Document:

EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT  AGREEMENT,  made as of this 26th day of June, 1998, by
and between KLEVER MARKETING, INC., a Delaware corporation (the "Employer"), and
GERARD C. COELSCH ("Employee");

                               W I T N E S S E T H

                  WHEREAS,  the Employer  conducts  business  from its principal
office located at 350 West 300 South, Suite 201, Salt Lake City, Utah; and

                  WHEREAS,  the  Employer  desires  to  engage  Employee  as its
President and Chief  Operating  Officer upon the terms and  conditions set forth
herein, and Employee desires to become so engaged;

                  NOW THEREFORE,  in  consideration  of the foregoing and of the
mutual covenants, terms and agreements hereinafter set forth, the parties hereto
agree as follows:

         1 .  EMPLOYMENT.  The Employer  hereby employs  Employee,  and Employee
hereby accepts such employment, upon the terms and subject to the conditions set
forth in this Agreement.

         2. Term. ' The initial term of employment shall begin on July .6, 1998,
and shall end on July .8, 1999 (the "First Contract Year");  provided,  however,
that if the Employer obtains (i) a binding commitment to raise capital,  or does
in  fact  raise  capital,  in  an  amount  of  at  least  Five  Million  Dollars
($5,000,000),  through  a  private  or  public  offering,  or (ii) the  Board of
Directors approves any other funding method (e.g. a joint venture, etc.), during
the  First  Contract  Year,  the  term  of this  employment  contract  shall  be
automatically  extended for a two (2) year period (the "Extension Period").  The
Extension Period shall commence on the date that the Employer first obtains such
binding  commitment for capital or first raises such capital,  whichever  occurs
first,  or the date the Board of Directors  approves such other funding  method,
provided  such funding  transaction  is  ultimately  consummated.  The Extension
Period  shall not be extended  by any  unexpired  portion of the First  Contract
Year. For example,  if the Extension  Period commences on December 22, 1998, the
initial  term of  employment  hereunder  shall last  through  December 21, 2000.
Employee's  term of  employment  hereunder  shall be  automatically  renewed for
additional  one-year  terms  unless,  at  least  sixty  (60)  days  prior to the
expiration of the current term, either party to this Agreement  provides written
notice to the other party hereto that such party is  terminating  the employment
of  Employee  effective  as of the  end  of  the  current  term.  The  foregoing
provisions of this section 2 notwithstanding,  the employment of Employee may be
sooner  terminated at any time in accordance  with the other  provisions of this
Agreement.

<PAGE>

     3.  POSITION,  DUTIES  AND  LOYALTY.  Employee  shall  assume the office of
President  and Chief  Operating  0fficer  of  Employer.  Employee  shall  report
directly to Employer' and Employee shall  faithfully and  industriously  perform
all duties in accordance with the  instructions of Employer.  Employee shall owe
the  Employer  his highest  loyalty and  Employee  will use his best  efforts to
promote the interests of Employer.

         4.  COMPENSATION:   BASE  SALARY.  In  consideration  of  the  faithful
performance of his duties, Employer agrees to pay Employee an annual base salary
of Two Hundred  Thousand  Dollars  ($200,000.00).  Unless  Employer and Employee
mutually  agree in  writing  to adjust  Employee's  annual  base  salary for any
succeeding  contract  period,  Employer  shall continue to pay Employee the same
annual base salary paid during the  immediately  preceding  contract  year.  The
annual base salary shall be payable on a twenty-four  (24) period payroll cycle,
and all compensation hereunder shall be subject to the customary withholding tax
and other  employment  taxes as required with respect to compensation  paid by a
corporation to an employee.  Until this agreement is terminated,  Employer shall
continue to pay the base salary to Employee  notwithstanding  Employee's absence
due to illness or injury; provided,  however, such obligation shall expire after
Employee  is  absent  from work for a period  of three  (3)  continuous  months.
Employee  represents  to  Employer  that  as of the  date of  execution  of this
Agreement, Employee is not aware of any serious medical condition which could be
reasonably expected to hinder or impair Employee with respect to the performance
of his duties hereunder.

         5. COMPENSATION: CASH PERFORMANCE BONUS. In addition to the base salary
and any other  compensation  payable to Employee under this Agreement,  Employer
shall pay Employee a cash  performance  bonus as set forth in this Section 5. At
the end of each  fiscal  year of  Employer,  Employer  shall pay a cash bonus to
Employee based on the following formula:

Current Base Salary x Plan Fraction.

The Plan  Fraction  is 25% plus .555  times the  Excess  Percentage.  The Excess
Percentage is the percentage by which the actual revenue of the Employer for the
fiscal year,  divided by the revenue set forth in the  Employer's  business plan
duly adopted by the Employer's board of directors for such fiscal year,  exceeds
55%. If such actual revenue  divided by such plan revenue is less than 55%, then
the Plan Fraction  shall equal zero. In no event shall the Plan Fraction  exceed
fifty percent (50%)  notwithstanding  the fact that actual revenue  exceeds plan
revenue.

         Examples.  Assume the  Current  Base Salary is  $200,000,  and the plan
revenue is $ 1,000,000.

<PAGE>

If the actual revenue is $700,000, then the bonus is:

         $200,000 x (25% + (70%-55%)x.555)) = $66,650

If the actual revenue is $1,000,000, then the bonus is:

         $200,000 x (25% + (100%-55%)x.555)) = $99,950

If the actual revenue is $550,000, then the bonus is:

         $200,000 x (25% + (55%-55%)x.555)) = $50,000

If the actual revenue is $1,500,000, then the bonus is:

         $200,000 x 50%, or $100,000

If the actual revenue is $500,000, then the bonus is:

     $200,000 x 0%, or nothing.

         6.  EXPENSES.  During the term of Employee's  employment,  the Employer
shall  promptly  reimburse  Employee  for all  properly  documented,  reasonable
expenses  incurred by Employee in the  performance  of his  services  and duties
hereunder  to the extent such  expenses are in  accordance  with the policies of
Employer,  or Employer  approved  of such  expenses  in  advance.  In  addition,
Employer shall pay or reimburse Employee for the following expenses:

                  a)  Moving  Expense.  Employer  shall  pay for all  reasonable
         moving  expenses  incurred  in order for  Employee  to move his family,
         household belongings and automobiles from Jacksonville, Florida, to the
         Salt Lake City area; provided, however, that all such reimbursements or
         payments  by  Employer  shall  not  exceed  Fifteen   Thousand  Dollars
         ($15,000.00)  except to the extent Employer agrees to make a reasonable
         accommodation for any overage.

                  b) Rent  Payments.  During  the  first  twelve  months of this
         contract, Employer shall directly make payments for Employee's rent and
         utility  expenses with respect to Employee's  housing and living costs;
         provided,  however, that all such payments by Employer shall not exceed
         Eighteen Thousand Dollars ($18,000.00).

                  c) Travel  Allowance.  During  each of the first two months of
         this contract, Employer shall reimburse Employee for two round-trip air

<PAGE>

              fares  from  Jacksonville,   Florida  to  Salt  Lake  City,  Utah;
         provided, however, that such reimbursement shall not exceed the cost of
         tickets  which  are  purchased  at  least  14 days in  advance,  with a
         Saturday night STAYOVER.

Employee shall properly  document the foregoing  expenses in accordance with the
policies of  Employer.  As  necessary,  Employer  shall  report all payments and
reimbursements hereunder as required under applicable tax laws.

     7.  VACATION.  After the first  twelve  (12)  month  period of  employment,
Employee  shall be  entitled to two weeks (2) weeks'  paid  vacation.  After the
second  twelve (12) month period of  employment,  Employee  shall be entitled to
three (3) weeks' paid  vacation.  After the third  twelve  (12) month  period of
employment,  Employee shall be entitled to three (3) weeks' paid vacation. After
the fourth  twelve  month  employment,  and after each  succeeding  twelve month
period of Employee shall be entitled to four (4) weeks' paid vacation.  Employer
and Employee shall mutually agree upon any planned  absence from work in advance
to the extent reasonably possible.  Unless previously approved by the Employer's
chief executive officer,  any unused,  accrued vacation benefits shall expire at
the end of the  applicable  twelve  month period and shall not carry over to any
succeeding twelve month period.

     8. FRINGE BENEFITS. Employee shall be entitled to participate in or receive
benefits  under all of the  Employer's  benefit  plans and other fringe  benefit
arrangements,  if any. Except for the stock option rights set forth in Section 9
below, the Employer,  however, has complete discretion to determine the type and
amount of benefits,  if any, that it shall provide to its  employees,  including
any applicable  vesting  schedules and the variation of benefits among different
employees or groups of  employees.  Except as the parties may  otherwise  agree,
nothing  paid to or on  behalf of  Employee  under any  fringe  benefit  plan or
arrangement  shall  be  deemed  to be in lieu of  compensation  to  Employee  as
outlined in Sections 4 and 5 above,  or any other  provision of this  agreement.
The  foregoing  notwithstanding,   during  the  term  of  Employee's  employment
hereunder,  the  Employer  in any case  agrees to provide  standard  medical and
dental insurance  coverage to Employee and Employee's  dependents under a policy
that waives any  pre-existing  conditions,  with coverage to begin no later than
July 1, 1998.

9. STOCK  OPTIONS.  Employer  represents to Employee that the board of directors
and shareholders of Employer have duly adopted the " Klever Marketing, Inc. 1998
Stock Incentive  Plan" (the "Plan"),  which provides for the grant of "incentive
stock options"  (intended to qualify under ss.422 of the Internal  Revenue Code)
and it  nonqualified  options"  with respect to the stock of Employer.  Employer
hereby  agrees to grant  Employee  certain  options under the Plan as more fully
described  herein  as a  material  inducement  to  Employee  for  executing  and
delivering this employment

                                                               - 4 -

<PAGE>

agreement.  Employer agrees that the grant of options pursuant to this Agreement
constitute  a  substantial  and  material  part of the  compensation  payable to
Employee under this  agreement,  and that such  compensation  is addition to the
compensation  payable to  Employee  under  Sections 4 and 5 above,  or any other
provisions of this  Agreement.  The grant of options  described  herein shall be
further documented in a separate  instrument,  and the options set forth in such
separate instrument shall be a counterpart to the applicable  provisions of this
Agreement,  and shall not be  construed  to double  the  Shares  subject to such
option(s) from 400,000 or 500,000 to 800,000 or 1,000,000.  Nothing herein shall
preclude  the grant of  options in  addition  to those  described  herein by the
Employer in its absolute discretion.

     A) GRANT OF OPTION.  Employer  hereby  agrees to grant  Employee on July 6,
1998,  an option (the  "Option")  to purchase  Four Hundred  Thousand  (400,000)
shares of the  common  stock of  Employer,  $.01 par value  (the  "Shares").  In
addition, if the Employer obtains a binding commitment to raise capital, or does
in  fact  raise  capital,  in  an  amount  of  at  least  Five  Million  Dollars
($5,000,000),  through a private or public  offering,  then  Employer  agrees to
grant Employee an additional option (the "Additional Option") as follows: (i) if
the price per Share in such  private or public  offering  is at least  $4.00 per
Share, the Additional Option shall be for Fifty Thousand (50,000) Shares (for an
aggregate of 450,000 Shares subject to the Option and  Additional  Option);  and
(ii) if the price per Share in such private or public offering is at least $4.50
per Share, an additional Fifty Thousand  (50,000) Shares shall be subject to the
Additional  Option (for an aggregate of 500,000 Shares subject to the Option and
Additional  Option).  Employer shall  immediately grant the Additional Option to
Employee as of the date the right to the Additional Option arises.

         B) VESTING OF EXERCISE  RIGHTS.  Employer hereby agrees that the Option
shall vest, and provide Employee with rights of exercise, as follows:

Employee  may first  exercise  the  Option  to  purchase  the first One  Hundred
Thousand (100,000) Shares beginning on July 6, 1998.

Employee  may first  exercise the Option to purchase an  additional  Twenty Five
Thousand (25,000) Shares, beginning on October 6, 1998 (for an outstanding total
of 125,000 Shares).

Employee  may first  exercise the Option to purchase an  additional  Twenty Five
Thousand (25,000) Shares, beginning on January 6, 1999 (for an outstanding total
of 150,000 Shares).

                                                               - 5 -

<PAGE>

Employee  may first  exercise the Option to purchase an  additional  Twenty Five
Thousand  (25,000) Shares,  beginning on April 6, 1999 (for an outstanding total
of 175,000 Shares).

Employee  may first  exercise the Option to purchase an  additional  Twenty Five
Thousand (25,ODO) Shares, beginning on July 6, 1999 (for an outstanding total of
200,000 Shares).

Employee  may first  exercise the Option to purchase an  additional  Twenty Five
Thousand (25,000) Shares, beginning on October 6, 1999 (for an outstanding total
of 225,000 Shares).

Employee  may first  exercise the Option to purchase an  additional  Twenty Five
Thousand (25,000) Shares, beginning on January 6, 2000 (for an outstanding total
of 250,000 Shares).

Employee  may first  exercise the Option to purchase an  additional  Twenty Five
Thousand  (25,000) Shares,  beginning on April 6, 2000 (for an outstanding total
of 275,000 Shares).

Employee  may first  exercise the Option to purchase an  additional  Twenty Five
Thousand (25,000) Shares, beginning on July 6, 2000 (for an outstanding total of
300,000 Shares).

Employee  may first  exercise the Option to purchase an  additional  Twenty Five
Thousand (25,000) Shares, beginning on October 6, 2000 (for an outstanding total
of 325,000 Shares).

Employee  may first  exercise the Option to purchase an  additional  Twenty Five
Thousand (25,000) Shares, beginning on January 6, 2001 (for an outstanding total
of 350,000 Shares).

Employee  may first  exercise the Option to purchase an  additional  Twenty Five
Thousand  (25,000) Shares,  beginning on April 6, 2001 (for an outstanding total
of 375,000 Shares).

Employee  may first  exercise the Option to purchase an  additional  Twenty Five
Thousand (25,000) Shares, beginning on July 6, 2001 (for an outstanding total of
400,000 Shares).

Employer  hereby  agrees that the  Additional  Option  shall  vest,  and provide
Employee with rights of exercise, as follows:

                                                               - 6 -

<PAGE>

Employee may  exercise the  Additional  Option to purchase  twenty-five  percent
(25%) of the Shares subject to the Additional  Option  beginning on the date the
Additional Option arises.

Employee  may  exercise  the   Additional   Option  to  purchase  an  additional
twenty-five  percent  (25%)  of the  Shares  subject  to the  Additional  Option
beginning on the later of June 22, 1999 or the date the Additional Option arises
(for an  aggregate  of fifty  percent  of the Shares  subject to the  Additional
Option).

Employee  may  exercise  the   Additional   Option  to  purchase  an  additional
twenty-five  percent  (25%)  of the  Shares  subject  to the  Additional  Option
beginning on the later of June 22, 2000 or the date the Additional Option arises
(for  an  aggregate  of  seventy-five  percent  of  the  Shares  subject  to the
Additional Option).

Employee  may  exercise  the   Additional   Option  to  purchase  an  additional
twenty-five  percent  (25%)  of the  Shares  subject  to the  Additional  Option
beginning on the later of June 22, 2001 or the date the Additional Option arises
(for an aggregate of one hundred percent of the Shares subject to the Additional
Option).

The  foregoing  notwithstanding:  (i)  in the  event  of a  "Transaction  of the
Employer (as defined in the Plan),  or, (ii) in the event of as in the event the
employment  of  Employee  is  terminated  for any  reason  other  than Cause (as
hereinafter  defined) or other than Employee's  voluntary  decision to leave the
employ of Employer,  then in any such case all  outstanding  options  (i.e.  all
rights of purchase under the Option and the Additional  Option,  if any),  shall
immediately  vest and Employee (or the  representatives  of Employee) shall have
the immediate and continuing  right (in accordance  with the other terms hereof)
to purchase all of the Shares subject to such options.

         C)  RESTRICTIONS  ON STOCK.  The option  agreement may provide that any
Shares  purchased by Employee  pursuant to the Option or  Additional  Option are
subject to a right of first  refusal by the  Employer for a period not to exceed
three (3) years  after  Employee  first  purchases  such  Shares.  Such right of
refusal  shall  state  that if  Employee  desires  to sell  all or a part of the
Shares,  then Employee  shall first offer to sell such Shares to Employer at the
same price and on the same terms and conditions as the proposed  sale.  Employee
shall deliver to Employer a complete and accurate written statement of the terms
and conditions of

                                                                - 7

<PAGE>

the proposed sale, and shall either (i) identify a confirmed buyer who is ready,
willing and able to purchase  Employee's shares, or (ii) state that Employee has
arranged to sell such Shares publicly  through a broker.  If Employer desires to
purchase such Shares of Employee,  then Employer  shall notify  Employee of such
decision in writing  within  three (3) full  business  days after the receipt by
Employer of the  aforesaid  written  statement.  The parties shall then complete
such sale and purchase of the subject  Shares within fifteen (15) days following
the receipt by Employee of such written notice of purchase by Employer (but only
if such notice is timely).  If Employer does not notify Employee of its decision
to purchase the Shares  within said three (3) day period,  or provides  Employee
with written  notice that Employer does not elect to purchase such Shares,  then
Employee may sell such Shares,  but only pursuant to the terms and conditions of
the proposed  sale  previously  communicated  to  Employer,  and only within the
thirty (30) day period  following  the  expiration of the three (3) day Employer
decision  period.   Any  such  right  of  refusal  shall  further  provide  that
notwithstanding  the  foregoing,  no rights of first refusal of any nature shall
exist with  respect to any of the Shares if the stock of  Employer  (of the same
class) has previously been the subject of a completed public offering.

         D) CHARACTER OF OPTIONS.  Employer  agrees that all options  granted to
Employee as specified  herein shall,  to the maximum  extent  permissible  under
applicable  law,  be  "Incentive  Stock  Options"  as  defined in the Plan which
qualify under ss.422 of the Internal Revenue Code.

           E)STRIKE PRICE. Employer agrees that the purchase price of the Shares
subject to the Option shall be the average of the mean  closing  "bid" and "ask"
price for such stock for the five trading days previous to the date of grant, or
July 6,  1998.  Employer  agrees  that the Price of the  Shares  subject  to the
Additional Option shall be the average of the mean closing "bid" and "ask" price
for such stock for the five trading days previous to the date of grant

         F) TERM OF  OPTIONS.  Employer  agrees  that  the  term of the  options
         granted  hereunder  shall be five  (5)  years  from the date of  grant,
         unless such option sooner expires in accordance with the following:

         (I)  DEATH OR  DISABILITY.  In the  event the  employment  of  Employee
         terminates  as the  result  of  death  or  Disability  (as  hereinafter
         defined),  Employee or his representatives may exercise all outstanding
         vested options

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<PAGE>

for a period of one (1) year after the date Employee's employment terminates.

         (ii)  Cause.  In  the  event  the  Employer  elects  to  terminate  the
employment of Employee for Cause, as hereinafter defined, all options which have
not yet  vested  shall  expire  as of the  date of such  termination;  provided,
however,  that the Employee may exercise all  outstanding  vested  options for a
period of ninety (90) days after the date Employee's employment terminates.

         (III) OTHER REASONS. In the event the employment of Employee terminates
for  any  reason  other  than  death,  Disability,   Cause  or  retirement,  all
outstanding  options shall immediately vest and Employee or his  representatives
may exercise  all of the granted  options for a period of ninety (90) days after
the date Employee's employment terminates;  provided,  however, that if Employee
unilaterally and voluntarily terminates his employment hereunder (other than for
retirement  at  normal  retirement  age as set  forth  in the  Plan),  then  all
outstanding  options  which have not vested  shall  expire,  and Employee or his
representatives  may exercise all of the theretofore vested options for a period
of ninety (90) days after the date Employee's employment terminates.

     G)  ADJUSTMENT  OF SHARES.  Employer  agrees  that all  options  granted to
Employee shall contain adequate  provisions to protect against any change in the
outstanding   stock  of   Employer   through   any  stock   dividend  or  split,
reorganization, recapitalization, merger, consolidation or other similar form of
corporate  transaction which affects the capital structure of Employer,  so that
the number and type of Shares subject to such option are appropriately  adjusted
by the Board of Directors to reflect such change.  the event of any  TRANSACTION
WHICH (as defined in the Plan) or the liquidation of the Employer or the sale of
substantially  all of the assets of the  Employer,  such options  shall  provide
that: (i)  outstanding  options shall remain in effect in accordance  with their
terms;  (ii)  outstanding  options  shall be converted  into options to purchase
securities issued by the surviving or acquiring  company;  or (iii) the Board of
Directors  shall  provide  a 30 day  period  prior to the  consummation  of such
transaction  during  which all  outstanding  options  vest and may be  exercised
whereby  such  exercise  is  contingent  upon and  concurrent  with  the  actual
consummation of the transaction.

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<PAGE>

         H) COMPENSATION ADJUSTMENT. Employer agrees that all options granted to
Employee shall contain a provision to reimburse  Employee,  and Employer  hereby
agrees to reimburse Employee,  against the effect of "golden parachute taxes" as
follows:

Compensation  Adjustment.  The Company  shall pay to the  Participant  an amount
equal to the excise tax under  Internal  Revenue Code Section 4999 (as amended),
if any,  incurred by Participant by reason of any excess parachute payment under
this  Agreement  as a result of the  acceleration  of option  vesting  hereunder
because of a Change of Control as defined herein. In addition, the Company shall
pay the  Participant an amount equal to all excise taxes and federal,  state and
local income taxes  incurred by the  Participant  as -6. a result of any payment
made  Attached  to this  Agreement  as  Exhibit  [_] I " is an  example.  of the
computation of such payments. Such payments shall be made no later than the date
the  Participant is required to pay the excise tax under Code Section 4999 or is
required to remit  amounts for  withholding  applicable  to such excise tax. All
determinations  of amounts  required to be paid under this paragraph 12 shall be
made by the Company's  independent  accounting firm which shall provide detailed
supporting calculations to the Company and the Participant.  In computing taxes,
the  accounting  firm shall use the highest  marginal  federal,  state and local
income tax rates applicable to the Participant.

An example of the foregoing calculation is attached hereto as Exhibit "A."

         10.   TERMINATION.   In  addition  to  the  termination  of  Employee's
employment  upon  expiration of the current term, the employment of Employee may
sooner terminate as follows:

         A) DEATH OF  EMPLOYEE.  The  employment  of  Employee  hereunder  shall
terminate immediately upon his death.

         B) DISABILITY OF EMPLOYEE. The Employer may terminate the employment of
Employee  hereunder if the Employee  has suffered a Disability  (as  hereinafter
defined)  for a  period  of at  least  three  (3)  continuous  months.  The term
"Disability"  shall mean the  inability  of the  Employee  to perform his normal
duties and functions by reason of a physical or mental condition.

                                                               - 10 -

<PAGE>

         C) EARLY  TERMINATION FOR CAUSE. Any provision in this Agreement to the
contrary notwithstanding, Employer shall have the option to terminate Employee's
employment  hereunder  for Cause  immediately  and at any time.  "Cause" as used
herein shall mean the  following:  (i) Employee  engages in any business that is
competitive  with that of the Employer while an employee;  (ii) Employee commits
any material act of dishonesty,  including but not necessarily  limited to theft
or embezzlement of funds or property of the Employer, or perpetrating a fraud on
or affecting the Employer;  (iii)  Employee  engages in any gross  negligence or
willful  misconduct  with  respect  to his  duties  and  responsibilities  as an
employee or Employee  acts in any other way that has a direct,  substantial  and
adverse  effect on the  Employer's  reputation,  including  but not  limited  to
willful or grossly negligent  disregard for the Employer's  obligation to comply
with laws,  regulations  and the like  applicable to Employer,  its  properties,
assets  or  business;  (iv)  Employee's  conviction  of a felony;  (v)  Employee
repeatedly  fails to  follow  the  instructions  or  directions  of the Board of
Directors  as set  forth in duly  adopted  resolutions  of such  Board;  or (vi)
Employee  repeatedly fails to follow the instructions or directions of the Chief
Executive  Officer,  provided such  instructions or directions do not contravene
any applicable laws or governmental regulations,  any policies or resolutions of
the Board of Directors,  or sound business  practice or policy (as determined by
the Board of Directors).

         11.  COMPENSATION  UPON  TERMINATION.  If the employment of Employee is
terminated  for any reason,  Employer  shall owe Employee all base salary as set
forth in Section 4 of this Agreement  which has accrued through the date of such
termination,  all fringe  benefits  which have accrued  through the date of such
termination,  if any, and all properly incurred expenses which have not yet been
reimbursed.  If the  employment of Employee is  terminated  for any reason other
than  cause,  Employer  shall  owe  Employee  a pro  rated  portion  of the cash
performance  bonus as set forth in Section  5,  based on the number of  calendar
months in the current  fiscal  year,  including  the full  calendar  month which
includes  the date of  termination.  For  purposes  of  calculating  such bonus,
revenues through the end of the calendar month during which termination occurred
shall be annualized.  If the employment of Employee is terminated for any reason
other  than  death,  disability,  cause  or  Employee's  voluntary  decision  to
terminate his employment hereunder, then Employee, in addition to the foregoing,
shall be entitled to all base  salary from the date of  termination  through the
end of the  then  current  term  of  employment.  For  example,  if the  current
employment term is two years,  and such  termination  occured in the sixth month
thereof, the remaining 18 months of base salary shall be payable to Employee. In
addition,  Employee  shall be entitled to exercise  stock  options in accordance
with the provisions of Section 9 above.

                                                               - 11 -

<PAGE>

         12. Notices. All notices,  consents,  approvals or other communications
which are required to be made in writing  hereunder shall be deemed to have been
duly given,  made or served upon delivery if delivered in person or by overnight
courier,  or upon the first to occur of actual receipt or the third business day
after mailing,  if mailed by registered or certified  mail,  first class postage
prepaid, receipt requested, to the parties at the following address:

If to Employer:                           Klever Marketing, Inc.
                          350 West 300 South, Suite 201

                           Salt Lake City, Utah 84101

                            Attention: Paul G. Begum

With a copy to:                            Parsons Behle & Latimer
                                           Utah Center

                                           One 201 South Main Street, Suite 1800
                         Salt Lake City, Utah 84145-0898

                           Attention: J. Gordon Hansen

If to Employee:                            Gerard Coelsch

                           1305 Biggin Church Road S.

                        Jacksonville, Florida 32224-7686

With a copy to:                           Korn & Zehmer P.A.
                           6620 Southpoint Drive South

                                          Suite 200
                           Jacksonville, Florida 32216

                                          Attention: John Zehmer

Notice of a change in address shall be made in writing as provided  herein,  and
effective only upon actual receipt.

         13. ENTIRE  AGREEMENT.  This  Agreement  embodies the entire  Agreement
between Employer and Employee,  and there are no agreements,  representations or
warranties,  oral or written, between Employer and Employee other than those set
forth or provided for in this  Agreement.  This Agreement may not be modified or
changed,  in whole or part,  except by a  supplemental  agreement  signed by the
Employer and Employee.

         14. ASSIGNMENT, RIGHTS AND OBLIGATIONS OF SUCCESSORS. This Agreement is
personal  in its  nature and  neither  of the  parties  hereto  shall  assign or
transfer this  Agreement or any rights or obligations  hereunder.  The foregoing
shall not be construed to prohibit Employer from engaging in any reorganization,
recapitalization,

                                                               - 12 -

<PAGE>

merger,  consolidation,  exchange of shares,  sale of  substantially  all of the
assets, or other similar types of corporate transactions.

15. DISPUTES.

         a) The  provisions of this paragraph 15 shall be the sole and exclusive
remedy for any default  under or breach by any party of any term or provision of
this  Agreement,  and no claim may be  brought  under this  Agreement  except in
accordance  with and  pursuant to the terms of this  paragraph  15. In the event
there is a dispute under this Agreement, the parties shall meet with one another
and diligently attempt to resolve their disagreements.  If they are unable to do
so, then upon the  request of any party to the  dispute,  they will  mediate the
dispute,  utilizing an impartial  mediator pursuant to the rules of the American
Arbitration  Association  ("AAA")  or  any  other  reputable  organization  that
sponsors mediation upon which the parties shall mutually agree. If, after thirty
(30) days,  the mediation is not  successful,  then any party to the dispute may
institute an  arbitration  proceeding  in accordance  with this  paragraph 15 to
resolve  the  dispute,  but only if such party  makes a written  demand to do so
within twelve 0 2) months of the date the above-ref erenced thirty day mediation
period expires.

         b) If negotiations  and mediation are  unsuccessful and a party makes a
timely  written demand for  arbitration,  the  arbitration  shall occur before a
single  arbitrator in Salt Lake City,  Utah, in accordance  with the  commercial
arbitration rules of the American Arbitration  Association ("AAA") and chosen by
the AAA. Such rules notwithstanding,  the arbitrator shall be an attorney at law
who has  experience  in employment  law issues.  The  arbitrator  shall base his
decision on  applicable  principles  of law and equity,  taking into account all
relevant  statutes,  case law and other  relevant legal  authority.  The parties
agree that the  interpretation,  legal effect and  enforcement OF THIS AGREEMENT
SHALL BE  GOVERNED  BY THE LAWS OF THE STATE OF UTAH.  UPON THE  REQUEST  OF ANY
PARTY, the arbitrator will include in his award findings of fact and conclusions
of law upon  which the award is based.  The  arbitrator  may grant such legal or
equitable  relief as he deems  appropriate,  including  money damages,  specific
performance and injunctive relief.

         c) Questions of whether a dispute is subject to arbitration  shall also
be decided by the arbitrator.  Within ten (10) days after the appointment of the
arbitrator,  each party to the dispute shall present to the arbitrator a written
statement  of the  issues  in  dispute.  Within  five (5) days  thereafter,  the
arbitrator shall give notice to the parties of a

                                                               - 13 -

                                [GRAPHIC OMITTED]

<PAGE>

preliminary  hearing to discuss the issues and discuss timetables for discovery,
which hearing shall be held as soon as reasonably possible.  Each party shall be
entitled to perform  discovery in accordance with the applicable  rules of civil
procedure  for civil  actions in the state courts  located in the State of Utah.
The arbitrator  shall set  reasonable  time periods for the taking of discovery,
with the goal of expediting and  completing  such process in a timely and prompt
fashion.  The final arbitration  hearing shall occur within forty-five (45) days
after the closing of all discovery, but in no event more than one-hundred eighty
(180) days after the date of the preliminary hearing.

     d) Any party may request and obtain from a court of competent  jurisdiction
provisional or ancillary  remedies for relief,  such as an  injunction,  but the
institution of a judicial  proceeding  will not constitute a waiver of the right
of a party to submit a dispute to arbitration. A court of competent jurisdiction
may enter a  judgment  upon an  arbitration  award.  Subject to the award of the
arbitrators,  each  party  shall pay an equal  share of the  arbitrator's  fees,
except  that the  arbitrators  shall have the power to  determine  and award all
expenses  (but not  including  attorneys'  fees) to the  prevailing  party.  The
parties shall maintain all matters  relative to the  arbitration,  including the
result thereof, as confidential.

         16.  HEADINGS;  REFERENCES  TO SECTIONS.  The headings of the sections,
paragraphs and  subparagraphs  of this Agreement are solely for  convenience and
reference  and shall not limit or  otherwise  affect  the  meaning of any of the
terms or provisions of this Agreement.

         17.  COUNTERPARTS.  This  Agreement  may be  executed  in any number of
counterparts,  each of which shall be an original, but which together constitute
one and the same instrument.

         18.  SEVERABILITY.  In the event that any one or more of the provisions
contained in this Agreement shall, for any reason, be judicially  declared to be
invalid,  illegal,  unenforceable or void in any respect, such declaration shall
not have the effect of  invalidating  or voiding the remainder of this Agreement
and the parties  hereto hereby agree that the part or parts of this Agreement so
held to be invalid,  illegal,  unenforceable or void will be deemed to have been
stricken  herefrom and the remaining  provisions of this Agreement will have the
same force and effect as if such part had never been included herein.

         19. DELAY OR OMISSION.  No delay or omission of a party to exercise any
right,  power or remedy  under  this  Agreement  or  accruing  upon any  default
hereunder shall

                                                               - 14 -

<PAGE>

exhaust or impair any such  right,  power or remedy,  or shall be  construed  to
waive any such default or to constitute acquiescence therein. Every right, power
and remedy of a party  hereunder may be exercised from time to time and as often
as may be deemed expedient by such party.

         20. Waiver of Breach.  No waiver of any default  hereunder shall extend
to or affect any subsequent  default or another  default then existing or impair
any rights, powers or remedies consequent thereon.

         21. CUMULATIVE RIGHTS. No right or remedy conferred upon or reserved to
any party  herein  is  intended  to be  exclusive  of any other  right or remedy
available to such party at law, in equity or otherwise. Each and every right and
remedy is cumulative.

     22.  SURVIVAL.  Except  as  otherwise  specifically  provided  herein,  the
representations,  warranties and other undertakings of the Employer and Employee
contained  herein,  which are to be  observed  or  performed  subsequent  to the
termination of Employee's employment or the termination of this Agreement, shall
survive such termination.

         23. CONSTRUCTION OF AGREEMENT.  The parties agree that in the event any
court or other tribunal construes or interprets any provision hereof,  that such
court or other  tribunal  shall not strictly  construe any such provision or any
ambiguity therein in favor

                 [THE REST OF THIS PAGE IS INTENTIONALLY BLANK]

                                                               - 5 -

<PAGE>

of or against either party hereto based upon any rule that one party has drafted
such provision or that one party has superior bargaining power or knowledge.

         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as
of the 26 th day of June, 1998.

EMPLOYER:

KLEVER MARKETING, INC.

Witness

Witness

        .

    Witness

'Witness

COELSCH\COELEA.4

By:

          Chief Executive Off

EMPLOYEE:

 CC. COELSCH

                                                               - 16 -

<PAGE>

                                    EXHIBIT A
               COMPUTATION OF COMPENSATION ADJUSTMENT TO EMPLOYEE

1.       Excess Parachute Payment Subject to Excise Tax                 $50,000

2.       Excise Tax on Item 1 @ 20%                                     $10,000

3.       Total Additional Payments Due                                  $22,292*

4.       Verification of Payments Due

         a)       Excise Tax on new $22,292 @ 20%                        $4,458
         b)       State Income Tax on $22,292 @ 6%                        1,338
         c)       Federal Income Tax on $22,292:

         (i) Additional Income                                          $22,292
                  (ii)     State Tax Deduction                         ( 1,338)
                  (iii)    Net Additional Income                        $20.954
                  (iv)     Federal Income Tax @ 31 %                      6,496
d)       Total Taxes on Payments Due                                    $12,292
e)       Net Amount Available to Optionee
         to pay excise tax (see no. 2 above)                            $10,000
f)       Total Amount Paid to Employee                                  $22,292

The formula  used to compute the amounts due to Employee is to divide the excise
tax amount on the excess  parachute  payment by a percentage  equal to 100% less
the sum of the excise  tax  percentage  plus the  federal  and state  income tax
percentage  less  a  percentage   determined  by  multiplying  the  federal  tax
percentage times the state tax percentage (if applicable).  Thus, in the example
above, the following percentages would be subtracted from 100 %:

         1 )      Excise Tax Percentage                                     20%
         2)       State Tax Percentage                                       6%
         3)       Federal Tax Percentage                                    31%
                                    Total                                   75%

                  Less 31 % times 6%                                      1.86%

                                                                         55.14%

The resulting percentage of 44.86% is divided into 10,000  =  $22,292

                                                               -17 -
                                [GRAPHIC OMITTED]

<PAGE>

                                                            RIDER "A" TO
                                                        EMPLOYMENT AGREEMENT

     There shall be no  adjustment in the Exercise  Price,  and no adjustment in
the number of Shares which may be received by the Employee  upon exercise of the
Option, as a result of the sale or issuance by the Employer of additional shares
of its  capital  stock to a third party for a  consideration  that is greater or
less then the purchase  price of the Option.  For  example,  (i) if the Employer
were to issue  additional  shares of common stock through a stock divided at the
rate of two shares for each issued and outstanding  share of common stock,  then
the Exercise  Price shall be decreased by 2/3's and the number of shares subject
to the Option shall be increased by three times;  and (ii) if the Employer  were
to sell 10,000 shares of common stock to XYZ Company for $20,000  (i.e.,  $2 per
share),  and the Exercise Price hereunder is $4.00 per share,  there shall be no
adjustment hereunder.<PAGE>

                                                                 EXHIBIT 10.1

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

                        THE McGRAW-HILL COMPANIES, INC.

                  ____________________________________________

                                 $625,000,000

                           364-DAY CREDIT AGREEMENT

                                  dated as of

                               August 15, 2000

                  ______________________________________________

           CHASE SECURITIES INC., as Lead Arranger and Book Manager

                          THE CHASE MANHATTAN BANK,
                           as Administrative Agent

                            BANK OF AMERICA, N.A.,
                            as Co-Syndication Agent

                              CITIBANK, N.A., as
                             Co-Syndication Agent

                      DEUTSCHE BANK AG NEW YORK BRANCH,
                            as Co-Syndication Agent

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

<PAGE>

                               TABLE OF CONTENTS
                               -----------------
<TABLE>
<CAPTION>
                                                                        Page
                                                                        ----
<S>                                                                     <C>
                                   ARTICLE I

                                   Definitions.......................    1

SECTION 1.01  Defined Terms..........................................    1
SECTION 1.02. Classification of Loans and Borrowings.................   16
SECTION 1.03. Terms Generally........................................   16
SECTION 1.04. Accounting Terms; GAAP.................................   16

                                  ARTICLE II

                                  The Credits........................   17

SECTION 2.01. Commitments............................................   17
SECTION 2.02. Loans and Borrowings...................................   17
SECTION 2.03. Requests for Revolving Borrowings......................   18
SECTION 2.04. Term Loans.............................................   19
SECTION 2.05. Request for Term Borrowing.............................   19
SECTION 2.06. Competitive Bid Procedure..............................   20
SECTION 2.07. Funding of Borrowings..................................   22
SECTION 2.08. Interest Elections.....................................   23
SECTION 2.09. Termination and Reduction of Commitments...............   24
SECTION 2.10. Repayment of Loans; Evidence of Debt...................   25
SECTION 2.11. Prepayment of Loans....................................   26
SECTION 2.12. Fees...................................................   26
SECTION 2.13. Interest...............................................   27
SECTION 2.14. Alternate Rate of Interest.............................   28
SECTION 2.15. Increased Costs........................................   28
SECTION 2.16. Break Funding Payments.................................   30
SECTION 2.17. Taxes..................................................   31
SECTION 2.18. Payments Generally; Pro Rata Treatment;
              Sharing of Set-offs....................................   31
SECTION 2.19. Mitigation Obligations; Replacement of Lenders.........   33
SECTION 2.20. Proceeds...............................................   34

                                  ARTICLE III

                       Representations and Warranties................   34

SECTION 3.01. Organization, Powers and Good Standing.................   34
SECTION 3.02. Authorization of Borrowing, etc........................   35
SECTION 3.03. Financial Condition....................................   35
SECTION 3.04. No Adverse Material Change.............................   36

</TABLE>
<PAGE>

<TABLE>
<S>                                                                         <C>
SECTION 3.05.   Litigation.................................................. 36
SECTION 3.06.   Payment of Taxes............................................ 36
SECTION 3.07.   Governmental Regulation..................................... 36
SECTION 3.08.   Securities Activities....................................... 37
SECTION 3.09.   ERISA....................................................... 37

                                  ARTICLE IV

                                  Conditions................................ 37

SECTION 4.01.   Effective Date.............................................. 37
SECTION 4.02.   Each Credit Event........................................... 38

                                  ARTICLE V

                             Affirmative Covenants.......................... 39

SECTION 5.01.   Financial Statements and Other Reports...................... 39
SECTION 5.02.   Corporate Existence......................................... 41
SECTION 5.03.   Payment of Taxes............................................ 41
SECTION 5.04.   Maintenance of Properties; Insurance........................ 41
SECTION 5.05.   Compliance with Laws........................................ 42
SECTION 5.06.   Notices of ERISA Event...................................... 42

                                  ARTICLE VI

                              Negative Covenants............................ 42

SECTION 6.01.   Fundamental Changes......................................... 42
SECTION 6.02.   Liens....................................................... 42
SECTION 6.03.   Financial Covenants......................................... 43
SECTION 6.04.   Use of Proceeds............................................. 43

                                  ARTICLE VII

                               Events of Default............................ 43

SECTION 7.01.   Failure to Make Payments When Due........................... 44
SECTION 7.02.   Default in Other Agreements................................. 44
SECTION 7.03.   Breach of Certain Covenants................................. 45
SECTION 7.04.   Breach of Warranty.......................................... 45
SECTION 7.05.   Other Defaults Under Agreement.............................. 45
SECTION 7.06.   Change In Control........................................... 45
SECTION 7.07.   Involuntary Bankruptcy; Appointment of Receiver, etc........ 45
SECTION 7.08.   Voluntary Bankruptcy; Appointment of Receiver, etc.......... 46
</TABLE>
<PAGE>

<TABLE>
<S>                                                                        <C>
SECTION 7.09. Judgments and Attachments..................................  46
SECTION 7.10. Involuntary Dissolution....................................  46
SECTION 7.11. ERISA Event................................................  47

                                 ARTICLE VIII

                           The Administrative Agent......................  47

                                  ARTICLE IX

                                 Miscellaneous...........................  50

SECTION 9.01. Notices....................................................  50
SECTION 9.02. Waivers; Amendments........................................  50
SECTION 9.03. Expenses; Indemnity; Damage Waiver.........................
SECTION 9.04. Successors and Assigns.....................................  51
SECTION 9.05. Survival...................................................  53
SECTION 9.06. Counterparts; Integration; Effectiveness...................  55
SECTION 9.07. Severability...............................................  56
SECTION 9.08. Right of Setoff............................................  56
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of
              Process....................................................  56
SECTION 9.10. WAIVER OF JURY TRIAL.......................................  57
SECTION 9.11. Headings...................................................  57
SECTION 9.12. Confidentiality............................................  58
</TABLE>

SCHEDULES:

Schedule 2.01 -- Commitments
Schedule 3.01 -- Material Subsidiaries
Schedule 3.05 -- Material Litigation
Schedule 6.02 -- Existing Liens

EXHIBITS:

Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Opinion of General Counsel of Borrower
<PAGE>

          364-DAY CREDIT AGREEMENT dated as of August 15, 2000, among THE
McGRAW-HILL COMPANIES, INC. (the "Borrower"), the several banks and other
                                  --------
financial institutions from time to time parties hereto (the "Lenders") and THE
                                                              -------
CHASE MANHATTAN BANK ("Chase"), as administrative agent (in such capacity, the
                       -----
"Administrative Agent").
 --------------------

          The parties hereto hereby agree as follows:

                                   ARTICLE I

                                  Definitions
                                  -----------

          SECTION 1.01.  Defined Terms.  As used in this Agreement, the
                         -------------
following terms have the meanings specified below:

          "ABR", when used in reference to any Loan or Borrowing, refers to
           ---
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.

          "Administrative Agent" means The Chase Manhattan Bank, in its capacity
           --------------------
as administrative agent for the Lenders hereunder.

          "Administrative Questionnaire" means an Administrative Questionnaire
           ----------------------------
in a form supplied by the Administrative Agent.

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

          "Agreement" means this Credit Agreement, as amended, supplemented or
           ---------
otherwise modified from time to time.

          "Alternate Base Rate" means, for any day, a rate per annum equal to
           -------------------
the greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate
in effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect
on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a
change in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively.
<PAGE>

                                                                               2

          "Applicable Percentage" means, with respect to any Lender, the
           ---------------------
percentage of the total Commitments represented by such Lender's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.

          "Applicable Rate" means, for any day, with respect to any Eurodollar
           ---------------
Revolving Loan, or with respect to the facility fees payable hereunder, as the
case may be, the applicable rate per annum set forth below under the caption
"Eurodollar Spread" or "Facility Fee Rate", as the case may be:

                  =======================================
                       Eurodollar       Facility Fee
                       ----------       ------------
                         Spread              Rate
                         ------              ----
                  ---------------------------------------

                         0.150%             0.050%

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

          "Assessment Rate" means, for any day, the annual assessment rate in
           ---------------
effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory subgroup "A" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the Federal Deposit Insurance Corporation
for insurance by such Corporation of time deposits made in dollars at the
offices of such member in the United States; provided that if, as a result of
                                             --------
any change in any law, rule or regulation, it is no longer possible to determine
the Assessment Rate as aforesaid, then the Assessment Rate shall be such annual
rate as shall be determined by the Administrative Agent to be representative of
the cost of such insurance to the Lenders.

          "Assignment and Acceptance" means an assignment and acceptance entered
           -------------------------
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the form
of Exhibit A or any other form approved by the Administrative Agent.

          "Availability Period" means the period from and including the
           -------------------
Effective Date to but excluding the earlier of the Termination Date and the date
of termination of the Commitments.

          "Base CD Rate" means the sum of (a) the Three-Month Secondary CD Rate
           ------------
multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.

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

          "BofA" means Bank of America, N.A.
           ----
<PAGE>

                                                                               3

          "Borrower" means The McGraw-Hill Companies, Inc., a New York
           --------
corporation.

          "Borrowing" means (a) Revolving Loans  or Term Loans of the same Type,
           ---------
made, converted or continued on the same date and, in the case of Eurodollar
Loans, as to which a single Interest Period is in effect, or (b) a Competitive
Loan or group of Competitive Loans of the same Type made on the same date and as
to which a single Interest Period is in effect.

          "Borrowing Request" means a Revolving Borrowing Request or a Term
           -----------------
Borrowing Request.

          "Business Day" means any day that is not a Saturday, Sunday or other
           ------------
day on which commercial banks in New York City are authorized or required by law
to remain closed; provided that, when used in connection with a Eurodollar Loan,
                  --------
the term "Business Day" shall also exclude any day on which banks are not open
          ------------
for dealings in dollar deposits in the London interbank market.

          "Capitalized Lease" means any lease which is or should be capitalized
           -----------------
on the balance sheet of the lessee in accordance with GAAP existing on the date
hereof and Statement No. 13 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 existing on the date
hereof and Statement No. 13 of the Financial Accounting Standards Board.

          "Change in Law" means (a) the adoption of any law, rule or regulation
           -------------
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or, for
purposes of Section 2.14(b), by any lending office of such Lender or by such
Lender's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.

          "Citibank" means Citibank, N.A.
           --------

          "Class", when used in reference to any Loan or Borrowing, refers to
           -----
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans,
Term Loans or Competitive Loans.

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

                                                                               4

          "Commitment" means, with respect to each Lender, the commitment of
           ----------
such Lender to make Revolving Loans and Term Loans hereunder, expressed as an
amount representing the maximum aggregate amount of such Lender's Revolving
Loans and Term Loans hereunder, as such commitment may be (a) reduced from time
to time pursuant to Section 2.09 and (b) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to Section 9.04.  The
initial amount of each Lender's Commitment is set forth on Schedule 2.01, or in
the Assignment and Acceptance pursuant to which such Lender shall have assumed
its Commitment, as applicable.

          "Competitive Bid" means an offer by a Lender to make a Competitive
           ---------------
Loan in accordance with Section 2.06.

          "Competitive Bid Rate" means, with respect to any Competitive Bid, the
           --------------------
Margin or the Fixed Rate, as applicable, offered by the Lender making such
Competitive Bid.

          "Competitive Bid Request" means a request by the Borrower for
           -----------------------
Competitive Bids in accordance with Section 2.06.

          "Competitive Loan" means a Loan made pursuant to Section 2.06.
           ----------------

          "Compliance Certificate" has the meaning assigned to that term in
           ----------------------
Section 5.01(b)(i) hereof.

          "Consolidated Cash Flow" of the Borrower and the Subsidiaries for any
           ----------------------
period (the "Determination Period") means the sum of (i) Consolidated Net Income
for the Determination Period, plus (ii) all amounts deducted in the
determination of such Consolidated Net Income in respect of (a) depreciation and
amortization (including without limitation amortization of assets held under
Capitalized Leases), (b) Consolidated Interest Expense, (c) provisions for taxes
based on or measured by income; provided, however, that (A) if during the
                                --------  -------
Determination Period the Borrower disposes of any asset, the sum of (x) the net
income (loss) produced by such asset, before extraordinary items, during the
portion of the Determination Period prior to the date on which such asset was
disposed of, plus (y) all amounts deducted in determining such net income (loss)
for such period in respect of depreciation and amortization (including without
limitation amortization of assets held under Capitalized Leases), interest on
Indebtedness, and provisions for taxes based on or measured by income shall be
excluded on a pro forma adjusted and consolidated basis in Consolidated Cash
Flow for the Determination Period (to the extent they would otherwise have been
included thereto), and (B) if during the Determination Period the Borrower makes
an investment in any asset, the sum of (x) the net income (loss) produced by
such asset, before extraordinary items, during the portion of the Determination
Period prior to the date on which such investment in such asset was made, plus
(y) all amounts deducted in determining such net income (loss) for such period
in respect of depreciation and amortization (including, without limitation,
amortization of assets held under Capitalized Leases), interest on Indebtedness,
and provisions for taxes based on or
<PAGE>

                                                                               5

measured by income shall be included on a pro forma adjusted and consolidated
basis in Consolidated Cash Flow for the Determination Period (to the extent they
would have otherwise been excluded therefrom); provided further, however,
                                               -------- -------  -------
Consolidated Cash Flow for any Determination Period shall be reduced by an
amount equal to that amount comprising consolidated capital expenditures
associated with the book publishing business during such Determination Period.

          "Consolidated Interest Expense" means, for any period, the interest
           -----------------------------
expense of the Borrower and its Subsidiaries determined on a consolidated basis
in conformity with GAAP existing on the date hereof including, without
limitation, (i) the amortization of debt discount, (ii) the amortization of all
fees payable in connection with the incurrence of Indebtedness to the extent
included in interest expense and (iii) the portion of any obligation with
respect to a Capitalized Lease allocable to interest expense.

          "Consolidated Net Income" for any period means the net income (or
           -----------------------
loss) of the Borrower and its Subsidiaries for such period before extraordinary
items, determined in accordance with GAAP existing on the date hereof on a
consolidated basis, after eliminating all intercompany items, provided that
there shall be excluded (i) income (or loss) of any Person (other than a
consolidated Subsidiary of such Person) in which any other Person (other than
such Person or any of its consolidated Subsidiaries) has a joint interest,
except to the extent of the amount of dividends or other distributions actually
paid to such Person or any of its consolidated Subsidiaries by such other Person
during such Period, (ii) the income (or loss) of any Person accrued prior to the
date it becomes a consolidated Subsidiary of such Person or is merged into or
consolidated with such Person or any of its consolidated Subsidiaries, (iii) the
income of any consolidated Subsidiary of such Person to the extent that the
declaration or payment of dividends or similar distributions by that
consolidated Subsidiary of the income is not at the time permitted, (iv) any
after-tax gains (but not pre-tax losses) attributable to sales of assets out of
the ordinary course of business and any after-tax gains on pension reversions
received by such Person and its consolidated Subsidiaries and (v) any income (or
loss) attributable to any lease of property (whether real, personal or mixed)
under which the Borrower or any of its Subsidiaries is the lessor; provided,
                                                                   --------
however, there shall be excluded from any calculation pursuant to any of clauses
-------
(ii)-(iv) any income or loss attributable to assets purchased or sold, as the
case may be, having an individual or aggregate (for any consecutive twelve month
period) fair market value of less than $50,000,000.

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

          "Co-Syndication Agent" means BofA, Citibank and Deutsche Bank.
           --------------------
<PAGE>

                                                                               6

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

          "Determination Date" means, as used in connection with any
           ------------------
certificate, report or calculation delivered hereunder, the date (which shall be
specified in such certificate, report or calculation) as of which the
determinations set forth in such certificate, report or calculation are made.

          "Deutsche Bank" means Deutsche Bank AG New York Branch.
           -------------

          "dollars" or "$" refers to lawful money of the United States of
           -------      -
America.

          "Effective Date" means the date on which the conditions specified in
           --------------
Section 4.01 are satisfied (or waived in accordance with Section 9.02).

          "Environmental Laws" means federal, state, local and foreign laws or
           ------------------
regulations, codes, orders, decrees, judgments or injunctions issued,
promulgated, approved or entered thereunder relating to pollution or protection
of the environment, including, without limitation, laws relating to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment (including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances or wastes.

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

          "ERISA Affiliate" means any trade or business (whether or not
           ---------------
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.

          "ERISA Event" means (a) any "reportable event", as defined in
           -----------
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan
pursuant to Section 4041(c) or 4042 of ERISA; (f)
<PAGE>

                                                                               7

the incurrence by the Borrower or any of its ERISA Affiliates of any Withdrawal
Liability or any liability with respect to the withdrawal of such Person from
any Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any
notice from any Multiemployer Plan to which the Borrower or any ERISA Affiliate
has an obligation to contribute setting forth a determination that the Borrower
or any ERISA Affiliate has incurred liability as a result of the insolvency or
reorganization of such Multiemployer Plan, within the meaning of Title IV of
ERISA.

          "Eurodollar", when used in reference to any Loan or Borrowing, refers
           ----------
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the LIBO Rate.

          "Event of Default" has the meaning assigned to such term in Article
           ----------------
VII.

          "Exchange Act" means the Securities Exchange Act of 1934, as from time
           ------------
to time amended, and any successor statutes.

          "Excluded Taxes" means, with respect to the Administrative Agent, any
           --------------
Lender or any other recipient of any payment to be made by or on account of any
obligation of the Borrower hereunder, (a) income or franchise taxes imposed on
(or measured by) its net income  by the United States of America, or any state
or local government or taxing authority in the United States of America, (b) any
branch profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction in which the Borrower is located and (c) in
the case of a Foreign Lender (other than an assignee pursuant to a request by
the Borrower under Section 2.19(b)), any withholding tax that is imposed on
amounts payable to such Foreign Lender at the time such Foreign Lender becomes a
party to this Agreement or is attributable to such Foreign Lender's failure or
inability to comply with Section 2.16(e), except to the extent that  such
Foreign Lender's assignor (if any) was entitled, at the time of assignment, to
receive additional amounts from the Borrower with respect to such withholding
tax pursuant to Section 2.17(a).

          "Existing Facility" means the $800,000,000 Credit Agreement, dated as
           -----------------
of February 13, 1997, among the Borrower, the lenders parties thereto and Chase,
as administrative agent.

          "Federal Funds Effective Rate" means, for any day, the weighted
           ----------------------------
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
<PAGE>

                                                                               8

          "Fiscal Quarter" means a quarterly period beginning on the first day
           --------------
of January, April, July and October in each Fiscal Year.

          "Fiscal Year" means an annual period beginning on January 1 in each
           -----------
year and ending on December 31 of such year.

          "Five-Year Credit Agreement" means the Five-Year Credit Agreement,
           --------------------------
dated as of August 15, 2000 (as amended, modified or replaced from time to
time), among the Borrower, the lenders parties thereto and The Chase Manhattan
Bank as administrative agent.

          "Fixed Rate" means, with respect to any Competitive Loan (other than a
           ----------
Eurodollar Competitive Loan), the fixed rate of interest per annum specified by
the Lender making such Competitive Loan in its related Competitive Bid.

          "Fixed Rate Loan" means a Competitive Loan bearing interest at a Fixed
           ---------------
Rate.

          "Foreign Lender" means any Lender that is organized under the laws of
           --------------
a jurisdiction other than that in which the Borrower is located.  For purposes
of this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.

          "GAAP" means generally accepted accounting principles in the United
           ----
States of America in effect from time to time except as specifically noted.

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

          "Guarantee" means, with respect to any Person, (i) any guarantee,
           ---------
reimbursement agreement or similar contingent obligation made by such Person in
respect of any Indebtedness of any other Person, (ii) any other arrangement
whereby credit is extended to any other Person on the basis of any promise or
undertaking of such Person, (a) to pay the Indebtedness of such other Person,
(b) to purchase an obligation owed by such other Person, (c) to purchase or
lease assets under circumstances that would enable such other Person to
discharge such credit of its obligations or (d) to maintain the capital, working
capital, solvency or general financial condition of such other Person, in each
case whether or not such arrangement is disclosed in the balance sheet of such
other Person or is referred to in a footnote thereto, and (iii) any liability,
(other than Indebtedness which is recourse to a Subsidiary of the Borrower, the
only asset of which is its interest in the partnership of which the Subsidiary
is the general partner, and which Indebtedness is non-recourse to the Borrower)
as a general partner of a partnership in respect of
<PAGE>

                                                                               9

Indebtedness of such partnership; provided, however, that the term Guarantee
                                  --------  -------
shall not include (1) endorsements for collection or deposit in the ordinary
course of business or (2) obligations of the Borrower and its Subsidiaries which
would constitute Guarantees solely by virtue of the continuing liability of any
such Person which has sold assets subject to liabilities for liabilities which
were assumed by another Person acquiring the assets which were sold, unless such
liability is required to be carried on the balance sheet of the Borrower and its
Subsidiaries in accordance with GAAP.  The amount of any Guarantee and the
amount of Indebtedness resulting from such Guarantee shall be the amount which
would have to be carried on the balance sheet of the guarantor in respect of
such Guarantee in accordance with GAAP.

          "Indebtedness" means, with respect to any Person, all obligations, for
           ------------
the repayment of borrowed money, which in accordance with GAAP in effect on the
date hereof should be classified upon such Person's balance sheet as
liabilities, but in any event including (i) liabilities for the repayment of
borrowed money to the extent secured by any Lien existing on property owned or
acquired by such Person or a Subsidiary thereof, whether or not the liability
secured thereby shall have been assumed by such Person and (ii) all Guarantees
of such Person.

          "Indebtedness to Cash Flow Ratio" means the ratio of (i) Indebtedness
           -------------------------------
of the Borrower at the Determination Date to (ii) the Consolidated Cash Flow for
the four consecutive Fiscal Quarters ending immediately prior to the
Determination Date.

          "Indemnified Taxes" means Taxes other than Excluded Taxes.
           -----------------

          "Independent Public Accountant" means any of the firms of public
           -----------------------------
accountants (or their survivors in any merger therewith) currently referred to
as the "Big Six" or any other firm of public accountants of nationally
recognized stature which is (i) independent (as such term is defined in the
rules and regulations promulgated by the Securities and Exchange Commission
under the Exchange Act) from the Person the financial statements of which are
being reported on, (ii) selected by such Person and (iii) reasonably acceptable
to the Required Lenders.

          "Index Debt" means senior, unsecured, long-term indebtedness for
           ----------
borrowed money of the Borrower that is not guaranteed by any other Person or
subject to any other credit enhancement.

          "Interest Election Request" means a request by the Borrower to convert
           -------------------------
or continue a Revolving Borrowing in accordance with Section 2.08.

          "Interest Payment Date" means (a) with respect to any ABR Loan, the
           ---------------------
last day of each March, June, September and December, (b) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing
of which such Loan is a part and, in the case of a Eurodollar Borrowing with an
Interest Period of more than three months' duration, each day prior to the last
day of such Interest Period that occurs at
<PAGE>

                                                                              10

intervals of three months' duration after the first day of such Interest Period,
and (c) with respect to any Fixed Rate Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a
Fixed Rate Borrowing with an Interest Period of more than 90 days' duration
(unless otherwise specified in the applicable Competitive Bid Request), each day
prior to the last day of such Interest Period that occurs at intervals of 90
days' duration after the first day of such Interest Period, and any other dates
that are specified in the applicable Competitive Bid Request as Interest Payment
Dates with respect to such Borrowing.

          "Interest Period" means (a) with respect to any Eurodollar Borrowing,
           ---------------
the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months (or, with the consent of each Lender, nine or twelve months)
thereafter, as the Borrower may elect, (b) with respect to any Fixed Rate
Borrowing, the period (which shall not be less than 7 days or more than 360
days) commencing on the date of such Borrowing and ending on the date specified
in the applicable Competitive Bid Request; provided, that (i) if any Interest
                                           --------
Period would end on a day other than a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless, in the case of a
Eurodollar Borrowing only, such next succeeding Business Day would fall in the
next calendar month, in which case such Interest Period shall end on the next
preceding Business Day, (ii) any Interest Period pertaining to a Eurodollar
Borrowing that commences on the last Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the last calendar
month of such Interest Period) shall end on the last Business Day of the last
calendar month of such Interest Period and (iii) any Interest Period that would
otherwise extend beyond the Termination Date (if such Interest Period commences
prior to the Termination Date) or beyond the Maturity Date (if such Interest
Period commences on or after the Termination Date) shall end on the Termination
Date or the Maturity Date, respectively.  For purposes hereof, the date of a
Borrowing initially shall be the date on which such Borrowing is made and, in
the case of a Revolving Borrowing, thereafter shall be the effective date of the
most recent conversion or continuation of such Borrowing.

          "Lenders" means the Persons listed on Schedule 2.01 and any other
           -------
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.

          "LIBO Rate" means, with respect to any Eurodollar Borrowing for any
           ---------
Interest Period, the rate appearing on Page 3750 of the Telerate Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period.  In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
                                                 ---------
Eurodollar Borrowing for such
<PAGE>

                                                                              11

Interest Period shall be the rate at which dollar deposits of $5,000,000 and for
a maturity comparable to such Interest Period are offered by the principal
London office of the Administrative Agent in immediately available funds in the
London interbank market at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period.

          "Lien" means any mortgage, pledge, security interest, encumbrance,
           ----
lien or charge of any kind (including, without limitation, any conditional sale
or other title retention agreement or lease in the nature thereof) or any sale
of receivables with recourse against the seller.

          "Loans" means the loans made by the Lenders to the Borrower pursuant
           -----
to this Agreement.

          "Margin" means, with respect to any Competitive Loan bearing interest
           ------
at a rate based on the LIBO Rate, the marginal rate of interest, if any, to be
added to or subtracted from the LIBO Rate to determine the rate of interest
applicable to such Loan, as specified by the Lender making such Loan in its
related Competitive Bid.

          "Margin Stock" has the meaning assigned to that term in Regulation U
           ------------
of the Board as in effect from time to time.

          "Material Adverse Effect" means a material adverse effect on the
           -----------------------
business, operations, properties, assets or financial condition of the Borrower
and its Subsidiaries, taken as a whole.

          "Material Subsidiary" means each Subsidiary that is a "significant
           -------------------
subsidiary" as defined in Regulation (S) 230.405 promulgated pursuant to the
Securities Act, as such Regulation is in effect on the date hereof.

          "Maturity Date" means the first anniversary of the Termination Date.
           -------------

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

          "Note" means a promissory note executed and delivered pursuant to
           ----
Section 2.10(e) evidencing the Revolving Loans made by a Lender.

          "Officer's Certificate" means, as applied to any corporation, a
           ---------------------
certificate executed on behalf of such corporation by its Chairman of the Board
(if an officer), its President, its Chief Financial Officer or its Treasurer.

          "Other Taxes" means any and all present or future stamp or documentary
           -----------
taxes or any other excise or property taxes, charges or similar levies arising
from any
<PAGE>

                                                                              12

payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement.

          "PBGC" means the Pension Benefit Guaranty Corporation referred to and
           ----
defined in ERISA and any successor entity performing similar functions.

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

          "Permitted Liens" means:
           ---------------

          (a)  Liens for taxes, assessments or governmental charges or levies
(including any Lien imposed by ERISA arising out of an ERISA Event), either not
yet delinquent or so long as the amount, applicability or validity of the same
is being contested in good faith provided that any proceedings commenced for the
foreclosure on such Liens have been duly suspended and adequate reserves, if
any, have been established therefor in accordance with GAAP;

          (b)  Statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other Liens imposed by law incurred in the ordinary
course of business for sums not delinquent for a period of more than 45 days or
being contested in good faith, if such reserve or other appropriate provision,
if any, as shall be required by GAAP, shall have been made therefor;

          (c)  Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security, or to secure the performance of tenders,
statutory obligations, bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations (exclusive of obligations
for the payment of borrowed money);

          (d)  Any attachment or judgment Lien unless the attachment or judgment
it secures shall remain undischarged and execution thereof shall remain unstayed
pending appeal for a period of 60 days;

          (e)  Easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the business of
the Borrower or any of its Subsidiaries;

          (f)  Any interest or title of a lessor under any lease; and

          (g)  Liens arising from equipment leases entered into in the ordinary
course of business.
<PAGE>

                                                                              13

          "Person" means any natural person, corporation, limited liability
           ------
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.

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

          "Register" has the meaning set forth in Section 9.04.
           --------

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

          "Required Lenders" means (a) prior to any conversion of Revolving
           ----------------
Loans to Term Loans in accordance with Sections 2.04 and 2.05, Lenders having
Revolving Credit Exposures and unused Commitments representing at least 51% of
the sum of the total Revolving Credit Exposures and unused Commitments at such
time; provided that, for purposes of declaring the Loans to be due and payable
      --------
pursuant to Article VII, and for all purposes after the Loans become due and
payable pursuant to Article VII or the Commitments expire or terminate, the
outstanding Competitive Loans of the Lenders shall be included in their
respective Revolving Credit Exposures in determining the Required Lenders, and
(b) thereafter, Lenders having Term Loans with a total outstanding principal
amount representing at least 51% of the sum of the total outstanding principal
amount of Term Loans at such time.

          "Requirement of Law" means, as to any Person, any law, treaty, rule or
           ------------------
regulation or determination of any arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.

          "Revolving Borrowing Request" means a request by the Borrower for a
           ---------------------------
Revolving Borrowing in accordance with Section 2.03.

          "Revolving Credit Exposure" means, with respect to any Lender at any
           -------------------------
time, the sum of the outstanding principal amount of such Lender's Revolving
Loans at such time.

          "Revolving Loan" means a Loan made pursuant to Section 2.03.
           --------------

          "Securities Act" means the Securities Act of 1933, as from time to
           --------------
time amended, and any successor statutes.

          "Statutory Reserve Rate" means a fraction (expressed as a decimal),
           ----------------------
the numerator of which is the number one and the denominator of which is the
number one
<PAGE>

                                                                              14

minus the aggregate of the maximum reserve percentages (including any marginal,
special, emergency or supplemental reserves) expressed as a decimal established
by the Board (a) with respect to the Base CD Rate, to which the Administrative
Agent is subject for new negotiable nonpersonal time deposits in dollars of over
$100,000 with maturities approximately equal to (i) three months and (b) with
respect to the LIBO Rate, to which the Lender is subject for eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of
the Board). Such reserve percentages shall include those imposed pursuant to
such Regulation D. The Statutory Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in any reserve percentage.

          "Subsidiary" means, with respect to any Person, a corporation of which
           ----------
shares of stock having ordinary voting power (other than stock having such power
only by reason of the happening of a contingency) to elect a majority of the
board of directors or other managers of such corporation are at the time owned,
directly or indirectly through one or more intermediaries, or both, by such
Person.

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

          "Term Borrowing Request" means a request by the Borrower for a
           ----------------------
conversion of Revolving Loans to Term Loans in accordance with Section 2.05.

          "Termination Date" means August 14, 2001.
           ----------------

          "Term Loan" means a Loan made pursuant to Section 2.04.
           ---------

          "Three-Month Secondary CD Rate" means, for any day, the secondary
           -----------------------------
market rate for three-month certificates of deposit reported as being in effect
on such day (or, if such day is not a Business Day, the next preceding Business
Day) by the Board through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current practices of the
Board, be published in Federal Reserve Statistical Release H.15(519) during the
week following such day) or, if such rate is not so reported on such day or such
next preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York City
received at approximately 10:00 a.m., New York City time, on such day (or, if
such day is not a Business Day, on the next preceding Business Day) by the
Administrative Agent from three negotiable certificate of deposit dealers of
recognized standing selected by it.

          "Transactions" means the execution, delivery and performance by the
           ------------
Borrower of this Agreement, the borrowing of Loans and the use of the proceeds
thereof.

          "Type", when used in reference to any Loan or Borrowing, refers to
           ----
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is
<PAGE>

                                                                              15

determined by reference to the LIBO Rate, the Alternate Base Rate or, in the
case of a Competitive Loan or Borrowing, the LIBO Rate or a Fixed Rate.

          "Withdrawal Liability" means liability to a Multiemployer Plan as a
           --------------------
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.

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

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

          SECTION 1.04.  Accounting Terms; GAAP.  Except as otherwise expressly
                         ----------------------
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP; provided that, if the Borrower notifies the
                                   --------
Administrative Agent that the Borrower requests an amendment to any provision
hereof to eliminate the effect of any change occurring after the date hereof in
GAAP or in the application thereof on the operation of such provision (or if the
Administrative Agent notifies the Borrower that the Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith.
<PAGE>

                                                                              16

                                  ARTICLE II

                                  The Credits
                                  -----------

          SECTION 2.01.  Commitments.  Subject to the terms and conditions set
                         -----------
forth herein, each Lender agrees to make Revolving Loans to the Borrower from
time to time during the Availability Period in an aggregate principal amount
that will not result in (a) such Lender's Revolving Credit Exposure exceeding
such Lender's Commitment or (b) the sum of the total Revolving Credit Exposures
plus the aggregate principal amount of outstanding Competitive Loans exceeding
the total Commitments.  Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow
Revolving Loans.

          SECTION 2.02.  Loans and Borrowings.  (a)  Each Revolving Loan shall
                         --------------------
be made as part of a Borrowing consisting of Revolving Loans made by the Lenders
ratably in accordance with their respective Commitments.  Each Term Loan shall
be made as part of a Borrowing consisting of Term Loans made by the Lenders
ratably in accordance with their respective Commitments.  Each Competitive Loan
shall be made in accordance with the procedures set forth in Section 2.06.  The
failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder; provided that the
                                                       --------
Commitments and Competitive Bids of the Lenders are several and no Lender shall
be responsible for any other Lender's failure to make Loans as required.

          (b)  Subject to Section 2.14, (i) each Revolving Borrowing or Term
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the
Borrower may request in accordance herewith, and (ii) each Competitive Borrowing
shall be comprised entirely of Eurodollar Loans or Fixed Rate Loans as the
Borrower may request in accordance herewith.  Each Lender at its option may make
any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of
such Lender to make such Loan; provided that any exercise of such option shall
                               --------
not affect the obligation of the Borrower to repay such Loan in accordance with
the terms of this Agreement and shall not cause the Borrower to incur as of the
date of the exercise of such option any greater liability than it shall then
have under Sections 2.15 and 2.17.

          (c)  At the commencement of each Interest Period for any Eurodollar
Revolving Borrowing or Eurodollar Term Borrowing, such Borrowing shall be in an
aggregate amount that is an integral multiple of $5,000,000 and not less than
$10,000,000. At the time that each ABR Revolving Borrowing or ABR Term Borrowing
is made, such Borrowing shall be in an aggregate amount that is an integral
multiple of $5,000,000 and not less than $10,000,000; provided that an ABR
                                                      --------
Revolving Borrowing may be in an aggregate amount that is equal to the entire
unused balance of the total Commitments.  Each Competitive Borrowing shall be in
an aggregate amount that is an integral multiple of $1,000,000 and not less than
$5,000,000.  Borrowings of more than one Type and Class may be outstanding at
the same time; provided that there shall not at any time be more than
               --------
<PAGE>

                                                                              17

a total of 10 Eurodollar Revolving Borrowings or 10 Eurodollar Term Borrowings
outstanding.

          (d)  Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Termination Date (if such Interest Period commences prior thereto) or
the Maturity Date (if such Interest Period commences on or after the Termination
Date).

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

          (i)    the aggregate amount of the requested Borrowing;

          (ii)   the date of such Borrowing, which shall be a Business Day;

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

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

          (v)    the location and number of the Borrower's account to which
     funds are to be disbursed, which shall comply with the requirements of
     Section 2.07.

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

          SECTION 2.04.  Term Loans.  The Revolving Loans outstanding at the
                         ----------
close of business on the Termination Date shall, at the option of the Borrower
by notice
<PAGE>

                                                                              18

given to the Administrative Agent as provided in Section 2.05 but subject to the
terms and conditions hereof (including Section 4.02), convert on such date into
term loans (the "Term Loans") to the Borrower. The Term Loans may from time to
                 ----------
time be (a) Eurodollar Loans, (b) ABR Loans or (c) a combination thereof, as
determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.05 and 2.08.

          SECTION 2.05.  Request for Term Borrowing.  To request the conversion
                         --------------------------
of the Revolving Loans to Term Loans as contemplated in Section 2.04, the
Borrower shall notify the Administrative Agent of such request by telephone
prior to 11:00 A.M., New York City time, (a) three Business Days prior to the
Termination Date, if all or any part of the Term Loans are to be initially
Eurodollar Borrowing or (b) one Business Day prior to the Termination Date,
otherwise.  Such telephonic Term Borrowing Request shall be irrevocable and
shall be confirmed promptly by hand delivery or telecopy to the Administrative
Agent of a written Term Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower.  Each such telephonic and
written Term Borrowing Request shall specify the following information in
compliance with Section 2.02:

          (i)    the aggregate amount of the requested conversion;

          (ii)   the date of such conversion, which shall be the Termination
     Date;

          (iii)  whether after giving effect to such conversion, the outstanding
     Term Loans are to consist of an ABR Borrowing or a Eurodollar Borrowing, or
     a combination thereof; and

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

If no election as to the Type of Term Loans is specified, then the requested
Term Loans shall be an ABR Borrowing.  If no Interest Period is specified with
respect to any requested Eurodollar Term Borrowing, then the Borrower shall be
deemed to have selected an Interest Period of one month's duration.  Promptly
following receipt of a Term Borrowing Request in accordance with this Section,
the Administrative Agent shall advise each Lender of the details thereof and of
the amount of such Lender's Loan converted as part of the requested Borrowing.
The aggregate principal amount of the Term Loans shall be equal to the aggregate
principal amount of the Revolving Loans then outstanding and the Term Loans
shall be made by conversion of such Revolving Loans, without any payments being
made by the Lenders.

          SECTION 2.06.  Competitive Bid Procedure.  (a)  Subject to the terms
                         -------------------------
and conditions set forth herein, from time to time during the Availability
Period the Borrower may request Competitive Bids and may (but shall not have any
obligation to) accept Competitive Bids and borrow Competitive Loans; provided
                                                                     --------
that the sum of the total
<PAGE>

                                                                              19

Revolving Credit Exposures plus the aggregate principal amount of outstanding
Competitive Loans at any time shall not exceed the total Commitments.  To
request Competitive Bids, the Borrower shall notify the Administrative Agent of
such request by telephone, in the case of a Eurodollar Borrowing, not later than
11:00 a.m., New York City time, four Business Days before the date of the
proposed Borrowing and, in the case of a Fixed Rate Borrowing, not later than
10:00 a.m., New York City time, one Business Day before the date of the proposed
Borrowing; provided that the Borrower may submit up to (but not more than) 3
           --------
Competitive Bid Requests on the same day, but a Competitive Bid Request shall
not be made within five Business Days after the date of any previous Competitive
Bid Request, unless any and all such previous Competitive Bid Requests shall
have been withdrawn or all Competitive Bids received in response thereto
rejected.  Each such telephonic Competitive Bid Request shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written
Competitive Bid Request in a form approved by the Administrative Agent and
signed by the Borrower.  Each such telephonic and written Competitive Bid
Request shall specify the following information in compliance with Section 2.02:

          (i)    the aggregate amount of the requested Borrowing;

          (ii)   the date of such Borrowing, which shall be a Business Day;

          (iii)  whether such Borrowing is to be a Eurodollar Borrowing or a
     Fixed Rate Borrowing;

          (iv)   the Interest Period to be applicable to such Borrowing, which
     shall be a period contemplated by the definition of the term "Interest
     Period"; and

          (v)    the location and number of the Borrower's account to which
     funds are to be disbursed, which shall comply with the requirements of
     Section 2.07.

Promptly following receipt of a Competitive Bid Request in accordance with this
Section, the Administrative Agent shall notify the Lenders of the details
thereof by telecopy, inviting the Lenders to submit Competitive Bids.

          (b)  Each Lender may (but shall not have any obligation to) make one
or more Competitive Bids to the Borrower in response to a Competitive Bid
Request.  Each Competitive Bid by a Lender must be in a form approved by the
Administrative Agent and must be received by the Administrative Agent by
telecopy, in the case of a Eurodollar Competitive Borrowing, not later than 9:30
a.m., New York City time, three Business Days before the proposed date of such
Competitive Borrowing, and in the case of a Fixed Rate Borrowing, not later than
9:30 a.m., New York City time, on the proposed date of such Competitive
Borrowing.  Competitive Bids that do not conform substantially to the form
approved by the Administrative Agent may be rejected by the Administrative
Agent, and the Administrative Agent shall notify the applicable Lender as
promptly as practicable. Each Competitive Bid shall specify (i) the principal
amount (which shall be a minimum of
<PAGE>

                                                                              20

$5,000,000 and an integral multiple of $1,000,000 and which may equal the entire
principal amount of the Competitive Borrowing requested by the Borrower) of the
Competitive Loan or Loans that the Lender is willing to make, (ii) the
Competitive Bid Rate or Rates at which the Lender is prepared to make such Loan
or Loans (expressed as a percentage rate per annum in the form of a decimal to
no more than four decimal places) and (iii) the Interest Period applicable to
each such Loan and the last day thereof.

          (c)  The Administrative Agent shall promptly notify the Borrower by
telecopy of the Competitive Bid Rate and the principal amount specified in each
Competitive Bid  and the identity of the Lender that shall have made such
Competitive Bid.

          (d)  Subject only to the provisions of this paragraph, the Borrower
may accept or reject any Competitive Bid.  The Borrower shall notify the
Administrative Agent by telephone, confirmed by telecopy in a form approved by
the Administrative Agent, whether and to what extent it has decided to accept or
reject each Competitive Bid, in the case of a Eurodollar Competitive Borrowing,
not later than 10:30 a.m., New York City time, three Business Days before the
date of the proposed Competitive Borrowing, and in the case of a Fixed Rate
Borrowing, not later than 10:30 a.m., New York City time, on the proposed date
of the Competitive Borrowing; provided that (i) the failure of the Borrower to
give such notice shall be deemed to be a rejection of each Competitive Bid, (ii)
the Borrower shall not accept a Competitive Bid made at a particular Competitive
Bid Rate for a particular interest period if the Borrower rejects a Competitive
Bid made at a lower Competitive Bid Rate for the same interest period, (iii) the
aggregate amount of the Competitive Bids accepted by the Borrower shall not
exceed the aggregate amount of the requested Competitive Borrowing specified in
the related Competitive Bid Request, (iv) to the extent necessary to comply with
clause (iii) above, the Borrower may accept Competitive Bids at the same
Competitive Bid Rate in part, which acceptance, in the case of multiple
Competitive Bids at such Competitive Bid Rate, shall be made pro rata in
accordance with the amount of each such Competitive Bid, and (v) except pursuant
to clause (iv) above, no Competitive Bid shall be accepted for a Competitive
Loan unless such Competitive Loan is in a minimum principal amount of $5,000,000
and an integral multiple of $1,000,000; provided further that if a Competitive
                                        -------- -------
Loan must be in an amount less than $5,000,000 because of the provisions of
clause (iv) above, such Competitive Loan may be for a minimum of $1,000,000 or
any integral multiple thereof, and in calculating the pro rata allocation of
acceptances of portions of multiple Competitive Bids at a particular Competitive
Bid Rate pursuant to clause (iv) the amounts shall be rounded to integral
multiples of $1,000,000 in a manner determined by the Borrower.  A notice given
by the Borrower pursuant to this paragraph shall be irrevocable.

          (e)  The Administrative Agent shall promptly notify each bidding
Lender by telecopy whether or not its Competitive Bid has been accepted (and, if
so, the amount and Competitive Bid Rate so accepted), and each successful bidder
will thereupon become bound, subject to the terms and conditions hereof, to make
the Competitive Loan in respect of which its Competitive Bid has been accepted.
<PAGE>

                                                                              21

          (f)  If the Administrative Agent shall elect to submit a Competitive
Bid in its capacity as a Lender, it shall submit such Competitive Bid directly
to the Borrower at least one quarter of an hour earlier than the time by which
the other Lenders are required to submit their Competitive Bids to the
Administrative Agent pursuant to paragraph (b) of this Section.

          SECTION 2.07.  Funding of Borrowings.  (a)  Each Lender shall make
                         ---------------------
each Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds by 12:00 noon, New York City time, to
the account of the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders.  The Administrative Agent will make such Loans
available to the Borrower by promptly crediting the amounts so received, in like
funds, to an account of the Borrower maintained with the Administrative Agent in
New York City and designated by the Borrower in the applicable Revolving
Borrowing Request or Competitive Bid Request.

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

          SECTION 2.08.  Interest Elections.  (a)  Each Borrowing initially
                         ------------------
shall be of the Type specified in the applicable Borrowing Request and, in the
case of a Eurodollar Revolving Borrowing, shall have an initial Interest Period
as specified in such Borrowing Request.  Thereafter, the Borrower may elect to
convert such Borrowing to a different Type or to continue such Borrowing and, in
the case of a Eurodollar Revolving Borrowing, may elect Interest Periods
therefor, all as provided in this Section.  The Borrower may elect different
options with respect to different portions of the affected Borrowing, in which
case each such portion shall be allocated ratably among the Lenders holding the
Loans comprising such Borrowing, and the Loans comprising each such portion
shall be considered a separate Borrowing.  This Section shall not apply to
Competitive Borrowings, which may not be converted or continued.

          (b)  To make an election pursuant to this Section, the Borrower shall
notify the Administrative Agent of such election by telephone by the time that a
Revolving
<PAGE>

                                                                              22

Borrowing Request would be required under Section 2.03 or that a Term Borrowing
Request would be required under Section 2.05 if the Borrower were requesting a
Revolving Borrowing of the Type resulting from such election to be made on the
effective date of such election.  Each such telephonic Interest Election Request
shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Interest Election Request in a
form approved by the Administrative Agent and signed by the Borrower.

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

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

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

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

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

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

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

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

                                                                              23

the end of the Interest Period applicable thereto, and (b) no Revolving Loan or
Term Loan may be converted into or continued as a Eurodollar Borrowing after the
date that is one month or 30 days, respectively, prior to the Termination Date
or the Maturity Date, as the case may be.

          SECTION 2.09.  Termination and Reduction of Commitments.  (a)  Unless
                         ----------------------------------------
previously terminated, the Commitments shall terminate on the Termination Date.

          (b)  The Borrower may at any time terminate, or from time to time
reduce, the Commitments; provided that (i) each reduction of the Commitments
                         --------
shall be in minimum aggregate amounts of $10,000,000 (unless the total
Commitment at such time is less than $10,000,000, in which case, in an amount
equal to the total Commitment at such time) and, if such reduction is greater
than $5,000,000, in integral multiples of $5,000,000 in excess of such amount
and (ii) the Borrower shall not terminate or reduce the Commitments if, after
giving effect to any concurrent prepayment of the Loans in accordance with
Section 2.11, the sum of the Revolving Credit Exposures plus the aggregate
principal amount of outstanding Competitive Loans would exceed the total
Commitments.

          (c)  The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of this
Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof.  Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof.  Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable; provided that a notice
                                                        --------
of termination of the Commitments delivered by the Borrower may state that such
notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Borrower (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied.  Any termination or reduction of the Commitments
shall be permanent.  Termination of the Commitments prior to the Termination
Date shall also terminate the obligations of the Lenders to make the Term Loans.
Each reduction of the Commitments shall be made ratably among the Lenders in
accordance with their respective Commitments.

          SECTION 2.10.  Repayment of Loans; Evidence of Debt.  (a) The
                         ------------------------------------
Borrower hereby unconditionally promises to pay (i) to the Administrative Agent
for the account of each Lender the then unpaid principal amount of each
Revolving Loan on the Termination Date (subject to the provisions of Section
2.04), (ii) to the Administrative Agent for the account of each Lender the
principal amount of the Term Loan of such Lender on the Maturity Date, and (iii)
to the Administrative Agent for the account of each Lender with an outstanding
Competitive Loan the then unpaid principal amount of such Competitive Loan on
the last day of the Interest Period applicable to such Loan.

          (b)  Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting
<PAGE>

                                                                              24

from each Loan made by such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder.

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

          (d)  The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section shall be prima facie evidence of the existence and
                                    -----------
amounts of the obligations recorded therein; provided that the failure of any
                                             --------
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.  If there is a
conflict in entries made in the accounts maintained pursuant to paragraph (b) or
(c) of this Section, the entries made in the accounts maintained by the
Administrative Agent shall be such prima facie evidence of the existence and
                                   ----- -----
amounts of the obligations.

          (e)  Any Lender may request that Loans made by it be evidenced by a
promissory note.  In such event, the Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent.

          SECTION 2.11.  Prepayment of Loans.  (a)  The Borrower shall have the
                         -------------------
right at any time and from time to time to prepay any Borrowing in whole or in
part, subject to prior notice in accordance with paragraph (b) of this Section;
provided that the Borrower shall not have the right to prepay any Competitive
--------
Loan without the prior consent of the Lender thereof.

          (b)  The Borrower shall notify the Administrative Agent by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Revolving Borrowing, not later than 11:00 a.m., New
York City time, three Business Days before the date of prepayment or (ii) in the
case of prepayment of an ABR Revolving Borrowing, not later than 11:00 a.m., New
York City time, one Business Day before the date of prepayment.  Each such
notice shall be irrevocable and shall specify the prepayment date and the
principal amount of each Borrowing or portion thereof to be prepaid; provided
                                                                     --------
that, if a notice of prepayment is given in connection with a conditional notice
of termination of the Commitments as contemplated by Section 2.09, then such
notice of prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.09.  Promptly following receipt of any such notice
relating to a Revolving Borrowing, the Administrative Agent shall advise the
Lenders of the contents thereof.  Each partial prepayment of any Revolving
Borrowing shall be in an amount that would be
<PAGE>

                                                                              25

permitted in the case of an advance of a Revolving Borrowing of the same Type as
provided in Section 2.02. Each prepayment of a Revolving Borrowing shall be
applied ratably to the Loans included in the prepaid Borrowing. Prepayments
shall be accompanied by accrued interest to the extent required by Section 2.13
and shall be subject to Section 2.15. Amounts prepaid on account of Term Loans
may not be reborrowed.

          SECTION 2.12.  Fees.  (a)  The Borrower agrees to pay to the
                         -----
Administrative Agent for the account of each Lender a facility fee, which shall
accrue at the Applicable Rate on the daily amount of the Commitment of such
Lender (whether used or unused) during the period from and including the
Effective Date to but excluding the date on which such Commitment terminates;
provided that, if such Lender continues to have any Revolving Credit Exposure or
--------
Term Loans after its Commitment terminates, then such facility fee shall
continue to accrue on the daily amount of such Lender's Revolving Credit
Exposure or Term Loans from and including the date on which its Commitment
terminates to but excluding the date on which such Lender ceases to have any
Revolving Credit Exposure or Term Loans.  Accrued facility fees shall be payable
in arrears on the last day of March, June, September and December of each year
and on the date on which the Commitments terminate and the Term Loans are
repaid, commencing on the first such date to occur after the date hereof;
provided that any facility fees accruing other than on Term Loans after the date
--------
on which the Commitments terminate shall be payable on demand.  All facility
fees shall be computed on the basis of a year of 360 days and shall be payable
for the actual number of days elapsed (including the first day but excluding the
last day).

          (b)  The Borrower agrees to pay to the Administrative Agent for the
account of each Lender a utilization fee in an amount equal to 0.05% on the
aggregate principal amount of the Loans outstanding for each day on which the
sum of such Loans and the loans outstanding under the Five-Year Credit Agreement
equal or exceed 50% of the sum of the total amount of the Commitments (or if the
Commitments have terminated and Loans are outstanding, the Commitments as in
effect immediately prior to termination) and the total amount of the commitments
under the Five-Year Credit Agreement (or, if the commitments thereunder have
terminated and there are loans outstanding, the commitments as in effect
immediately prior to termination).  Accrued utilization fees shall be payable in
arrears on the last day of March, June, September and December of each year and
on the date on which the Commitments terminate and the Term Loans are repaid,
commencing on the first such date to occur after the date hereof; provided that
                                                                  --------
any utilization fees accruing other than on Term Loans after the date in which
the Commitments terminate shall be payable on demand.  All utilization fees
shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day).

          (c)  The Borrower agrees to pay to the Administrative Agent, for its
own account, fees payable in the amounts and at the times separately agreed upon
between the Borrower and the Administrative Agent.
<PAGE>

                                                                              26

          (d)  All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent for distribution, in
the case of facility fees to the Lenders.  Fees paid shall not be refundable
under any circumstances.

          SECTION 2.13.  Interest.  (a)  The Loans comprising each ABR Borrowing
                         --------
shall bear interest at a rate per annum equal to the Alternate Base Rate.

          (b)  The Loans comprising each Eurodollar Borrowing shall bear
interest at a rate per annum equal to (i) in the case of a Eurodollar Revolving
Loan, the LIBO Rate for the Interest Period in effect for such Borrowing plus
the Applicable Rate, or (ii) in the case of a Eurodollar Competitive Loan, the
LIBO Rate for the Interest Period in effect for such Borrowing plus (or minus,
as applicable) the Margin applicable to such Loan.

          (c)  Each Fixed Rate Loan shall bear interest at a rate per annum
equal to the Fixed Rate applicable to such Loan.

          (d)  Notwithstanding the foregoing, if any principal of or interest on
any Loan or any fee or other amount payable by the Borrower hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided above or (ii) in the case of
any other amount, 2% plus the rate applicable to ABR Loans as provided above.

          (e)  Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan; provided that (i) interest accrued pursuant
                                     --------
to paragraph (d) of this Section shall be payable on demand, (ii) in the event
of any repayment or prepayment of any Loan (other than a prepayment of an ABR
Revolving Loan prior to the end of the Availability Period), accrued interest on
the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment, (iii) in the event of any conversion of any Eurodollar
Revolving Loan prior to the end of the current Interest Period therefor, accrued
interest on such Loan shall be payable on the effective date of such conversion
and (iv) all accrued interest shall be payable upon termination of the
Commitments.

          (f)  All interest hereunder shall be computed on the basis of a year
of 360 days, except that interest computed by reference to the Alternate Base
Rate at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day).  The applicable Alternate Base Rate or
LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.

          SECTION 2.14.  Alternate Rate of Interest.  If prior to the
                         --------------------------
commencement of any Interest Period for a Eurodollar Borrowing:
<PAGE>

                                                                              27

          (a)  the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the LIBO Rate, as applicable, for such Interest Period;
or

          (b)  the Administrative Agent is advised by the Required Lenders (or,
in the case of a Eurodollar Competitive Loan, the Lender that is required to
make such Loan) that the LIBO Rate, as applicable, for such Interest Period will
not adequately and fairly reflect the cost to such Lenders (or Lender) of making
or maintaining their Loans (or its Loan) included in such Borrowing for such
Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing or Term
Borrowing to, or continuation of any Revolving Borrowing or Term Borrowing as, a
Eurodollar Borrowing shall be ineffective, (ii) if any Borrowing Request
requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR
Borrowing and (iii) any request by the Borrower for a Eurodollar Competitive
Borrowing shall be ineffective; provided that (A) if the circumstances giving
                                --------
rise to such notice do not affect all the Lenders, then requests by the Borrower
for Eurodollar Competitive Borrowings may be made to Lenders that are not
affected thereby and (B) if the circumstances giving rise to such notice affect
only one Type of Borrowings, then the other Type of Borrowings shall be
permitted.

          SECTION 2.15.  Increased Costs.  (a)  If any Change in Law shall:
                         ---------------

          (i)   impose, modify or deem applicable any reserve, special deposit
     or similar requirement against assets of, deposits with or for the account
     of, or credit extended by, any Lender (except any such reserve requirement
     as is covered by Section 2.15 (c)); or

          (ii)  impose on any Lender or the London interbank market any other
     condition affecting this Agreement or Eurodollar Loans or Fixed Rate Loans
     made by such Lender therein;

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan or Fixed Rate Loan (or of
maintaining its obligation to make any such Loan) (excluding any such increased
costs from Taxes or Excluded Taxes) or to reduce the amount of any sum received
or receivable by such Lender hereunder (whether of principal, interest or
otherwise), then the Borrower will upon notice by such Lender pay to such Lender
such additional amount or amounts as will compensate such Lender for such
additional costs incurred or reduction suffered.

          (b)   If any Lender determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of return
on such Lender's
<PAGE>

                                                                              28

capital or on the capital of such Lender's holding company, if any, as a
consequence of this Agreement or the Loans made by such Lender to a level below
that which such Lender or such Lender's holding company could have achieved but
for such Change in Law (taking into consideration such Lender's policies and the
policies of such Lender's holding company with respect to capital adequacy),
then from time to time the Borrower will pay to such Lender such additional
amount or amounts as will upon notice by such Lender compensate such Lender or
such Lender's holding company for any such reduction suffered to the extent
allocable to this Agreement.

          (c)  The Borrower shall pay to each Lender at any time when such
Lender is required to maintain reserves for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of the Board),
additional interest on the unpaid principal amount of each Eurodollar Loan of
such Lender from the date of such requirement until such principal amount is
paid in full or such requirement ceases at the rate per annum equal to (i) the
LIBO rate for the relevant Interest Period multiplied by (ii) the Statutory
Reserve Rate for such Lender minus (iii) such LIBO Rate, payable upon notice by
such Lender on each Interest Payment Date for such Eurodollar Loan.

          (d)  A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a), (b)  or (c) of this Section shall be delivered to
the Borrower and shall be conclusive absent manifest error.  The Borrower shall
pay such Lender the amount shown as due on any such certificate within 10 days
after receipt thereof.

          (e)  Failure or delay on the part of any Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender's right to
demand such compensation; provided that the Borrower shall not be required to
                          --------
compensate a Lender pursuant to this Section for any increased costs or
reductions incurred more than six months prior to the date that such Lender
notifies the Borrower of the Change in Law giving rise to such increased costs
or reductions and of such Lender's intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased costs
-------- -------
or reductions is retroactive, then the six-month period referred to above shall
be extended to include the period of retroactive effect thereof.

          (f)  Notwithstanding the foregoing provisions of this Section, a
Lender shall not be entitled to compensation pursuant to this Section in respect
of any Competitive Loan if the Change in Law that would otherwise entitle it to
such compensation shall have been publicly announced prior to submission of the
Competitive Bid pursuant to which such Loan was made.

          SECTION 2.16.  Break Funding Payments.  In the event of (a) the
                         ----------------------
payment of any principal of any Eurodollar Loan or Fixed Rate Loan other than on
the last day of an Interest Period applicable thereto (including as a result of
an Event of Default), (b) the conversion of any Eurodollar Loan other than on
the last day of the Interest Period applicable thereto, (c) the failure to
borrow, convert, continue or prepay any Eurodollar
<PAGE>

                                                                              29

Loan on the date specified in any notice delivered pursuant hereto (regardless
of whether such notice is permitted to be revocable under Section 2.11(b) and is
revoked in accordance herewith), (d) the failure to borrow any Competitive Loan
after accepting the Competitive Bid to make such Loan, or (e) the assignment of
any Eurodollar Loan or Fixed Rate Loan other than on the last day of the
Interest Period applicable thereto as a result of a request by the Borrower
pursuant to Section 2.19, then, in any such event, the Borrower shall compensate
each Lender for the loss, cost and expense attributable to such event (excluding
any loss of anticipated profits).  In the case of a Eurodollar Loan, the loss to
any Lender attributable to any such event shall be deemed to include an amount
determined by such Lender to be equal to the excess, if any, of (i) the amount
of interest that such Lender would pay for a deposit equal to the principal
amount of such Loan for the period from the date of such payment, conversion,
failure or assignment to the last day of the then current Interest Period for
such Loan (or, in the case of a failure to borrow, convert or continue, the
duration of the Interest Period that would have resulted from such borrowing,
conversion or continuation) if the interest rate payable on such deposit were
equal to the LIBO Rate for such Interest Period, over (ii) the amount of
interest that such Lender would earn on such principal amount for such period if
such Lender were to invest such principal amount for such period at the interest
rate that would be bid by such Lender (or an affiliate of such Lender) for
dollar deposits from other banks in the eurodollar market at the commencement of
such period.  A certificate of any Lender setting forth any amount or amounts
that such Lender is entitled to receive pursuant to this Section shall be
delivered to the Borrower and shall be conclusive absent manifest error.  The
Borrower shall pay such Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.

          SECTION 2.17.  Taxes.  (a)  Any and all payments by or an account of
                         -----
any obligation of the Borrower hereunder shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; provided that if the
                                                            --------
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent or Lender
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.

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

          (c)  The Borrower shall indemnify the Administrative Agent, and each
Lender, within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
paid by the Administrative Agent, such Lender and any penalties, interest and
reasonable expenses arising therefrom or with respect thereto.
<PAGE>

                                                                              30

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

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

          SECTION 2.18.  Payments Generally; Pro Rata Treatment; Sharing of Set-
                         ------------------------------------------------------
offs.  (a)  The Borrower shall make each payment required to be made by it
----
hereunder (whether of principal, interest, or fees, or under Section 2.15, 2.16
or 2.17, or otherwise) prior to 2:00 P.M., New York City time, on the date when
due, in immediately available funds, without set-off or counterclaim.  Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon.  All such payments
shall be made to the Administrative Agent at its offices at 270 Park Avenue, New
York, New York, except that payments pursuant to Sections 2.15, 2.16, 2.17 and
9.03 shall be made directly to the Persons entitled thereto.  The Administrative
Agent shall distribute any such payments received by it for the account of any
other Person to the appropriate recipient promptly following receipt thereof.
If any payment hereunder shall be due on a day that is not a Business Day, the
date for payment shall be extended to the next succeeding Business Day, and, in
the case of any payment accruing interest, interest thereon shall be payable for
the period of such extension.  All payments hereunder shall be made in dollars.

          (b)  If at any time insufficient funds are received by and available
to the Administrative Agent to pay fully all amounts of principal, interest and
fees then due hereunder, such funds shall be applied (i) first, to pay interest
and fees then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of interest and fees then due to such parties, and
(ii) second, to pay principal then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal then due to such
parties.

          (c)  If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans or Term Loans resulting in such Lender
receiving payment of a greater proportion of the aggregate amount of its
Revolving Loans or Term Loans and accrued interest thereon than the proportion
received by any other Lender, then the Lender receiving such greater
<PAGE>

                                                                              31

proportion shall purchase (for cash at face value) participations in the
Revolving Loans or Term Loans of other Lenders to the extent necessary so that
the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Revolving Loans or Term Loans; provided that (i) if any such
                                                --------
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). The Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.

          (d)  Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders hereunder that the Borrower will not make
such payment, the Administrative Agent may assume that the Borrower has made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders the amount due.  In such event, if the
Borrower has not in fact made such payment, then each of the Lenders severally
agrees to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the Federal Funds Effective Rate.

          (e)  If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.07(b) or 2.18(d), then the Administrative Agent may,
in its discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by the Administrative Agent for the account of such
Lender to satisfy such Lender's obligations under such Sections until all such
unsatisfied obligations are fully paid.

          SECTION 2.19.  Mitigation Obligations; Replacement of Lenders.  (a)
                         ----------------------------------------------
If any Lender requests compensation under Section 2.15, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous in any material respect to
such Lender.  The Borrower
<PAGE>

                                                                              32

hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

          (b)  If any Lender requests compensation under Section 2.15, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
then the Borrower may, at its sole expense and effort, upon notice to such
Lender and the Administrative Agent, require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained
in Section 9.04), all its interests, rights and obligations under this Agreement
(other than any outstanding Competitive Loans held by it) to an assignee that
shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Borrower shall have received the
                          --------
prior written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans (other than Competitive
Loans), accrued interest thereon, accrued fees and all other amounts payable to
it hereunder, from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or the Borrower (in the case of all other amounts)
and (iii) in the case of any such assignment resulting from a claim for
compensation under Section 2.15 or payments required to be made pursuant to
Section 2.17, such assignment will result in a reduction in such compensation or
payments. A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation cease to apply.

          SECTION 2.20.  Proceeds.  The proceeds of the Loans made by the
                         --------
Lenders to the Borrower shall be used for acquisitions, repurchases of capital
stock of the Borrower, the funding of dividends payable to shareholders of the
Borrower and for general corporate purposes of the Borrower.

                                  ARTICLE III

                        Representations and Warranties
                        ------------------------------

          The Borrower represents and warrants to the Lenders that the following
statements are true, correct and complete:

          SECTION 3.01.  Organization, Powers and Good Standing.  (a)  The
                         --------------------------------------
Borrower is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation.  The Borrower has all
requisite corporate power and authority (i) to own and operate its properties
and to carry on its business as now conducted and proposed to be conducted,
except where the lack of corporate power and authority would not have a Material
Adverse Effect and (ii) to enter into this Agreement and to carry out the
transactions contemplated hereby, and to issue the Notes.
<PAGE>

                                                                              33

          (b)  The Borrower is in good standing wherever necessary to carry on
its present business and operations, except in jurisdictions in which the
failure to be in good standing would not have a Material Adverse Effect.

          (c)  All of the Material Subsidiaries of the Borrower, as of the
Effective Date, are identified in Schedule 3.01 annexed hereto. Each Material
Subsidiary of the Borrower is validly existing and in good standing under the
laws of its respective jurisdiction of incorporation and has all requisite
corporate power and authority to own and operate its properties and to carry on
its business as now conducted except where failure to be in good standing or a
lack of corporate power and authority would not have a Material Adverse Effect.

          SECTION 3.02.  Authorization of Borrowing, etc.  (a)  The execution,
                         --------------------------------
delivery and performance of this Agreement, and the issuance, delivery and
payment of the Notes and the borrowing of the Loans have been duly authorized by
all necessary corporate action by the Borrower.

          (b)  The execution, delivery and performance by the Borrower of this
Agreement and the issuance, delivery and performance of the Notes by the
Borrower, and the borrowing of the Loans do not and will not (i) violate any
provision of law applicable to the Borrower or any of its Material Subsidiaries,
(ii) violate the Certificate of Incorporation or Bylaws of the Borrower or any
of its Material Subsidiaries, (iii) violate any order, judgment or decree of any
court or other agency of government binding on the Borrower or any of its
Material Subsidiaries, conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a default under any contractual obligation
of the Borrower or any of its Material Subsidiaries, result in or require the
creation or imposition of any Lien upon any of the material properties or assets
of the Borrower or any of its Material Subsidiaries or require any approval of
stockholders or any approval or consent of any Person under any contractual
obligation of the Borrower or any of its Material Subsidiaries other than such
approvals and consents which have been or will be obtained on or before the
Effective Date; except for any violation, conflict, default, breach, lien or
lack of approval the existence of which would not have a Material Adverse
Effect.

          (c)  The execution, delivery and performance by the Borrower of this
Agreement and the issuance, delivery and performance by the Borrower of the
Notes will not require on the part of the Borrower any registration with,
consent or approval of, or notice to, or other action to, with or by, any
federal, state or other governmental authority or regulatory body other than any
such registration, consent, approval, notice or other action which has been duly
made, given or taken.

          (d)  This Agreement is and each of the Notes when executed and
delivered will be a legally valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with its respective terms, except
as enforcement may be limited
<PAGE>

                                                                              34

by bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or limiting creditors' rights generally or by equitable principles relating
to enforceability.

          SECTION 3.03.  Financial Condition. The Borrower has delivered to the
                         -------------------
Administrative Agent the following materials:  (i) audited consolidated
financial statements of the Borrower and its Subsidiaries for the year ended
December 31, 1999 and (ii) unaudited consolidated financial statements of the
Borrower and its Subsidiaries for the Fiscal Quarters ended March 31, 2000 and
June 30, 2000 (collectively, the "Financial Statements").  All such Financial
Statements were prepared in accordance with GAAP except for the preparation of
footnote disclosures for the unaudited statements.  All such Financial
Statements fairly present the consolidated financial position of the Borrower
and its Subsidiaries as at the respective dates thereof and the consolidated
statements of income and changes in financial position of the Borrower and its
Subsidiaries for each of the periods covered thereby, subject, in the case of
any unaudited interim financial statements, to changes resulting from normal
year-end adjustments.

          SECTION 3.04.  No Adverse Material Change.  Since December 31, 1999,
                         --------------------------
there has been no change in the business, operations, properties, assets or
financial condition of the Borrower or any of its Subsidiaries, which has been,
either in any case or in the aggregate, materially adverse to the Borrower and
its Subsidiaries taken as a whole.

          SECTION 3.05.  Litigation.  Except as disclosed in the Financial
                         ----------

Statements delivered to the Lenders pursuant to Section 3.03 hereof or in
Schedule 3.05 to this Agreement, there is no action, suit, proceeding,
governmental investigation (including, without limitation, any of the foregoing
relating to laws, rules and regulations relating to the protection of the
environment, health and safety) of which the Borrower has knowledge or
arbitration (whether or not purportedly on behalf of the Borrower or any of its
Subsidiaries) at law or in equity or before or by any Governmental Authority,
domestic or foreign, pending or, to the knowledge of the Borrower, threatened
against the Borrower or any of its Subsidiaries or affecting any property of the
Borrower or any of its Subsidiaries which (i) challenges the validity of this
Agreement or any Note or (ii) could reasonably be expected to have a Material
Adverse Effect.

          SECTION 3.06.  Payment of Taxes.  Except to the extent permitted by
                         ----------------
Section 5.03 hereof, the Borrower has paid or caused to be paid all taxes,
assessments, fees and other governmental charges upon the Borrower and each of
its Subsidiaries and upon their respective properties, assets, income and
franchises, except for any taxes the failure of which to pay would not have a
Material Adverse Effect or which are not yet due and payable or which are being
contested in good faith.  The Borrower does not know of any proposed tax
assessment against the Borrower or such Subsidiary that would have a Material
Adverse Effect, which is not being contested in good faith by the Borrower or
such Subsidiary; provided that such reserves or other appropriate provisions, if
any, as shall be required in conformity with GAAP shall have been made or
provided therefor.
<PAGE>

                                                                              35

          SECTION 3.07.  Governmental Regulation.  (a) The Borrower is not
                         -----------------------
subject to regulation under the Public Utility Holding Company Act of 1935 or to
any federal or state statute or regulation limiting its ability to incur
Indebtedness for money borrowed as contemplated by this Agreement or by the
Notes.

          (b)  The Borrower is not an "investment company" or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended.

          SECTION 3.08.  Securities Activities.  The Borrower is not engaged
                         ---------------------
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.

          SECTION 3.09.  ERISA.  No ERISA Event has occurred or is reasonably
                         -----
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. As of the date hereof, the present value of
all accumulated benefit obligations under each Plan (based on the assumptions
used for purposes of Statement of Financial Accounting Standards No. 87) did
not, as of the date of the most recent financial statements reflecting such
amounts, exceed by more than $5,000,000 the fair market value of the assets of
such Plan, and the present value of all accumulated benefit obligations of all
underfunded Plans (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed by more than
$5,000,000 the fair market value of the assets of all such underfunded Plans.

                                  ARTICLE IV

                                  Conditions
                                  ----------

          SECTION 4.01.  Effective Date.  The obligations of the Lenders to make
                         --------------
Loans hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 9.02):

          (a)  The Administrative Agent (or its counsel) shall have received
from each party hereto either (i) a counterpart of this Agreement signed on
behalf of such party or (ii) written evidence satisfactory to the Administrative
Agent (which may include telecopy transmission of a signed signature page of
this Agreement) that such party has signed a counterpart of this Agreement.

          (b)  The Administrative Agent shall have received a favorable written
opinion (addressed to the Administrative Agent and the Lenders and dated the
Effective Date) of Kenneth M. Vittor, General Counsel to the Borrower,
substantially in the form of
<PAGE>

                                                                              36

Exhibit B, and covering such other matters relating to the Borrower, this
Agreement or the Transactions as the Required Lenders shall reasonably request.

          (c)  The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably request
relating to the organization, existence and good standing of the Borrower, the
authorization of the Transactions and any other legal matters relating to the
Borrower, this Agreement or the Transactions, all in form and substance
satisfactory to the Administrative Agent and its counsel.

          (d)  The Administrative Agent shall have received a certificate, dated
the Effective Date and signed by the President, a Vice President or a financial
officer of the Borrower, confirming compliance with the conditions set forth in
paragraphs (a) and (b) of Section 4.02.

          (e)  The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Effective Date, including, to the
extent invoiced, reimbursement or payment of all reasonable and actual out-of-
pocket expenses required to be reimbursed or paid by the Borrower hereunder.

          (f)  The Administrative Agent shall have received evidence
satisfactory to it that the Existing Facility has been terminated and all
amounts, if any, owing by the Borrower thereunder have been paid in full.

The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) at or prior to 3:00 p.m., New York City time, on
August 20, 2000 (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time).

          SECTION 4.02.  Each Credit Event.  The obligation of each Lender to
                         -----------------
make a Loan on the occasion of any Borrowing is subject to the satisfaction of
the following conditions:

          (a)  The representations and warranties of the Borrower set forth in
this Agreement (other than in Section 3.04 and Section 3.05(ii)) shall be true
and correct in all material respects on and as of the date of such Borrowing.

          (b)  At the time of and immediately after giving effect to such
Borrowing no Default shall have occurred and be continuing.

Each Borrowing and the conversion of the Revolving Loans into Term Loans
pursuant to Sections 2.04 and 2.05 shall be deemed to constitute a
representation and warranty by the
<PAGE>

                                                                              37

Borrower on the date thereof as to the matters specified in paragraphs (a) and
(b) of this Section.

                                   ARTICLE V

                             Affirmative Covenants
                             ---------------------

          Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full, the Borrower covenants and agrees with the Lenders that:

          SECTION 5.01.  Financial Statements and Other Reports.  The Borrower
                         --------------------------------------
and each of its Subsidiaries will maintain a system of accounting established
and administered in accordance with sound business practices to permit
preparation of consolidated financial statements in conformity with GAAP and the
Borrower will deliver to the Administrative Agent (which will deliver copies
thereof to the Lenders) (except to the extent otherwise expressly provided below
in subsection 5.01(b)(ii)):

          (a)(i)  as soon as practicable and in any event within 45 days after
     the end of each of the first three Fiscal Quarters of each Fiscal Year
     ending after the Effective Date the consolidated balance sheet of the
     Borrower and its consolidated Subsidiaries as at the end of such period,
     and the related consolidated statements of income and shareholders' equity
     and cash flows of the Borrower and its consolidated Subsidiaries in each
     case certified by the chief financial officer or controller of the Borrower
     that they fairly present the financial condition of the Borrower and its
     consolidated subsidiaries as at the dates indicated and the results of
     their operations and changes in their financial position, subject to
     changes resulting from audit and normal year-end adjustments, based on the
     Borrower's normal accounting procedures applied on a consistent basis
     (except as noted therein);

          (ii)   as soon as practicable and in any event within 90 days after
     the end of each Fiscal Year the consolidated balance sheet of the Borrower
     and its consolidated Subsidiaries as at the end of such year and the
     related consolidated statements of income and shareholders' equity and cash
     flows of the Borrower and its consolidated Subsidiaries for such Fiscal
     Year, accompanied by a report thereon of an Independent Public Accountant
     which report shall be unqualified as to (w) the accuracy of all numbers or
     amounts set forth in such financial statements, (x) the inclusion or
     reflection in such financial statements of all amounts pertaining to
     contingencies required to be included or reflected therein in accordance
     with GAAP, (y) going concern and (z) scope of audit and shall state that
     such consolidated financial statements present fairly the financial
     position of the Borrower and its consolidated subsidiaries as at the dates
     indicated and the results of their operations and changes in their
     financial position for the periods indicated
<PAGE>

                                                                              38

     in conformity with GAAP applied on a basis consistent with prior years
     (except as noted in such report and approved by such Independent Public
     Accountant) and that the examination by such Independent Public Accountant
     in connection with such consolidated financial statements has been made in
     accordance with generally accepted auditing standards;

          The Borrower will be deemed to have complied with the requirements of
Section 5.01(a)(i) hereof if within 45 days after the end of each Fiscal Quarter
(other than the final Fiscal Quarter) of each of its Fiscal Years, a copy of the
Borrower's Form 10-Q as filed with the Securities and Exchange Commission with
respect to such Fiscal Quarter is furnished to the Administrative Agent, and the
Borrower will be deemed to have complied with the requirements of Section
5.01(a)(ii) hereof if within 90 days after the end of each of its Fiscal Years,
a copy of the Borrower's Annual Report on Form 10-K as filed with the Securities
and Exchange Commission with respect to such Fiscal Year is furnished to the
Administrative Agent.

          (b)(i)  together with each delivery of financial statements of the
     Borrower and its consolidated subsidiaries pursuant to subdivisions (a)(i)
     and (a)(ii) above, (x) an Officer's Certificate of the Borrower stating
     that the signer has reviewed the terms of this Agreement and has made, or
     caused to be made under such signer's supervision, a review in reasonable
     detail of the transactions and condition of the Borrower and its
     consolidated subsidiaries during the accounting period covered by such
     financial statements and that such review has not disclosed the existence
     during or at the end of such accounting period, and that the signer does
     not have knowledge of the existence as at the date of the Officers'
     Certificate, of any condition or event which constitutes an Event of
     Default or Default, or, if any such condition or event existed or exists,
     specifying the nature and period of existence thereof and what action the
     Borrower has taken, is taking and proposes to take with respect thereto;
     and (y) an Officer's Certificate demonstrating in reasonable detail
     compliance with the restrictions contained in Section 6.03 hereof (a
     "Compliance Certificate") and, in addition, a written statement of the
     chief accounting officer, chief financial officer, any vice president or
     the treasurer or any assistant treasurer of the Borrower describing in
     reasonable detail the differences between the financial information
     contained in such financial statements and the information contained in the
     Officer's Certificate relating to compliance with Section 6.03 hereof;

          (ii)   promptly upon their becoming available but only to the extent
     requested by the Administrative Agent, copies of all publicly available
     financial statements, reports, notices and proxy statements sent by the
     Borrower to its security holders, of all regular and periodic reports and
     all registration statements and prospectuses, if any, filed by the Borrower
     with any securities exchange or with the Securities and Exchange
     Commission;
<PAGE>

                                                                              39

          (iii)  promptly upon (and in no event later than three days after) any
     of the chairman of the board, the chief executive officer, the president,
     the chief accounting officer, the chief financial officer or the treasurer
     of the Borrower obtaining actual knowledge (x) of any condition or event
     which constitutes an Event of Default or Default, or (y) of a Material
     Adverse Effect, an Officer's Certificate specifying the nature and period
     of existence of any such condition or event, or specifying the notice given
     or action taken by such holder or Person and the nature of such claimed
     default, Event of Default, Default, event or condition, and what action, if
     any, the Borrower has taken, is taking and proposes to take with respect
     thereto;

          (iv)   with reasonable promptness, such other information and data
     with respect to the Borrower or any of its Subsidiaries as from time to
     time may be reasonably requested by any Lender.

          SECTION 5.02.  Corporate Existence.  Except as may result from a
                         -------------------
transaction permitted by Section 6.01 hereof, the Borrower will maintain its
corporate existence in good standing and qualify and remain qualified to do
business as a foreign corporation in each jurisdiction in which the character of
the properties owned or leased by it therein or in which the transaction of its
business is such that the failure to qualify would have a Material Adverse
Effect.

          SECTION 5.03.  Payment of Taxes.  The Borrower will, and will cause
                         ----------------
each of its Subsidiaries to, pay all taxes, assessments and other governmental
charges imposed upon it or any of its properties or assets or in respect of any
of its franchises, business, income or property when due which are material to
the Borrower and its Subsidiaries, taken as a whole, provided, that no such
                                                     --------
amount need be paid if being contested in good faith by appropriate proceedings
diligently conducted and if such reserve or other appropriate provision, if any,
as shall be required in conformity with GAAP shall have been made therefor.

          SECTION 5.04.  Maintenance of Properties; Insurance. The Borrower will
                         ------------------------------------
maintain or cause to be maintained in good repair, working order and condition
(ordinary wear and tear excepted) all material properties and equipment used or
useful in its business. The foregoing sentence shall not be construed as to
prohibit or restrict the sale or disposition of any assets of the Borrower or
any of its Subsidiaries. The Borrower will maintain or cause to be maintained,
with financially sound and reputable insurers, insurance with respect to its
material properties and business and the material properties and business of its
Subsidiaries against loss or damage of the kinds customarily insured against by
corporations of established reputation engaged in the same or similar businesses
and similarly situated, of such types and in such amounts as are customarily
carried under similar circumstances by such other corporations.

          SECTION 5.05.  Compliance with Laws. The Borrower and its Subsidiaries
                         --------------------
shall exercise all due diligence in order to comply in all material respects
<PAGE>

                                                                              40

with the requirements of all applicable laws, rules, regulations and orders of
any Governmental Authority (including, without limitation, laws, rules and
regulations relating to the disposal of hazardous wastes and asbestos in the
environment), noncompliance with which would have a Material Adverse Effect.

          SECTION 5.06.  Notices of ERISA Event.  The Borrower will furnish to
                         ----------------------
the Administrative Agent and each Lender prompt written notice of the occurrence
of any ERISA Event that, alone or together with any other ERISA Events that have
occurred, could reasonably be expected to result in liability of the Borrower
and its Subsidiaries in an aggregate amount exceeding $50,000,000.

                                  ARTICLE VI

                              Negative Covenants
                              ------------------

          Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees   payable hereunder have been paid in
full, the Borrower covenants and agrees with the Lenders that:

          SECTION 6.01.  Fundamental Changes. The Borrower will not consolidate
                         -------------------
with or merge with or into, or transfer all or substantially all of its
properties and assets to one or more Persons in one or a series of related
transactions unless (i) if the Borrower is the surviving entity in any such
transaction, after giving effect to such transaction, there would not exist any
Default or Event of Default hereunder or (ii) if the Borrower is not the
surviving entity in any such transaction, each of the Lenders (or in the case of
any such transaction which is in the nature of an internal corporate
reorganization of only the Borrower and its Subsidiaries and does not, in the
reasonable judgement of the Required Lenders affect, in any material respect,
the creditworthiness of the Borrower, the Required Lenders) consent to such
transaction in advance.

          SECTION 6.02.  Liens.  The Borrower will not, and will not permit any
                         -----
of its Subsidiaries to, directly or indirectly, create, incur, assume or permit
to exist any Lien on or with respect to any property or asset (including any
document or instrument in respect of goods or accounts receivable) of the
Borrower or any of its Subsidiaries, whether now owned or hereafter acquired, or
any income or profits therefrom, except:

          (a)  Liens in existence on the date hereof and set forth on Schedule
6.02 hereto;

          (b)  Permitted Liens;

          (c)  Purchase money security interests (including mortgages,
conditional sales, Capitalized Leases and any other title retention or deferred
purchase devices) in real or tangible personal property of the Borrower or any
of its Subsidiaries existing or created
<PAGE>

                                                                              41

at the time of acquisition thereof or within 90 days thereafter, and the
renewal, extension or refunding of any such security interest in an amount not
exceeding the amount thereof remaining unpaid immediately prior to such renewal,
extension or refunding; provided, however, that the principal amount of
Indebtedness and Capitalized Lease Obligations secured by each such security
interest in each item of property shall not exceed the cost (including all such
Indebtedness secured thereby, whether or not assumed) of the item subject
thereto and that such security interests shall attach solely to the particular
item of property so acquired; and

          (d)  In addition to Liens permitted by clauses (a) through (c), the
Borrower and its Subsidiaries may have attachment or judgment Liens and Liens
securing the payment of Indebtedness, which Liens secure in the aggregate not
more than $100,000,000.

          SECTION 6.03.  Financial Covenants.  The Borrower shall not permit the
                         --------------------
Indebtedness to Cash Flow Ratio for each Determination Date which is the last
day of a Fiscal Quarter of the Borrower to be greater than 4.0:1.0 at any time.

          SECTION 6.04.  Use of Proceeds.  No portion of the proceeds of any
                         ---------------
borrowing under this Agreement shall be used by the Borrower in any manner which
would cause the borrowing or the application of such proceeds to violate
Regulation G, Regulation U, Regulation T, or Regulation X of the Board of
Governors of the Federal Reserve System or any other regulation of the Board or
to violate the Exchange Act, in each case as in effect on the date or dates of
such borrowing and such use of proceeds.

                                  ARTICLE VII

                               Events of Default
                               -----------------

          If any of the following conditions or events ("Events of Default")
shall occur and be continuing:                           -----------------

          SECTION 7.01.  Failure to Make Payments When Due.  Failure to pay any
                         ---------------------------------
installment of principal of any Loan when due, whether at stated maturity, by
acceleration, by notice of prepayment or otherwise; or failure to pay any other
amount due under this Agreement (including, without limitation, the fees
described in Section 2.11 hereof) or to pay interest on any Loan, in either case
within 3 Business Days after the date when due.

          SECTION 7.02.  Default in Other Agreements.  (a) Failure of the
                         ---------------------------
Borrower or any of its Material Subsidiaries to pay when due, after giving
effect to any applicable grace period and to any waiver or extension granted
thereunder, any principal or interest on any Indebtedness of the Borrower or any
Material Subsidiary (other than Indebtedness referred to in subsection 7.01) and
Capital Lease Obligations in a principal amount (individually or in the
aggregate) of $50,000,000 or more.
<PAGE>

                                                                              42

          (b)  The breach or default of the Borrower or any of its Subsidiaries
with respect to any other term of any Indebtedness or Capital Lease Obligations
in a principal amount (individually or in the aggregate) of $50,000,000 or more
or any loan agreement, mortgage, indenture or other agreement relating thereto,
if such failure, default or breach results in such Indebtedness or Capital Lease
Obligations in a principal amount (individually or in the aggregate) of
$50,000,000 or more becoming or being declared by the holders thereof to be due
and payable prior to its stated maturity; provided that if the Borrower or any
                                          --------
of its Material Subsidiaries enters into or is a party (as a borrower, guarantor
or other obligor) to any such loan agreement, mortgage, indenture or other
agreement and such instrument contains a provision in the nature of a "cross-
default" clause (whether as a default provision, a covenant or otherwise), such
provision is hereby incorporated by reference in this Agreement, mutatis
                                                                 -------
mutandis, for the benefit of the Lenders and the Agent (and without giving
--------
effect to any amendment, modification or waiver unless such amendment,
modification or waiver is intended solely to cure any ambiguity, omission,
defect or inconsistency (which intention shall be determined in good faith by
the Chief Financial Officer of the Borrower)); provided, further, that
                                               --------  -------
notwithstanding anything contained in this Agreement to the contrary, this
Section 7.02 shall not be applicable to any Indebtedness of, or Capitalized
Lease Obligation (or loan agreement, mortgage, indenture or other agreement
relating thereto) entered into by, a partnership (a "Partnership") of which any
                                                     -----------
Subsidiary of the Borrower is a general partner (a "General Partner") of said
                                                    ---------------
Partnership provided that (i) such General Partner's only asset is its interest
            --------
in the Partnership and (ii) such Indebtedness and/or Capitalized Lease
Obligation, as the case may be, (A) is with recourse only to such asset, the
assets of the Partnership and any asset or assets of any general partner or
other entity that is not an Affiliate of the General Partner and (B) is without
recourse to the Borrower and any of its other Subsidiaries.

          SECTION 7.03.  Breach of Certain Covenants.  Failure of the Borrower
                         ---------------------------
to perform or comply with any term or condition contained in Section 5.02 or
Article 6 of this Agreement.

          SECTION 7.04.  Breach of Warranty.  Any material representation or
                         ------------------
warranty made by the Borrower in this Agreement or in any statement or
certificate at any time given by the Borrower in writing pursuant hereto or
thereto or in connection herewith or therewith shall be false in any material
respect on the date as of which made or deemed to be made.

          SECTION 7.05.  Other Defaults Under Agreement.  The Borrower shall
                         ------------------------------
default in the performance of or compliance with any term contained in this
Agreement (other than any default described in any other provision of Section 7
hereof) and such default shall not have been remedied or waived within 30 days
after receipt by the Borrower of notice from the Agent or any Lender of such
default.

          SECTION 7.06.  Change In Control.  (a) The acquisition (other than
                         -----------------
from the Borrower) by any Person or any "group", within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act (excluding, for this purpose, the
Borrower or its Subsidiaries
<PAGE>

                                                                              43

or any employee benefit plan of the Borrower or its Subsidiaries) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 20% or more of either the then outstanding shares of common stock or the
combined voting power of the Borrower's then outstanding voting securities
entitled to vote generally in the election of directors; or (b) individuals who,
as of the date hereof, constitute the Board of Directors of the Borrower (as of
the date hereof, 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 date hereof, whose election, or nomination for election by the
Borrower'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 initial assumption of office is in connection
with an actual or threatened election contest relating to the election of the
directors of the Borrower, as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act) shall be, for purposes of this
provision, considered as though such person were a member of the Incumbent
Board.

          SECTION 7.07.  Involuntary Bankruptcy; Appointment of Receiver, etc.
                         -----------------------------------------------------
(a)  A court having jurisdiction in the premises shall enter a decree or order
for relief in respect of the Borrower or any of its Material Subsidiaries in an
involuntary case under the Bankruptcy Code or any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, which decree or
order is not stayed; or any other similar relief shall be granted under any
applicable federal or state law and is not stayed.

          (b)  An involuntary case is commenced against the Borrower or any of
its Material Subsidiaries under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect; or a decree or order of a court having
jurisdiction in the premises for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar powers over the
Borrower or any of its Material Subsidiaries, or over all or a substantial part
of its property, shall have been entered; or an interim receiver, trustee or
other custodian of the Borrower or any of its Material Subsidiaries for all or a
substantial part of the property of the Borrower or any of its Material
Subsidiaries is involuntarily appointed; or a warrant of attachment, execution
or similar process is issued against any substantial part of the property of the
Borrower or any of its Material Subsidiaries; and the continuance of any such
events in subpart (b) for 90 days unless dismissed, bonded or discharged.

          SECTION 7.08.  Voluntary Bankruptcy; Appointment of Receiver, etc.
                         ---------------------------------------------------
The Borrower or any of its Material Subsidiaries shall have an order for relief
entered with respect to it or commence a voluntary case under the Bankruptcy
Code or any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or shall consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to a voluntary
case, under any such law, or shall consent to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a substantial
part of its property; the making by the Borrower or any of its Material
Subsidiaries of any assignment for the benefit of creditors generally; or the
inability or failure of the Borrower or any of
<PAGE>

                                                                              44

its Material Subsidiaries, or the admission by the Borrower or any of its
Material Subsidiaries in writing of its inability to pay its debts as such debts
become due; or the Board of Directors of the Borrower or any Material Subsidiary
(or any committee thereof) adopts any resolution or otherwise authorizes action
to approve any of the foregoing; or

          SECTION 7.09.  Judgments and Attachments. Any money judgment, writ or
                         -------------------------
warrant of attachment, or similar process involving individually or at any one
time in the aggregate an amount in excess of $100,000,000 (calculated net of
insurance coverage, so long as such coverage has been accepted by the relevant
insurance company or companies) shall be entered or filed against the Borrower
or any of its Subsidiaries or any of its assets and shall remain undischarged,
unvacated, unbonded or unstayed, as the case may be, for a period of 90 days or
in any event later than five days prior to the date of any announced sale
thereunder; or

          SECTION 7.10.  Involuntary Dissolution. Any order, judgment or decree
                         -----------------------
shall be entered against the Borrower or any of its Material Subsidiaries
decreeing the dissolution or split up of the Borrower or any of its Material
Subsidiaries and such order shall remain undischarged or unstayed for a period
in excess of 60 days; or

          SECTION 7.11.  ERISA Event.  An ERISA Event shall have occurred that,
                         -----------
when taken together with all other ERISA Events that have occurred, could
reasonably be expected to result in a Material Adverse Effect;

          THEN (i) upon the occurrence of any Event of Default described in the
foregoing subsection 7.07 or 7.08, the unpaid principal amount of and accrued
interest on the Loans and any fees and other amounts owing by the Borrower under
this Agreement and the Notes shall automatically become immediately due and
payable, without presentment, demand, protest or other requirements of any kind,
all of which are hereby expressly waived by the Borrower and the obligation of
each Lender to make any Loans shall thereupon terminate, and (ii) upon the
occurrence of any other Event of Default, the Agent, as directed by the Required
Lenders, may, by written notice to the Borrower, declare all of the unpaid
principal amount of and accrued interest on the Loans and any fees and other
amounts owing by the Borrower under this Agreement and the Notes to be, and the
same shall forthwith become immediately, due and payable, together with accrued
interest thereon, and the obligation of each Lender to make any Loan hereunder
shall thereupon terminate.  Nevertheless, if at any time within 60 days after
acceleration of the maturity of the Loans the Borrower shall pay all arrears of
interest and all payments on account of the principal which shall have become
due otherwise than by acceleration (with interest on principal and, to the
extent permitted by law, on overdue interest, at the rates specified in this
Agreement or the Notes) and all other fees or expenses then owed hereunder and
all Events of Default and Defaults (other than non-payment of principal of and
accrued interest on the Loans and the Notes due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to Section 9.02 hereof, then
the Required Lenders by written notice to the Borrower may (in their sole
discretion) rescind and annul the acceleration and
<PAGE>

                                                                              45

its consequences; but such action shall not affect any subsequent Event of
Default or Default or impair any right consequent thereon.

                                 ARTICLE VIII

                           The Administrative Agent
                           ------------------------

          Each of the Lenders hereby irrevocably appoints the Administrative
Agent as its agent and authorizes the Administrative Agent to take such actions
on its behalf and to exercise such powers as are delegated to the Administrative
Agent by the terms hereof, together with such actions and powers as are
reasonably incidental thereto.

          The bank serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.

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

                                                                              46

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

          The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent.  The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties.  The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.

          Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders and the Borrower.  Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor.  If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent which shall be a bank with an office in New York,
New York, or an Affiliate of any such bank.  Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder.  The fees
payable by the Borrower to a successor Administrative Agent shall be the same as
those payable to its predecessor unless otherwise agreed between the Borrower
and such successor.  After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Administrative Agent.

          Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement.  Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make
<PAGE>

                                                                              47

its own decisions in taking or not taking action under or based upon this
Agreement, any related agreement or any document furnished hereunder or
thereunder.

          It is agreed that the Co-Syndication Agents shall have no duties,
responsibilities or liabilities hereunder in their capacities as such.

                                  ARTICLE IX

                                 Miscellaneous
                                 -------------

          SECTION 9.01.  Notices.  Except in the case of notices and other
                         -------
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:

          (a)  if to the Borrower, to it at 1221 Avenue of the Americas, New
York, New York 10020,  Attention of Frank Penglase, Senior Vice President and
Treasurer (Telecopy No. (212) 512-4078), with a copy to Attention of Kenneth M.
Vittor, Executive Vice President and General Counsel (Telecopy No. (212) 512-
4827);

          (b)  if to the Administrative Agent, to The Chase Manhattan Bank,
Agent Bank Services Group, Chase Manhattan Plaza, 8th Floor, New York, New York
10081, Attention of Janet Belden Telecopy No. (212) 552-5658, with a copy to The
Chase Manhattan Bank, Chase Manhattan Plaza, 4th Floor, New York 10081,
Attention of Bruce E. Langenkamp Telecopy No. (212) 270-7340; and

          (c)  if to any other Lender, to it at its address (or telecopy number)
set forth in its Administrative Questionnaire.

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

          SECTION 9.02.  Waivers; Amendments.  (a)  No failure or delay by the
                         -------------------
Administrative Agent or any Lender in exercising any right or power hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the
Administrative Agent and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or consent to any departure by the Borrower
therefrom shall in any event be effective unless the same shall be permitted by
<PAGE>

                                                                              48

paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent or any Lender may have had notice or knowledge of such
Default at the time.

          (b)  Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or by the Borrower and the
Administrative Agent with the consent of the Required Lenders; provided that no
                                                               --------
such agreement shall (i) increase  the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan, or any interest
thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse
any such payment, or postpone the scheduled date of expiration of any
Commitment, without the written consent of each Lender affected thereby, (iv)
change Section 2.17(b) or (c) in a manner that would alter the pro rata sharing
of payments required thereby, without the written consent of each Lender, or (v)
change any of the provisions of this Section or the definition of "Required
Lenders" or any other provision hereof specifying the number or percentage of
Lenders required to waive, amend or modify any rights hereunder or make any
determination or grant any consent hereunder, without the  written consent of
each Lender; provided further that no such agreement shall amend, modify or
             ----------------
otherwise affect the rights or duties of the Administrative Agent hereunder
without the prior written consent of the Administrative Agent.

          SECTION 9.03.  Expenses; Indemnity; Damage Waiver.  (a)  The Borrower
                         ----------------------------------
shall pay (i) all reasonable and actual out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including the reasonable and actual
fees, charges and disbursements of counsel for the Administrative Agent, in
connection with the syndication of the credit facilities provided for herein,
the preparation and administration of this Agreement or any amendments,
modifications or waivers of the provisions hereof (whether or not the
transactions contemplated hereby or thereby shall be consummated) and (ii)  all
reasonable and actual out-of-pocket expenses incurred by the Administrative
Agent or any Lender, including the fees, charges and disbursements of any
counsel for the Administrative Agent or any Lender, in connection with the
enforcement or protection of its rights in connection with this Agreement,
including its rights under this Section, or in connection with the Loans made
hereunder, including in connection with any workout, restructuring or
negotiations in respect thereof.

          (b)  The Borrower shall indemnify the Administrative Agent and each
Lender, and each Related Party of any of the foregoing Persons (each such Person
being called an "Indemnitee") against, and hold each Indemnitee harmless from,
                 ----------
any and all losses, claims, damages, liabilities and related expenses, including
the fees, charges and disbursements of any counsel for any Indemnitee, incurred
by or asserted against any
<PAGE>

                                                                              49

Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement or any agreement or instrument
contemplated hereby, the performance by the parties hereto of their respective
obligations hereunder or the consummation of the Transactions or any other
transactions contemplated hereby, (ii) any actual or alleged presence or release
of hazardous materials on or from any property owned or operated by the Borrower
or any of its Subsidiaries, or any environmental liability related in any way to
the Borrower or any of its Subsidiaries, or (iii) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses resulted from the gross negligence or wilful
misconduct of such Indemnitee.

          (c)  To the extent that the Borrower fails to pay any amount required
to be paid by it to the Administrative Agent under paragraph (a) or (b) of this
Section, each Lender severally agrees to pay to the Administrative Agent, as the
case may be, such Lender's Applicable Percentage (determined as of the time that
the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent in its capacity as such.

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

          (e)  The Borrower shall not be liable for any liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements which may be imposed on, incurred by or
asserted against an Indemnitee that is a Lender by another Lender or any entity
which has purchased or otherwise acquired a participation in any Loan,
Commitment or interest herein or in a Note of such Indemnitee to the extent such
relate solely to or arise solely out of actions taken or not taken by the
Indemnitee Lender in connection with matters that are of an "interbank nature".
To the extent that the undertaking to indemnify, pay and hold harmless set forth
in the preceding sentence may be unenforceable because it is violative of any
law or public policy or otherwise, the Borrower shall contribute the maximum
portion which it is permitted to pay and satisfy under applicable law, to the
payment and satisfaction of all indemnified liabilities incurred by the
Indemnitees or any of them.

          (f)  All amounts due under this Section shall be payable promptly
after written demand therefor.
<PAGE>

                                                                              50

          SECTION 9.04.  Successors and Assigns.  (a)  The provisions of this
                         ----------------------
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that the
Borrower may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by the Borrower without such consent shall be null and
void).  Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

          (b)  Any Lender may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans at the time owing to it); provided  that (i)
                                                          --------
except in the case of an assignment to a Lender, each of the Borrower and the
Administrative Agent must give their prior written consent to such assignment
(which consent shall not be unreasonably withheld it being understood that the
Borrower will not be deemed to act unreasonably if it shall withhold consent on
the basis of concerns relating to a proposed assignee's creditworthiness), (ii)
except in the case of an assignment to a Lender or an assignment of the entire
remaining amount of the assigning Lender's Commitment, the amount of the
Commitment of the assigning Lender subject to each such assignment (determined
as of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $5,000,000 unless
each of the Borrower and the Administrative Agent otherwise consent, (iii) each
partial assignment shall be made as an assignment of a proportionate part of all
the assigning Lender's rights and obligations under this Agreement, except that
this clause (iii) shall not apply to rights in respect of outstanding
Competitive Loans, (iv) the parties to each assignment shall execute and deliver
to the Administrative Agent an Assignment and Acceptance, together with a
processing and recordation fee of $3,500, and (v) the assignee, if it shall not
be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire; provided further that any consent of the Borrower otherwise
               ----------------
required under this paragraph shall not be required if an Event of Default under
Section 7.07 or 7.08 has occurred and is continuing.  Upon acceptance and
recording pursuant to paragraph (d) of this Section, from and after the
effective date specified in each Assignment and Acceptance, the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03).  Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this paragraph shall be treated for purposes of this
Agreement as a sale by
<PAGE>

                                                                              51

such Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section.

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

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

          (e)  Any Lender may, without the consent of the Borrower, the
Administrative Agent, sell participations to one or more banks or other entities
(a "Participant") in all or a portion of such Lender's rights and obligations
    -----------
under this Agreement (including all or a portion of its Commitment and the Loans
owing to it); provided that (i) such Lender's obligations under this Agreement
              --------
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iii) the
Borrower, the Administrative 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.  Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
                                                           --------
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that affects such Participant.

          (f)  A Participant shall not be entitled to receive any greater
payment under Section 2.14 or 2.16 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent.  A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.16 unless
the Borrower is notified of the participation sold to such Participant
<PAGE>

                                                                              52

and such Participant agrees, for the benefit of the Borrower, to comply with
Section 2.16(e) as though it were a Lender.

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

          SECTION 9.05.  Survival.  All covenants, agreements, representations
                         --------
and warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any
Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent or any Lender may have
had notice or knowledge of any Default or incorrect representation or warranty
at the time any credit is extended hereunder, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loan or
any fee or any other amount payable under this Agreement is outstanding and
unpaid  and so long as the Commitments have not expired or terminated.  The
provisions of Sections 2.14, 2.15, 2.16 and 9.03 and Article VIII shall survive
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Commitments or the termination of this Agreement or any
provision hereof.

          SECTION 9.06.  Counterparts; Integration; Effectiveness.  This
                         ----------------------------------------
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract.  This Agreement
and any separate letter agreements with respect to fees payable to the
Administrative Agent constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof.  Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.  Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.

          SECTION 9.07.  Severability.  Any provision of this Agreement held to
                         ------------
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the
<PAGE>

                                                                              53

invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.

          SECTION 9.08.  Right of Setoff.  If an Event of Default shall have
                         ---------------
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of the Borrower against any of and all the
obligations of the Borrower now or hereafter existing under this Agreement held
by such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement and although such obligations may be unmatured. The
rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.

          SECTION 9.09.  Governing Law; Jurisdiction; Consent to Service of
                         --------------------------------------------------
Process.  (a)  This Agreement shall be construed in accordance with and governed
-------
by the law of the State of New York.

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

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

          (d)  Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01.  Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
<PAGE>

                                                                              54

          SECTION 9.10.  WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
                         --------------------
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

          SECTION 9.11.  Headings. Article and Section headings and the Table
                         --------
of Contents used herein are for convenience of reference only, are not part of
this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

          SECTION 9.12.  Confidentiality. The Lenders shall hold all non-
                         ---------------
public information obtained pursuant to this Agreement which has been identified
as such by the Borrower in accordance with their customary procedures for
handling confidential information of this nature and in accordance with safe and
sound banking practices and in any event may make disclosure reasonably required
by any bona fide transferee or participant in connection with the contemplated
transfer of any Note, Loan or Commitment or participation therein or as required
or requested by any governmental agency or representative thereof or pursuant to
legal process; provided that, unless specifically prohibited by applicable law
               --------
or court order, each Lender shall notify the Borrower of any request by any
governmental agency or representative thereof (other than any such request in
connection with an examination of the financial condition of such Lender by such
governmental agency) or request pursuant to legal process for disclosure of any
such non-public information prior to disclosure of such information so that
either or both of them may seek an appropriate protective order; and further,
                                                                     -------
provided that in no event shall any Lender be obligated or required to return
--------
any materials furnished by the Borrower or any of its Subsidiaries.
<PAGE>

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

                                                THE McGRAW-HILL COMPANIES, INC.

                                                By:_____________________________
                                                   Name:
                                                   Title:
<PAGE>

                                         THE CHASE MANHATTAN BANK,
                                         as Administrative Agent and as a Lender

                                         By:____________________________________
                                            Name:
                                            Title:
<PAGE>

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

                                         By:____________________________________
                                            Name:
                                            Title:
<PAGE>

                                         CITIBANK, N.A.,
                                         as Co-Syndication Agent and as a Lender

                                         By:____________________________________
                                            Name:
                                            Title:
<PAGE>

                                        DEUTSCHE BANK AG NEW YORK
                                        BRANCH AND/OR CAYMAN ISLANDS
                                        BRANCH, as Co-Syndication Agent and as a
                                        Lender

                                        By:_____________________________________
                                           Name:
                                           Title:

                                        By:_____________________________________
                                           Name:
                                           Title:
<PAGE>

                                            BANCA DI ROMA -- NEW YORK
                                            BRANCH

                                            By:_________________________________
                                               Name:
                                               Title:

                                            By:_________________________________
                                               Name:
                                               Title:
<PAGE>

                                            THE BANK OF NEW YORK

                                            By:_________________________________
                                               Name:
                                               Title:
<PAGE>

                                            FIRST UNION NATIONAL BANK

                                            By:_________________________________
                                               Name:
                                               Title:
<PAGE>

                                            FLEET NATIONAL BANK

                                            By:_________________________________
                                               Name:
                                               Title:
<PAGE>

                                            THE FUJI BANK, LIMITED

                                            By:_________________________________
                                               Name:
                                               Title:
<PAGE>

                                            NATIONAL WESTMINSTER BANK, PLC

                                            By:_________________________________
                                               Name:
                                               Title:
<PAGE>

                                            THE NORTHERN TRUST COMPANY

                                            By:_________________________________
                                               Name:
                                               Title:

<PAGE>

                                                                       EXHIBIT A
                                   [FORM OF]
                           ASSIGNMENT AND ACCEPTANCE

     Reference is made to the 364-Day Credit Agreement dated as of August __,
2000 (as amended and in effect on the date hereof, the "Credit Agreement"),
                                                        ----------------
among The McGraw-Hill Companies, Inc., the Lenders named therein and The Chase
Manhattan Bank, as Administrative Agent for the Lenders. Terms defined in the
Credit Agreement are used herein with the same meanings.

     The Assignor named on the reverse hereof hereby sells and assigns, without
recourse, to the Assignee named on the reverse hereof, and the Assignee hereby
purchases and assumes, without recourse, from the Assignor, effective as of the
Assignment Date set forth on the reverse hereof, the interests set forth on the
reverse hereof (the "Assigned Interest") in the Assignor's rights and
obligations under the Credit Agreement, including, without limitation, the
interests set forth on the reverse hereof in the Commitment of the Assignor on
the Assignment Date and Revolving Loans and Competitive Loans owing to the
Assignor which are outstanding on the Assignment Date, but excluding accrued
interest and fees to and excluding the Assignment Date. The Assignee hereby
acknowledges receipt of a copy of the Credit Agreement. From and after the
Assignment Date (i) the Assignee shall be a party to and be bound by the
provisions of the Credit Agreement and, to the extent of the Assigned Interest,
have the rights and obligations of a Lender thereunder and (ii) the Assignor
shall, to the extent of the Assigned Interest, relinquish its rights and be
released from its obligations under the Credit Agreement.

     This Assignment and Acceptance is being delivered to the Administrative
Agent together with (i) if the Assignee is a Foreign Lender, any documentation
required to be delivered by the Assignee pursuant to Section 2.17(e) of the
Credit Agreement, duly completed and executed by the Assignee, and (ii) if the
Assignee is not already a Lender under the Credit Agreement, an Administrative
Questionnaire in the form supplied by the Administrative Agent, duly completed
by the Assignee. The [Assignee/Assignor] shall pay the fee payable to the
Administrative Agent pursuant to Section 9.04(b) of the Credit Agreement.

     This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York.

Date of Assignment:
Legal Name of Assignor:

Legal Name of Assignee:

Assignee's Address for Notices:

Effective Date of Assignment
("Assignment Date"):
<PAGE>

                                                                               2

<TABLE>
<CAPTION>
============================================================================================
                                                           Percentage Assigned of
                                                           Facility/Commitment (set
                          Principal Amount                 forth, to at least 8 decimals,
                          Assigned (and identifying        as a percentage of the
                          information as to                Facility and the aggregate
                          individual Competitive           Commitments of all Lenders
                                     -----------
Facility                  Loans)                           thereunder)
--------                  -----                            ----------
--------------------------------------------------------------------------------------------
<S>                       <C>                              <C>
Commitment Assigned:      $                                                               %
--------------------------------------------------------------------------------------------
Revolving Loans:
--------------------------------------------------------------------------------------------
Competitive Loans:
============================================================================================
</TABLE>

The terms set forth above and on the reverse side hereof are hereby agreed to:

                                             [Name of Assignor], as Assignor
                                             ------------------

                                             By: ______________________________
                                                 Name:
                                                 Title:

                                             [Name of Assignee], as Assignee
                                             ------------------

                                             By: ______________________________
                                             Name:
                                             Title:

The undersigned hereby consent to the within assignment:

The McGraw-Hill Companies, Inc.,

By: ____________________________
    Name:
    Title:

The Chase Manhattan Bank, as
Administrative Agent,

By: ____________________________
    Name:
    Title:
<PAGE>

                                                                       Exhibit B

                                                   August 15, 2000

To The Chase Manhattan Bank,
as Administrative Agent

To each of the Lenders listed
on Schedule I hereto:

          I am the General Counsel of The McGraw-Hill Companies, Inc., a New
York corporation (the "Borrower").  This opinion is being furnished to you
pursuant to Section 4.01 of that certain 364-Day Credit Agreement and that
certain Five-Year Credit Agreement, each dated as of August 15, 2000 (the
"Agreements"), among the Borrower, each of the Lenders (the "Lenders") listed
herein and The Chase Manhattan Bank, as Administrative Agent (the
"Administrative Agent").  The undersigned has prepared this opinion and
delivered it to the Lenders for their benefit at the request of the Borrower.
Unless otherwise defined herein, the meanings of the capitalized terms used in
this opinion shall be the same as those in the Agreements.

          I advise you that, in my opinion:

          1.  The Borrower is and each Material Subsidiary of the Borrower is a
     corporation duly organized, validly existing and in corporate good standing
     under the laws of the state of incorporation and has all requisite
     corporate power and authority to own, operate and lease its properties and
     to carry on its business as now conducted and proposed to be conducted.
     The Borrower is in good standing in each jurisdiction in which the nature
     of the business conducted or the properties or assets owned or leased by it
     makes such qualification reasonably necessary and where the failure to
     qualify would have a Material Adverse Effect.

          2.  The Borrower has all requisite corporate power and authority to
     execute, deliver and perform its obligations under the Agreements. The
     execution, delivery and performance of the Agreements have been duly
     authorized by all necessary corporate action by the Borrower.

          3.  The execution, delivery and performance by the Borrower of the
     Agreements do not and will not (i) violate any provision of law applicable
     to the Borrower, or any of its Material Subsidiaries, the Restated
     Certificate of Incorporation or By-Laws of the Borrower or the Certificate
     of Incorporation or By-Laws of any of its Material Subsidiaries, or any
     order, judgment or decree of any court or other agency of government
     binding on the Borrower or any of its Material Subsidiaries, (ii) conflict
     with, result in a breach of or constitute (with due notice or lapse of time
     or both) a default under any contractual obligation of the Borrower or any
     of its Material Subsidiaries, (iii) result in or require the creation or
     imposition of any Lien upon any of the material properties or assets of the
     Borrower or any of its Material Subsidiaries or (iv) require any approval
     of stockholders or any approval or consent of any Person under any
     contractual obligation of the Borrower or any of its Material

                                       1
<PAGE>

     Subsidiaries other than such approvals or consents which have been obtained
     or will be obtained on or before the Effective Date; except for any
                                                          ------
     violation, conflict, default, breach, Lien or lack of approval the
     existence of which would not have a Material Adverse Effect.

          4.  The Borrower has duly executed and delivered the Agreements.  The
     Agreements are the legal, valid and binding obligation of the Borrower,
     enforceable against the Borrower in accordance with their respective terms,
     except as enforceability may be limited by the application of bankruptcy,
     reorganization, insolvency, moratorium and other laws affecting creditors'
     rights generally from time to time in effect and to general equitable
     principles.

          5.  Except as disclosed in the Financial Statements delivered to the
     Lenders pursuant to Section 3.03 of the Agreements, there is no action,
     suit, proceeding, governmental investigation or arbitration of which I have
     knowledge (whether or not purportedly on behalf of the Borrower or any of
     its Subsidiaries) at law or in equity or before or by any Governmental
     Authority, domestic or foreign, pending or, to my knowledge, threatened
     against the Borrower or any of its Subsidiaries or affecting any property
     of the Borrower or any of its Subsidiaries which (i) challenges the
     validity of the Agreements or (ii) could reasonably be expected to have a
     Material Adverse Effect.

          6.  The execution, delivery and performance by the Borrower of the
     Agreements do not and will not require any registration with, consent or
     approval of, or notice to, or other action to, with or by, any federal,
     state or other governmental authority or regulatory body other than any
     such registration, consent, approval, notice or other action which has been
     duly made, given or taken.

          7.  The Borrower is not an "investment company" or a company
     "controlled" by an "investment company" within the meaning of the
     Investment Company Act of 1940, as amended.

          8.  The Borrower is not subject to regulation under any federal or
     state statute or regulation limiting its ability to incur indebtedness for
     money borrowed as contemplated by the Agreements.

          I am admitted to the practice law in the State of New York.  No
opinion is expressed herein with respect to any laws other than those of the
State of New York and the United States.

                                          Very truly yours,

                                          Kenneth M. Vittor

                                       2
<PAGE>

                                   SCHEDULE I
                                   ----------

The Chase Manhattan Bank
Citibank, N.A.
Bank of America
Deutsche Bank AG New York
First Union National Bank
National Westminster Bank PLC
The Bank of New York
The Fuji Bank Limited
The Northern Trust Company
Banca di Roma
Fleet National Bank

                                       3
<PAGE>

                                                                SCHEDULE 2.01 TO
                                                                CREDIT AGREEMENT
                                                                ----------------

                             LENDERS' COMMITMENTS
                             --------------------

--------------------------------------------------------------------------------
                                LENDER                             COMMITMENT
                                ------                             ----------
--------------------------------------------------------------------------------
  The Chase Manhattan Bank                                          $95,000,000

  Domestic and Eurodollar Lending Office:
  One Chase Manhattan Plaza
  New York, N Y 10081
  Attention: Linda Wisnieski
  Telephone: (212) 522-6414
  Facsimile: (212) 522-4266
--------------------------------------------------------------------------------
  Bank of America, N.A.                                             $85,000,000

  Domestic and Eurodollar Lending Office:
  130 Liberty Street
  New York, NY 10006
  Attention: Mary Jo Jolly
  Telephone: (212) 250-5860
  Facsimile: (212) 250-7351
--------------------------------------------------------------------------------
  Citibank, N.A.                                                    $85,000,000

  Domestic and Eurodollar Lending Office:
  1 Court Square 7/3
  Long Island City, NY 11120
  Attention: Sandy Rivera
  Telephone: (718) 248-7205
  Facsimile: (718) 248-4844
--------------------------------------------------------------------------------
  Deutsche Bank AG New York and/or Cayman Islands Branch            $85,000,000

  Domestic and Eurodollar Lending Office:
  31 West 52/nd/ Street
  New York, NY 10019
  Attention: William W. McGinty
  Telephone: (212) 469-8662
  Facsimile (212) 469-7070
--------------------------------------------------------------------------------
<PAGE>

                                                                               2

--------------------------------------------------------------------------------
                                LENDER                             COMMITMENT
                                ------                             ----------
--------------------------------------------------------------------------------
  Banca di Roma -- New York Branch                                  $25,000,000

  Domestic and Eurodollar Lending Office:
  34 East 51/st/ Street
  New York, NY 10022
  Attention: Steven Paley
  Telephone: (212) 407-1791
  Facsimile: (212) 407-1740
--------------------------------------------------------------------------------
  The Bank of New York                                              $50,000,000

  Domestic and Eurodollar Lending Office:
  One Wall Street
  New York, NY 10286
  Attention: Trisha E. Hardy
  Telephone: (212) 635-8473
  Facsimile: (212) 635-8595
--------------------------------------------------------------------------------
  First Union National Bank                                         $50,000,000

  Domestic and Eurodollar Lending Office:

  Attention:
  Telephone:
  Facsimile:
--------------------------------------------------------------------------------
  Fleet National Bank                                               $50,000,000

  Domestic and Eurodollar Lending Office:
  100 Federal Street
  Boston, MA 02110
  Attention: Julie V. Jalelian
  Telephone: (617) 374-4105
  Facsimile: (617)
--------------------------------------------------------------------------------
<PAGE>

                                                                               3

--------------------------------------------------------------------------------
                                LENDER                             COMMITMENT
                                ------                             ----------
--------------------------------------------------------------------------------
  Fuji Bank Limited                                                 $25,000,000

  Domestic and Eurodollar Lending Office:
  Two World Trade Center
  New York, NY 10046
  Attention: Yua Tanaka
  Telephone: (212) 898-2000
  Facsimile: (212) 321-9407
--------------------------------------------------------------------------------
  National Westminster Bank PLC                                     $37,500,000

  Domestic Lending Office:
  National Westminster Bank PLC/New York Branch
  175 Water Street, 19th Floor
  New York, NY 10038
  Telephone: (212) 602-4180
  Facsimile: (212) 602-4118

  Eurodollar Lending Office:
  National Westminster Bank PLC/Nassau Branch
  175 Water Street, 19th Floor
  New York, NY 10038
  Telephone: (212) 602-4180
  Facsimile: (212) 602-4118
--------------------------------------------------------------------------------
  The Northern Trust Company                                        $37,500,000

  Domestic and Eurodollar Lending Office:
  50 South Lasalle Street
  Chicago, IL 60675
  Attention: Lisa M. Taylor
  Telephone: (312) 444-4196
  Facsimile: (312) 630-6062
--------------------------------------------------------------------------------
  TOTAL:                                                           $625,000,000
--------------------------------------------------------------------------------
<PAGE>

                                                                SCHEDULE 3.01 TO
                                                                CREDIT AGREEMENT
                                                                ----------------

                             MATERIAL SUBSIDIARIES
                             ---------------------

                                     None.
<PAGE>

                                                                SCHEDULE 3.05 TO
                                                                CREDIT AGREEMENT
                                                                ----------------

                              MATERIAL LITIGATION
                              -------------------

                                     None.
<PAGE>

                                                                SCHEDULE 6.02 TO
                                                                CREDIT AGREEMENT
                                                                ----------------

                                     LIENS
                                     -----

                                     None.

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