business which
constitutes the Credit Security in order to manage, protect, preserve, sell and
otherwise dispose of all or any portion of the Credit Security in accordance
with the terms of the Credit Documents, to continue the operations of the
Obligors and to collect all revenues and profits therefrom to be applied to the
payment of the Credit Obligations, including the compensation and expenses of
such receiver.

            10.5.2.    General Authority.  To the extent specified in written
                       -----------------
     notice from the Agent to the Obligor in question, each Obligor grants the
     Agent full and exclusive power

                                      -81-
<PAGE>

     and authority, subject to the other terms hereof and applicable law, to
     take any of the following actions (for the sole benefit of the Agent on
     behalf of the Lenders and the holders from time to time of any Credit
     Obligations, but at the Obligor's expense):

          (a)  To ask for, demand, take, collect, sue for and receive all
     payments in respect of any Accounts, general intangibles, Pledged
     Securities or leases which the Obligor could otherwise ask for, demand,
     take, collect, sue for and receive for its own use.

          (b)  To extend the time of payment of any Accounts, general
     intangibles, Pledged Securities or leases and to make any allowance or
     other adjustment with respect thereto.

          (c)  To settle, compromise, prosecute or defend any action or
     proceeding with respect to any Accounts, general intangibles, Pledged
     Securities or leases and to enforce all rights and remedies thereunder
     which the Obligor could otherwise enforce.

          (d)  To enforce the payment of any Accounts, general intangibles,
     Pledged Securities or leases, either in the name of the Obligor or in its
     own name, and to endorse the name of the Obligor on all checks, drafts,
     money orders and other instruments tendered to or received in payment of
     any Credit Security.

          (e)  To notify the third party payor with respect to any Accounts,
     general intangibles, Pledged Securities or leases of the existence of the
     security interest created hereby and to cause all payments in respect
     thereof thereafter to be made directly to the Agent; provided, however,
                                                          --------  -------
     that whether or not the Agent shall have so notified such payor, the
     Obligors will at their expense render all reasonable assistance to the
     Agent in collecting such items and in enforcing claims thereon.

          (f)  To sell, transfer, assign or otherwise deal in or with any Credit
     Security or the proceeds thereof, as fully as any Obligor otherwise could
     do.

          10.5.3.    Marshaling, etc.  Neither the Agent nor the Lenders shall
                     ---------------
     be required to make any demand upon, or pursue or exhaust any of their
     rights or remedies against, any Obligor or any other guarantor, pledgor or
     any other Person with respect to the payment of the Credit Obligations or
     to pursue or exhaust any of their rights or remedies with respect to any
     collateral therefor or any direct or indirect guarantee thereof. Neither
     the Agent nor the Lenders shall be required to marshal the Credit Security
     or any guarantee of the Credit Obligations or to resort to the Credit
     Security or any such guarantee in any particular order, and all of its and
     their rights hereunder or under any other Credit Document shall be
     cumulative. To the extent it may lawfully do so, each of the Obligors
     absolutely and irrevocably waives and relinquishes the benefit and
     advantage of, and covenants not to assert against the Agent or the Lenders,
     any valuation, stay, appraisement, extension, redemption or similar laws
     now or hereafter existing which, but for this provision, might be
     applicable to the sale of any Credit Security made under the

                                      -82-
<PAGE>

     judgment, order or decree of any court, or privately under the power of
     sale conferred by this Agreement, or otherwise. Without limiting the
     generality of the foregoing, each of the Obligors (a) agrees that it will
     not invoke or utilize any law which might prevent, cause a delay in or
     otherwise impede the enforcement of the rights of the Agent or any Lender
     in the Credit Security, (b) waives all such laws, and (c) agrees that it
     will not invoke or raise as a defense to any enforcement by the Agent or
     any Lender of any rights and remedies relating to the Credit Security or
     the Credit Obligations any legal or contractual requirement with which the
     Agent or any Lender may have in good faith failed to comply. In addition,
     each of the Obligors waives any right to prior notice (except to the extent
     expressly required by this Agreement) or judicial hearing in connection
     with foreclosure on or disposition of any Credit Security, including any
     such right which such Obligor would otherwise have under the Constitution
     of the United States of America, any state or territory thereof or any
     other jurisdiction.

          10.5.4.    Sales of Credit Security.  All or any part of the Credit
                     ------------------------
     Security may be sold for cash or other value in any number of lots at
     public or private sale, demand, advertisement or notice; provided, however,
                                                              --------  -------
     that unless the Credit Security to be sold threatens to decline speedily in
     value or is of a type customarily sold on a recognized market, the Agent
     shall give the Obligor granting the security interest in such Credit
     Security 10 days' prior written notice of the time and place of any public
     sale, or the time after which a private sale may be made, which notice each
     of the Obligors and the Lenders hereby agrees to be reasonable. At any sale
     or sales of Credit Security, any Lender or any of its respective officers
     acting on its behalf, or such Lender's assigns, may bid for and purchase
     all or any part of the property and rights so sold, may use all or any
     portion of the Credit Obligations owed to such Lender as payment for the
     property or rights so purchased, and upon compliance with the terms of such
     sale may hold and dispose of such property and rights without further
     accountability to the respective Obligor, except for the proceeds of such
     sale or sales pursuant to Section 10.5.6. The Obligors acknowledge that any
     such sale will be made by the Agent on an "as is" basis with disclaimers of
     all warranties, whether express or implied. The respective Obligors will
     execute and deliver or cause to be executed and delivered such instruments,
     documents, assignments, waivers, certificates and affidavits, will supply
     or cause to be supplied such further information and will take such further
     action as the Agent shall request in connection with any such sale.

          10.5.5.    Sale without Registration.  If, at any time when the Agent
                     -------------------------
     shall determine to exercise its rights hereunder to sell all or part of the
     securities included in the Credit Security, the securities in question
     shall not be effectively registered under the Securities Act (or other
     applicable law), the Agent may, in its sole discretion, sell such
     securities by private or other sale not requiring such registration in such
     manner and in such circumstances as the Agent may deem necessary or
     advisable in order that such sale may be effected in accordance with
     applicable securities laws without such registration and the related
     delays, uncertainty and expense. Without limiting the generality of the
     foregoing, in any event the Agent may, in its sole discretion, (a) approach
     and negotiate

                                      -83-
<PAGE>

     with a single purchaser or one or more possible purchasers to effect such
     sale, (b) restrict such sale to one or more purchasers each of whom will
     represent and agree that such purchaser is purchasing for its own account,
     for investment and not with a view to the distribution or sale of such
     securities and (c) cause to be placed on certificates representing the
     securities in question a legend to the effect that such securities have not
     been registered under the Securities Act (or other applicable law) and may
     not be disposed of in violation of the provisions thereof. Each of the
     Obligors agrees that such manner of disposition is commercially reasonable,
     that it will upon the Agent's request give any such purchaser access to
     such information regarding the issuer of the securities in question as the
     Agent may reasonably request and that the Agent and the Lenders shall not
     incur any responsibility for selling all or part of the securities included
     in the Credit Security at any private or other sale not requiring such
     registration, notwithstanding the possibility that a substantially higher
     price might be realized if the sale were deferred until after registration
     under the Securities Act (or other applicable law) or until made in
     compliance with certain other rules or exemptions from the registration
     provisions under the Securities Act (or other applicable law). Each of the
     Obligors acknowledges that no adequate remedy at law exists for breach by
     it of this Section 10.5.5 and that such breach would not be adequately
     compensable in damages and therefore agrees that this Section 10.5.5 may be
     specifically enforced.

            10.5.6.    Application of Proceeds.  The proceeds of all sales and
                       -----------------------
     collections in respect of any Credit Security or other assets of any
     Obligor, all funds collected from the Obligors and any cash contained in
     the Credit Security, the application of which is not otherwise specifically
     provided for herein, shall be applied as follows:

            First, to the payment of the costs and expenses of such sales and
     collections, the reasonable expenses of the Agent and the reasonable fees
     and expenses of its special counsel;

            Second, any surplus then remaining to the payment of the Credit
     Obligations in such order and manner as the Agent may in its sole
     discretion determine; provided, however, that any such payment of Credit
                           --------  -------
     Obligations owed to all Lenders shall be pro rata in accordance with the
     respective Aggregate Percentage Interests of the Lenders in the Loan;

            Third, any surplus then remaining shall be paid to the Obligors,
     subject, however, to the rights of the holder of any then existing Lien of
     which the Agent has actual notice.

     10.6.  Custody of Credit Security.  Except as provided by applicable law
            --------------------------
that cannot be waived, the Agent will have no duty as to the custody and
protection of the Credit Security, the collection of any part thereof or of any
income thereon or the preservation or exercise of any rights pertaining thereto,
including rights against prior parties, except for the use of reasonable care in
the custody and physical preservation of any Credit Security in its possession.
The Lenders will not be liable or responsible for any loss or damage to any
Credit Security, or for any

                                      -84-
<PAGE>

diminution in the value thereof, by reason of the act or omission of any agent
selected by the Agent acting in good faith.

11.  Expenses; Indemnity.
     -------------------

     11.1.  Expenses.  Whether or not the transactions contemplated hereby shall
            --------
be consummated, the Borrower will pay:

            (a)  all reasonable expenses of the Agent (including the out-of-
     pocket expenses related to forming the group of Lenders and reasonable fees
     and disbursements of the counsel to the Agent) in connection with the
     preparation and duplication of this Agreement, each other Credit Document,
     examinations by, and reports of, the Agent's commercial financial
     examiners, environmental surveys, the transactions contemplated hereby and
     thereby and amendments, waivers, consents and other operations hereunder
     and thereunder;

            (b)  all recording and filing fees and transfer and documentary
     stamp and similar taxes at any time payable in respect of this Agreement,
     any other Credit Document, any Credit Security or the incurrence of the
     Credit Obligations; and

            (c)  to the extent not prohibited by applicable law that cannot be
     waived, after the occurrence and during the continuance of any Default or
     Event of Default, all other reasonable expenses incurred by the Lenders or
     the holder of any Credit Obligation in connection with the enforcement of
     any rights hereunder or under any other Credit Document, including costs of
     collection and reasonable attorneys' fees (including a reasonable allowance
     for the hourly cost of attorneys employed by the Lenders on a salaried
     basis) and expenses.

     11.2.  General Indemnity.  The Borrower shall indemnify the Lenders and the
            -----------------
Agent and hold them harmless from any liability, loss or damage resulting from
the violation by the Company of Section 2.3. In addition, the Borrower shall
indemnify each Lender, the Agent, each of the Lenders' or the Agent's directors,
officers and employees, and each Person, if any, who controls any Lender or the
Agent (each Lender, the Agent and each of such directors, officers, employees
and control Persons is referred to as an "Indemnified Party") and hold each of
                                          -----------------
them harmless from and against any and all claims, damages, liabilities and
reasonable expenses (including reasonable fees and disbursements of counsel with
whom any Indemnified Party may consult in connection therewith and all
reasonable expenses of litigation or preparation therefor) which any Indemnified
Party may incur or which may be asserted against any Indemnified Party in
connection with (a) the Indemnified Party's compliance with or contest of any
subpoena or other process issued against it in any proceeding involving any of
the Obligors or their Affiliates, (b) any litigation or investigation involving
the Obligors or their Affiliates, or any officer, director or employee thereof,
(c) the existence or exercise of any security rights with respect to the Credit
Security in accordance with the Credit Documents, (d) this Agreement, any other
Credit Document or any transaction contemplated hereby or thereby or (e) the use
of or proposed use of proceeds from this Credit Agreement; provided, however,
                                                           -------- --------
that

                                      -85-
<PAGE>

the foregoing indemnity shall not apply to (i) to the extent such loss resulted
from the gross negligence or willful misconduct of the Indemnified Party; or
(ii) to litigation commenced by the Borrower or any Obligor against the Lenders
or the Agent which seeks enforcement of any of the rights of the Borrower or
such Obligor hereunder or under any other Credit Document and is determined
adversely to the Lenders or the Agent in a final nonappealable judgment or to
the extent such claims, damages, liabilities and expenses result from a Lender's
or the Agent's gross negligence or willful misconduct.

     11.3.  Indemnity With Respect to Letters of Credit.  The Borrower shall
            -------------------------------------------
indemnify each Letter of Credit Issuer and its correspondents and hold each of
them harmless from and against any and all claims, losses, liabilities, damages
and reasonable expenses (including reasonable attorneys' fees) arising from or
in connection with any Letter of Credit, including any such claim, loss,
liability, damage or expense arising out of any transfer, sale, delivery,
surrender or endorsement of any invoice, bill of lading, warehouse receipt or
other document at any time held by the Agent, any other Letter of Credit Issuer
or held for their respective accounts by any of their correspondents, in
connection with any Letter of Credit, except to the extent such claims, losses,
liabilities, damages and expenses result from gross negligence or willful
misconduct on the part of the Agent or any other Letter of Credit Issuer.

12.  Operations; Agent.
     -----------------

     12.1.  Interests in Credits.  The Percentage Interest of each Lender in the
            --------------------
Loan, and the related Commitments, shall be computed based on the maximum
principal amount for each Lender as set forth on Exhibit 12.1.  Upon the
                                                 ------------
consummation of any assignment pursuant to Section 13.1 or 13.3 or the addition
of any new Lender pursuant to Section 12.6(a), the Agent shall modify Exhibit
12.1 to reflect such assignment or addition.

     12.2.  Agent's Authority to Act, etc.  Each of the Lenders appoints and
            ------------------------------
authorizes Fleet National Bank to act for the Lenders as the Lenders' Agent in
connection with the transactions contemplated by this Agreement and the other
Credit Documents on the terms set forth herein.  In acting hereunder, the Agent
is acting for the account of Fleet National Bank to the extent of its Aggregate
Percentage Interest in the Loan and for the account of each other Lender to the
extent of the Lenders' respective Aggregate Percentage Interests in the Loan,
and all action in connection with the enforcement of, or the exercise of any
remedies (other than the Lenders' rights of set-off as provided in Section 8.2.4
or in any Credit Document) in respect of the Credit Obligations and Credit
Documents shall be taken by the Agent.

     12.3.  Borrower to Pay Agent, etc. The Borrower and each Guarantor shall be
            ---------------------------
fully protected in making all payments in respect of the Credit Obligations to
the Agent, in relying upon consents, modifications and amendments executed by
the Agent purportedly on the Lenders' behalf, and in dealing with the Agent as
herein provided. The Agent may charge the account of the Borrower, on the dates
when the amounts thereof become due and payable, with the amounts of the
principal of and interest on the Loan, any amounts paid by the Letter of Credit

                                      -86-
<PAGE>

Issuers to third parties under Letters of Credit or drafts presented thereunder,
commitment fees, Letter of Credit fees and all other fees and amounts owing
under any Credit Document.

     12.4.  Lender Operations for Advances, Letters of Credit, etc.
            -------------------------------------------------------

            12.4.1.  Advances. On each Closing Date, each Lender shall advance
                     --------
     to the Agent in immediately available funds such Lender's Percentage
     Interest in the portion of the Loan advanced on such Closing Date prior to
     12:00 noon (Boston time). If such funds are not received at such time, but
     all applicable conditions set forth in Section 5 have been satisfied, each
     Lender authorizes and requests the Agent to advance for the Lender's
     account, pursuant to the terms hereof, the Lender's respective Percentage
     Interest in such portion of the Loan and agrees to reimburse the Agent in
     immediately available funds for the amount thereof prior to 3:00 p.m.
     (Boston time) on the day any portion of the Loan is advanced hereunder;
     provided, however, that the Agent is not authorized to make any such
     --------  -------
     advance for the account of any Lender who has previously notified the Agent
     in writing that such Lender will not be performing its obligations to make
     further advances hereunder; and provided, further, that the Agent shall be
                                     --------  -------
     under no obligation to make any such advance.

            12.4.2.  Letters of Credit. Each of the Lenders authorizes and
                     -----------------
     requests each Letter of Credit Issuer to issue the Letters of Credit
     provided for in Section 2.2 and to grant each Lender a participation in
     each of such Letters of Credit in an amount equal to its Percentage
     Interest in the amount of each such Letter of Credit. Promptly upon the
     request of the Letter of Credit Issuer, each Lender shall reimburse the
     Letter of Credit Issuer in immediately available funds for such Lender's
     Percentage Interest in the amount of all obligations to third parties
     incurred by the Letter of Credit Issuer in respect of each Letter of Credit
     and each draft accepted under a Letter of Credit to the extent not
     reimbursed by the Borrower. The Letter of Credit Issuer will notify each
     Lender of the issuance of any Letter of Credit, the amount and date of
     payment of any draft drawn or accepted under a Letter of Credit and whether
     in connection with the payment of any such draft the amount thereof was
     added to the Revolving Loan or was reimbursed by the Borrower.

            12.4.3.  Agent to Allocate Payments, etc. All payments of principal
                     --------------------------------
     and interest in respect of the extensions of credit made pursuant to this
     Agreement, reimbursement of amounts paid by any Letter of Credit Issuer to
     third parties under Letters of Credit or drafts presented thereunder,
     commitment fees, Letter of Credit fees and other fees under this Agreement
     shall, as a matter of convenience, be made by the Borrower and the
     Guarantors to the Agent in immediately available funds. The share of each
     Lender shall be credited to such Lender by the Agent in immediately
     available funds in such manner that the principal amount of the Credit
     Obligations to be paid shall be paid proportionately in accordance with the
     Lenders' respective Percentage Interests in such Credit Obligations or
     portion of the Loan to which such Credit Obligation relates, except as
     otherwise provided in this Agreement. Under no circumstances shall any
     Lender be

                                      -87-
<PAGE>

     required to produce or present its Notes as evidence of its interests in
     the Credit Obligations in any action or proceeding relating to the Credit
     Obligations.

            12.4.4.  Delinquent Lenders; Nonperforming Lenders. In the event
                     -----------------------------------------
     that any Lender fails to reimburse the Agent pursuant to Section 12.4.1 for
     the Percentage Interest of such lender (a "Delinquent Lender") in any
                                                -----------------
     credit advanced by the Agent pursuant hereto, overdue amounts (the
     "Delinquent Payment") due from the Delinquent Lender to the Agent shall
      ------------------
     bear interest, payable by the Delinquent Lender on demand, at a per annum
     rate equal to (a) the Federal Funds Rate for the first three days overdue
     and (b) the sum of 2% plus the Federal Funds Rate for any longer period.
                           ----
     Such interest shall be payable to the Agent for its own account for the
     period commencing on the date of the Delinquent Payment and ending on the
     date the Delinquent Lender reimburses the Agent on account of the
     Delinquent Payment (to the extent not paid by the Company as provided
     below) and the accrued interest thereon (the "Delinquency Period"), whether
                                                   ------------------
     pursuant to the assignments referred to below or otherwise. Upon notice by
     the Agent, the Borrower will pay to the Agent the principal (but not the
     interest) portion of the Delinquent Payment. During the Delinquency Period,
     in order to make reimbursements for the Delinquent Payment and accrued
     interest thereon, the Delinquent Lender shall be deemed to have assigned to
     the Agent all interest, commitment fees and other payments made by the
     Borrower under Section 3 that would have thereafter otherwise been payable
     under the Credit Documents to the Delinquent Lender. During any other
     period in which any Lender is not performing its obligations to extend
     credit under Section 2 (a "Nonperforming Lender"), the Nonperforming Lender
                                ---------------------
     shall be deemed to have assigned to each Lender that is not a Nonperforming
     Lender (a "Performing Lender") all principal and other payments made by the
                -----------------
     Borrower under Section 4 that would have thereafter otherwise been payable
     under the Credit Documents to the Nonperforming Lender. The Agent shall
     credit a portion of such payments to each Performing Lender in an amount
     equal to the Percentage Interest of such Performing Lender in the portion
     of the Loan with respect to which there is such nonperformance, in an
     amount equal to such Percentage Interest of such Performing Lender divided
     by one minus the Percentage Interest of the Nonperforming Lender in the
            -----
     portion of the Loan with respect to which there is such nonperformance,
     until the respective portions of such portion of the Loan owed to all the
     Lenders are the same as the Percentage Interests of the Lenders in such
     portion of the Loan immediately prior to the failure of the Nonperforming
     Lender to perform its obligations under Section 2. The foregoing provisions
     shall be in addition to any other remedies the Agent, the Performing
     Lenders or the Borrower may have under law or equity against the Delinquent
     Lender as a result of the Delinquent Payment or against the Nonperforming
     Lender as a result of its failure to perform its obligations under Section
     2.

     12.5.  Sharing of Payments, etc. Each Lender agrees that (a) if by
            -------------------------
exercising any right of set-off or counterclaim or otherwise, it shall receive
payment of (i) a proportion of the aggregate amount due with respect to its
Percentage Interest in a portion of the Loan and Letter of Credit Exposure which
is greater than (ii) the proportion received by any other Lender in

                                      -88-
<PAGE>

respect of the aggregate amount due with respect to such other Lender's
Percentage Interest in such portion of the Loan and Letter of Credit Exposure
and (b) if such inequality shall continue for more than 10 days, the Lender
receiving such proportionately greater payment shall purchase participations in
the Percentage Interests in the portions of the Loan and Letter of Credit
Exposure held by the other Lenders, and such other adjustments shall be made
from time to time (including rescission of such purchases of participations in
the event the unequal payment originally received is recovered from such Lender
through bankruptcy proceedings or otherwise), as may be required so that all
such payments of principal and interest with respect to the portion of the Loan
and Letter of Credit Exposure held by the Lenders shall be shared by the Lenders
pro rata in accordance with their respective Percentage Interests in the
relevant portion of the Loan; provided, however, that this Section 12.5 shall
                              --------  -------
not impair the right of any Lender to exercise any right of set-off or
counterclaim it may have and to apply the amount subject to such exercise to the
payment of Indebtedness of any Obligor other than such Obligor's Indebtedness
with respect to the Loan and Letter of Credit Exposure. Each Lender that grants
a participation in the Credit Obligations to a Credit Participant shall require
as a condition to the granting of such participation that such Credit
Participant agree to share payments received in respect of the Credit
Obligations as provided in this Section 12.5. The provisions of this Section
12.5 are for the sole and exclusive benefit of the Lenders and no failure of any
Lender to comply with the terms hereof shall be available to any Obligor as a
defense to the payment of the Credit Obligations.

     12.6.  Actions by Agent, Amendments, Consents, Waivers, etc.  Except as
            -----------------------------------------------------
otherwise set forth in this Section 12.6, the Agent may (a) admit additional
Lenders who shall make Commitments for an Aggregate Percentage Interest in the
Loan; provided, however, that without consent obtained in accordance with
      --------  -------
Section 12.6.2(c) the aggregate Commitments shall not exceed $300,000,000 and
(b) (and upon the written request of the Required Lenders the Agent shall) take
or refrain from taking any action under this Agreement or any other Credit
Document, including giving its written consent to any modification of or
amendment to and waiving in writing compliance with any covenant or condition in
this Agreement or any other Credit Document or any Default or Event of Default,
all of which actions shall be binding upon all of the Lenders; provided,
                                                               --------
however, that:
-------

            12.6.1.  Without the written consent of the Required Lenders (other
     than Delinquent Lenders during the existence of a Delinquency Period so
     long as such Delinquent Lender is treated the same as the other Lenders
     with respect to any actions enumerated below), no written modification of,
     amendment to, consent with respect to, waiver of compliance with or waiver
     of a Default under any of the Credit Documents (other than Interest Rate
     Protection Agreements) shall be made.

            12.6.2.  Without the written consent of such Lenders as own 100% of
     the Aggregate Percentage Interests in the Loan (other than Delinquent
     Lenders during the existence of a Delinquency Period so long as such
     Delinquent Lender is treated the same as the other Lenders with respect to
     any actions enumerated below):

                                      -89-
<PAGE>

            (a)  No reduction shall be made in (i) the amount of principal of
     the Loan or reimbursement obligations for payments made under Letters of
     Credit, (ii) the interest rate on the Loan or the Swingline Loan or (iii)
     the Letter of Credit fees or commitment fees.

            (b)  No change shall be made in the stated time of payment of all or
     any portion of the Loan or interest thereon or reimbursement of payments
     made under Letters of Credit or fees relating to any of the foregoing
     payable to all of the Lenders and no waiver shall be made of any Default
     under Section 8.1.1.

            (c)  Except for additional Commitments from new Lenders expressly
     contemplated by Section 12.6.1(a) hereof, no increase shall be made in the
     amount, or extension of the term, of the Commitments beyond that provided
     for under Section 2.

            (d)  No alteration shall be made of the Lenders' rights of set-off
     contained in Section 8.2.4.

            (e)  No release of any Credit Security or of any Guarantor shall be
     made (except that the Agent may release particular items of Credit Security
     or particular Guarantors in dispositions permitted by Section 6.11 and may
     release all Credit Security pursuant to Section 18 upon payment in full of
     the Credit Obligations and termination of the Commitments without the
     written consent of the Lenders).

            (f)  No amendment to or modification of this Section 12.6 or of the
     definition of Required Lenders shall be made.

     12.7.  Agent's Resignation. The Agent may resign at any time by giving at
            -------------------
least 60 days' prior written notice of its intention to do so to each other of
the Lenders and the Borrower and upon the appointment by the Required Lenders of
a successor Agent satisfactory to the Borrower. If no successor Agent shall have
been so appointed and shall have accepted such appointment within 45 days after
the retiring Agent's giving of such notice of resignation, then the retiring
Agent may with the consent of the Borrower, which shall not be unreasonably
withheld, appoint a successor Agent which shall be a bank or a trust company
organized under the laws of the United States of America or any state thereof
and having a combined capital, surplus and undivided profit of at least
$100,000,000; provided, however, that any successor Agent appointed under this
              --------  -------
sentence may be removed upon the written request of the Required Lenders, which
request shall also appoint a successor Agent satisfactory to the Borrower. Upon
the appointment of a new Agent hereunder, the term "Agent" shall for all
purposes of this Agreement thereafter mean such successor. After any retiring
Agent's resignation hereunder as Agent, or the removal hereunder of any
successor Agent, the provisions of this Agreement shall continue to inure to the
benefit of such Agent as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement.

     12.8.  Concerning the Agent.
            --------------------

                                      -90-
<PAGE>

     12.8.1.  Action in Good Faith, etc. The Agent and its officers, directors,
              -------------------------
employees and agents shall be under no liability to any of the Lenders or to any
future holder of any interest in the Credit Obligations for any action or
failure to act taken or suffered in good faith, and any action or failure to act
in accordance with an opinion of its counsel shall conclusively be deemed to be
in good faith. The Agent shall in all cases be entitled to rely, and shall be
fully protected in relying, on instructions given to the Agent by the required
holders of Credit Obligations as provided in this Agreement.

     12.8.2.  No Implied Duties, etc. The Agent shall have and may exercise such
              ----------------------
powers as are specifically delegated to the Agent under this Agreement or any
other Credit Document together with all other powers incidental thereto. The
Agent shall have no implied duties to any Person or any obligation to take any
action under this Agreement or any other Credit Document except for action
specifically provided for in this Agreement or any other Credit Document to be
taken by the Agent. Before taking any action under this Agreement or any other
Credit Document, the Agent may request an appropriate specific indemnity
satisfactory to it from each Lender in addition to the general indemnity
provided for in Section 12.11. Until the Agent has received such specific
indemnity, the Agent shall not be obligated to take (although it may in its sole
discretion take) any such action under this Agreement or any other Credit
Document. Each Lender confirms that the Agent does not have a fiduciary
relationship to it under the Credit Documents. Each of the Obligors party hereto
confirms that neither the Agent nor any other Lender has a fiduciary
relationship to it under the Credit Documents.

     12.8.3.  Validity, etc. The Agent shall not be responsible to any Lender or
              -------------
any future holder of any interest in the Credit Obligations (a) for the
legality, validity, enforceability or effectiveness of this Agreement or any
other Credit Document, (b) for any recitals, reports, representations,
warranties or statements contained in or made in connection with this Agreement
or any other Credit Document, (c) for the existence or value of any assets
included in any security for the Credit Obligations, (d) for the effectiveness
of any Lien purported to be included in the Credit Security, (e) for the
specification or failure to specify any particular assets to be included in the
Credit Security, or (f) unless the Agent shall have failed to comply with
Section 12.8.1, for either the perfection of the security interests in the
Credit Security or for failure of the Agent to its obligations under Section
12.8.8.

     12.8.4.  Compliance. The Agent shall not be obligated to ascertain or
              ----------
inquire as to the performance or observance of any of the terms of this
Agreement or any other Credit Document; and in connection with any extension of
credit under this Agreement or any other Credit Document, the Agent shall be
fully protected in relying on a certificate of the Borrower as to the
fulfillment by the Borrower of any conditions to such extension of credit.

     12.8.5.  Employment of Agents and Counsel. The Agent may execute any of its
              --------------------------------
duties as Agent under this Agreement or any other Credit Document by or through

                                      -91-
<PAGE>

     employees, agents and attorneys-in-fact and shall not be responsible to any
     of the Lenders, the Borrower or any other Obligor for the default or
     misconduct of any such agents or attorneys-in-fact selected by the Agent
     acting in good faith. The Agent shall be entitled to advice of counsel
     concerning all matters pertaining to the agency hereby created and its
     duties hereunder or under any other Credit Document.

            12.8.6.  Reliance on Documents and Counsel. The Agent shall be
                     ---------------------------------
     entitled to rely, and shall be fully protected in relying, upon any
     affidavit, certificate, cablegram, consent, instrument, letter, notice,
     order, document, statement, telecopy, telegram, telex or teletype message
     or writing reasonably believed in good faith by the Agent to be genuine and
     correct and to have been signed, sent or made by the Person in question,
     including any telephonic or oral statement made by such Person, and, with
     respect to legal matters, upon an opinion or the advice of counsel selected
     by the Agent.

            12.8.7.  Agent's Reimbursement. Each of the Lenders severally agrees
                     ---------------------
     to reimburse the Agent, in the amount of such Lender's Aggregate Percentage
     Interest in the Loan, for any reasonable expenses not reimbursed by the
     Borrower or the Guarantors (without limiting the obligation of the Borrower
     or the Guarantors to make such reimbursement): (a) for which the Agent is
     entitled to reimbursement by the Borrower or the Guarantors under this
     Agreement or any other Credit Document, and (b) after the occurrence of a
     Default, for any other reasonable expenses incurred by the Agent on the
     Lenders' behalf in connection with the enforcement of the Lenders' rights
     under this Agreement or any other Credit Document.

            12.8.8.  Conveying Reports to Lenders. The Agent shall provide to
                     ----------------------------
     each of the Lenders, in any reasonable form and reasonably promptly, a copy
     of those communications received from the Company pursuant to Sections
     4.3.3, 5.2, 6.4 and 6.2 1.

     12.9.  Rights as a Lender. With respect to any credit extended by it
            ------------------
hereunder, Fleet National Bank shall have the same rights, obligations and
powers hereunder as any other Lender and may exercise such rights and powers as
though it were not the Agent, and unless the context otherwise specifies, Fleet
National Bank shall be treated in its individual capacity as though it were not
the Agent hereunder. Without limiting the generality of the foregoing, the
Percentage Interest in any portion of the Loan, and the Aggregate Percentage
Interest in the Loan, of Fleet National Bank shall be included in any
computations of Percentage Interests and Aggregate Percentage Interests in the
Loan, respectively. Fleet National Bank and its Affiliates may accept deposits
from, lend money to, act as trustee for and generally engage in any kind of
banking or trust business with the Borrower, any of its Subsidiaries or any
Affiliate of any of them and any Person who may do business with or own an
equity interest in the Borrower, any of its Subsidiaries or any Affiliate of any
of them, all as if Fleet National Bank were not the Agent and without any duty
to account therefor to the other Lenders.

                                      -92-
<PAGE>

     12.10.  Independent Credit Decision. Each of the Lenders acknowledges that
             ---------------------------
it has independently and without reliance upon the Agent, based on the financial
statements and other documents referred to in Section 7.2, on the other
representations and warranties contained herein and on such other information
with respect to the Obligors as such Lender deemed appropriate, made such
Lender's own credit analysis and decision to enter into this Agreement and to
make the extensions of credit provided for hereunder. Each Lender represents to
the Agent that such Lender will continue to make its own independent credit and
other decisions in taking or not taking action under this Agreement or any other
Credit Document. Each Lender expressly acknowledges that neither the Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to such Lender, and no act
by the Agent taken under this Agreement or any other Credit Document, including
any review of the affairs of the Obligors, shall be deemed to constitute any
representation or warranty by the Agent. Except for notices, reports and other
documents expressly required to be furnished to each Lender by the Agent under
this Agreement or any other Credit Document, the Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition, financial or
otherwise, or creditworthiness of any Obligor which may come into the possession
of the Agent or any of its officers, directors, employees, agents, attorneys-in-
fact or Affiliates.

     12.11.  Indemnification. The holders of the Credit Obligations shall
             ---------------
indemnify the Agent and its officers, directors, employees and agents (to the
extent not reimbursed by the Obligors and without limiting the obligation of any
of the Obligors to do so), pro rata in accordance with their respective
Aggregate Percentage Interests in the Loan, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time be
imposed on, incurred by or asserted against the Agent or such Persons relating
to or arising out of this Agreement, any other Credit Document, the transactions
contemplated hereby or thereby, or any action taken or omitted by the Agent in
connection with any of the foregoing; provided, however, that the foregoing
                                      --------  -------
shall not extend to actions or omissions which are taken by the Agent with gross
negligence or willful misconduct.

13.  Successors and Assigns; Lender Assignments and Participations.  Any
     -------------------------------------------------------------
reference in this Agreement to any of the parties hereto shall be deemed to
include the successors and assigns of such party, and all covenants and
agreements by or on behalf of the Obligors, the Guarantors, the Agent or the
Lenders that are contained in this Agreement or any other Credit Documents shall
bind and inure to the benefit of their respective successors and assigns;
provided, however, that (a) the Obligors may not assign their rights or
obligations under this Agreement except for mergers or liquidations permitted by
Section 6.11, and (b) the Lenders shall be not entitled to assign their
respective Percentage Interests in portions of the Loan hereunder except as set
forth below in this Section 13.

     13.1.   Assignments by Lenders.
             ----------------------

                                      -93-
<PAGE>

          13.1.1.  Assignees and Assignment Procedures. Each Lender may (a)
                   -----------------------------------
     without the consent of the Agent or the Borrower if the proposed assignee
     is already a Lender hereunder or a Wholly Owned Subsidiary of the same
     corporate parent of which the assigning Lender is a Subsidiary, or (b)
     otherwise with the consents of the Agent and (so long as no Event of
     Default has occurred and is continuing) the Borrower (which consents will
     not be unreasonably withheld), in compliance with applicable laws in
     connection with such assignment, assign to one or more commercial banks or
     other financial institutions (each, an "Assignee") all or a portion of its
                                             --------
     interests, rights and obligations under this Agreement and the other Credit
     Documents, including all or a portion, which need not be pro rata between
     the Loan and the Letter of Credit Exposure, of its Commitment, the portion
     of the Loan and Letter of Credit Exposure at the time owing to it and the
     Notes held by it, but excluding its rights and obligations as a Letter of
     Credit Issuer; provided, however, that:
                    --------  -------

                   (i)   the aggregate amount of the Commitment of the assigning
          Lender subject to each such assignment to any Assignee other than
          another Lender (determined as of the date the Assignment and
          Acceptance with respect to such assignment is delivered to the Agent)
          shall be not less than $5,000,000 and in increments of $1,000,000; and

                   (ii)  the parties to each such assignment shall execute and
          deliver to the Agent an Assignment and Acceptance (the "Assignment and
                                                                  --------------
          Acceptance") substantially in the form of Exhibit 13.1.1, together
          ----------                                --------------
          with the Note subject to such assignment and a processing and
          recordation fee of $3,500 payable to the Agent by the assigning Lender
          or the Assignee.

          Upon acceptance and recording pursuant to Section 13.1.4, from and
          after the effective date specified in each Assignment and Acceptance
          (which effective date shall be at least five Banking Days after the
          execution thereof unless waived by the Agent):

            (A)   the Assignee shall be a party hereto and, to the extent
                  provided in such Assignment and Acceptance, have the rights
                  and obligations of a Lender under this Agreement and

            (B)   the assigning Lender shall, to the extent provided in such
                  assignment, be released from its obligations under this
                  Agreement (and, in the case of an Assignment and Acceptance
                  covering all or the remaining portion of an assigning Lender's
                  rights and obligations under this Agreement, such Lender shall
                  cease to be a party hereto but shall continue to be entitled
                  to the benefits of Sections 3.2.4, 3.5 and 11, as well as to
                  any fees accrued for its account hereunder and not yet paid).

                                      -94-
<PAGE>

          13.1.2. Terms of Assignment and Acceptance. By executing and
                  ----------------------------------
     delivering an Assignment and Acceptance, the assigning Lender and Assignee
     shall be deemed to confirm to and agree with each other and the other
     parties hereto as follows:

          (a)     other than the representation and warranty that it is the
     legal and beneficial owner of the interest being assigned thereby free and
     clear of any adverse claim, such assigning Lender makes no representation
     or warranty and assumes no responsibility with respect to any statements,
     warranties or representations made in or in connection with this Agreement
     or the execution, legality, validity, enforceability, genuineness,
     sufficiency or value of this Agreement, any other Credit Document or any
     other instrument or document furnished pursuant hereto;

          (b)     such assigning Lender makes no representation or warranty and
     assumes no responsibility with respect to the financial condition of the
     Obligors or the performance or observance by any Obligor of any of its
     obligations under this Agreement, any other Credit Document or any other
     instrument or document furnished pursuant hereto;

          (c)     such Assignee confirms that it has received a copy of this
     Agreement, together with copies of the most recent financial statements
     delivered pursuant to Section 7.2 or Section 6.4 and such other documents
     and information as it has deemed appropriate to make its own credit
     analysis and decision to enter into such Assignment and Acceptance;

          (d)     such Assignee will independently and without reliance upon the
     Agent, such Lender or any other Lender, and based on such documents and
     information as it shall deem appropriate at the time, continue to make its
     own credit decisions in taking or not taking action under this Agreement;

          (e)     such Assignee appoints and authorizes the Agent to take such
     action as agent on its behalf and to exercise such powers under this
     Agreement as are delegated to the Agent by the terms hereof, together with
     such powers as are reasonably incidental thereto; and

          (f)     such Assignee agrees that it will perform in accordance with
     the terms of this Agreement all the obligations which are required to be
     performed by it as a Lender.

          13.1.3. Register.  The Agent shall maintain at the Boston Office a
                  --------
     register (the "Register") for the recordation of (a) the names and
                    --------
     addresses of the Lenders and the Assignees which assume rights and
     obligations pursuant to an assignment under Section 13.1.1, (b) the
     Percentage Interests of each such Lender in the Revolving Loan as set forth
     in Section 12.1 and (c) the amount of the Loan and Letter of Credit
     Exposure owing to each Lender from time to time. The entries in the
     Register shall be conclusive, in the absence of manifest error, and the
     Borrower, the Agent and the Lenders may treat each Person whose name is
     registered therein for all purposes as a party to this

                                      -95-
<PAGE>

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

          13.1.4. Acceptance of Assignment and Assumption.  Upon its receipt of
                  ---------------------------------------
     a completed Assignment and Acceptance executed by an assigning Lender and
     an Assignee together with the Note or Notes subject to such assignment, and
     the processing and recordation fee referred to in Section 13.1.1, the Agent
     shall (a) accept such Assignment and Acceptance, (b) record the information
     contained therein in the Register and (c) give prompt notice thereof to the
     Borrower. Within five Banking Days after receipt of notice, the Borrower,
     at their own expense, shall execute and deliver to the Agent, in exchange
     for the surrendered Note or Notes, a new Note or Notes to the order of such
     Assignee in a principal amount equal to the applicable Commitment and Loan
     assumed by it pursuant to such Assignment and Acceptance and, if the
     assigning Lender has retained a Commitment and Loan, a new Note or Notes to
     the order of such assigning Lender in a principal amount equal to the
     applicable Commitment and Loan retained by it. Such new Note or Notes shall
     be in an aggregate principal amount equal to the aggregate principal amount
     of such surrendered Note or Notes, respectively, and shall be dated the
     date of the surrendered Notes which they replace.

          13.1.5. Federal Reserve Bank.  Notwithstanding the foregoing
                  --------------------
     provisions of this Section 13, any Lender may at any time pledge or assign
     all or any portion of such Lender's rights under this Agreement and the
     other Credit Documents to a Federal Reserve Bank; provided, however, that
                                                       --------  -------
     no such pledge or assignment shall release such Lender from such Lender's
     obligations hereunder or under any other Credit Document.

          13.1.6. Further Assurances.  The Obligors shall sign such documents
                  ------------------
     and take such other actions from time to time reasonably requested by an
     Assignee to enable it to share in the benefits of the rights created by the
     Credit Documents.

     13.2.   Credit Participants.  Each Lender may, without the consent of the
             -------------------
Borrower or the Agent, in compliance with applicable laws in connection with
such participation, sell to one or more commercial banks or other financial
institutions (each a "Credit Participant") participations, in all or a portion
                      ------------------
of its interests, rights and obligations under this Agreement and the other
Credit Documents (including all or a portion of its Commitment, the Loan and
Letter of Credit Exposure owing to it and the Notes held by it); provided,
                                                                 --------
however, that:
-------

             (a)  such Lender's obligations under this Agreement shall remain
     unchanged;

             (b)  such Lender shall remain solely responsible to the other
     parties hereto for the performance of such obligations;

             (c)  the Credit Participant shall be entitled to the benefit of the
     cost protection provisions contained in Sections 3.2.4, 3.5 and 11, but
     shall not be entitled to receive any greater payment thereunder than the
     selling Lender would have been entitled to receive with respect to the
     interest so sold if such interest had not been sold; and

                                      -96-
<PAGE>

             (d)  the Borrower, the Agent and the other Lenders shall continue
     to deal solely and directly with such Lender in connection with such
     Lender's rights and obligations under this Agreement, and such Lender shall
     retain the sole right as one of the Lenders to vote with respect to the
     enforcement of the obligations of the Borrower relating to the Loan and
     Letter of Credit Exposure and the approval of any amendment, modification
     or waiver of any provision of this Agreement (other than amendments,
     modifications, consents or waivers described in clause (c) of the proviso
     to Section 12.6).

Each Obligor agrees, to the fullest extent permitted by applicable law, that any
Credit Participant and any Lender purchasing a participation from another Lender
pursuant to Section 12.5 may exercise all rights of payment (including the right
of set-off), with respect to its participation as fully as if such Credit
Participant or such Lender were the direct creditor of the Obligors and a Lender
hereunder in the amount of such participation.

     13.3.   Replacement of Lender. In the event that any Lender or, to the
             ---------------------
extent applicable, any Credit Participant (the "Affected Lender"):
                                                ---------------

             (a)  fails to perform its obligations to fund any portion of the
     Loan or to issue any Letter of Credit on any Closing Date when required to
     do so by the terms of the Credit Documents, or fails to provide its portion
     of any LIBOR Pricing Option pursuant to Section 3.2.1 or on account of a
     Legal Requirement as contemplated by Section 3.2.5;

             (b)  demands payment under the Reserve provisions of Section 3.5.1,
     the Tax provisions of Section 3.5.2, the capital adequacy provisions of
     Section 3.5.3 or the regulatory change provisions in Section 3.5.4 in an
     amount the Company deems materially in excess of the amounts with respect
     thereto demanded by the other Lenders; or

             (c)  refuses to consent to a proposed amendment, modification,
     waiver or other action requiring consent of the holders of 100% of the
     Aggregate Percentage Interests in the Loan under Section 12.6.1(c) that is
     consented to by the other Lenders;

then, so long as no Event of Default exists and is continuing, the Borrower
shall have the right to seek a replacement lender which is reasonably
satisfactory to the Agent (the "Replacement Lender").  The Replacement Lender
                                ------------------
shall purchase the interests of the Affected Lender in the Loan, Letters of
Credit and its Commitment and shall assume the obligations of the Affected
Lender hereunder and under the other Credit Documents upon execution by the
Replacement Lender of an Assignment and Acceptance and the tender by it to the
Affected Lender of a purchase price agreed between it and the Affected Lender
(or, if they are unable to agree, a purchase price in the aggregate amount of
the Affected Lender's Percentage Interests in each portion of the Loan and
Letter of Credit Exposure, or appropriate credit support for contingent amounts
included therein, and all other outstanding Credit Obligations then owed to the
Affected Lender).  Such assignment by the Affected Lender shall be deemed an
early termination of any LIBOR Pricing Option to the extent of the Affected
Lender's portion thereof, and the Borrower will pay to the Affected Lender any
resulting amounts due under Section 3.2.4.  Upon

                                      -97-
<PAGE>

consummation of such assignment, the Replacement Lender shall become party to
this Agreement as a signatory hereto and shall have all the rights and
obligations of the Affected Lender under this Agreement and the other Credit
Documents with a Percentage Interest in each portion of the Loan equal to the
Percentage Interest in such portion of the Loan of the Affected Lender, the
Affected Lender shall be released from its obligations hereunder and under the
other Credit Documents, and no further consent or action by any party shall be
required. Upon the consummation of such assignment, the Borrower, the Agent and
the Affected Lender shall make appropriate arrangements so that a new Note is
issued to the Replacement Lender if it has acquired a portion of the Loan. The
Borrower and the Guarantors shall sign such documents and take such other
actions reasonably requested by the Replacement Lender to enable it to share in
the benefits of the rights created by the Credit Documents. Until the
consummation of an assignment in accordance with the foregoing provisions of
this Section 13.3, the Borrower shall continue to pay to the Affected Lender any
Credit Obligations as they become due and payable.

     13.4.   Foreign Lenders.  If any Lender is not incorporated or organized
             ---------------
under the laws of the United States of America or a state thereof, such Lender
shall deliver to the Borrower and the Agent the following:

             (a)  Two duly completed copies of United States Internal Revenue
     Service Form 1001 or 4224 or successor form, as the case may be, certifying
     in each case that such Person is entitled to receive payments under this
     Agreement, the Notes and reimbursement obligations under Letters of Credit
     payable to it, without deduction or withholding of any United States
     federal income taxes; and

             (b)  A duly completed Internal Revenue Service Form W-8 or W-9 or
     successor form, as the case may be, to establish an exemption from United
     States backup withholding tax.

     Each such Lender that delivers to the Borrower and the Agent a Form 1001 or
4224 and Form W-8 or W-9 pursuant to this Section 13 further undertakes to
deliver to the Borrower and the Agent two further copies of Form 1001 or 4224
and Form W-8 or W-9, or successor applicable form, or other manner of
certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form previously delivered by it to the Borrower and
the Agent.  Such Forms 1001 or 4224 shall certify that such Lender is entitled
to receive payments under this Agreement without deduction or withholding of any
United States federal income taxes.  The foregoing documents need not be
delivered in the event any change in treaty, law or regulation or official
interpretation thereof has occurred which renders all such forms inapplicable or
which would prevent such Lender from delivering any such form with respect to
it, or such Lender advises the Borrower that it is not capable of receiving
payments without any deduction or withholding of United States federal income
tax and, in the case of a Form W-8 or W-9, establishing an exemption from United
States backup withholding tax.  Until such time as the Borrower and the Agent
have received such forms indicating that payments hereunder are not subject to
United States withholding tax or are subject to such tax at a rate reduced by an

                                      -98-
<PAGE>

applicable tax treaty, the Borrower shall withhold taxes from such payments at
the applicable statutory rate without regard to Section 3.5.2.

14.  Confidentiality.  Each Lender will make no disclosure of confidential
     ---------------
information furnished to it by any Obligor unless such information shall have
become public, except:

          (a)  in connection with operations under or the enforcement of this
     Agreement or any other Credit Document;

          (b)  pursuant to any statutory or regulatory requirement or any
     mandatory court order, subpoena or other legal process;

          (c)  to any parent or corporate Affiliate of such Lender or to any
     Credit Participant, proposed Credit Participant or proposed Assignee;
     provided, however, that any such Person shall agree to comply with the
     --------  -------
     restrictions set forth in this Section 14 with respect to such information;

          (d)  to its independent counsel, auditors and other professional
     advisors with an instruction to such Person to keep such information
     confidential; and

          (e)  with the prior written consent of the Borrower, to any other
     Person.

                                      -99-
<PAGE>

15.  Acknowledgments and Consents.  The Borrower and each Guarantor and each
     ----------------------------
Obligor, in their capacities as Borrower, as guarantors of the Credit
Obligations, grantors of security interests to secure the Credit Obligations
and/or holders of Subordinated Indebtedness, as the case may be, pursuant to the
Credit Agreement dated as of May 29, 1996, as amended and restated previously
and hereby and as in effect on the date hereof, hereby acknowledge and agree
that, as of the Initial Closing Date, (i) the Uniform Commercial Code Financing
Statements and other instruments previously filed in connection with the
perfection of the Liens created in the Credit Security pursuant to such Credit
Agreement shall be deemed to refer to the Credit Agreement as amended and
restated hereby and that the term "Credit Obligations" as used in such financing
statements and other instruments, shall be deemed to refer to the Credit
Obligations under the Credit Agreement as amended and restated hereby; and (ii)
such financing statements and other instruments are confirmed and ratified as
being in full force and effect.

16.  Notices.  Except as otherwise specified in this Agreement, any notice
     -------
required to be given pursuant to this Agreement shall be given in writing.  Any
notice, consent, approval, demand or other communication in connection with this
Agreement shall be deemed to be given if given in writing (including telex,
telecopy or similar teletransmission) addressed as provided below (or to the
addressee at such other address as the addressee shall have specified by notice
actually received by the addressor), and if either (a) actually delivered in
fully legible form to such address (evidenced in the case of a telex by receipt
of the correct answerback) or (b) in the case of a letter, unless actual receipt
of the notice is required by any Credit Document five days shall have elapsed
after the same shall have been deposited in the United States mails, with first-
class postage prepaid and registered or certified.

     If to the Borrower or its Subsidiaries, to it at its address set forth in
Exhibit 7.1 (as supplemented pursuant to Sections 6.4.1 and 6.4.2), to the
attention of the chief financial officer.

     If to any Lender or the Agent, to it at its address set forth on the
signature pages of this Agreement or in the Register, with a copy to the Agent,
with a copy to:

          Ropes & Gray
          One International Place
          Boston, MA 02110
          Attn:  David A. McKay

17.  Course of Dealing; Amendments and Waivers.  No course of dealing between
     -----------------------------------------
any Lender or the Agent, on one hand, and the Borrower or any other Obligor, on
the other hand, shall operate as a waiver of any of the Lenders' or the Agent's
rights under this Agreement or any other Credit Document or with respect to the
Credit Obligations.  Each of the Borrower and the Guarantors acknowledges that
if the Lenders or the Agent, without being required to do so by this Agreement
or any other Credit Document, give any notice or information to, or obtain any
consent from, the Borrower or any other Obligor, the Lenders and the Agent shall
not by implication have amended, waived or modified any provision of this
Agreement or any other Credit Document, or created any duty to give any such
notice or information or to obtain any

                                     -100-
<PAGE>

such consent on any future occasion. No delay or omission on the part of any
Lender of the Agent in exercising any right under this Agreement or any other
Credit Document or with respect to the Credit Obligations shall operate as a
waiver of such right or any other right hereunder or thereunder. A waiver on any
one occasion shall not be construed as a bar to or waiver of any right or remedy
on any future occasion. No waiver, consent or amendment with respect to this
Agreement or any other Credit Document shall be binding unless it is in writing
and signed by the Agent and the Required Lenders.

18.  Defeasance.  When all Credit Obligations have been paid, performed and
     ----------
reasonably determined by the Lenders to have been indefeasibly discharged in
full, and if at the time no Lender continues to be committed to extend any
credit to the Borrower hereunder or under any other Credit Document, this
Agreement shall terminate and, at the Borrower's written request, accompanied by
such certificates and other items as the Agent shall reasonably deem necessary,
the Credit Security shall revert to the Obligors and the right, title and
interest of the Lenders therein shall terminate.  Thereupon, on the Obligor's
demand and at their cost and expense, the Agent shall execute proper
instruments, acknowledging satisfaction of and discharging this Agreement, and
shall redeliver to the Obligors any Credit Security then in its possession;
provided, however, that Sections 3.2.4, 3.5, 11, 12.8.7, 12.11, 14, 19 and 20
--------  -------
shall survive the termination of this Agreement.

19.  Venue; Service of Process.  Each of the Borrower and the other Obligors:
     -------------------------

          (a)  Irrevocably submits to the nonexclusive jurisdiction of the state
     courts of The Commonwealth of Massachusetts and to the nonexclusive
     jurisdiction of the United States District Court for the District of
     Massachusetts for the purpose of any suit, action or other proceeding
     arising out of or based upon this Agreement or any other Credit Document or
     the subject matter hereof or thereof.

          (b)  Waives to the extent not prohibited by applicable law that cannot
     be waived, and agrees not to assert, by way of motion, as a defense or
     otherwise, in any such proceeding brought in any of the above-named courts,
     any claim that it is not subject personally to the jurisdiction of such
     court, that its property is exempt or immune from attachment or execution,
     that such proceeding is brought in an inconvenient forum, that the venue of
     such proceeding is improper, or that this Agreement or any other Credit
     Document, or the subject matter hereof or thereof, may not be enforced in
     or by such court.

Each of the Borrower and the other Obligors consents to service of process in
any such proceeding in any manner at the time permitted by Chapter 223A of the
General Laws of The Commonwealth of Massachusetts and agrees that service of
process by registered or certified mail, return receipt requested, at its
address specified in or pursuant to Section 16 is reasonably calculated to give
actual notice.

20.  WAIVER OF JURY TRIAL.  TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT
     --------------------
CANNOT BE WAIVED, EACH OF THE BORROWER, THE

                                     -101-
<PAGE>

OTHER OBLIGORS, THE AGENT AND THE LENDERS WAIVES, AND COVENANTS THAT IT WILL NOT
ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY
JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM OR PROCEEDING ARISING OUT OF
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT OR THE SUBJECT MATTER HEREOF OR
THEREOF OR ANY CREDIT OBLIGATION OR IN ANY WAY CONNECTED WITH THE DEALINGS OF
THE LENDERS, THE AGENT, THE BORROWER OR ANY OTHER OBLIGOR IN CONNECTION WITH ANY
OF THE ABOVE, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER
IN CONTRACT, TORT OR OTHERWISE. Each of the Borrower and the other Obligors
acknowledges that it has been informed by the Agent that the provisions of this
Section 20 constitute a material inducement upon which each of the Lenders has
relied and will rely in entering into this Agreement and any other Credit
Document, and that it has reviewed the provisions of this Section 20 with its
counsel. Any Lender, the Agent, the Borrower or any other Obligor may file an
original counterpart or a copy of this Section 20 with any court as written
evidence of the consent of the Borrower, the other Obligors, the Agent and the
Lenders to the waiver of their rights to trial by jury.

21.  No Strict Construction.  The parties have participated jointly in the
     ----------------------
negotiation and drafting of this Agreement and the other Credit Documents with
counsel sophisticated in financing transactions.  In the event an ambiguity or
question of intent or interpretation arises, this Agreement and the other Credit
Documents shall be construed as if drafted jointly by the parties and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement and the other
Credit Documents.

22.  General.  All covenants, agreements, representations and warranties made in
     -------
this Agreement or any other Credit Document or in certificates delivered
pursuant hereto or thereto shall be deemed to have been relied on by each
Lender, notwithstanding any investigation made by any Lender on its behalf, and
shall survive the execution and delivery to the Lenders hereof and thereof.  The
invalidity or unenforceability of any provision hereof shall not affect the
validity or enforceability of any other provision hereof.  The headings in this
Agreement are for convenience of reference only and shall not limit or otherwise
affect the meaning hereof.  This Agreement and the other Credit Documents
(including any related fee agreements with the Agent or the Lenders) constitute
the entire understanding of the parties with respect to the subject matter
hereof and thereof and supersede all prior and contemporaneous understandings
and agreements, whether written or oral.  This Agreement may be executed in any
number of counterparts which together shall constitute one instrument.  This
Agreement shall be governed by and construed in accordance with the laws (other
than the conflict of laws rules) of The Commonwealth of Massachusetts, except as
may be required by the UCC with respect to matters involving the perfection of
the Agent's Lien on the Credit Security.

                                     -102-
<PAGE>

     Agreement to be executed and delivered by its duly authorized officer as an
agreement under seal as of the date first above written.

                                          The Company

                                          AMERIPATH, INC.

                                          By _________________________________
                                             Title:

<PAGE>

                        The Guarantors
                        --------------

                        AMERIPATH ALABAMA, INC.
                        SHOALS PATHOLOGY ASSOCIATES, INC.
                        PCA OF LOS GATOS, INC.
                        CALIFORNIA PATHOLOGY CONSULTANTS OF AMERICA,
                             INC.
                        PCA OF DENVER, INC.
                        AMERIPATH FLORIDA, INC.
                        AMERIPATH MARKETING USA, INC.
                        SOUTH FLORIDA PATHOLOGY ASSOCIATES, INC.
                        HIALEAH PATHOLOGY ASSOCIATES, INC.
                        MEDGENETICS DIAGNOSTICS LABORATORIES, INC.
                        ORANGE PARK PATHOLOGY LABORATORY
                             CONSULTANTS, INC.
                        AMERIPATH, LLC
                        API NO. 2, LLC
                        OCMULGEE MEDICAL PATHOLOGY ASSOCIATION, INC.
                        AMERIPATH CARROLLTON, INC.
                        GEORGIA PATHOLOGY CONSULANTS OF AMERICA, INC.
                        AMERIPATH INDIANA, INC.
                        AMERIPATH KENTUCKY, INC.
                        PATHSOURCE - NEW ENGLAND, INC.
                        AMERIPATH MICHIGAN, INC.
                        AMERIPATH MISSISSIPPI, INC.
                        R.M.C. PATHOLOGY ASSOCIATES, INC.
                        PCA OF COLUMBUS, INC.
                        BEN F. MARTIN, MD, FCAP, INC.
                        JOHN H. PARKER, JR, MD, FCAP, INC.
                        PCA SOUTHEAST II, INC.
                        PCA OF ST. LOUIS II, INC.
                        AMERIPATH NEW YORK, INC.
                        PATHSOURCE, INC.
                        DERMPATH, INC.
                        AMERIPATH NORTH CAROLINA, INC.
                        AMERIPATH OHIO, INC.
                        AMERIPATH CINCINNATI, INC.
                        AMERIPATH CLEVELAND, INC.
                        AMERIPATH P.C.C., INC.
                        AMERIPATH YOUNGSTOWN, INC.
                        AMERIPATH YOUNGSTOWN LABS, INC.
                        DIAGNOSTIC PATHOLOGY MANAGEMENT SERVICES,
                             INC.
                        ANATOMIC PATHOLOGY SERVICES, INC.
                        AMERIPATH PENNSYLVANIA, INC.

<PAGE>

                        AMERIPATH PHILADELPHIA, INC.
                        TID ACQUISITION CORPORATION
                        PATHOLOGY CONSULTANTS OF AMERICA, INC.
                        PCA/APR ACQUISITION CORPORATION
                        PCA OF NASHVILLE, INC.
                        PCA OF MEMPHIS, INC.
                        CPA I, INC.
                        CPA II, INC.
                        AMERIPATH 5.01(a) CORPORATION
                        DFW 5.01(a) CORPORATION
                        AMERIPATH SAN ANTONIO 5.01(a) CORPORATION
                        AMERIPATH LUBBOCK 5.01(a) CORPORATION
                        AMERIPATH TEXARKANA 5.01(A) CORPORATION
                        AMERIPATH TEXAS, LP
                        PATHOLOGY AFFILIATED SERVICES, INC.
                        AMERIPATH PAT, INC.
                        ARLINGTON PATHOLOGY ASSOCIATION 5.01(A)
                             CORPORATION
                        SIMPSON PATHOLOGY 5.01(A) CORPORATION
                        AMERIPATH VIRGINIA, INC.
                        AMERIPATH WISCONSIN, INC.

                        By ________________________________
                           Authorized officer of each of the foregoing
                           corporations

<PAGE>

                              FLEET NATIONAL BANK, as Agent

                              By ________________________________
                                 FLEET NATIONAL BANK, as Lender

                              By ________________________________
                                  Title:
<PAGE>

                              BANK OF AMERICA, N.A.
                              as Lender and Syndication Agent

                              By ________________________________
                                 Title:
<PAGE>

                              BANK ONE, NA, as Lender and Co-Agent

                              By ________________________________
                                 Title:
<PAGE>

                              FIRST UNION NATIONAL BANK, as Lender and
                                 Co-Agent

                              By ________________________________
                                 Title:
<PAGE>

                              CITIZENS BANK OF MASSACHUSETTS, a
                              Successor to US Trust

                              By ________________________________
                                 Title:
<PAGE>

                              BANK AUSTRIA CREDITANSTALT
                              CORPORATE FINANCE, INC.

                              By ________________________________
                                 Title:

                              By ________________________________
                                 Title:
<PAGE>

                              SUNTRUST BANK NATIONAL ASSOCIATION

                              By ________________________________
                                 Title:
<PAGE>

                              U.S. BANK NATIONAL ASSOCIATION

                              By ________________________________
                                 Title:
<PAGE>

                              AMSOUTH BANK

                              By ________________________________
                                 Title:
<PAGE>

                              IMPERIAL BANK

                              By ________________________________
                                 Title:
<PAGE>

                              BANKATLANTIC

                              By ________________________________
                                 Title:
<PAGE>

                              CITICORP USA, INC. as Lender and
                              Documentation Agent

                              By ________________________________
                                 Title:
<PAGE>

                              CREDIT SUISSE FIRST BOSTON

                              By ________________________________
                                 Title:

                              By ________________________________
                                 Title:
<PAGE>

                                                                       EXHIBIT 1

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
           Ratio of Consolidated Total Debt to      Interest Rate on Portions   Interest Rate on Portions
           Consolidated Adjusted EBITDA for the     of Revolving Loan Subject   of Revolving Loan Not      Applicable Commitment
Levels     most recently completed four fiscal      to LIBOR Pricing Options    Subject to LIBOR           Fee Rate
           quarters                                                             Pricing Option
---------------------------------------------------------------------------------------------------------------------------------
<S>        <C>                                         <C>                         <C>                         <C>
Level I    Greater than 2.0 to 1 but less than or   LIBOR Rate plus 2.375%      Base Rate plus 1.375%      0.50%
                                                               ----                       ----
           equal to 2.5 to 1
---------------------------------------------------------------------------------------------------------------------------------
Level II   Less than or equal to 2.0 to 1           LIBOR Rate plus 2.125%      Base Rate plus 1.125%      0.375%
                                                               ----                       ----
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      -1-
<PAGE>

                                                                   Exhibit 2.2.3

                         NON-NEGOTIABLE SWINGLINE NOTE

No. ___                                                   _______________, 199_
                                                          Boston, Massachusetts

     FOR VALUE RECEIVED, the undersigned AmeriPath, Inc.,  a Delaware
corporation, (the "Borrower") hereby promises to pay to FLEET NATIONAL BANK,
                   --------
(the "Holder") or order, on the Final Maturity Date (as defined in the Credit
      ------
Agreement referred to below) the aggregate unpaid Swingline Loan made to the
Borrower by the Holder, with daily interest from the date hereof, computed as
provided in the Credit Agreement, on the principal amount of such Swingline Loan
from time to time unpaid at a rate per annum on each portion of the principal
amount which shall at all times equal the Swingline Rate (as defined in the
Credit Agreement) applicable to such portion in accordance with the Credit
Agreement.  Interest shall be payable on the dates specified in the Credit
Agreement, except that all accrued interest shall be paid at the stated or
accelerated maturity hereof or upon the prepayment in full hereof.

     Payments hereunder shall be made to Fleet National Bank, as Agent for the
payee hereof, at 100 Federal Street, Boston, Massachusetts 02110.

     This Note evidences the Swingline Loan under and is entitled to the
benefits and subject to the provisions of the Credit Agreement dated as of May
29, 1996, as amended and restated as of December 16, 1999, as from time to time
in effect (the "Credit Agreement"), among AmeriPath, Inc., certain of its
Subsidiaries from time to time party thereto, Fleet National Bank, and certain
Lenders for which Fleet National Bank, is acting as Agent.  The principal of
this Note may be due and payable in whole or in part prior to the maturity date
stated above and is subject to required prepayment in the amounts and under the
circumstances set forth in the Credit Agreement, and may be prepaid in whole or
from time to time in part, all as set forth in the Credit Agreement.  Amounts so
prepaid may be reborrowed by the Borrower in accordance with and subject to the
terms of the Credit Agreement.  This Note may not be assigned or otherwise
transferred except in accordance with the Credit Agreement.  Terms defined in
the Credit Agreement are used herein with the meanings so defined.

     In case an Event of Default (as defined in the Credit Agreement) shall
occur, the entire principal amount of this Note may become or be declared due
and payable in the manner and with the effect provided in the Credit Agreement.

     This Note shall be governed by and construed in accordance with the laws
(other than the conflict of laws rules) of The Commonwealth of Massachusetts.

     The undersigned maker and all guarantors and endorsers, hereby waive
presentment, demand, notice, protest and all other demands and notices in
connection with the delivery, acceptance, performance and enforcement of this
Note, except as specifically otherwise provided

                                      -1-
<PAGE>

in the Credit Agreement, and assent to extensions of time of payment or
forbearance or other indulgence without notice.

                                          AMERIPATH, INC.

                                          By__________________________
                                           Title:

                                      -2-
<PAGE>

                                                                    Exhibit 12.1

                        LENDERS AND PERCENTAGE INTERESTS
                        --------------------------------

                                 Revolving Loan
                                 --------------

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
                  Lender                                     Commitment        Percentage
                  ------                                     ----------        ----------
                                                                                 Interest
                                                                                 --------
------------------------------------------------------------------------------------------
<S>                                                        <C>                  <C>
Fleet National Bank, Administrative Agent                   $ 50,000,000          17.69911
------------------------------------------------------------------------------------------
Bank of America, N.A., Syndication Agent                      40,000,000          14.15929
------------------------------------------------------------------------------------------
Citicorp USA, Inc. Documentation Agent                        37,500,000          13.27433
------------------------------------------------------------------------------------------
Bank One, NA Co-Agent                                         25,000,000           8.84955
------------------------------------------------------------------------------------------
First Union National Bank, Co-Agent                           25,000,000           8.84955
------------------------------------------------------------------------------------------
USTrust                                                       17,500,000           6.19469
------------------------------------------------------------------------------------------
Bank Austria Creditanstalt Corporate Finance, Inc.            15,000,000           5.30973
------------------------------------------------------------------------------------------
Credit Suisse First Boston                                    15,000,000           5.30973
------------------------------------------------------------------------------------------
SunTrust Bank, Central Florida, National Association          15,000,000           5.30973
------------------------------------------------------------------------------------------
U.S. Bank National Association                                15,000,000           5.30973
------------------------------------------------------------------------------------------
AmSouth Bank                                                  10,000,000           3.53982
------------------------------------------------------------------------------------------
Imperial Bank                                                 10,000,000           3.53982
------------------------------------------------------------------------------------------
BankAtlantic                                                   7,500,000           2.65486
------------------------------------------------------------------------------------------
     Total                                                  $282,500,000               100%
------------------------------------------------------------------------------------------
</TABLE>

                                      -1-<PAGE>

                                                                    Exhibit 10.2

               AMENDMENT TO EMPLOYMENT AND RETENTION AGREEMENTS
               ------------------------------------------------

     This Amendment to Employment and Retention Agreements ("Amendment") is made
and entered into on this 1/st/ day of June, 2001, by and between AMERIPATH,
INC., a Delaware corporation (the "Company"), and ALAN LEVIN, M.D. (hereinafter,
the "Executive").

                                R E C I T A L S
                                - - - - - - - -

     A.  The Executive is currently employed by the Company as a Doctor of
Medicine, Specializing in Pathology, pursuant to an Employment Agreement with
Derrick & Associates Pathology, P.A. ("Derrick"), dated November 3, 1994 (the
"Prior Employment Agreement"), which Prior Employment Agreement was assumed by
the Company when it acquired Derrick.

     B.  Subsequent to entering into the Prior Employment Agreement, the Company
offered the Executive and the Executive accepted an Executive Retention
Agreement dated August 12, 1999 (the "Retention Agreement").

     C.  The Company and the Executive now wish to amend portions of the Prior
Employment Agreement and the Retention Agreement.

                                   AGREEMENT
                                   ---------

     NOW, THEREFORE, in consideration of the promises and mutual covenants set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Executive and the Company agree
as follows:

     1.  Recitals. The foregoing recitals are true and correct and are
         --------
incorporated herein by this reference.

     2.  Term of Employment. The Executive's term of employment (the "Term of
         ------------------
Employment"), shall commence upon execution of this Amendment by both the
Executive and the Company and shall terminate upon the date on which the
employment of the Executive is terminated pursuant to and in accordance with
Section 5 hereof (the "Expiration Date").

     3.  Compensation.
         ------------

         3.1 Base Salary. The Executive shall receive a base salary at the
             -----------
annual rate of $ 300,000 (the "Base Salary") during the Term of Employment, with
                               ------------
such Base Salary payable in installments consistent with the Company's normal
payroll schedule, subject to applicable withholding and other taxes. The Base
Salary shall be reviewed at least annually.

         3.2 Bonuses.
             -------

             a.  During the Term of Employment, for each calendar year during
the Term of Employment (the "Bonus Period"), the Board shall establish a bonus
pool from which

                                      -1-
<PAGE>

the Executive shall be eligible to receive an annual bonus potentially equal to
thirty-five percent (35%) of the Executive's Base Salary (the "Bonus Payment"),
to be determined by the Executive's supervisor and based upon the satisfaction
by the Executive and/or the Company of the goals (the "Goals"), to be
established by the Company. Notwithstanding the foregoing, in the event that the
Goals are either exceeded or not fully achieved for a Bonus Period, the
Executive may be eligible to receive a Bonus Payment in an amount in excess of
or less than thirty-five percent (35%) of the Executive's Base Salary.

              b.  For the Bonus Period in which the Executive's employment with
the Company terminates for any reason other than by the Company for Cause under
Section 5.1 hereof, provided that the Executive has been continuously employed
with the Company for a minimum of six (6) months during such Bonus Period, the
Company shall pay the Executive a pro rata portion (based upon the period
beginning on the first day of the Bonus Period and ending on the date on which
the Executive's employment with the Company terminates) of the bonus otherwise
payable under Section 3.2 for the Bonus Period in which such termination of
employment occurs; provided, however, that (i) the Bonus Period shall be deemed
to end on the last day of the calendar quarter in which the Executive's
employment so terminates, and (ii) the business criteria used to determine the
bonus for this short Bonus Period shall be annualized and shall be determined
based upon audited financial information prepared in accordance with generally
accepted accounting principles, applied consistently with prior periods, and
reviewed and approved by the Compensation Committee of the Board. The Incentive
Compensation for this Bonus Period is sometimes hereinafter referred to as the
"Termination Year Bonus".

     4.  Expense Reimbursement and Other Benefits.
         ----------------------------------------

         4.1  Reimbursement of Expenses. Upon the submission of proper
              -------------------------
substantiation by the Executive, and subject to such rules and guidelines as the
Company may from time to time adopt with respect to the reimbursement of
expenses of executive personnel, the Company shall reimburse the Executive for
all reasonable expenses actually paid or incurred by the Executive during the
Term of Employment in the course of and pursuant to the business of the Company.
The Executive shall account to the Company in writing for all expenses for which
reimbursement is sought and shall supply to the Company copies of all relevant
invoices, receipts or other evidence reasonably requested by the Company.

         4.2  Compensation/Benefit Programs. During the Term of Employment, the
              -----------------------------
Executive shall be entitled to participate in all medical, dental,
hospitalization, accidental death and dismemberment, disability, travel and life
insurance plans, and any and all other plans as are presently and hereinafter
offered by the Company to its executive personnel, including savings, pension,
profit-sharing and deferred compensation plans, subject to the general
eligibility and participation provisions set forth in such plans.

         4.3  Stock Options. During the Term of Employment hereunder, and
              -------------
subject to the execution of any other applicable agreements, the Executive shall
be eligible on an annual basis to receive options (the "Stock Options") to
purchase common stock (the "Common Stock")

                                      -2-
<PAGE>

of the Company, the amount to be determined by the Chairman of the Board and CEO
(the "Chairman") of the Company based upon the Executive's performance and
services rendered to the Company, and subject to the approval by both the
Compensation Committee and the Board at their regular annual review of executive
performance. If and to the extent awarded, the Stock Options shall be granted
under (and therefore subject to all terms of) the Company's stock option plan
(the "Stock Option Plan") and pursuant to the terms of a certain stock option
agreement (the "Option Agreement") to be entered into by and between the
Executive and the Company. In addition, during the Term of Employment, the
Executive shall be eligible to be granted additional options under the Company's
Stock Option Plan. The number, if any, of additional options and terms and
conditions thereof shall be determined by the Committee appointed pursuant to
the Stock Option Plan, or by the Board of Directors of the Company, in its
discretion and pursuant to the Stock Option Plan. Notwithstanding any other
provision of this Amendment, Option Agreements entered into by the Executive and
the Company prior to the date of this Amendment shall remain in full force and
effect.

          4.4  Other Benefits. The Executive shall accrue up to four (4) weeks
               --------------
of paid vacation each calendar year during the Term of Employment, to be taken
at such times as the Executive and the Company shall mutually determine and
provided that no vacation time shall significantly interfere with the duties
required to be rendered by the Executive hereunder.  Any accrued vacation time
not taken by Executive during any calendar year may be carried forward into any
succeeding calendar year. Notwithstanding the foregoing, in no event shall the
Executive's accrued vacation time exceed four (4) weeks at any point in time.
The Executive shall receive such additional benefits, if any, as the Board of
the Company shall from time to time determine.

     5.   Termination and/or Change of Control.
          ------------------------------------

          5.1  Termination for Cause. The Company shall at all times have the
               ---------------------
right, upon written notice to the Executive, to terminate the Term of
Employment, for Cause as defined by Paragraph 16 of the Prior Employment
Agreement. Any termination for Cause shall be made by notice in writing to the
Executive, which notice shall set forth in reasonable detail all acts or
omissions upon which the Company is relying for such termination. Upon any
termination pursuant to this Section 5.1, the Company shall pay to the Executive
any accrued and unpaid Base Salary through the date of termination. Upon any
termination effected and compensated pursuant to this Section 5.1, the Company
shall have no further liability hereunder (other than for reimbursement for
reasonable business expenses incurred prior to the date of termination, subject,
however, to the provisions of Section 4.1, and payment of compensation for
accrued and unused vacation days).

          5.2  Disability. The Company shall at all times have the right, upon
               ----------
written notice to the Executive, to terminate the Term of Employment, if the
Executive shall become entitled to benefits under the Company's long term
disability plan as then in effect, or, if the Executive shall as the result of
mental or physical incapacity, illness or disability, become unable to perform
his obligations hereunder for a period of 180 days in any 12-month period. The
Board

                                      -3-
<PAGE>

shall have sole discretion based upon competent medical advice to determine
whether the Executive is or continues to be disabled. Upon any termination
pursuant to this Section 5.2, the Company shall (i) pay to the Executive any
accrued and unpaid Base Salary and Bonus Payment, through the effective date of
termination specified in such notice, (ii) pay to the Executive his Termination
Year Bonus, if any, at the time provided in Section 3.2b hereof, and (iii) pay
the COBRA premiums for the Executive's medical and dental insurance coverage in
effect on the termination date, for a period of eighteen (18) months following
the termination of the Executive's employment with the Company. Upon any
termination effected and compensated pursuant to this Section 5.2, the Company
shall have no further liability hereunder (other than for reimbursement for
reasonable business expenses incurred prior to the date of termination, subject,
however, to the provisions of Section 4.1, and payment of compensation for
accrued and unused vacation days).

          5.3  Death. Upon the death of the Executive during the Term of
               -----
Employment, the Company shall (i) pay to the estate of the deceased Executive
any accrued and unpaid Base Salary and Bonus Payment, through the Executive's
date of death, (ii) pay to the estate of the deceased Executive, the Executive's
Termination Year Bonus, if any, at the time provided in Section 3.2b hereof.
Upon any termination effected and compensated pursuant to this Section 5.3, the
Company shall have no further liability hereunder (other than for reimbursement
for reasonable business expenses incurred prior to the date of termination,
subject, however, to the provisions of Section 4.1, and payment of compensation
for accrued and unused vacation days).

          5.4  Termination Without Cause. At any time the Company shall have
               -------------------------
the right to terminate the Term of Employment by written notice to the
Executive. Upon any termination pursuant to this Section 5.4 (that is not a
termination under any of Sections 5.1, 5.2, 5.3 or 5.5) the Company shall (i)
pay to the Executive any accrued and unpaid Base Salary and Bonus Payment,
through the date of termination specified in such notice, (ii) continue to pay
the Executive's Base Salary for a period of twelve (12) months following the
termination of the Executive's employment with the Company, in the manner and at
such times as the Base Salary otherwise would have been payable to the
Executive, (iii) pay to the Executive his Termination Year Bonus, if any, at the
time provided in Section 3.2b, and (iv) pay the COBRA premiums for the
Executive's medical and dental insurance coverage in effect on the termination
date, for a period of eighteen (18) months following the termination of the
Executive's employment with the Company. Upon any termination effected and
compensated pursuant to this Section 5.4, the Company shall have no further
liability hereunder (other than for reimbursement for reasonable business
expenses incurred prior to the date of termination, subject, however, to the
provisions of Section 4.1, and payment of compensation for accrued and unused
vacation days).

          5.5  Termination by Executive.
               ------------------------

               a.  The Executive shall at all times have the right to terminate
the Employment Term without cause upon not less than one hundred and eighty
(180) days notice given pursuant to paragraph c. of this Section 5.5.

                                      -4-
<PAGE>

          b.  The Executive shall at all times have the right to terminate his
Employment Term for "Good Reason". For purposes of this Section 5.5, "Good
Reason" shall mean:

              (i)   the assignment to the Executive of any duties inconsistent
in any material respect with the Executive's position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by the Prior Employment Agreement and the
Retention Agreement, or any other action by the Company which results in a
diminution in such position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Executive;

              (ii)  any failure by the Company to comply with any of the
provisions of Section 3 of this Amendment, other than an isolated, insubstantial
and inadvertent action not taken in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Executive;

              (iii) the Company's requiring the Executive to be based at any
office or location other than that in which the Executive was based at the time
this Amendment was executed, except for travel reasonably required in the
performance of the Executive's duties and responsibilities hereunder;

              (iv)  any purported termination by the Company of the Executive's
employment otherwise than as expressly permitted by this Amendment; or

              (v)   any failure by the Company or its successor(s) to assume its
obligations in accordance with Section 14 of this Amendment.

          c.  Any termination by Executive pursuant to this Section 5.5 shall be
communicated in writing, in accordance with Section 13 of this Amendment, and
shall specify the reason for the termination and the effective date thereof.

          d.  Upon termination of the Term of Employment pursuant to paragraph
a. of this Section 5.5 (that is not a termination under Section 5.6) by the
Executive, the Company shall pay to the Executive any accrued and unpaid Base
Salary and Bonus Payment, through the effective date of termination specified in
such notice.

          e.  Upon termination of the Term of Employment for "Good Reason",
pursuant to paragraph b. of this Section 5.5 (that is not a termination under
Section 5.6), by the Executive, the Company shall (i) pay to the Executive any
accrued and unpaid Base Salary and Bonus Payment, through the date of
termination specified in such notice, (ii) continue to pay the Executive's Base
Salary for a period of twelve (12) months following the termination of the
Executive's employment with the Company, in the manner and at such times as the
Base Salary otherwise would have been payable to the Executive, (iii) pay to the
Executive his Termination Year Bonus, if any, at the time provided in Section
4.2b, and (iv) pay the COBRA premiums for

                                      -5-
<PAGE>

the Executive's and Executive's family's medical and dental insurance coverage
in effect on the termination date, for a period of eighteen (18) months
following the termination of the Executive's employment with the Company.

          f.  Upon any termination effected and compensated pursuant to this
Section 5.5, the Company shall have no further liability hereunder (other than
for reimbursement for reasonable business expenses incurred prior to the date of
termination, subject, however, to the provisions of Section 4.1, and payment of
compensation for accrued and unused vacation days).

     5.6  Change in Control of the Company.
          --------------------------------

          a.  Unless otherwise provided in Section 5.7 hereof, in the event that
a Change in Control (as defined in paragraph f. of this Section 5.6) in the
Company shall occur during the Term of Employment, the Company shall pay to the
Executive, within thirty (30) days of the date of the Change in Control, a lump
sum bonus equal to two (2) times the Executive's current annual Base Salary (the
"Change in Control Date Bonus"), and (ii) accelerate the vesting of all
AmeriPath Stock Options which have been granted to the Executive but are
unvested, so that the unvested shares are one hundred (100) percent vested on
the date of the Change in Control.

          b.  If the Executive's Term of Employment is terminated prior to the
date on which a Change of Control occurs, and it is reasonably demonstrated that
such termination (i) was at the request of a third party who has taken steps
reasonably calculated to effect a Change of Control, or (ii) otherwise arose in
connection with or anticipation of a Change of Control, then for all purposes
hereunder, a "Change of Control Termination" shall be deemed to have occurred.

          c.  If Executive's Term of Employment is terminated without cause
pursuant to Section 5.4 hereof, within one year after a Change of Control, a
"Change of Control Termination" shall be deemed to have occurred.

          d.  If, within one year following a Change of Control, the Company
requires the Executive to be based at any office or location other than that in
which the Executive was based at the time this Amendment was executed, except
for travel reasonably required in the performance of the Executive's duties and
responsibilities hereunder, the Executive may elect to terminate this Amendment
and a "Change of Control Termination" shall be deemed to have occurred.

          e.  In the event of a "Change of Control Termination" under
paragraphs b, c, or d of this Section 5.6, the Company shall:

              (i)   pay to the Executive any accrued and unpaid Base Salary and
Bonus Payment, through the effective date of the termination;

                                      -6-
<PAGE>

              (ii)  pay to the Executive his Termination Year Bonus, if any, at
the time provided in Section 4.2b hereof;

              (iii) pay to the Executive, within 30 days of the termination of
his employment hereunder, a lump sum payment equal to one (1) times the
Executive's annual Base Salary;

              (iv)  accelerate the vesting of all AmeriPath Stock Options which
have been granted to the Executive but are unvested, so that the unvested shares
are one hundred (100) percent vested as of the Executive's Termination Date; and

              (v)   pay to the Executive in a lump sum the compensation and
benefits provided in the Termination Without Cause Section 5.4.

The Company shall have no further liability hereunder (other than for
reimbursement for reasonable business expenses incurred prior to the date of
termination, subject, however, to the provisions of Section 4.1, and payment of
compensation for accrued and unused vacation days).

          f.  If, on the date of the one-year anniversary of the date of the
Change In Control, the Executive is in the employ of the Company, or any
successor thereto or assign thereof, the Executive shall be paid, on such one-
year anniversary date, an additional lump sum bonus equal to one (1) times the
Executive's annual Base Salary as determined immediately prior to the Change in
Control Date (the "Anniversary Bonus").

          g.  For purposes of this Amendment, the term "Change in Control" shall
mean:

              (i)   Approval by the shareholders of the Company of (x) a
reorganization, merger, consolidation or other form of corporate transaction or
series of transactions, in each case, with respect to which persons who were the
shareholders of the Company immediately prior to such reorganization, merger or
consolidation or other transaction do not, immediately thereafter, own more than
50% of the combined voting power entitled to vote generally in the election of
directors of the reorganized, merged or consolidated company's then outstanding
voting securities, in substantially the same proportions as their ownership
immediately prior to such reorganization, merger, consolidation or other
transaction, or (y) a liquidation or dissolution of the Company or (z) the sale
of all or substantially all of the assets of the Company (unless such
reorganization, merger, consolidation or other corporate transaction,
liquidation, dissolution or sale is subsequently abandoned);

              (ii)  Individuals who, as of the Commencement Date of this
Amendment, constitute the Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board, provided that any person becoming a
director subsequent to the Commencement Date of this Amendment whose election,
or nomination for election by the Company's shareholders, was approved by a vote
of at least a majority of the directors then comprising the Incumbent Board
(other than an election or nomination of an individual whose

                                      -7-
<PAGE>

initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the Directors of the Company) shall
be, for purposes of this Amendment, considered as though such person were a
member of the Incumbent Board; or

              (iii) the acquisition (other than by or from the Company) by any
person, entity or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act, of beneficial ownership within the meaning of Rule
13-d promulgated under the Securities Exchange Act of 50% or more of either the
then outstanding shares of the Company's Common Stock or the combined voting
power of the Company's then outstanding voting securities entitled to vote
generally in the election of directors [(hereinafter referred to as the
ownership of a "Controlling Interest") excluding, for this purpose, any
acquisitions by (1) the Company or its Subsidiaries, (2) any person, entity or
"group" that as of the Commencement Date of this Amendment owns beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Securities
Exchange Act) of a Controlling Interest or (3) any employee benefit plan of the
Company or its Subsidiaries].

     5.7  Certain Reduction of Payments by the Company.
          --------------------------------------------

          a.  For purposes of this section, (i) A Payment shall mean any payment
or distribution in the nature of compensation to or for the benefit of the
Executive, whether paid or payable pursuant to this Amendment or otherwise; (ii)
Amendment Payment shall mean a Payment paid or payable pursuant to this
Amendment (disregarding this Section 5.7); (iii) Net After Tax Receipt shall
mean the Present Value of a Payment net of all taxes imposed on the Executive
with respect thereto under Sections 1 and 4999 of the Code, determined by
applying the highest marginal rate under Section 1 of the Code which applied to
the Executive's taxable income for the immediately preceding taxable year; (iv)
"Present Value" shall mean such value determined in accordance with Section
280G(d)(4) of the Code; and (v) "Reduced Amount" shall mean the smallest
aggregate amount of Payments which (a) is less than the sum of all Payments and
(b) results in aggregate Net After Tax Receipts which are equal to or greater
than the Net After Tax Receipts which would result if the aggregate Payments
were any other amount equal to or less than the sum of all Payments.

          b.  Anything in this Amendment to the contrary notwithstanding, in the
event that the Company's independent auditors or, at the Executive's option, any
other nationally or regionally recognized firm of independent accountants
selected by the Executive and approved by the Company, which approval shall not
be unreasonably withheld (the "Accounting Firm"), shall determine that receipt
of all Payments would subject the Executive to tax under Section 4999 of the
Code, it shall determine whether some amount of Payments would meet the
definition of a "Reduced Amount." If the Accounting Firm determines that there
is a Reduced Amount, the aggregate Amendment Payments shall be reduced to such
Reduced Amount; provided, however, that if the Reduced Amount exceeds the
aggregate Amendment Payments, the aggregate Payments shall, after the reduction
of all Amendment Payments, be reduced (but not below zero) in the amount of such
excess.

                                      -8-
<PAGE>

          c.  If the Accounting Firm determines that aggregate Amendment
Payments or Payments, as the case may be, should be reduced to the Reduced
Amount, the Company shall promptly give the Executive notice to that effect and
a copy of the detailed calculation thereof, and the Executive may then elect, in
his sole discretion, which and how much of the Amendment Payments or Payments,
as the case may be, shall be eliminated or reduced (as long as after such
election the present value of the aggregate Payments equals the Reduced Amount),
and shall advise the Company in writing of his election within ten days of his
receipt of notice. If no such election is made by the Executive within such ten-
day period, the Company may elect which of the Amendment Payments or Payments,
as the case may be, shall be eliminated or reduced (as long as after such
election the present value of the aggregate Payments equals the Reduced Amount)
and shall notify the Executive promptly of such election. All determinations
made by the Accounting Firm under this Section shall be binding upon the Company
and the Executive and shall be made within 60 days of a termination of
employment of the Executive. As promptly as practicable following such
determination, the Company shall pay to or distribute for the benefit of the
Executive such Payments as are then due to the Executive under this Amendment
and shall promptly pay to or distribute for the benefit of the Executive in the
future such Payments as become due to the Executive under this Amendment.

          d.  While it is the intention of the Company and the Executive to
reduce the amounts payable or distributable to the Executive hereunder only if
the aggregate Net After Tax Receipts to the Executive would thereby be
increased, as a result of the uncertainty in the application of Section 4999 of
the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that amounts will not have been paid or distributed by
the Company to or for the benefit of the Executive pursuant to this Amendment
which should not have been so paid or distributed ("Overpayment") or that
additional amounts which will have not been paid or distributed by the Company
to or for the benefit of the Executive pursuant to this Amendment could have
been so paid or distributed ("Underpayment"), in each case, consistent with the
calculation of the Reduced Amount hereunder. In the event that the Accounting
Firm, based either upon the assertion of a deficiency by the Internal Revenue
Service against the Company or the Executive which the Accounting Firm believes
has a high probability of success or controlling precedent or other substantial
authority, determines that an Overpayment has been made, any such Overpayment
paid or distributed by the Company to or for the benefit of the Executive shall
be treated for all purposes as a loan ab initio to the Executive which the
                                      -- ------
Executive shall repay to the Company together with interest at the applicable
federal rate provided for in Section 7872(f)(2) of the Code;  provided, however,
that no loan shall be deemed to have been made and no amount shall be payable by
the Executive to the Company if and to the extent such deemed loan and payment
would not either reduce the amount on which the Executive is subject to tax
under Section 1 and Section 4999 of the Code or generate a refund of such taxes.
In the event that the Accounting Firm, based upon controlling precedent or other
substantial authority, determines that an Underpayment has occurred, any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Executive together with interest at the applicable federal rate provided for in
Section 7872(f)(2) of the Code.

                                      -9-
<PAGE>

          5.8  Resignation.  Upon any termination of employment pursuant to this
               -----------
Article 5, the Executive shall be deemed to have resigned as an officer, and if
he was then serving as a director of the Company, as a director, and if required
by the Board, the Executive hereby agrees to immediately execute a resignation
letter to the Board.

          5.9  Survival.  The provisions of this Article 5 shall survive the
               --------
termination of this Amendment, as applicable.

      6.  Restrictive Covenants.
          ---------------------

          6.1  Non-competition. The noncompete provisions set forth in
               ---------------
Paragraphs 20 and 21 of the Prior Employment Agreement are hereby ratified and
affirmed by the Company and the Executive and the Executive agrees to fully
comply therewith.

          In addition, at all times while the Executive is employed by the
Company and for a two (2) year period immediately following the termination of
the Executive's employment with the Company for any reason, the Executive shall
not, directly or indirectly, engage in or have any interest in any sole
proprietorship, corporation, company, partnership, association, venture or
business or any other person or entity (whether as an employee, officer,
director, partner, agent, security holder, creditor, consultant or otherwise)
that directly or indirectly (or through any affiliated entity) competes with the
Company's business (for purposes of this Agreement, any business that engages in
the management or provision of anatomic pathology diagnostic services {whether
through physician practices, laboratories, hospitals, medical or surgery centers
or otherwise} shall be deemed to compete with the Company's business); provided
that such provision shall not apply to the Executive's ownership of common stock
of the Company or the acquisition by the Executive, solely as an investment, of
securities of any issuer that are registered under Section 12(b) or 12(g) of the
Securities Exchange Act of 1934, as amended, and that are listed or admitted for
trading on any United States national securities exchange or that are quoted on
the National Association of Securities Dealers Automated Quotations System, or
any similar system or automated dissemination of quotations of securities prices
in common use, so long as the Executive does not control, acquire a controlling
interest in or become a member of a group which exercises direct or indirect
control of, more than five percent (5.0%) of any class of capital stock of such
corporation.

          6.2  Confidential Information. The Executive shall not at any time
               ------------------------
divulge, communicate, use to the detriment of the Company or for the benefit of
any other person or persons, or misuse in any way, any Confidential Information
(as hereinafter defined) pertaining to the business of the Company.  Any
Confidential Information or data now or hereafter acquired by the Executive with
respect to the business of the Company (which shall include, but not be limited
to, information concerning the Company's financial condition, prospects,
technology, customers, suppliers, employees, employee compensation or benefits,
employment practices and methods of doing business) shall be deemed a valuable,
special and unique asset of the Company that is received by the Executive in
confidence and as a fiduciary, and Executive shall remain a fiduciary to the
Company with respect to all of such information. For purposes of this

                                      -10-
<PAGE>

Amendment, "Confidential Information" means information disclosed to the
            ------------------------
Executive or known by the Executive as a consequence of or through the unique
position of his employment with the Company (including information conceived,
originated, discovered or developed by the Executive) prior to or after the date
hereof, and not generally or publicly known, about the Company or its business.
Notwithstanding the foregoing, nothing herein shall be deemed to restrict the
Executive from disclosing Confidential Information to promote the best interests
of the Company or to the extent required by law.

          6.3  Nonsolicitation of Employees and Customers.  At all times while
               ------------------------------------------
the Executive is employed by the Company and for the two (2) year period
immediately following the termination of the Executive's employment with the
Company for any reason, the Executive shall not, directly or indirectly, for
himself or for or on behalf of any other person, firm, corporation, partnership,
association or other entity (a) employ or attempt to employ or solicit the
termination of employment of or enter into any contractual arrangement with any
employee or former employee of the Company, unless such employee or former
employee has not been employed by the Company for a period in excess of six (6)
months, and/or (b) call on or solicit any of the actual or targeted prospective
customers or clients of the Company (or of its physician practices or
laboratories) on behalf of any person or entity in connection with any business
that competes with the Company's business, nor shall the Executive make known
the names and/or addresses of such employees, customers or clients or any
information relating in any manner to the Company's trade or business
relationships with such employees, customers or clients, other than in
connection with the performance of Executive's duties under this Amendment.

          6.4  Ownership of Developments.  All copyrights, patents, trade
               -------------------------
secrets, or other intellectual property rights associated with any ideas,
concepts, techniques, inventions, processes, or works of authorship developed or
created by Executive during the course of performing work for the Company or its
clients (collectively, the "Work Product") shall belong exclusively to the
                            ------------
Company and shall, to the extent possible, be considered a work made by the
Executive for hire for the Company within the meaning of Title 17 of the United
States Code.  To the extent the Work Product may not be considered work made by
the Executive for hire for the Company, the Executive agrees to assign, and
automatically assign at the time of creation of the Work Product, without any
requirement of further consideration, any right, title, or interest the
Executive may have in such Work Product.  Upon the request of the Company, the
Executive shall take such further actions, including execution and delivery of
instruments of conveyance, as may be appropriate to give full and proper effect
to such assignment.

          6.5  Books and Records.  All books, records, and accounts relating in
               -----------------
any manner to the customers or clients of the Company, whether prepared by the
Executive or otherwise coming into the Executive's possession, shall be the
exclusive property of the Company and shall be returned immediately to the
Company on termination of the Executive's employment hereunder or on the
Company's request at any time.

          6.6  Definition of Company.  Solely for purposes of this Article 6,
               ---------------------
the term "Company" also shall include any existing or future subsidiaries of the
Company that are

                                      -11-
<PAGE>

operating during the time periods described herein and any other entities that
directly or indirectly, through one or more intermediaries, control, are
controlled by or are under common control with the Company during the periods
described herein.

          6.7  Acknowledgment by Executive. The Executive acknowledges and
               ---------------------------
confirms that (a) the restrictive covenants contained in this Article 6 are
reasonably necessary to protect the legitimate business interests of the
Company, and (b) the restrictions contained in this Article 6 (including without
limitation the length of the term of the provisions of this Article 6) are not
overbroad, overlong, or unfair and are not the result of overreaching, duress or
coercion of any kind. The Executive acknowledges and confirms that his special
knowledge of the business of the Company is such as would cause the Company
serious injury or loss if he were to use such ability and knowledge to the
benefit of a competitor or were to compete with the Company in violation of the
terms of this Article 6. The Executive further acknowledges that the
restrictions contained in this Article 6 are intended to be, and shall be, for
the benefit of and shall be enforceable by, the Company's successors and
assigns.

          6.8  Reformation by Court. In the event that a court of competent
               --------------------
jurisdiction shall determine that any provision of this Article 6 is invalid or
more restrictive than permitted under the governing law of such jurisdiction,
then only as to enforcement of this Article 6 within the jurisdiction of such
court, such provision shall be interpreted and enforced as if it provided for
the maximum restriction permitted under such governing law.

          6.9  Extension of Time. If the Executive shall be in violation of any
               -----------------
provision of this Article 6, then each time limitation set forth in this Article
6 shall be extended for a period of time equal to the period of time during
which such violation or violations occur. If the Company seeks injunctive relief
from such violation in any court, then the covenants set forth in this Article 6
shall be extended for a period of time equal to the pendency of such proceeding
including all appeals by the Executive.

          6.10 Survival.  The provisions of this Article 6 shall survive the
               --------
termination of this Amendment, as applicable.

     7.   Injunction. It is recognized and hereby acknowledged by the parties
          ----------
hereto that a breach by the Executive of any of the covenants contained in
Article 6 of this Amendment will cause irreparable harm and damage to the
Company, the monetary amount of which may be virtually impossible to ascertain.
As a result, the Executive recognizes and hereby acknowledges that the Company
shall be entitled to an injunction from any court of competent jurisdiction
enjoining and restraining any violation of any or all of the covenants contained
in Article 6 of this Amendment by the Executive or any of his affiliates,
associates, partners or agents, either directly or indirectly, and that such
right to injunction shall be cumulative and in addition to whatever other
remedies the Company may possess.

     8.   Arbitration. Any dispute or controversy arising under or in connection
          ------------
with this Amendment shall be settled exclusively by arbitration in Palm Beach
County, Florida, in

                                      -12-
<PAGE>

accordance with the Rules of the American Arbitration Association then in effect
(except to the extent that the procedures outlined below differ from such
rules). Within thirty (30) days after written notice by either party has been
given that a dispute exists and that arbitration is required, each party must
select an arbitrator and those two arbitrators shall promptly, but in no event
later than thirty (30) days after their selection, select a third arbitrator.
The parties agree to act as expeditiously as possible to select arbitrators and
conclude the dispute. The selected arbitrators must render their decision in
writing. The cost and expenses of the arbitration and of enforcement of any
award in any court shall be borne by the non-prevailing party. If advances are
required, each party will advance one-half of the estimated fees and expenses of
the arbitrators. Judgment may be entered on the arbitrators' award in any court
having jurisdiction. Although arbitration is contemplated to resolve disputes
hereunder, either party may proceed to court to obtain an injunction to protect
its rights hereunder, the parties agreeing that either could suffer irreparable
harm by reason of any breach of this Amendment. Pursuit of an injunction shall
not impair arbitration on all remaining issues.

     9.   Section 162(m) Limits. Notwithstanding any other provision of this
          ---------------------
Amendment to the contrary, if and to the extent that any remuneration payable by
the Company to the Executive for any year would exceed the maximum amount of
remuneration that the Company may deduct for that year under Section 162(m)
("Section 162(m)") of the Code, payment of the portion of the remuneration for
  --------------
that year that would not be so deductible under Section 162(m) shall, in the
sole discretion of the Board, be deferred and become payable at such time or
times as the Board determines that it first would be deductible by the Company
under Section 162(m), with interest at the "short-term applicable rate" as such
term is defined in Section 1274(d) of the Code.  The limitation set forth under
this Section 9 shall not apply with respect to any amounts payable to the
Executive pursuant to Article 5 hereof.

     10.  Assignment.  Neither party shall have the right to assign or delegate
          ----------
his rights or obligations hereunder, or any portion thereof, to any other
person.

     11.  Governing Law.  This Amendment shall be governed by and construed and
          -------------
enforced in accordance with the laws of the State of Florida, without reference
to principles of conflict of laws.

     12.  Entire Agreement; Prior Agreements.  To the extent this Amendment
          ----------------------------------
modifies the Prior Employment Agreement or Retention Agreement, the same are
replaced and superseded hereby.  Unless specifically provided herein to the
contrary, in the event of any conflict between the terms of the Prior Employment
Agreement, the Retention Agreement and/or this Amendment, the terms of this
Amendment shall control.  To the extent such agreements are not modified by this
Amendment, they shall remain in full force and effect.

     13.  Notices:  All notices and other communications hereunder shall be in
          -------
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:

                                      -13-
<PAGE>

          If to the Executive:
          -------------------

          Alan Levin, M.D.
          21 Island Road
          Stuart, FL 34936

          If to the Company:
          -----------------

          AmeriPath, Inc.
          7289 Garden Road, Suite 200
          Riviera Beach, FL 33404
          Attention: Chairman of the Board

or to such other address as either party shall have furnished to the other in
writing in accordance herewith.  Notice and communications shall be effective
when actually received by the addressee.

     14.  Benefits; Binding Effect.  This Amendment shall be for the benefit of
          ------------------------
and binding upon the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and, where permitted and
applicable, assigns, including, without limitation, any successor to the
Company, whether by merger, consolidation, sale of stock, sale of assets or
otherwise.

     15.  Severability.  The invalidity of any one or more of the words,
          ------------
phrases, sentences, clauses, provisions, sections or articles contained in this
Amendment shall not affect the enforceability of the remaining portions of this
Amendment or any part thereof, all of which are inserted conditionally on their
being valid in law, and, in the event that any one or more of the words,
phrases, sentences, clauses, provisions, sections or articles contained in this
Amendment shall be declared invalid, this Amendment shall be construed as if
such invalid word or words, phrase or phrases, sentence or sentences, clause or
clauses, provisions or provisions,  section or sections or article or articles
had not been inserted.  If such invalidity is caused by length of time or size
of area, or both, the otherwise invalid provision will be considered to be
reduced to a period or area which would cure such invalidity.

     16.  Waivers.  The waiver by either party hereto of a breach or violation
          -------
of any term or provision of this Amendment shall not operate nor be construed as
a waiver of any subsequent breach or violation.

     17.  Damages.  Nothing contained herein shall be construed to prevent the
          -------
Company or the Executive from seeking and recovering from the other damages
sustained by either or both of them as a result of its or his breach of any term
or provision of this Amendment.  In the event that either party hereto brings
suit for the collection of any damages resulting from, or the injunction of any
action constituting, a breach of any of the terms or provisions of this

                                      -14-
<PAGE>

Amendment, then the party found to be at fault shall pay all reasonable court
costs and attorneys' fees of the other.

     18.  Section Headings.  The article, section and paragraph headings
          ----------------
contained in this Amendment are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Amendment.

     19.  No Third Party Beneficiary.  Nothing expressed or implied in this
          --------------------------
Amendment is intended, or shall be construed, to confer upon or give any person
other than the Company, the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and permitted assigns, any
rights or remedies under or by reason of this Amendment.

     20.  Withholding Taxes. The Company may withhold from any amounts payable
          -----------------
under this Amendment such Federal, state or local taxes as shall be required to
be withheld pursuant to any applicable law or regulation.

     21.  Counterparts.  This Amendment may be executed in one or more
          -------------
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument and agreement.

     IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the
date first above written.

EXECUTIVE:                               COMPANY:

                                         AMERIPATH, INC.

________________________________         By:____________________________________
Alan Levin, M.D.                           James C. New
                                           Chairman and Chief Executive Officer

                                      -15-

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