Document:

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                                                                   EXHIBIT 10.16

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                                REVOLVING CREDIT,
                      TRANCHE B LOAN AND SECURITY AGREEMENT

                            FLEET RETAIL FINANCE INC.
                          ADMINISTRATIVE, DOCUMENTATION
                            AND COLLATERAL AGENT FOR
                            THE LENDERS NAMED HEREIN

                         WELLS FARGO RETAIL FINANCE,LLC
                     NATIONAL CITY COMMERCIAL FINANCE, INC.
                                    CO-AGENTS

                          THE REVOLVING CREDIT LENDERS
                                  NAMED HEREIN

                          BACK BAY CAPITAL FUNDING LLC
                              THE TRANCHE B LENDER

                             MAYOR'S JEWELERS, INC.
                             MAYOR'S JEWELERS, INC.
                         AND THEIR DOMESTIC SUBSIDIARIES
                                  THE BORROWERS

                                  May 30, 2002

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                               TABLE OF CONTENTS
<TABLE>

<S>                                                                                                 <C>
DEFINITIONS AND RULES OF INTERPRETATION..............................................................1
         1.1  DEFINITIONS............................................................................1

2.  THE REVOLVING CREDIT FACILITY....................................................................26
         2.1.  COMMITMENT TO LEND....................................................................26
         2.2.  MATURITY..............................................................................26
         2.3.  UNUSED FEE............................................................................26
         2.4.  REDUCTION OF COMMITMENT...............................................................26
         2.5.  MANDATORY REPAYMENTS OF REVOLVING CREDIT LOANS........................................27
         2.6.  OPTIONAL REPAYMENTS OF REVOLVING CREDIT LOANS.........................................27
         2.7.  THE LOAN ACCOUNT AND REVOLVING CREDIT NOTES...........................................27
                  2.7.1.  LOAN ACCOUNT...............................................................27
                  2.7.2.  REVOLVING CREDIT NOTES.....................................................28
         2.8.  INTEREST ON REVOLVING CREDIT LOANS....................................................28
                  2.8.1.  ACCRUAL OF INTEREST........................................................29
                  2.8.2.  AUTOMATIC DEBIT OF INTEREST................................................29
         2.9.  REQUESTS FOR REVOLVING CREDIT LOANS...................................................29
                  2.9.1.  GENERAL....................................................................29
                  2.9.2.  SWING LINE.................................................................29
         2.10.  CONVERSION OPTIONS...................................................................30
                  2.10.1.  CONVERSION TO DIFFERENT TYPE OF REVOLVING CREDIT LOAN.....................30
                  2.10.2.  CONTINUATION OF TYPE OF REVOLVING CREDIT LOAN.............................30
                  2.10.3.  EURODOLLAR RATE LOANS.....................................................31
         2.11.  FUNDS FOR REVOLVING CREDIT LOAN......................................................31
                  2.11.1.  FUNDING PROCEDURES........................................................31
                  2.11.2.  ADVANCES BY ADMINISTRATIVE AGENT..........................................31
                  2.11.3.  LIMITATION OF LIABILITY...................................................32
         2.12.   BORROWING BASE/REDUCTIONS TO AVAILABILITY...........................................32
                  2.12.1.  CHANGE IN BORROWING BASE..................................................32
                  2.12.2.  RISK OF VALUE OF COLLATERAL...............................................32
                  2.12.3.  REDUCTIONS TO AVAILABILITY................................................33
         2.13.  SETTLEMENTS..........................................................................33
                  2.13.1.  GENERAL...................................................................33
                  2.13.2.  FAILURE TO MAKE FUNDS AVAILABLE...........................................33
                  2.13.3.  NO EFFECT ON OTHER LENDERS................................................34
         2.14.  REPAYMENTS OF REVOLVING CREDIT LOANS ABSENT AN EVENT OF DEFAULT......................34
                  2.14.1.  CREDIT FOR FUNDS RECEIVED IN CONCENTRATION ACCOUNT........................34
                  2.14.2.  APPLICATION OF PAYMENTS ABSENT AN EVENT OF DEFAULT........................35
         2.15.  REPAYMENTS OF REVOLVING CREDIT LOANS AFTER EVENT OF DEFAULT..........................36
         2.16.  OVERLOANS AND PROTECTIVE OVERADVANCES................................................36

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<S>                                                                                                 <C>

                  2.16.1.   PROTECTIVE OVERADVANCES..................................................36
                  2.16.2.   OVERLOANS................................................................36
                  2.16.3.  NO OBLIGATION TO PROVIDE OVERLOANS........................................36

3.  THE TRANCHE B FACILITY...........................................................................36
         3.1.  COMMITMENT TO LEND....................................................................36
         3.2.  THE TRANCHE B LOAN NOTE...............................................................36
         3.3.  PAYMENTS OF PRINCIPAL OF TRANCHE B LOAN...............................................36
         3.4.  INTEREST ON TRANCHE B LOAN............................................................37
         3.5.  TRANCHE B LOAN ANNIVERSARY FEE........................................................38
         3.6.  PAYMENTS ON ACCOUNT OF TRANCHE B LOAN.................................................38
         3.7.  BUYOUT OPTION.........................................................................38

4.  LETTERS OF CREDIT................................................................................39
         4.1.  LETTER OF CREDIT COMMITMENTS..........................................................39
                  4.1.1.  COMMITMENT TO ISSUE LETTERS OF CREDIT......................................39
                  4.1.2.  LETTER OF CREDIT APPLICATIONS..............................................39
                  4.1.3.  TERMS OF LETTERS OF CREDIT.................................................39
                  4.1.4.  REIMBURSEMENT OBLIGATIONS OF REVOLVING CREDIT LENDERS......................40
                  4.1.5.  PARTICIPATIONS OF REVOLVING CREDIT LENDERS.................................40
         4.2.  REIMBURSEMENT OBLIGATION OF THE BORROWERS.............................................40
         4.3.  LETTER OF CREDIT PAYMENTS.............................................................41
         4.4.  OBLIGATIONS ABSOLUTE..................................................................41
         4.5.  RELIANCE BY ISSUER....................................................................42
         4.6.  LETTER OF CREDIT FEE..................................................................42

5.  CERTAIN GENERAL PROVISIONS.......................................................................43
         5.1.  ADMINISTRATIVE AGENT FEES.............................................................43
         5.2.  TRANCHE B LENDER FEES.................................................................43
         5.3.  FUNDS FOR PAYMENTS....................................................................43
                  5.3.1.  PAYMENTS TO ADMINISTRATIVE AGENT...........................................43
                  5.3.2.  NO OFFSET, ETC.............................................................43
         5.4.  COMPUTATIONS..........................................................................44
         5.5.  INABILITY TO DETERMINE EURODOLLAR RATE................................................44
         5.6.  ILLEGALITY............................................................................44
         5.7.  ADDITIONAL COSTS, ETC.................................................................45
         5.8.  CERTIFICATE...........................................................................46
         5.9.  INDEMNITY.............................................................................46
         5.10.  INTEREST AFTER DEFAULT...............................................................46
         5.11.  FEES NON-REFUNDABLE..................................................................46
         5.12.  CONCERNING JOINT AND SEVERAL LIABILITY OF THE BORROWERS..............................46

6.  COLLATERAL SECURITY AND GUARANTIES...............................................................48
         6.1.  GRANT OF SECURITY INTEREST............................................................48
         6.2.  AUTHORIZATION TO FILE FINANCING STATEMENTS............................................48
         6.3.  OTHER ACTIONS.........................................................................49
                  6.3.1.  PROMISSORY NOTES AND TANGIBLE CHATTEL PAPER................................49
                  6.3.2.  DEPOSIT ACCOUNTS...........................................................49

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<S>                                                                                                 <C>
                  6.3.3.  INVESTMENT PROPERTY........................................................49
                  6.3.4.  COLLATERAL IN THE POSSESSION OF A BAILEE...................................50
                  6.3.5.  ELECTRONIC CHATTEL PAPER AND TRANSFERABLE RECORDS..........................50
                  6.3.6.  LETTER-OF-CREDIT RIGHTS....................................................50
                  6.3.7.  COMMERCIAL TORT CLAIMS.....................................................50
                  6.3.8.  OTHER ACTIONS AS TO ANY AND ALL COLLATERAL.................................50
         6.4.  RELATION TO OTHER SECURITY DOCUMENTS..................................................51
                  6.4.1.  STOCK PLEDGE AGREEMENT.....................................................51
                  6.4.2.  TRADEMARK ASSIGNMENTS......................................................51

7  REPRESENTATIONS AND WARRANTIES....................................................................52
         7.1.  CORPORATE AUTHORITY...................................................................52
                  7.1.1.  INCORPORATION; GOOD STANDING...............................................52
                  7.1.2.  AUTHORIZATION..............................................................52
                  7.1.3.  ENFORCEABILITY.............................................................52
         7.2.  GOVERNMENTAL APPROVALS................................................................52
         7.3.  TITLE TO PROPERTIES; LEASES...........................................................52
         7.4.  FINANCIAL STATEMENTS AND PROJECTIONS..................................................53
                  7.4.1.  FISCAL YEAR................................................................53
                  7.4.2.  FINANCIAL STATEMENTS.......................................................53
                  7.4.3.  PROJECTIONS................................................................53
         7.5.  NO MATERIAL ADVERSE CHANGES, ETC......................................................53
         7.6.  FRANCHISES, PATENTS, COPYRIGHTS, ETC..................................................53
         7.7.  LITIGATION............................................................................53
         7.8.  NO MATERIALLY ADVERSE CONTRACTS, ETC..................................................54
         7.9.  COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC..........................................54
         7.10.  TAX STATUS...........................................................................54
         7.11.  IN DEFAULT...........................................................................54
         7.12.  HOLDING COMPANY AND INVESTMENT COMPANY ACTS..........................................54
         7.13.  ABSENCE OF FINANCING STATEMENTS, ETC.................................................54
         7.14.  COLLATERAL...........................................................................54
                  7.14.1.  PERFECTION CERTIFICATE....................................................54
                  7.14.2.  NATURE OF COLLATERAL......................................................55
                  7.14.3.  PERFECTION OF SECURITY INTEREST...........................................55
         7.15.  CERTAIN TRANSACTIONS.................................................................55
         7.16.  EMPLOYEE BENEFIT PLANS...............................................................55
                  7.16.1.  IN GENERAL................................................................55
                  7.16.2.  TERMINABILITY OF WELFARE PLANS............................................56
                  7.16.3.  GUARANTEED PENSION PLANS..................................................56
                  7.16.4.  MULTIEMPLOYER PLANS.......................................................56
         7.17.  USE OF PROCEEDS......................................................................56
                  7.17.1.  GENERAL...................................................................56
                  7.17.2.  REGULATIONS U AND X.......................................................57
         7.18.  ENVIRONMENTAL COMPLIANCE.............................................................57
         7.19.  SUBSIDIARIES, ETC....................................................................58
         7.20.  BANK ACCOUNTS; CREDIT CARD ARRANGEMENTS..............................................58
         7.21.  LABOR RELATIONS......................................................................58

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<S>                                                                                                 <C>

         7.22.  DISCLOSURE...........................................................................59

8.  AFFIRMATIVE COVENANTS............................................................................59
         8.1.  PUNCTUAL PAYMENT......................................................................59
         8.2.  NOTICE OF CHANGE OF ORGANIZATION/MAINTENANCE OF OFFICE................................59
         8.3.  RECORDS AND ACCOUNTS..................................................................60
         8.4.  FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION....................................60
         8.5.  NOTICES...............................................................................61
                  8.5.1.  DEFAULTS...................................................................61
                  8.5.2.  ENVIRONMENTAL EVENTS.......................................................62
                  8.5.3.  NOTIFICATION OF CLAIM AGAINST COLLATERAL...................................62
                  8.5.4.  NOTICE OF LITIGATION AND JUDGMENTS.........................................62
                  8.5.5.  NOTICES CONCERNING INVENTORY COLLATERAL....................................62
                  8.5.6.  CHANGE IN OFFICERS OR ACCOUNTANTS..........................................63
         8.6.  LEGAL EXISTENCE; MAINTENANCE OF PROPERTIES............................................63
         8.7.  INSURANCE.............................................................................63
                  8.7.1.  MAINTENANCE OF INSURANCE...................................................63
                  8.7.2.  INSURANCE PROCEEDS.........................................................64
                  8.7.3.  CONTINUATION OF INSURANCE..................................................64
         8.8.  TAXES.................................................................................64
         8.9.  INSPECTION OF PROPERTIES AND BOOKS, ETC...............................................64
                  8.9.1.  GENERAL....................................................................64
                  8.9.2  COLLATERAL REPORTS; PHYSICAL INVENTORIES....................................65
                  8.9.4.  ENVIRONMENTAL ASSESSMENTS..................................................66
                  8.9.5.  COMMUNICATIONS WITH ACCOUNTANTS AND OTHER PERSONS..........................66
                  8.9.6.  RESTRUCTURING ADVISOR......................................................66
         8.10.  COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS...............................66
         8.11.  EMPLOYEE BENEFIT PLANS...............................................................67
         8.12.  USE OF PROCEEDS......................................................................67
         8.13.  ADDITIONAL MORTGAGED PROPERTY........................................................67
         8.14.  BANK ACCOUNTS........................................................................67
                  8.14.1.  GENERAL...................................................................67
                  8.14.2.  ACKNOWLEDGMENT OF APPLICATION.............................................68
         8.15.  COVENANTS CONCERNING COLLATERAL, ETC.................................................68
         8.16.  FURTHER ASSURANCES...................................................................68

9.  CERTAIN NEGATIVE COVENANTS.......................................................................68
         9.1.  RESTRICTIONS ON INDEBTEDNESS..........................................................69
         9.2.  RESTRICTIONS ON LIENS.................................................................69
                  9.2.1.  PERMITTED LIENS............................................................69
                  9.2.2.  RESTRICTIONS ON NEGATIVE PLEDGES AND UPSTREAM LIMITATIONS..................71
         9.3.  RESTRICTIONS ON INVESTMENTS...........................................................71
         9.4.  RESTRICTED PAYMENTS...................................................................72
         9.5.  MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.......................................72
                  9.5.1.  MERGERS AND ACQUISITIONS...................................................72
                  9.5.2.  DISPOSITION OF ASSETS......................................................72

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<S>                                                                                                 <C>

         9.6.  SALE AND LEASEBACK....................................................................72
         9.7.  COMPLIANCE WITH ENVIRONMENTAL LAWS....................................................72
         9.8.  EMPLOYEE BENEFIT PLANS................................................................72
         9.9.  BUSINESS ACTIVITIES; PERMITTED STORE CLOSINGS.........................................73
         9.10.  FISCAL YEAR..........................................................................73
         9.11.  TRANSACTIONS WITH AFFILIATES.........................................................73
         9.12.  BANK ACCOUNTS........................................................................73

10.  FINANCIAL COVENANTS.............................................................................74
         10.1.  MINIMUM INVENTORY PURCHASES..........................................................74
         10.2  CAPITAL EXPENDITURES..................................................................74

11.   CLOSING CONDITIONS.............................................................................74
         11.1.  LOAN DOCUMENTS.......................................................................74
         11.2.  CERTIFIED COPIES OF GOVERNING DOCUMENTS..............................................74
         11.3.  CORPORATE OR OTHER ACTION............................................................74
         11.4.  INCUMBENCY CERTIFICATE...............................................................75
         11.5.  VALIDITY OF LIENS....................................................................75
         11.6.  PERFECTION CERTIFICATES AND UCC SEARCH RESULTS.......................................75
         11.7.  TAXES................................................................................75
         11.8.  TITLE INSURANCE......................................................................75
         11.9.  CERTIFICATES OF INSURANCE............................................................75
         11.10.  CONTROL AGREEMENTS; CREDIT CARD CLEARING HOUSE......................................75
         11.11.  BORROWING BASE REPORT...............................................................76
         11.12.  MINIMUM DAY ONE AVAILABILITY........................................................76
         11.13.  ACCOUNTS RECEIVABLE AGING REPORT....................................................76
         11.14.  HAZARDOUS WASTE ASSESSMENTS.........................................................76
         11.15.  APPRAISALS OF ELIGIBLE FIXED ASSETS.................................................76
         11.16.  OPINION OF COUNSEL..................................................................76
         11.18.  PAYMENT OF FEES.....................................................................76
         11.19.  PAYOFF LETTER.......................................................................76
         11.20.  ROLEX AGREEMENTS....................................................................76

12.  CONDITIONS TO ALL BORROWINGS....................................................................76
         12.1.  REPRESENTATIONS TRUE; NOT IN DEFAULT.................................................77
         12.2.  NO LEGAL IMPEDIMENT..................................................................77
         12.3.  PROCEEDINGS AND DOCUMENTS............................................................77
         12.4.  BORROWING BASE REPORT................................................................77
         12.5.  MATERIAL ADVERSE CHANGE..............................................................77
         12.6.  SALES TAXES..........................................................................77

13.  EVENTS OF DEFAULT; ACCELERATION; ETC............................................................77
         13.1.  EVENTS OF DEFAULT AND ACCELERATION...................................................77
         13.2.  TERMINATION OF COMMITMENTS...........................................................80
         13.3.  REMEDIES.............................................................................81
                  13.3.1.  GENERAL...................................................................81
                  13.3.2.  SECURITIES AND DEPOSITS...................................................82
                  13.3.3.  NOTIFICATION TO ACCOUNT DEBTORS AND OTHER PERSONS
                           OBLIGATED ON COLLATERAL...................................................82

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<S>                                                                                                 <C>
                  13.3.4.  STANDARDS FOR EXERCISING RIGHTS AND REMEDIES..............................82
         13.4.  DISTRIBUTION OF COLLATERAL PROCEEDS..................................................83

14.  THE ADMINISTRATIVE AGENT........................................................................84
         14.1.  AUTHORIZATION........................................................................84
         14.2.  EMPLOYEES AND ADMINISTRATIVE AGENTS..................................................85
         14.3.  NO LIABILITY.........................................................................85
         14.4.  NO REPRESENTATIONS...................................................................85
                  14.4.1.  GENERAL...................................................................85
                  14.4.2.  CLOSING DOCUMENTATION, ETC................................................86
         14.5.  PAYMENTS.............................................................................86
                  14.5.1.  PAYMENTS TO ADMINISTRATIVE AGENT..........................................86
                  14.5.2.  DISTRIBUTION BY ADMINISTRATIVE AGENT......................................86
                  14.5.3.  DELINQUENT LENDERS........................................................86
         14.6.  HOLDERS OF NOTES.....................................................................87
         14.7.  INDEMNITY............................................................................87
         14.8.  ADMINISTRATIVE AGENT AS LENDER.......................................................87
         14.9.  RESIGNATION..........................................................................87
         14.10.  NOTIFICATION IF DEFAULT EXISTS......................................................88
         14.11.  DUTIES IN THE CASE OF ENFORCEMENT...................................................88
         14.12.  ADMINISTRATIVE AGENT'S OBLIGATIONS AND DUTIES WITH REGARD TO COLLATERAL.............88

15.   ASSIGNMENT AND PARTICIPATION...................................................................89
         15.1.  CONDITIONS TO ASSIGNMENT.............................................................89
                  15.1.1  CONDITIONS TO ASSIGNMENT BY REVOLVING CREDIT LENDERS.......................89
                  15.1.2. CONDITIONS TO ASSIGNMENT BY TRANCHE B LENDER...............................89
         15.2.  CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS.......................90
         15.3.  NEW NOTES............................................................................91
         15.4.  PARTICIPATIONS.......................................................................91
         15.5.  ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWERS................................91
         15.6.  MISCELLANEOUS ASSIGNMENT PROVISIONS..................................................92
         15.7.  ASSIGNMENT BY BORROWERS..............................................................92

16.  PROVISIONS OF GENERAL APPLICATIONS..............................................................92
         16.1.  SETOFF...............................................................................92
         16.2.  EXPENSES.............................................................................93
         16.3.  INDEMNIFICATION......................................................................94
         16.4.  TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION........................................95
                  16.4.1.  CONFIDENTIALITY...........................................................95
                  16.4.2.  PRIOR NOTIFICATION........................................................96
                  16.4.3.  OTHER.....................................................................96
         16.5.  SURVIVAL OF COVENANTS, ETC...........................................................96
         16.6.  NOTICES..............................................................................96
         16.7.  GOVERNING LAW........................................................................97
         16.8.  HEADINGS.............................................................................98

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<S>                                                                                                 <C>
         16.9.  COUNTERPARTS.........................................................................98
         16.10.  ENTIRE AGREEMENT, ETC...............................................................98
         16.11.  WAIVER OF JURY TRIAL................................................................98
         16.12.  CONSENTS, AMENDMENTS, WAIVERS, ETC..................................................98
         16.13.  POWER OF ATTORNEY...................................................................101
                  16.13.1.  APPOINTMENT AND POWERS OF ADMINISTRATIVE AGENT...........................101
                  16.13.2.  RATIFICATION BY BORROWERS................................................102
                  16.13.3.  NO DUTY ON ADMINISTRATIVE AGENT..........................................102
         16.14.  SURETYSHIP WAIVERS BY THE BORROWERS.................................................102
         16.15.  MARSHALLING.........................................................................102
         16.16.  SEVERABILITY........................................................................103

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                                     -vii-

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                                    EXHIBITS

EXHIBIT A         Form of Borrowing Base Report
EXHIBIT B         Form of Revolving Credit Note
EXHIBIT C         Form of Loan Request
EXHIBIT D         Form of Tranche B Note
EXHIBIT E         Form of Compliance Certificate
EXHIBIT F(i)      Assignment and Acceptance/Revolving Credit
EXHIBIT F(ii)     Assignment and Acceptance/Tranche B Loan

                  SCHEDULES

SCHEDULE 1        Lenders and Commitments
SCHEDULE 2.12.1   Reserves
SCHEDULE 7.3      Title to Properties; Leases
SCHEDULE 7.5      Material Adverse Changes
SCHEDULE 7.7      Litigation
SCHEDULE 7.8      Contracts
SCHEDULE 7.10     Tax Status
SCHEDULE 7.18     Environmental Compliance
SCHEDULE 7.19     Subsidiaries Etc.
SCHEDULE 7.20     Bank Accounts
SCHEDULE 8.4(f)   Borrowing Base Reports
SCHEDULE 8.4(i)   Other Reports
SCHEDULE 8.7.1    Insurance Policies
SCHEDULE 8.10     Noncompliance with Laws, Contracts, Licenses and Permits
SCHEDULE 9.1      Existing Indebtedness
SCHEDULE 9.2      Existing Liens
SCHEDULE 9.3      Existing Investments
SCHEDULE 9.9      Permitted Store Closings

                                     -viii-

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

REVOLVING CREDIT, TRANCHE B
LOAN AND SECURITY AGREEMENT                           FLEET RETAIL FINANCE INC.
    Administrative, Documentation and Collateral Agent

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

                                                              As of May 30, 2002

This REVOLVING CREDIT, TRANCHE B LOAN AND SECURITY AGREEMENT is made by and
among

         Fleet Retail Finance Inc. (in such capacity, herein the "ADMINISTRATIVE
AGENT"), a Delaware corporation, with offices at 40 Broad Street, Boston,
Massachusetts 02109 as agent for itself and such other lending institutions,

         and

         Fleet Retail Finance Inc., a Delaware corporation, with offices at 40
Broad Street, Boston, Massachusetts 02109 and the other revolving credit lending
institutions listed on SCHEDULE 1,

         and

         Back Bay Capital Funding LLC, a Delaware limited liability company,
with offices at 40 Broad Street, Boston, Massachusetts 02109, as Tranche B
Lender,

         and

         Mayor's Jewelers, Inc. ("MAYOR'S"), a Delaware corporation and Mayor's
Jewelers, Inc. ("MAYOR'S FLA"), a Florida corporation, each having its principal
place of business at 14051 Northwest 14th Street, Sunrise, FL 33323 and the
other Domestic Subsidiaries of Mayor's parties hereto.

In consideration of the mutual covenants contained herein and benefits derived
herefrom

                                   WITNESSETH:
                    DEFINITIONS AND RULES OF INTERPRETATION.

1.1 DEFINITIONS. The following terms shall have the meanings set forth in this
ss.1 or elsewhere in the provisions of this Agreement referred to below:

         ACCOUNTS RECEIVABLE. All rights of the Borrowers or any of their
                  Subsidiaries to payment for goods sold, leased or otherwise
                  marketed in the ordinary course of business and all rights of
                  the Borrowers or any of their Subsidiaries to payment for
                  services rendered in the ordinary course of business and all
                  sums of money or other proceeds due thereon pursuant to
                  transactions with account debtors, except for that portion of
                  the sum of money or other proceeds due thereon that relate to
                  sales, use or property taxes in conjunction with such
                  transactions, recorded on the books of account in accordance
                  with GAAP.

<PAGE>

         ACH. Automated clearing house.

         ADMINISTRATIVE AGENT. Fleet Retail Finance, acting as agent for the
                  Lenders and each other Person appointed as the successor
                  Administrative Agent in accordance with ss.14.9.

         ADMINISTRATIVE AGENT FEES. See ss.5.1.

         ADMINISTRATIVE AGENT'S OFFICE. The Administrative Agent's office
                  located at 40 Broad Street, Boston, Massachusetts 02109, or at
                  such other location as the Administrative Agent may designate
                  from time to time.

         ADMINISTRATIVE AGENT'S SPECIAL COUNSEL. Bingham Dana LLP or such other
                  counsel as may be approved by the Administrative Agent.

         AFFILIATE. Any Person that would be considered to be an affiliate of
                  the Borrowers under Rule 144(a) of the Rules and Regulations
                  of the Securities and Exchange Commission, as in effect on the
                  date hereof, if the Borrowers were issuing securities.

         AGREEMENT. This Revolving Credit, Tranche B Loan and Security
                  Agreement, including the Schedules and Exhibits hereto.

         APPLICABLE MARGIN. (a) At all times prior to an Approved
                  Recapitalization, the Applicable Margin for Base Rate Loans
                  shall be 2.75% and the Applicable Margin for Eurodollar Rate
                  Loans shall be 4.0%.

                  (b) Commencing with the first complete calendar quarter
                  following an Approved Recapitalization, the Applicable Margin
                  for each calendar quarter shall be the applicable margin set
                  forth below with respect to the average daily level of
                  Availability during the previous calendar quarter; PROVIDED,
                  HOWEVER, during the four complete calendar quarters following
                  the Closing Date, the Applicable Margin will be set at Level
                  II if the table would otherwise indicate that the Applicable
                  Margin was to be based on Level I:

<TABLE>
<CAPTION>

                         -----------------------------------------------------------------------------------
                                                                                              Applicable
                                                                             Applicable       Margin for
                                                                          Margin for Base  Eurodollar Rate
                              Level          Availability                    Rate Loans         Loans
                         -----------------------------------------------------------------------------------
<S>                                          <C>                                <C>             <C>
                                I            Greater than or equal to           1.50%           2.75%
                                             $10,000,000
                         -----------------------------------------------------------------------------------
                               II            Greater than or equal to
                                             $5,000,000 and less than           1.75%            3.00%
                                             $10,000,000
                         -----------------------------------------------------------------------------------
                               III             Less than $5,000,000             2.00%            3.25%
                         -----------------------------------------------------------------------------------

</TABLE>

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         APPLICABLE PENSION LEGISLATION. At any time, any pension or retirement
                  benefits legislation (be it national, federal, provincial,
                  territorial or otherwise) then applicable to the Borrowers or
                  any of their Subsidiaries.

         APPRAISED A/R LIQUIDATION VALUE. The product of (a) the net book value
                  of Private Label Accounts multiplied by (b) the percentage
                  determined from the then most recent appraisal of Private
                  Label Accounts undertaken at the request of the Administrative
                  Agent, to reflect the appraised estimate of the net recovery
                  on the Private Label Accounts on a forced liquidation basis.

         APPRAISED A/R PERCENTAGE.  90%.

         APPRAISED A/R TRANCHE B PERCENTAGE.  95%.

         APPRAISED INVENTORY LIQUIDATION VALUE. The product of (a) the Cost of
                  Eligible Inventory (net of Inventory Reserves) MULTIPLIED by
                  (b) that percentage, determined from the then most recent
                  appraisal of the Borrowers' Inventory undertaken at the
                  request of the Administrative Agent, to reflect the
                  appraiser's estimate of the net recovery on the Borrowers'
                  Inventory in the event of an in-store liquidation of that
                  Inventory.

         APPRAISED INVENTORY PERCENTAGE.  85%.

         APPROVED RECAPITALIZATION. A transaction whereby (a) the Borrowers
                  receive not less than $11,500,000 of gross proceeds from the
                  sale or issuance of Approved Recapitalization Liabilities net
                  of reasonable transaction costs acceptable to the
                  Administrative Agent, (b) Availability exceeds $11,500,000
                  after receipt of such Net Proceeds, (c) the Borrowers have
                  delivered to the Administrative Agent pro forma financial
                  statements for the next 12 months demonstrating, in form and
                  substance satisfactory to the Administrative Agent that,
                  Availability will exceed (i) $2,500,000 at all times during
                  the next 12 months after giving effect to the Permitted Store
                  Closings and (ii) $4,500,000 on average during the 12 months
                  after giving effect to the Permitted Store Closings, (d) the
                  Borrowers are receiving, and will continue to receive,
                  adequate Inventory supplies of Rolex watches on terms and
                  conditions satisfactory to the Administrative Agent and (e) if
                  in connection with such transaction any person or group of
                  persons (within the meaning of Section 13 or 14 of the
                  Securities Exchange Act of 1934) shall acquire beneficial
                  ownership (within the meaning of Rule 13d-3 promulgated by the
                  Securities and Exchange Commission under said Act), directly
                  OR indirectly, of thirty-five percent (35%) or more of the
                  outstanding shares of Capital Stock of the Borrowers, such
                  person or group of persons is either Birks or a Subsidiary of
                  Birks or a person or group of persons acceptable to the
                  Administrative Agent.

         APPROVED RECAPITALIZATION LIABILITIES. Indebtedness or Capital Stock of
                  Mayor's issued in connection with an Approved
                  Recapitalization, which Indebtedness or Capital Stock requires
                  no current cash payments and is otherwise on terms and
                  conditions acceptable to the Administrative Agent.

                                      -3-
<PAGE>

         ASSIGNMENT AND ACCEPTANCE.  See ss.15.1.

         AVAILABILITY: The lesser of (a), (b) or (c), where:

                  (a)      is the result of

                           (i)      The Total Commitment

                                           MINUS

                           (ii)     The Outstanding amount of the Revolving
                                    Credit Loans (after giving effect to all
                                    amounts requested).

                                           MINUS

                           (iii)    The Maximum Drawing Amount and all Unpaid
                                    Reimbursement Obligations.

                                           MINUS

                           (iv)     The Availability Block.

                  (b)      is the result of

                           (i)      The Borrowing Base

                                           MINUS

                           (ii)     The Outstanding amount of the Revolving
                                    Credit Loans (after giving effect to all
                                    amounts requested).

                                           MINUS

                           (iii)    The Maximum Drawing Amount and all Unpaid
                                    Re-imbursement Obligations.

                                           MINUS

                           (iv)     The aggregate of the Availability Reserves.

                                           MINUS

                           (v)      The Availability Block.

                  (c)      is the result of

                           (i)      The Tranche B Borrowing Base

                                           MINUS

                           (ii)     The Outstanding amount of the Revolving
                                    Credit Loans and Tranche B Loans (after
                                    giving effect to all amounts requested and
                                    including Tranche B Loan PIK Interest).

                                           MINUS

                           (iii)    The Maximum Drawing Amount and all Unpaid
                                    Reimbursement Obligations.

                                           MINUS

                           (iv)     The aggregate of the Availability Reserves.

                                           MINUS

                           (v)      The Availability Block.

                                      -4-
<PAGE>

         AVAILABILITY BLOCK. $8,000,000; PROVIDED, HOWEVER, after an Approved
                  Recapitalization the Availability Block will be $7,000,000.

         AVAILABILITY RESERVES. Such reserves as the Administrative Agent from
                  time to time determines in the Administrative Agent's
                  reasonable discretion as being appropriate (determined in
                  accordance with its customary credit considerations) to
                  reflect the impediments to the Administrative Agent's ability
                  to realize upon the Collateral. Without limiting the
                  generality of the foregoing, Availability Reserves may include
                  (but are not limited to) reserves based on the following:

                  (a)      Lease reserves.

                  (b)      Customer Credit Liabilities.

                  (c)      Taxes and other governmental charges, including, ad
                           valorem, personal property, and other taxes which
                           might have priority over the Collateral Interests of
                           the Administrative Agent in the Collateral.

         BALANCE SHEET DATE.  February 2, 2002

         BASE RATE. The higher of (a) the variable annual rate of interest
                  so designated from time to time by Fleet National Bank as its
                  "prime rate", such rate being a reference rate and not
                  necessarily representing the lowest or best rate being charged
                  to any customer, and (b) one-half of one percent (1/2%) above
                  the Federal Funds Effective Rate. For the purposes of this
                  definition, "FEDERAL FUNDS EFFECTIVE RATE" shall mean for any
                  day, the rate per annum equal to the weighted average of the
                  rates on overnight federal funds transactions with members of
                  the Federal Reserve System arranged by federal funds brokers,
                  as published for such day (or, if such day is not a Business
                  Day, for the next preceding 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 of the
                  quotations for such day on such transactions received by Fleet
                  National Bank from three funds brokers of recognized standing
                  selected by the Administrative Agent. Changes in the Base Rate
                  resulting from any changes in Fleet National Bank's "PRIME
                  RATE" shall take place immediately without notice or demand of
                  any kind.

         BASE RATE LOANS. Revolving Credit Loans bearing interest calculated
                  by reference to the Base Rate.

         BIRKS. Henry Birks & Sons Inc.

         BOARD OF DIRECTORS. The Board of Directors of any Borrower or any
                  committee thereof duly authorized to act on behalf of such
                  Board.

                                      -5-
<PAGE>

         BORROWER(S). Mayor's and Mayor's Fla and the Domestic Subsidiaries of
                  Mayor's and Mayor's Fla.

         BORROWERS' REPRESENTATIVE.  Mayor's.

         BORROWING BASE.  The aggregate of the following:

                  (a)      The lesser of (i) the face amount of Eligible Credit
                           Card Receivables MULTIPLIED BY the Credit Card
                           Advance Rate or (ii) the Appraised A/R Percentage of
                           the Appraised A/R Liquidation Value.

                           PLUS

                  (b)      The lesser of (i) the Cost of Eligible Inventory (net
                           of Inventory Reserves to the extent not taken into
                           account in setting the Inventory Advance Rate)
                           MULTIPLIED BY the Inventory Advance Rate or (ii) the
                           Appraised Inventory Percentage of the Appraised
                           Inventory Liquidation Value.

         BORROWING BASE REPORT. A Borrowing Base Report signed by the chief
                  financial officer of the Borrowers' Representative and in
                  substantially the form of EXHIBIT A hereto.

         BUSINESS DAY. Any day on which banking institutions in Boston,
                  Massachusetts and New York, New York, are open for the
                  transaction of banking business and, in the case of Eurodollar
                  Rate Loans, also a day which is a Eurodollar Business Day.

         BUYOUT ACCEPTANCE NOTICE.  See ss.3.7.

         BUYOUT EXERCISE NOTICE. The Administrative Agent giving the Tranche B
                  Lender notice that the Administrative Agent intends to grant,
                  consent to, or otherwise approve, a sale or transfer by the
                  Borrowers of assets at a time when an OverLoan exists or an
                  OverLoan will exist, or is projected to exist, upon the
                  completion of such sale or transfer.

         BUYOUT EXERCISE PERIOD. Any time (a) within sixty (60) days following
                  any Standstill Termination Date or (b) within ten (10) days
                  following the Tranche B Lender's receipt of a Buyout Exercise
                  Notice.

         CAPITAL ASSETS. Fixed assets, both tangible (such as land, buildings,
                  fixtures, machinery and equipment) and intangible (such as
                  patents, copyrights, trademarks, franchises and good will);
                  PROVIDED that Capital Assets shall not include any item
                  customarily charged directly to expense or depreciated over a
                  useful life of twelve (12) months or less in accordance with
                  GAAP.

         CAPITAL EXPENDITURES. Amounts paid or Indebtedness incurred by the
                  Borrowers or any of their Subsidiaries in connection with (i)
                  the purchase or lease by the Borrowers or any of their
                  Subsidiaries of Capital Assets that would be required to be
                  capitalized and shown on the balance sheet of such Person in
                  accordance with GAAP or (ii) the lease of any assets by the

                                      -6-
<PAGE>

                  Borrowers or any of their Subsidiaries as lessee under any
                  Synthetic Lease to the extent that such assets would have been
                  Capital Assets had the Synthetic Lease been treated for
                  accounting purposes as a Capitalized Lease.

         CAPITALIZED LEASES. Leases under which the Borrowers or any of their
                  Subsidiaries is the lessee or obligor, the discounted future
                  rental payment obligations under which are required to be
                  capitalized on the balance sheet of the lessee or obligor in
                  accordance with GAAP.

         CAPITAL STOCK. Any and all shares, interests, participations or other
                  equivalents (however designated) of capital stock of a
                  corporation, any and all equivalent ownership interests in a
                  Person (other than a corporation) and any and all warrants,
                  rights or options to purchase any of the foregoing.

         CASH EQUIVALENTS. As to the Borrowers and their Subsidiaries, (a)
                  securities issued or directly and fully guaranteed or insured
                  by the United States of America and having a maturity of not
                  more than six (6) months from the date of acquisition; (b)
                  certificates of deposit, time deposits and eurodollar time
                  deposits with maturities of six (6) months or less from the
                  date of acquisition, bankers' acceptances with maturities not
                  exceeding six (6) months and overnight bank deposits, in each
                  case, (i) with any Lenders or (ii) with any domestic
                  commercial bank organized under the laws of the United States
                  of America or any state thereof, in each case having a rating
                  of not less than A or its equivalent by S&P or any successor
                  and having capital and surplus in excess of $1,000,000,000;
                  (c) repurchase obligations with a term of not more than seven
                  (7) days for underlying securities of the types described in
                  clauses (a) and (b) above; and (d) any commercial paper or
                  finance company paper issued by (i) any Lender or any holding
                  company controlling any Lender or (ii) any other Person that
                  is rated not less than "P-1" or "A-1" or their equivalents by
                  Moody's or S&P or their successors.

         CERCLA. See ss.7.18(a).

         CHANGE OF CONTROL. Except in connection with an Approved
                  Recapitalization, an event or series of events by which any
                  person or group of persons (within the meaning of Section 13
                  or 14 of the Securities Exchange Act of 1934) shall have
                  acquired beneficial ownership (within the meaning of Rule
                  13d-3 promulgated by the Securities and Exchange Commission
                  under said Act), directly or indirectly, of thirty-five
                  percent (35%) or more of the outstanding shares of Capital
                  Stock of the Borrowers; or, the individuals on the Closing
                  Date that constituted the Board of Directors (together with
                  any new directors whose election by such Board of Directors or
                  whose nomination for election by the stockholders of Mayor's
                  was approved by a vote of a majority of the directors of
                  Mayor's then still in office who were either directors on the
                  Closing Date or whose election or nomination for election was
                  previously so approved) cease for any reason to constitute a
                  majority of the Board of Directors then in office.

                                      -7-
<PAGE>

         CLOSING DATE. The first date on which the conditions set forth in
                  ss.11 have been satisfied and any Revolving Credit Loans or
                  Tranche B Loans are to be made or any Letter of Credit is to
                  be issued hereunder.

         CODE. The Internal Revenue Code of 1986.

         COLLATERAL. See ss.6.1.

         COMMITMENT. With respect to each Revolving Credit Lender, the amount
                  set forth on SCHEDULE 1 hereto as the amount of such Revolving
                  Credit Lender's commitment to make Revolving Credit Loans to,
                  and to participate in the issuance, extension and renewal of
                  Letters of Credit for the account of, the Borrowers, as the
                  same may be reduced from time to time; or if such commitment
                  is terminated pursuant to the provisions hereof, zero. With
                  respect to the Tranche B Lender, the outstanding principal
                  amount of the Tranche B Loan.

         COMMITMENT PERCENTAGE. With respect to each Revolving Credit Lender,
                  the percentage set forth on SCHEDULE 1 hereto as such
                  Revolving Credit Lender's percentage of the aggregate
                  Commitments of all of the Revolving Credit Lenders.

         COMPLIANCE CERTIFICATE.  See ss.8.4(d).

         CONSOLIDATED OR CONSOLIDATED. With reference to any term defined
                  herein, shall mean that term as applied to the accounts of
                  Mayor's and its Subsidiaries, consolidated in accordance with
                  GAAP.

         CONTROL AGREEMENT(S). See ss.6.3.2.

         CONVERSION REQUEST. A notice given by the Borrowers to the
                  Administrative Agent of the Borrower's election to convert or
                  continue a Loan in accordance with ss.2.10.

         COST. The calculated cost of purchases, based upon the Borrowers'
                  accounting practices, known to the Administrative Agent, which
                  practices are in effect on the date on which this Agreement
                  was executed as such calculated cost is determined from:
                  invoices received by the Borrowers; the Borrowers' purchase
                  journal; or the Borrowers' stock ledger. "Cost" does not
                  include inventory capitalization costs or other non-purchase
                  price charges (such as freight) used in the Borrowers'
                  calculation of cost of goods sold. The Cost of Eligible
                  Inventory will be determined in a manner consistent with the
                  Borrowers' then current tracking practices, based on the
                  Borrowers' stock ledger inventory.

         CREDIT CARD ADVANCE RATE.  60%.

         CREDIT CARD TRANCHE B ADVANCE RATE.  65%.

         CUSTOMER CREDIT LIABILITY. Gift certificates, customer deposits,
                  offsets, merchandise credits, layaway obligations, frequent
                  shopping programs, and similar liabilities of the Borrowers
                  and their Subsidiaries to their retail customers and
                  prospective customers.

                                      -8-
<PAGE>

         DEFAULT. Any occurrence, circumstance, or state of facts with respect
                  to the Borrowers which (a) is an Event of Default; or (b)
                  would become an Event of Default if any requisite notice were
                  given and/or any requisite period of time were to run and such
                  occurrence, circumstance, or state of facts were not
                  absolutely cured within any applicable grace period.

         DELINQUENT LENDER.  See ss.14.5.3.

         DEPOSIT ACCOUNT.  See ss.6.3.2.

         DETERMINED VALUE. At the relevant time of reference thereto, the lesser
                  of (a) the net book value of Eligible Fixed Assets, determined
                  in accordance with GAAP, and (b) the appraised value of such
                  assets on forced liquidation basis determined by the most
                  recent appraisal thereof conducted pursuant to ss.8.4(h).

         DISTRIBUTION. The declaration or payment of any dividend on or in
                  respect of any shares of any class of Capital Stock of the
                  Borrowers, other than dividends payable solely in shares of
                  common stock of the Borrowers; the purchase, redemption,
                  defeasance, retirement or other acquisition of any shares of
                  any class of Capital Stock of the Borrowers, directly or
                  indirectly through a Subsidiary of the Borrowers or otherwise
                  (including the setting apart of assets for a sinking or other
                  analogous fund to be used for such purpose); the return of
                  capital by the Borrowers to their shareholders as such; or any
                  other distribution on or in respect of any shares of any class
                  of Capital Stock of the Borrowers.

         DOLLARS or $. Dollars in lawful currency of the United States of
                  America.

         DOMESTIC LENDING OFFICE. Initially, the office of each Revolving Credit
                  Lender designated as such in SCHEDULE 1 hereto; thereafter,
                  such other office of such Revolving Credit Lender, if any,
                  located within the United States that will be making or
                  maintaining Base Rate Loans.

         DOMESTIC SUBSIDIARIES. All Subsidiaries of Mayor's organized under the
                  laws of the United States of America.

         DRAWDOWN DATE. The date on which any Revolving Credit Loan or Tranche B
                  Loans is made or is to be made, and the date on which any
                  Revolving Credit Loan is converted or continued in accordance
                  with ss.2.10.

         ELIGIBLE CREDIT CARD RECEIVABLES. Accounts due on the Borrowers'
                  private label credit card program, which are deemed in the
                  reasonable discretion of the Administrative Agent (based on
                  customary credit considerations of the Administrative Agent)
                  to be eligible.

         ELIGIBLE FIXED ASSETS. The Headquarters Facility to the extent that it
                  is (a) owned by the Borrowers, (b) subject to a Mortgage, (c)
                  properly insured in accordance with the provisions of ss.8.7
                  and (d) not encumbered by a lien or encumbrance other than
                  Permitted Liens.

                                      -9-
<PAGE>

         ELIGIBLE INVENTORY. All of the Borrowers' Inventory at such locations,
                  and of such types, character, qualities and quantities, as the
                  Administrative Agent in its reasonable discretion (based on
                  customary credit considerations of the Administrative Agent)
                  from time to time determines to be acceptable for borrowing,
                  as to which Inventory, the Administrative Agent has a
                  perfected security interest which is prior and superior to all
                  security interests, claims, and Liens.

         EMPLOYEE BENEFIT PLAN. Any employee benefit plan within the meaning of
                  ss.3(3) of ERISA maintained or contributed to by the Borrowers
                  or any ERISA Affiliate, other than a Guaranteed Pension Plan
                  or a Multiemployer Plan.

         ENVIRONMENTAL LAWS.  See ss.7.18(a).

         EPA.  See ss.7.18(b).

         ERISA.  The Employee Retirement Income Security Act of 1974.

         ERISA AFFILIATE. Any Person which is treated as a single employer
                  with the Borrowers under ss.414(b), (c), (m) and (o) of the
                  Code.

         ERISA REPORTABLE EVENT. A reportable event with respect to a
                  Guaranteed Pension Plan within the meaning of ss.4043 of ERISA
                  and the regulations promulgated thereunder.

         EUROCURRENCY RESERVE RATE. For any day with respect to a Eurodollar
                  Rate Loan, the maximum rate (expressed as a decimal) at which
                  any bank subject thereto would be required to maintain
                  reserves under Regulation D of the Board of Governors of the
                  Federal Reserve System (or any successor or similar
                  regulations relating to such reserve requirements) against
                  "EUROCURRENCY LIABILITIES" (as that term is used in Regulation
                  D), if such liabilities were outstanding. The Eurocurrency
                  Reserve Rate shall be adjusted automatically on and as of the
                  effective date of any change in the Eurocurrency Reserve Rate.

         EURODOLLAR BUSINESS DAY. Any day on which commercial banks are open for
                  international business (including dealings in Dollar deposits)
                  in London or such other eurodollar interbank market as may be
                  selected by the Administrative Agent in its sole discretion
                  acting in good faith.

         EURODOLLAR LENDING OFFICE. Initially, the office of each Revolving
                  Credit Lender designated as such in SCHEDULE 1 hereto;
                  thereafter, such other office of such Lender, if any, that
                  shall be making or maintaining Eurodollar Rate Loans.

         EURODOLLAR RATE. For any Interest Period with respect to a Eurodollar
                  Rate Loan, the rate of interest equal to (a) the arithmetic
                  average of the rates per annum (rounded upwards to the nearest
                  1/100 of one percent) determined by the Administrative Agent
                  in good faith to be the highest prevailing rate per annum at
                  which Fleet National Bank is offered Dollar deposits two
                  Eurodollar Business Days prior to the beginning of such

                                      -10-
<PAGE>

                  Interest Period in the interbank eurodollar market where the
                  eurodollar and foreign currency and exchange operations of
                  Fleet National Bank are customarily conducted, for delivery on
                  the first day of such Interest Period for the number of days
                  comprised therein and in an amount comparable to the amount of
                  the Eurodollar Rate Loan of Fleet National Bank Lender to
                  which such Interest Period applies, divided by (b) a number
                  equal to 1.00 minus the Eurocurrency Reserve Rate, if
                  applicable.

         EURODOLLAR RATE LOANS. Revolving Credit Loans bearing interest
                  calculated by reference to the Eurodollar Rate.

         EVENT OF DEFAULT.  See ss.13.1.

         EXEMPT DDA: A depository account maintained by any of the Borrowers,
                  the only contents of which may be transfers from the Operating
                  Account and actually used solely (i) for petty cash purposes;
                  or (ii) for payroll, payroll taxes and other employee wages
                  and benefit payments to or for the benefit of the Borrowers'
                  salaried and hourly employees.

         FEES. Collectively, the Unused Fee, the Letter of Credit Fees, the
                  Administrative Agent's Fee, the Commitment Fee, the Tranche B
                  Commitment Fee, the Administrative Agent Monitoring Fee and
                  the Tranche B Monitoring Fee.

         FINANCIAL AFFILIATE. A Subsidiary of the bank holding company
                  controlling any Lender, which Subsidiary is engaging in any of
                  the activities permitted by ss.4(e) of the Bank Holding
                  Company Act of 1956 (12 U.S.C. ss.1843).

         FISCAL. When followed by "month" or "quarter", the relevant fiscal
                  period based on the Borrowers' fiscal year and accounting
                  conventions. When followed by reference to a specific year,
                  the fiscal year which ends in a month of the year to which
                  reference is being made (e.g., if the Borrowers' fiscal year
                  ends in January 2001 reference to that year would be to the
                  Borrowers' "Fiscal 2000").

         FLEET. Fleet National Bank, a national banking association.

         FLEET CONCENTRATION ACCOUNT.  See ss.8.14.1.

         FRFI. Fleet Retail Finance Inc.

         FRFI FEE LETTER. The fee letter dated as of May 30, 2002, among the
                  Borrowers and the Administrative Agent.

         GAAP OR GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. Principles that
                  are (i) consistent with the principles promulgated or adopted
                  by the Financial Accounting Standards Board and its
                  predecessors, as in effect from time to time in the United
                  States of America, and (ii) consistently applied with past
                  financial statements of the Borrowers adopting the same
                  principles, provided that in each case referred to in this
                  definition of "GAAP" a certified public accountant would,
                  insofar as the use of such accounting principles is pertinent,

                                      -11-
<PAGE>

                  be in a position to deliver an unqualified opinion (other than
                  a qualification regarding changes in GAAP) as to financial
                  statements in which such principles have been properly
                  applied.

         GORDON BROTHERS. GB Retail Funding, LLC and its affiliates.

         GOVERNING DOCUMENTS. With respect to any Person, its certificate or
                  articles of incorporation, its by-laws and all shareholder
                  agreements, voting trusts and similar arrangements applicable
                  to any of its Capital Stock.

         GOVERNMENTAL AUTHORITY. Any foreign, federal, state, regional, local,
                  municipal or other government, or any department, commission,
                  board, bureau, agency, public authority or instrumentality
                  thereof, or any court or arbitrator.

         GUARANTEED PENSION PLAN. Any employee pension benefit plan within the
                  meaning of ss.3(2) of ERISA maintained or contributed to by
                  the Borrowers or any ERISA Affiliate the benefits of which are
                  guaranteed on termination in full or in part by the PBGC
                  pursuant to Title IV of ERISA, other than a Multiemployer
                  Plan.

         HAZARDOUS SUBSTANCES.  See ss.7.18(b).

         HEADQUARTERS FACILITY. The Borrowers headquarters building and related
                  real estate located at 14051 N.W. 14th Street, Sunrise,
                  Florida 33323.

         INDEBTEDNESS. As to any Person and whether recourse is secured by or is
                  otherwise available against all or only a portion of the
                  assets of such Person and whether or not contingent, but
                  without duplication:

                  (a)      every obligation of such Person for money borrowed,

                  (b)      every obligation of such Person evidenced by bonds,
                           debentures, notes or other similar instruments,
                           including obligations incurred in connection with the
                           acquisition of property, assets or businesses,

                  (c)      every reimbursement obligation of such Person with
                           respect to letters of credit, bankers' acceptances or
                           similar facilities issued for the account of such
                           Person,

                  (d)      every obligation of such Person issued or assumed as
                           the deferred purchase price of property or services
                           (including securities repurchase agreements but
                           excluding trade accounts payable or accrued
                           liabilities arising in the ordinary course of
                           business which are not overdue or which are being
                           contested in good faith),

                  (e)      every obligation of such Person under any Capitalized
                           Lease,

                  (f)      every obligation of such Person under any Synthetic
                           Lease,

                  (g)      all sales by such Person of (i) accounts or general
                           intangibles for money due or to become due, (ii)
                           chattel paper, instruments or documents creating or

                                      -12-
<PAGE>

                           evidencing a right to payment of money or (iii) other
                           receivables (collectively "RECEIVABLES"), -----------
                           whether pursuant to a purchase facility or otherwise,
                           other than in connection with the disposition of the
                           business operations of such Person relating thereto
                           or a disposition of defaulted receivables for
                           collection and not as a financing arrangement, and
                           together with any obligation of such Person to pay
                           any discount, interest, fees, indemnities, penalties,
                           recourse, expenses or other amounts in connection
                           therewith,

                  (h)      every obligation of such Person (an "EQUITY RELATED
                           PURCHASE OBLIGATION") to purchase, redeem, retire or
                           otherwise acquire for value any shares of Capital
                           Stock issued by such Person or any rights measured by
                           the value of such Capital Stock,

                  (i)      every obligation of such Person under any forward
                           contract, futures contract, swap, option or other
                           financing agreement or arrangement (including,
                           without limitation, caps, floors, collars and similar
                           agreements), the value of which is dependent upon
                           interest rates, currency exchange rates, commodities
                           or other indices (a "DERIVATIVE CONTRACT"),

                  (j)      every obligation in respect of Indebtedness of any
                           other entity (including any partnership in which such
                           Person is a general partner) to the extent that such
                           Person is liable therefor as a result of such
                           Person's ownership interest in or other relationship
                           with such entity, except to the extent that the terms
                           of such Indebtedness provide that such Person is not
                           liable therefor and such terms are enforceable under
                           applicable law,

                  (k)      every obligation, contingent or otherwise, of such
                           Person guaranteeing, or having the economic effect of
                           guarantying or otherwise acting as surety for, any
                           obligation of a type described in any of clauses (a)
                           through (j) (the "PRIMARY OBLIGATION") of another
                           Person (the "PRIMARY OBLIGOR"), in any manner,
                           whether directly or indirectly, and including,
                           without limitation, any obligation of such Person (i)
                           to purchase or pay (or advance or supply funds for
                           the purchase of) any security for the payment of such
                           primary obligation, (ii) to purchase property,
                           securities or services for the purpose of assuring
                           the payment of such primary obligation, or (iii) to
                           maintain working capital, equity capital or other
                           financial statement condition or liquidity of the
                           primary obligor so as to enable the primary obligor
                           to pay such primary obligation.

                  The "AMOUNT" or "PRINCIPAL AMOUNT" of any Indebtedness at any
                  time of determination represented by (t) any Indebtedness,
                  issued at a price that is less than the principal amount at
                  maturity thereof, shall be the amount of the liability in
                  respect thereof determined in accordance with GAAP, (u) any
                  Capitalized Lease shall be the principal component of the
                  aggregate of the rentals obligation under such Capitalized
                  Lease payable over the term thereof that is not subject to
                  termination by the lessee, (v) any sale of receivables shall
                  be the amount of unrecovered capital or principal investment
                  of the purchaser (other than the Borrowers or any of their
                  wholly-owned Subsidiaries) thereof, excluding amounts

                                      -13-
<PAGE>

                  representative of yield or interest earned on such investment,
                  (w) any Synthetic Lease shall be the stipulated loss value,
                  termination value or other equivalent amount, (x) any
                  derivative contract shall be the maximum amount of any net
                  termination or loss payment required to be paid by such Person
                  if such derivative contract were, at the time of
                  determination, to be terminated by reason of any event of
                  default or early termination event thereunder, whether or not
                  such event of default or early termination event has in fact
                  occurred, (y) any equity related purchase obligation shall be
                  the maximum fixed redemption or purchase price thereof
                  inclusive of any accrued and unpaid dividends to be comprised
                  in such redemption or purchase price and (z) any guaranty or
                  other contingent liability referred to in clause (k) shall be
                  an amount equal to the stated or determinable amount of the
                  primary obligation in respect of which such guaranty or other
                  contingent obligation is made or, if not stated or
                  determinable, the maximum reasonably anticipated liability in
                  respect thereof (assuming such Person is required to perform
                  thereunder) as determined by such Person in good faith.

         INELIGIBLE SECURITIES. Securities which may not be underwritten or
                  dealt in by member banks of the Federal Reserve System under
                  Section 16 of the Banking Act of 1933 (12 U.S.C. ss.24,
                  Seventh), as amended.

         INTEREST PAYMENT DATE. (a) As to any Base Rate Loan, the last day of
                  the calendar month with respect to interest accrued during
                  such calendar month, including, without limitation, the
                  calendar month which includes the Drawdown Date of such Base
                  Rate Loan; (b) as to any Eurodollar Rate Loan, the last day of
                  such Interest Period and (c) following the occurrence of any
                  Event of Default, with such frequency as may be determined by
                  the Administrative Agent.

         INTEREST PERIOD. With respect to each Revolving Credit Loan, (a)
                  initially, the period commencing on the Drawdown Date of such
                  Loan and ending on the last day of one of the periods set
                  forth below, as selected by the Borrowers' Representative in a
                  Loan Request or as otherwise required by the terms of this
                  Agreement (i) for any Base Rate Loan, the last day of the
                  calendar month; and (ii) for any Eurodollar Rate Loan, 1, 2 or
                  3 months; and (b) thereafter, each period commencing on the
                  last day of the next preceding Interest Period applicable to
                  such Revolving Credit Loan and ending on the last day of one
                  of the periods set forth above, as selected by the Borrowers'
                  Representative in a Conversion Request; PROVIDED that all of
                  the foregoing provisions relating to Interest Periods are
                  subject to the following:

                  (A)      if any Interest Period with respect to a Eurodollar
                           Rate Loan would otherwise end on a day that is not a
                           Eurodollar Business Day, that Interest Period shall
                           be extended to the next succeeding Eurodollar

                                      -14-
<PAGE>

                           Business Day unless the result of such extension
                           would be to carry such Interest Period into another
                           calendar month, in which event such Interest Period
                           shall end on the immediately preceding Eurodollar
                           Business Day;

                  (B)      if any Interest Period with respect to a Base Rate
                           Loan would end on a day that is not a Business Day,
                           that Interest Period shall end on the next succeeding
                           Business Day;

                  (C)      if the Borrowers' Representative shall fail to give
                           notice as provided in ss.2.10, the Borrowers shall be
                           deemed to have requested a conversion of the affected
                           Eurodollar Rate Loan to a Base Rate Loan and the
                           continuance of all Base Rate Loans as Base Rate Loans
                           on the last day of the then current Interest Period
                           with respect thereto;

                  (D)      any Interest Period relating to any Eurodollar Rate
                           Loan that begins on the last Eurodollar Business Day
                           of a calendar month (or on a day for which there is
                           no numerically corresponding day in the calendar
                           month at the end of such Interest Period) shall end
                           on the last Eurodollar Business Day of a calendar
                           month; and

                  (E)      any Interest Period that would otherwise extend
                           beyond the Maturity Date.

         INTEREST RATE AGREEMENT. Any interest rate swap agreement, interest
                  rate cap agreement, interest rate collar agreement, interest
                  rate futures contract, interest rate option agreement or other
                  similar agreement or arrangement to which the Borrowers and
                  the Administrative Agent is a party, designed to protect the
                  Borrowers against fluctuations in interest rates.

         INTERIM CONCENTRATION ACCOUNT. Deposit Accounts (other than Local
                  Accounts and the Fleet Concentration Account) with financial
                  institutions which have entered into Control Agreements.

         INVENTORY. With respect to the Borrowers, finished goods, work in
                  progress and raw materials and component parts inventory owned
                  by the Borrowers.

         INVENTORY ADVANCE RATE. On the Closing Date, 56.5% as such amount is
                  adjusted from time to time by the Administrative Agent in its
                  reasonable discretion (determined in accordance with its
                  customary credit considerations) to reflect changes in the
                  nature and quality of the Borrowers' Inventory; PROVIDED,
                  HOWEVER, the Inventory Advance Rate may not exceed 64% without
                  the consent of all Lenders.

         INVENTORY RESERVES. Such reserves as may be established from time to
                  time by the Administrative Agent in the Administrative Agent's
                  discretion with respect to the determination of shrink, the
                  saleability, at retail, of the Eligible Inventory or which
                  reflect such other factors as affect the market value of the
                  Eligible Inventory.

                                      -15-
<PAGE>

         INVESTMENTS. All expenditures made and all liabilities incurred
                  (contingently or otherwise) for the acquisition of stock or
                  Indebtedness of, or for loans, advances, capital contributions
                  or transfers of property to, or in respect of any guaranties
                  (or other commitments as described under Indebtedness), or
                  obligations of, any Person. In determining the aggregate
                  amount of Investments outstanding at any particular time: (a)
                  the amount of any Investment represented by a guaranty shall
                  be taken at not less than the principal amount of the
                  obligations guaranteed and still outstanding; (b) there shall
                  be included as an Investment all interest accrued with respect
                  to Indebtedness constituting an Investment unless and until
                  such interest is paid; (c) there shall be deducted in respect
                  of each such Investment any amount received as a return of
                  capital (but only by repurchase, redemption, retirement,
                  repayment, liquidating dividend or liquidating distribution);
                  (d) there shall not be deducted in respect of any Investment
                  any amounts received as earnings on such Investment, whether
                  as dividends, interest or otherwise, except that accrued
                  interest included as provided in the foregoing clause (b) may
                  be deducted when paid; and (e) there shall not be deducted
                  from the aggregate amount of Investments any decrease in the
                  value thereof.

         ISRAELI SUBSIDIARY ASSETS. $1,924,910.35 owed by Exclusive Diamonds
                  International, Ltd. to Mayor's pursuant to the judgment issued
                  by the United States District Court, Southern District of
                  Florida, on January 16, 2002.

         LENDER AFFILIATE. (a) With respect to any Lender, (i) an Affiliate of
                  such Lender or (ii) any entity (whether a corporation,
                  partnership, limited liability company, trust or legal entity)
                  that is engaged in making, purchasing, holding or otherwise
                  investing in bank loans and similar extensions of credit in
                  the ordinary course of its business and is administered or
                  managed by such Lender or an Affiliate of such Lender and (b)
                  with respect to any Lender that is a fund which invests in
                  bank loans and similar extensions of credit, any other entity
                  (whether a corporation, partnership, limited liability
                  company, trust or other legal entity) that is a fund that
                  invests in bank loans and similar extensions of credit and is
                  managed by the same investment advisor as such Lender or by an
                  Affiliate of such investment advisor.

         LENDERS. The Revolving Credit Lenders and the Tranche B Lender.

         LETTER OF CREDIT. See ss.4.1.1.

         LETTER OF CREDIT APPLICATION. See ss.4.1.1.

         LETTER OF CREDIT FEE. See ss.4.6.

         LETTER OF CREDIT ISSUER. Fleet or such other Person selected by the
                  Administrative Agent to issue Letters of Credit.

         LETTER OF CREDIT PARTICIPATION. See ss.4.1.4.

                                      -16-
<PAGE>

         LIEN. Any mortgage, deed of trust, security interest, pledge,
                  hypothecation, assignment, attachment, deposit arrangement,
                  encumbrance, lien (statutory, judgment or otherwise), or other
                  security agreement or preferential arrangement of any kind or
                  nature whatsoever (including any conditional sale or other
                  title retention agreement, any Capitalized Lease, any
                  Synthetic Lease, any financing lease involving substantially
                  the same economic effect as any of the foregoing and the
                  filing of any financing statement under the UCC or comparable
                  law of any jurisdiction).

         LOAN DOCUMENTS. This Agreement, the Notes, the Letter of Credit
                  Applications, the Letters of Credit and the Security
                  Documents.

         LOAN REQUEST. See ss.2.9.

         LOANS. The Revolving Credit Loans and the Tranche B Loan.

         LOCAL ACCOUNTS. Deposit Accounts maintained for the benefit of a
                  single retail location of the Borrowers.

         LOAN ACCOUNT.  See ss.2.7.1.

         MATERIAL ADVERSE EFFECT. With respect to any event or occurrence of
                  whatever nature (including any adverse determination in any
                  litigation, arbitration or governmental investigation or
                  proceeding):

                  (a)      a material adverse effect on the business,
                           properties, financial condition, assets, operations
                           or income of Mayor's, Mayor's Fla or the Borrowers
                           and their Subsidiaries, taken as a whole;

                  (b)      any material impairment of the ability of the
                           Borrowers taken as a whole, to perform any of their
                           respective Obligations under any of the Loan
                           Documents to which it is a party; or

                  (c)      any impairment of the validity, binding effect or
                           enforceability of this Agreement or any of the other
                           Loan Documents, any impairment of the rights,
                           remedies or benefits available to the Administrative
                           Agent or any Lender under any Loan Document or any
                           impairment of the attachment, perfection or priority
                           of any Lien of the Administrative Agent under the
                           Security Documents.

         MATURITY DATE. May 30, 2005.

         MAXIMUM DRAWING AMOUNT. The maximum aggregate amount that the
                  beneficiaries may at any time draw under outstanding Letters
                  of Credit, as such aggregate amount may be reduced from time
                  to time pursuant to the terms of the Letters of Credit.

         MAYOR'S. See preamble.

         MAYOR'S FLA. See preamble.

         MOODY'S. Moody's Investors Services, Inc.

                                      -17-
<PAGE>

         MORTGAGED PROPERTY. The Headquarters Facility and any Real Estate which
                  is subject to any Mortgage.

         MORTGAGE. The mortgage, dated or to be dated on or prior to the Closing
                  Date, from Mayor's to the Administrative Agent with respect to
                  the fee interest of Mayor's in the Headquarters Facility and
                  in form and substance satisfactory to the Lender and the
                  Administrative Agent.

         MULTIEMPLOYER PLAN. Any multiemployer plan within the meaning
                  of ss.3(37) of ERISA maintained or contributed to by the
                  Borrowers or any ERISA Affiliate.

         NET PROCEEDS. With respect to any sale or issuance by Mayor's of
                  its Capital Stock or Indebtedness, the excess of the gross
                  cash proceeds received by Mayor's for such sale or issuance
                  after deduction of all transfer and sales taxes and reasonable
                  and customary transaction expenses (including, without
                  limitation, underwriting discounts and commissions) actually
                  incurred in connection with such a sale or other issuance.

         NOTES. The Revolving Credit Notes and Tranche B Notes.

         OBLIGATIONS. (a) All indebtedness, obligations and liabilities of any
                  of the Borrowers and their Subsidiaries to any of the Lenders
                  and the Administrative Agent, individually or collectively,
                  existing on the date of this Agreement or arising thereafter,
                  direct or indirect, joint or several, absolute or contingent,
                  matured or unmatured, liquidated or unliquidated, secured or
                  unsecured, arising by contract, operation of law or otherwise,
                  to the extent arising or incurred under this Agreement or any
                  of the other Loan Documents or any Interest Rate Agreement or
                  in respect of any of the Loans made or Reimbursement
                  Obligations incurred or any of the Notes, Letter of Credit
                  Application, Letter of Credit or other instruments at any time
                  evidencing any thereof.

                           (b) Any and all direct or indirect liabilities,
                  debts, and obligations of the Borrowers to the Administrative
                  Agent or any Affiliate of the Administrative Agent, each of
                  every kind, nature, and description owing on account of any
                  service or accommodation provided to, or for the account of
                  the Borrowers pursuant to this or any other Loan Document,
                  including cash management services or any other fee based
                  banking products.

         OPERATING ACCOUNT.  See ss.2.9.2.

         OUTSTANDING. With respect to the Loans, the aggregate unpaid principal
                  thereof as of any date of determination.

         OVERLOAN: A Loan, advance, or providing of credit support (such as the
                  issuance of any Letter of Credit) to the extent that,
                  immediately after its having been made, Availability is less
                  than $0.

                                      -18-
<PAGE>

         PARTICIPANT. Any Person that acquires a direct or indirect
                  participation in a Lender's rights and obligations under this
                  Agreement and the other Loan Documents.

         PBGC. The Pension Benefit Guaranty Corporation created by ss.4002 of
                  ERISA and any successor entity or entities having similar
                  responsibilities.

         PERFECTION CERTIFICATE. See ss.7.14.1.

         PERMITTED LIENS. Liens permitted by ss.9.2.

         PERMITTED STORE CLOSINGS. The closing of the Borrowers' retail
                  locations listed on SCHEDULE 9.9 hereto and, with the consent
                  of the Administrative Agent, the closing by the Borrowers of
                  two (2) other retail locations per fiscal year.

         PERSON. Any individual, corporation, limited liability company
                  partnership, limited liability partnership, trust, other
                  unincorporated association, business, or other legal entity,
                  and any Governmental Authority.

         PRIVATE LABEL ACCOUNTS. Accounts Receivable due on the Borrowers'
                  private label credit card programs.

         PROTECTIVE OVERADVANCES. Revolving Credit Loans which are OverLoans or
                  which are made at such time as there is a Default, but as to
                  which each of the following conditions is satisfied: (a) the
                  Total Commitment is not exceeded, (b) when aggregated with all
                  other Protective OverAdvances, such Revolving Credit Loans do
                  not aggregate more than 5% of the aggregate of the Borrowing
                  Base, (c) Protective OverAdvances may not be outstanding for
                  more than 45 consecutive Business Days or more than twice in
                  any twelve month period without the consent of the
                  SuperMajority Lenders and the Tranche B Lender and (d) such
                  Revolving Credit Loans are made or undertaken in the
                  Administrative Agent's sole discretion to protect and preserve
                  the interests of the Lenders.

         RCRA. See ss.7.18(a).

         REAL ESTATE. All real property at any time owned or leased (as
                  lessee or sublessee) by the Borrowers or any of their
                  Subsidiaries.

         RECEIPTS.All cash, cash equivalents, money, checks, credit card slips,
                  receipts and other Proceeds from any sale of the Collateral.

         RECORD. The grid attached to a Note, or the continuation of such grid,
                  or any other similar record, including computer records,
                  maintained by any Lender with respect to any Loan referred to
                  in such Note.

         REGISTER. See ss.2.7.1.

         REIMBURSEMENT OBLIGATION. The Borrowers' obligation to reimburse the
                  Letter of Credit Issuer and the Lenders on account of any
                  drawing under any Letter of Credit as provided in ss.4.2.

                                      -19-
<PAGE>

         REQUIRED LENDERS. As of any date, the Lenders whose aggregate
                  Commitments constitutes at least fifty-one percent (51%) (the
                  "Required Lenders Percentage") of the Commitments; PROVIDED,
                  HOWEVER, until such time as FRFI's and the Tranche B Lender's
                  aggregate Commitments constitutes less than fifty-one percent
                  (51%) of the Commitments, the Required Lenders Percentage
                  shall be fifty-six percent (56%).

         REQUIRED REVOLVING CREDIT LENDERS. As of any date, the Revolving Credit
                  Lenders whose aggregate Commitments constitutes at least
                  fifty-five percent (55%) of the Total Commitment.

         RESTRICTED PAYMENT. In relation to the Borrowers and their
                  Subsidiaries, any (a) Distribution, (b) payment or prepayment
                  by the Borrowers or their Subsidiaries to the Borrowers' or
                  any Subsidiary's shareholders (or other equity holders), in
                  each case, other than to the Borrowers, or to any Affiliate of
                  the Borrowers or any Subsidiary or any Affiliate of the
                  Borrowers' or such Subsidiary's shareholders (or other equity
                  holders), in each case, other than to the Borrowers or (c)
                  derivatives or other transactions with any financial
                  institution, commodities or stock exchange or clearinghouse (a
                  "DERIVATIVES COUNTERPARTY") obligating the Borrowers or any
                  Subsidiary to make payments to such Derivatives Counterparty
                  as a result of any change in market value of any Capital Stock
                  of the Borrowers or such Subsidiary.

         RESTRUCTURING ADVISOR. Phoenix Management Services, Inc. or any other
                  restructuring advisor of the Borrowers' acceptable to the
                  Administrative Agent.

         RESERVES. The following: Availability Reserves and Inventory Reserves.

         REVOLVING CREDIT EARLY TERMINATION FEE.  See ss.2.4.

         REVOLVING CREDIT LENDERS. Fleet and the other lending institutions
                  listed on SCHEDULE 1 hereto and any other Person who becomes
                  an assignee of any rights and obligations of a Revolving
                  Credit Lender pursuant to ss.15.

         REVOLVING CREDIT LOANS. Revolving credit loans made or to be made by
                  the Revolving Credit Lenders to the Borrowers pursuant to
                  ss.2.

         REVOLVING CREDIT NOTE RECORD. A Record with respect to a Revolving
                  Credit Note.

         REVOLVING CREDIT NOTES.  See ss.2.7.2.

         ROLEX LIENS. Liens on Inventory of the Borrowers consisting of Rolex
                  watches in favor of Rolex Watch U.S.A., Inc. to the extent
                  that such liens are junior and subordinate to the Liens
                  securing the Obligations on terms and conditions satisfactory
                  to the Administrative Agent.

         SARA.  See ss.7.18(a).

         SECURITY DOCUMENTS. This Agreement, the Mortgage, the Trademark
                  Assignment, the Stock Pledge Agreement and all other

                                      -20-
<PAGE>

                  instruments and documents, including without limitation
                  Uniform Commercial Code financing statements, required to be
                  executed or delivered pursuant to any Security Document.

         SETTLEMENT. The making or receiving of payments, in immediately
                  available funds, by the Revolving Credit Lenders, to the
                  extent necessary to cause each Revolving Credit Lender's
                  actual share of the outstanding amount of Revolving Credit
                  Loans (after giving effect to any Loan Request) to be equal to
                  such Revolving Credit Lender's Commitment Percentage of the
                  outstanding amount of such Revolving Credit Loans (after
                  giving effect to any Loan Request), in any case where, prior
                  to such event or action, the actual share is not so equal.

         SETTLEMENT AMOUNT.  See ss.2.13.1.

         SETTLEMENT DATE. (a) The Drawdown Date relating to any Loan Request
                  which would cause the Swing Line Loan to exceed the Swing Line
                  Ceiling, (b) at the option of the Administrative Agent, on any
                  Business Day following a day on which the account officers of
                  the Administrative Agent active upon the Borrowers' account
                  become aware that a Default exists, (c) at the option of the
                  Administrative Agent, the Business Day following notice to the
                  Lenders of the Administrative Agents intent to effect a
                  Settlement, (d) any Business Day on which the amount of
                  Revolving Credit Loans outstanding from FRFI PLUS FRFI's
                  Commitment Percentage of the sum of the Maximum Drawing Amount
                  and any Unpaid Reimbursement Obligations is equal to or
                  greater than FRFI's Commitment Percentage of the Total
                  Commitment, (e) the Business Day immediately following any
                  Business Day on which the amount of Swing Line Loans exceeds
                  the Swing Line Ceiling, (f) if it is a Business Day, Wednesday
                  of each week or (g) any Business Day on which (i) the amount
                  of outstanding Revolving Credit Loans decreases and (ii) the
                  amount of the Administrative Agent's Revolving Credit Loans
                  outstanding equals zero Dollars ($0).

         SETTLING LENDER. See ss.2.13.1.

         S&P. Standard & Poor's Ratings Group.

         STANDSTILL TERMINATION DATE. Any date (a) that an Event of Default
                  under Section 13.1(g), (h) or (j) exists, (b) on which an
                  Event of Default exists under Section 13.1(a) or (b) and has
                  existed for at least fifteen (15) consecutive days prior to
                  such date, (c) on which Availability is less than $0 and (i)
                  fifteen (15) days prior to such date Availability was less
                  than $0 and during such fifteen (15) day period there was no
                  period of three (3) consecutive days in which Availablity was
                  equal to or exceeded $0 or (ii) during the forty-five (45)
                  days prior to such date Availability was less than $0 for
                  twenty-five (25) or more days during such period, and (d) the
                  date which is thirty (30) days after the Tranche B Lender has
                  given notice to the Administrative Agent that an Event of
                  Default in respect of ss.10.1 has occurred.

                                      -21-
<PAGE>

         STOCK PLEDGE AGREEMENT. The Stock Pledge Agreement, dated or to be
                  dated on or prior to the Closing Date, among certain of the
                  Borrowers and the Administrative Agent and in form and
                  substance satisfactory to the Administrative Agent.

         SUBSIDIARY. Any corporation, association, trust, or other business
                  entity of which the designated parent shall at any time own
                  directly or indirectly through a Subsidiary or Subsidiaries at
                  least a majority (by number of votes) of the outstanding
                  Voting Stock.

         SUPERMAJORITY LENDERS. As of any date, Revolving Credit Lenders holding
                  at least sixty-six and two thirds percent (66 2/3%) of the
                  outstanding principal amount of the Revolving Credit Notes on
                  such date; and if no such principal is outstanding, the
                  Revolving Credit Lenders whose aggregate Commitments
                  constitute at least sixty-six and two thirds percent (66 2/3%)
                  of the Total Commitment.

         SWING LINE CEILING.  $10,000,000.

         SWING LINE LOANS. Revolving Credit Loans made by the Administrative
                  Agent to the Borrowers pursuant to ss.2.9.2.

         SYNTHETIC LEASE. Any lease of goods or other property, whether real or
                  personal, which is treated as an operating lease under GAAP
                  and as a loan or financing for U.S. income tax purposes.

         TITLE INSURANCE COMPANY.  LandAmerica.

         TITLE POLICY. In relation to each Mortgaged Property, an ALTA
                  standard form title insurance policy issued by the Title
                  Insurance Company (with such reinsurance or co-insurance as
                  the Administrative Agent may require, any such reinsurance to
                  be with direct access endorsements) in such amount as may be
                  determined by the Administrative Agent insuring the priority
                  of the Mortgage of such Mortgaged Property and that the
                  Borrowers or one of their Subsidiaries holds marketable fee
                  simple title to such Mortgaged Property, subject only to the
                  encumbrances permitted by such Mortgage and which shall not
                  contain exceptions for mechanics liens, persons in occupancy
                  or matters which would be shown by a survey (except as may be
                  permitted by such Mortgage), shall not insure over any matter
                  except to the extent that any such affirmative insurance is
                  acceptable to the Administrative Agent in its reasonable
                  discretion, and shall contain such endorsements and
                  affirmative insurance as the Administrative Agent in its
                  discretion may require, including but not limited to (a)
                  comprehensive endorsement, (b) variable rate of interest
                  endorsement, (c) revolving credit endorsement and (d) Florida
                  survey endorsement.

         TOTAL COMMITMENT. The sum of the Commitments of the Revolving Credit
                  Lenders, as in effect from time to time.

         TRADEMARK ASSIGNMENTS. The several Trademark Collateral Security and
                  Pledge Agreements, dated or to be dated on the Closing Date,
                  made by the Borrowers and their Subsidiaries in favor of the

                                      -22-
<PAGE>

                  Administrative Agent and the Assignments of Trademarks and
                  Trademarks executed in connection therewith, all in form and
                  substance satisfactory to the Lenders and the Administrative
                  Agent.

         TRANCHE B BORROWING BASE.  The aggregate of the following:

                  (a)      The lesser of (i) the face amount of Eligible Credit
                           Card Receivables MULTIPLIED BY the Credit Card
                           Tranche B Advance Rate or (ii) the Appraised A/R
                           Tranche B Percentage of the Appraised A/R Liquidation
                           Value.

                           PLUS

                  (b)      The lesser of (a) the Cost of Eligible Inventory (net
                           of Inventory Reserves) MULTIPLIED BY 66.5% or (b)
                           100% of the Appraised Inventory Liquidation Value.

                           PLUS

                  (c)      (i) Prior to the sale of the Headquarters Facility,
                           the lesser of (A) $4,000,000 and (B) the Determined
                           Value of Eligible Fixed Assets and (ii) after the
                           sale of the Headquarters Facility, $0.

         TRANCHE B EARLY TERMINATION FEE. See ss.3.3.

         TRANCHE B FEE LETTER. The fee letter dated as of May 30, 2002, among
                  the Borrowers and the Tranche B Lender.

         TRANCHE B INVENTORY ADVANCE RATE. 66.5% or such higher percentage as
                  determined by the Tranche B Lender.

         TRANCHE B LENDER.  Back Bay Capital Funding LLC.

         TRANCHE B LENDER FEES. See ss.5.2.

         TRANCHE  B LOAN. The Tranche B Loan made or to be made by the Tranche B
                  Lender to the Borrowers on the Closing Date originally in the
                  aggregate principal amount of $12,500,000 pursuant to ss.3.1.

         TRANCHE B LOAN PIK INTEREST. See ss.3.4.(b).

         TRANCHE B NOTES.  See ss.3.2.

         TYPE. As to any Revolving Credit Loan, its nature as a Base Rate
                  Loan or a Eurodollar Rate Loan.

         UNIFORM COMMERCIAL CODE. The Uniform Commercial Code of the
                  Commonwealth of Massachusetts.

         UNPAID REIMBURSEMENT OBLIGATION. Any Reimbursement Obligation for
                  which the Borrowers do not reimburse the Administrative Agent
                  and the Lenders on the date specified in, and in accordance
                  with, ss.4.2.

                                      -23-
<PAGE>

         UNUSED FEE.  Seess.2.3.

         VOTING STOCK. Stock or similar interests, of any class or classes
                  (however designated), the holders of which are at the time
                  entitled, as such holders, to vote for the election of a
                  majority of the directors (or persons performing similar
                  functions) of the corporation, association, trust or other
                  business entity involved, whether or not the right so to vote
                  exists by reason of the happening of a contingency.

         1.2.  RULES OF INTERPRETATION.

                  (a) A reference to any document or agreement shall include
         such document or agreement as amended, modified or supplemented from
         time to time in accordance with its terms and the terms of this
         Agreement.

                  (b) The singular includes the plural and the plural includes
         the singular.

                  (c) A reference to any law includes any amendment or
         modification to such law.

                  (d) A reference to any Person includes its permitted
         successors and permitted assigns.

                  (e) Accounting terms not otherwise defined herein have the
         meanings assigned to them by GAAP applied on a consistent basis by the
         accounting entity to which they refer.

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

                  (g) All terms not specifically defined herein or by GAAP,
         which terms are defined in the Uniform Commercial Code as in effect in
         the Commonwealth of Massachusetts, have the meanings assigned to them
         therein, with the term "INSTRUMENT" being that defined under Article 9
         of the Uniform Commercial Code.

                  (h) Reference to a particular "ss." refers to that section of
         this Agreement unless otherwise indicated.

                  (i) The words "herein", "hereof", "hereunder" and words of
         like import shall refer to this Agreement as a whole and not to any
         particular section or subdivision of this Agreement.

                  (j) Unless otherwise expressly indicated, in the computation
         of periods of time from a specified date to a later specified date, the
         word "from" means "from and including," the words "to" and "until" each
         mean "to but excluding," and the word "through" means "to and
         including."

                  (k) This Agreement and the other Loan Documents may use
         several different limitations, tests or measurements to regulate the
         same or similar matters. All such limitations, tests and measurements
         are, however, cumulative and are to be performed in accordance with the
         terms thereof.

                                      -24-
<PAGE>

                  (l) Text which is shown in ITALICS (except for parenthesized
         italicized text), shown in BOLD, shown IN ALL CAPITAL LETTERS, or in
         any combination of the foregoing, shall be deemed to be conspicuous.

                  (m)  The words "may not" are prohibitive and not permissive.

                  (n) Any reference to a Person's "knowledge" (or words of
         similar import) are to such Person's knowledge assuming that such
         Person has undertaken reasonable and diligent investigation with
         respect to the subject of such "knowledge" (whether or not such
         investigation has actually been undertaken).

                  (o) This Agreement and the other Loan Documents are the result
         of negotiation among, and have been reviewed by counsel to, among
         others, the Administrative Agent and the Borrowers and are the product
         of discussions and negotiations among all parties. Accordingly, this
         Agreement and the other Loan Documents are not intended to be construed
         against the Administrative Agent or any of the Lenders merely on
         account of the Administrative Agent's or any Lender's involvement in
         the preparation of such documents.

                        2. THE REVOLVING CREDIT FACILITY.

2.1. COMMITMENT TO LEND. Subject to the terms and conditions set forth in this
Agreement, each of the Revolving Credit Lenders severally agrees to lend to the
Borrowers, and the Borrowers on a joint and several basis may borrow, repay, and
reborrow from time to time from the Closing Date up to but not including the
Maturity Date upon notice by the Borrowers' Representative to the Administrative
Agent given in accordance with ss.2.9, such sums as are requested by the
Borrowers' Representative up to a maximum aggregate amount outstanding (after
giving effect to all amounts requested) at any one time equal to such Revolving
Credit Lender's Commitment MINUS such Revolving Credit Lender's Commitment
Percentage of the sum of the Maximum Drawing Amount and all Unpaid Reimbursement
Obligations, PROVIDED that the Administrative Agent and the Revolving Credit
Lenders shall have no obligation to make any Revolving Credit Loans which would
constitute an OverLoan and the Borrowers shall never allow Availability to be
less than $0. Each request for a Revolving Credit Loan hereunder shall
constitute a representation and warranty by the Borrowers that the conditions
set forth in ss.11 and ss.12, in the case of the initial Revolving Credit Loans
to be made on the Closing Date, and ss.12, in the case of all other Revolving
Credit Loans, have been satisfied on the date of such request. No Revolving
Credit Lender has any obligation to make any Revolving Credit Loan, or otherwise
to provide any credit to or for the benefit of the Borrowers where the result of
such loan, advance, or credit is an OverLoan.

2.2. MATURITY. The Borrowers jointly and severally promise to pay on the
Maturity Date, and there shall become absolutely due and payable on the Maturity
Date, all of the Revolving Credit Loans outstanding on such date, together with
any and all accrued and unpaid interest thereon.

2.3. UNUSED FEE. The Borrowers jointly and severally agree to pay to the
Administrative Agent for the accounts of the Revolving Credit Lenders in
accordance with their respective Commitment Percentages a commitment fee (the
"UNUSED FEE") calculated at the rate of three eighth's of one percent (0.375%)
on the average daily amount during each calendar month or portion thereof from
the date hereof to the Maturity Date by which the Total Commitment MINUS the sum
of the Maximum Drawing Amount and all Unpaid Reimbursement Obligations exceeds
the outstanding amount of Revolving Credit Loans during such calendar month. The
Unused Fee shall be payable monthly in arrears on the first day of each month

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for the immediately preceding month commencing on the first such date following
the date hereof, with a final payment on the Maturity Date or any earlier date
on which the Commitments shall terminate.

2.4. REDUCTION OF COMMITMENT. The Borrowers shall have the right, at any time
and from time to time upon five (5) Business Days written notice to the
Administrative Agent, to reduce by $5,000,000 or an integral multiple of
$1,000,000 in excess thereof, or terminate entirely the Total Commitment,
whereupon the Commitments of the Revolving Credit Lenders shall be reduced PRO
RATA in accordance with their respective Commitment Percentages of the amount
specified in such notice, or as the case may be, terminated. Promptly after
receiving any notice of the Borrowers delivered pursuant to this ss.2.4, the
Administrative Agent will notify the Revolving Credit Lenders of the substance
thereof. If the Borrowers repay or prepay all outstanding Revolving Credit Loans
or the Total Commitment is reduced or terminated during the period commencing on
the Closing Date and ending on the second anniversary of the Closing Date in a
single transaction or series of related transactions, the Borrowers shall pay to
the Administrative Agent a premium in an amount equal to the Commitment
Reduction Fee of the amount of the reduction of the Total Commitment or on the
amount of the Total Commitment immediately prior to such repayment or prepayment
or the first of a related series of prepayments or repayments, as the case may
be (the "REVOLVING CREDIT EARLY TERMINATION FEE"); PROVIDED, HOWEVER, no
Revolver Early Termination Fee shall be due if the Total Commitment is
terminated in connection with the Borrowers entering into a new credit facility
agented by the FRFI. No reduction or termination of the Total Commitment may be
reinstated. The "COMMITMENT REDUCTION FEE" shall be one percent (1%); PROVIDED,
HOWEVER, if an Approved Recapitalization has occurred, the Commitment Reduction
Fee shall be one-half of one percent (0.5%) during the period from the date of
the Approved Recapitalization through the day which is ninety (90) days
following the Closing Date.

2.5. MANDATORY REPAYMENTS OF REVOLVING CREDIT LOANS. If at any time Availability
is less than $0 or there is an OverLoan, then the Borrowers shall immediately
pay to the Administrative Agent for the respective accounts of the Revolving
Credit Lenders for application amounts necessary so that Availability is $0 or
greater and there are no OverLoans to be applied: first, to any Unpaid
Reimbursement Obligations; second, to the Revolving Credit Loans; and third, to
provide to the Administrative Agent cash collateral for Reimbursement
Obligations as contemplated by ss.4.2(b) and (c). Each payment of any Unpaid
Reimbursement Obligations or prepayment of Revolving Credit Loans shall be
allocated among the Revolving Credit Lenders, in proportion, as nearly as
practicable, to each Reimbursement Obligation or (as the case may be) the
respective unpaid principal amount of each Revolving Credit Lender's Revolving
Credit Note, with adjustments to the extent practicable to equalize any prior
payments or repayments not exactly in proportion.

2.6. OPTIONAL REPAYMENTS OF REVOLVING CREDIT LOANS. The Borrowers shall have the
right, at their election, to repay the outstanding amount of the Revolving
Credit Loans, as a whole or in part, at any time without penalty or premium,
PROVIDED that any full or partial prepayment of the outstanding amount of any
Eurodollar Rate Loans pursuant to this ss.2.6 may be made only on the last day
of the Interest Period relating thereto. Except for repayments of the Revolving
Credit Loans as contemplated by ss.2.14 the Borrowers' Representative shall give
the Administrative Agent, no later than 12:00 noon, Boston time, at least one
(1) Business Day prior written notice of any proposed prepayment pursuant to
this ss.2.6 of Base Rate Loans, and three (3) Eurodollar Business Days notice of
any proposed prepayment pursuant to this ss.2.6 of Eurodollar Rate Loans, in
each case, specifying the proposed date of prepayment of Revolving Credit Loans
and the principal amount to be prepaid. Each such partial prepayment of the

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Revolving Credit Loans shall be in an amount equal to $1,000,000 or an integral
multiple of $1,000,000 in excess thereof, shall be accompanied by the payment of
accrued interest on the principal prepaid to the date of prepayment and shall be
applied, in the absence of instruction by the Borrowers' Representative, first
to the principal of Base Rate Loans and then to the principal of Eurodollar Rate
Loans. Each partial prepayment shall be allocated among the Lenders, in
proportion, as nearly as practicable, to the respective unpaid principal amount
of each Lender's Revolving Credit Note, with adjustments to the extent
practicable to equalize any prior repayments not exactly in proportion.

2.7.  THE LOAN ACCOUNT AND REVOLVING CREDIT NOTES.

2.7.1.   LOAN ACCOUNT. An account ("LOAN ACCOUNT") shall be opened on the books
         of the Administrative Agent in which a record shall be kept of all
         Revolving Credit Loans. The Administrative Agent shall also keep a
         record (either in the Loan Account or elsewhere, as the Administrative
         Agent may from time to time elect) (such record the "REGISTER") of the
         name and addresses of the Revolving Credit Lenders, the Commitment
         Percentage of the Revolving Credit Lenders, all interest, fees, service
         charges, costs, expenses, and other debits owed to the Administrative
         Agent and each Revolving Credit Lender on account of the Obligations
         and of all credits against such amounts so owed. The Borrowers
         irrevocably authorize the Administrative Agent to make or cause to be
         made, at or about the time of the Drawdown Date of any Revolving Credit
         Loan or at the time of receipt of any payment of principal on the Loan
         Account, an appropriate notation on the Loan Account reflecting the
         making of such Revolving Credit Loan or (as the case may be) the
         receipt of such payment, but the failure to record, or any error in so
         recording, any such amount on the Loan Account shall not limit or
         otherwise affect the obligations of the Borrowers hereunder or under
         any Revolving Credit Loan to make payments of principal of or interest
         on any Revolving Credit Loan when due. The Borrowers jointly and
         severally promise to pay all of the Obligations in accordance with the
         provisions of this Agreement. All credits against the Obligations shall
         be conditional upon final payment to the Administrative Agent for the
         account of each Revolving Credit Lender of the items giving rise to
         such credits. The amount of any item credited against the Obligations
         due to the Revolving Credit Lenders which is charged back against the
         Administrative Agent or any Revolving Credit Lender for any reason or
         is not so paid shall be an Obligation and shall be added to the Loan
         Account, whether or not the item so charged back or not so paid is
         returned. Any statement rendered by the Administrative Agent to the
         Borrowers concerning the Obligations shall be considered correct and
         accepted (absent manifest error) by the Borrowers and shall be
         conclusively binding upon the Borrowers unless the Borrowers'
         Representative provides the Administrative Agent with written objection
         thereto within thirty (30) days from the mailing of such statement,
         which written objection shall indicate, with reasonable particularity,
         the reason for such objection. The Loan Account, the Register and the
         Administrative Agent's books and records concerning the loan
         arrangement contemplated herein and the Obligations shall be prima
         facie evidence and proof of the items described therein. The Loan
         Account and Register shall be available for inspection by the
         Borrowers' Representative and the Revolving Credit Lenders at any
         reasonable time and from time to time upon reasonable prior notice.

2.7.2.   REVOLVING CREDIT NOTES. At the request of any Revolving Credit Lender
         the Borrowers shall deliver to such Revolving Credit Lender separate
         promissory notes of the Borrowers in substantially the form of EXHIBIT
         B hereto (each a "REVOLVING CREDIT NOTE"), dated as of the Closing Date

                                      -27-
<PAGE>

         (or such other date on which a Revolving Credit Lender may become a
         party hereto in accordance with ss.15 hereof) and completed with
         appropriate insertions. Each Revolving Credit Note shall be payable to
         the order of such Revolving Credit Lender in a principal amount equal
         to such Revolving Credit Lender's Commitment or, if less, the
         outstanding amount of all Revolving Credit Loans made by such Revolving
         Credit Lender, plus interest accrued thereon, as set forth below. No
         Revolving Credit Note shall be required to establish or prove any
         Obligation. In the event that any Revolving Credit Note is ever lost,
         mutilated, or destroyed, the Borrowers shall execute a replacement
         thereof and deliver such replacement to the Administrative Agent;
         PROVIDED, HOWEVER, in the event that a Revolving Credit Note is to be
         exchanged following its acceleration or the entry of an order for
         relief under the Bankruptcy Code with respect to the Borrowers, the
         Administrative Agent, in lieu of causing the Borrowers to execute one
         or more new Revolving Credit Notes, may issue the Agent's Certificate
         confirming the resulting Lender's Commitment and Percentage
         Commitments.

2.8.  INTEREST ON REVOLVING CREDIT LOANS.

2.8.1.  ACCRUAL OF INTEREST.  Except as otherwise provided in ss.5.10,

                           (a) Each Revolving Credit Loan which is a Base Rate
                  Loan shall bear interest for the period commencing with the
                  Drawdown Date thereof and ending on the last day of the
                  Interest Period with respect thereto at the rate per annum
                  equal to the Base Rate PLUS the Applicable Margin with respect
                  to Base Rate Loans as in effect from time to time.

                           (b) Each Revolving Credit Loan which is a Eurodollar
                  Rate Loan shall bear interest for the period commencing with
                  the Drawdown Date thereof and ending on the last day of the
                  Interest Period with respect thereto at the rate per annum
                  equal to the Eurodollar Rate determined for such Interest
                  Period PLUS the Applicable Margin with respect to Eurodollar
                  Rate Loans as in effect from time to time.

                           The Borrowers jointly and severally promise to pay
                  interest on each Revolving Credit Loan in arrears on each
                  Interest Payment Date with respect thereto.

2.8.2.   AUTOMATIC DEBIT OF INTEREST. The Administrative Agent, without the
         request of the Borrowers, may make Revolving Credit Loans to pay any
         interest, fee, service charge, or other payment to which the
         Administrative Agent or any Lender is entitled from the Borrowers
         pursuant hereto and may charge the same to the Loan Account
         notwithstanding that an OverLoan may result thereby. Such action on the
         part of the Administrative Agent shall not constitute a waiver of the
         Administrative Agent's rights and the Borrowers' obligations under
         ss.13. Any amount which is added to the principal balance of the Loan
         Account as provided in this ss.2.8.2 shall bear interest at the
         interest rate then and thereafter applicable to Base Rate Loans.

2.9.  REQUESTS FOR REVOLVING CREDIT LOANS.

2.9.1.   GENERAL. The Borrowers' Representative shall give to the Administrative
         Agent written notice in the form of EXHIBIT C hereto (or telephonic
         notice confirmed in a writing in the form of EXHIBIT C hereto) of each
         Revolving Credit Loan requested hereunder (a "LOAN REQUEST") no later
         than (a) 12:00 noon on the Business Day of the proposed Drawdown Date
         of any Base Rate Loan and (b) 1:00 p.m. three (3) Eurodollar Business
         Days prior to the proposed Drawdown Date of any Eurodollar Rate Loan.
         Each such notice shall specify (i) the principal amount of the
         Revolving Credit Loan requested, (ii) the proposed Drawdown Date of

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<PAGE>

         such Revolving Credit Loan, (iii) the Interest Period for such
         Revolving Credit Loan and (iv) the Type of such Revolving Credit Loan.
         Promptly upon receipt of any such notice, but in any event no later
         than [2:00PM] on the proposed Drawdown Date, the Administrative Agent
         shall notify each of the Revolving Credit Lenders thereof. Each Loan
         Request shall be irrevocable and binding on the Borrowers and shall
         obligate the Borrowers to accept the Revolving Credit Loan requested
         from the Lenders on the proposed Drawdown Date. Each Loan Request shall
         be in a minimum aggregate amount of $1,000,000 or an integral multiple
         of $1,000,000 in excess thereof.

2.9.2.   SWING LINE. Notwithstanding the notice and minimum amount requirements
         set forth in ss.2.9.1 but otherwise in accordance with the terms and
         conditions of this Agreement (except with respect to Protective
         OverAdvances), the Administrative Agent may, in its sole discretion and
         without conferring with the Lenders, make Revolving Credit Loans to the
         Borrowers (a) by entry of credits to the Borrowers' operating account
         or such other account (the "OPERATING ACCOUNT") with the Administrative
         Agent to cover checks or other charges which the Borrowers have drawn
         or made against such account, (b) in an amount as otherwise requested
         by the Borrowers or (c) as Protective OverAdvances. The Borrowers
         hereby request and authorize the Administrative Agent to make from time
         to time such Revolving Credit Loans by means of appropriate entries of
         such credits sufficient to cover checks and other charges then
         presented for payment from the Operating Account or as otherwise so
         requested. The Borrowers acknowledge and agree that the making of such
         Revolving Credit Loans shall, in each case, be subject in all respects
         to the provisions of this Agreement as if they were Revolving Credit
         Loans covered by a Loan Request including, without limitation, the
         limitations set forth in ss.2.1 and the requirements that the
         applicable provisions of ss.11 (in the case of Revolving Credit Loans
         made on the Closing Date) and ss.12 be satisfied (except in the case of
         Protective OverAdvances). All actions taken by the Administrative Agent
         pursuant to the provisions of this ss.2.9.2 shall be conclusive and
         binding on the Borrowers and the Revolving Credit Lenders absent the
         Administrative Agent's gross negligence or willful misconduct.
         Revolving Credit Loans made pursuant to this ss.2.9.2 shall be Base
         Rate Loans until converted in accordance with the provisions of the
         Agreement and, prior to a Settlement, such interest shall be for the
         account of the Administrative Agent.

2.10.  CONVERSION OPTIONS.

2.10.1.  CONVERSION TO DIFFERENT TYPE OF REVOLVING CREDIT LOAN. The Borrowers'
         Representative may elect from time to time to convert any outstanding
         Revolving Credit Loan to a Revolving Credit Loan of another Type,
         PROVIDED that (a) with respect to any such conversion of a Eurodollar
         Rate Loan to a Base Rate Loan, the Borrowers' Representative shall give
         the Administrative Agent at least one (1) Business Days prior written
         notice of such election; (b) with respect to any such conversion of a
         Base Rate Loan to a Eurodollar Rate Loan, the Borrowers' Representative
         shall give the Administrative Agent at least three (3) Eurodollar
         Business Days prior written notice of such election; (c) with respect
         to any such conversion of a Eurodollar Rate Loan into a Base Rate Loan,
         such conversion shall only be made on the last day of the Interest
         Period with respect thereto and (d) no Revolving Credit Loan may be
         converted into a Eurodollar Rate Loan when any Default has occurred and
         is continuing. On the date on which such conversion is being made each

                                      -29-
<PAGE>

         Revolving Credit Lender shall take such action as is necessary to
         transfer its Commitment Percentage of such Revolving Credit Loans to
         its Domestic Lending Office or its Eurodollar Lending Office, as the
         case may be. All or any part of outstanding Revolving Credit Loans of
         any Type may be converted into a Revolving Credit Loan of another Type
         as provided herein, PROVIDED that any partial conversion shall be in an
         aggregate principal amount of $1,000,000 or an integral multiple of
         $1,000,000 in excess thereof. Each Conversion Request relating to the
         conversion of a Revolving Credit Loan to a Eurodollar Rate Loan shall
         be irrevocable by the Borrowers.

2.10.2.  CONTINUATION OF TYPE OF REVOLVING CREDIT LOAN. Any Revolving Credit
         Loan of any Type may be continued as a Revolving Credit Loan of the
         same Type upon the expiration of an Interest Period with respect
         thereto by compliance by the Borrowers with the notice provisions
         contained in ss.2.10.1; PROVIDED that no Eurodollar Rate Loan may be
         continued as such when any Default has occurred and is continuing, but
         shall be automatically converted to a Base Rate Loan on the last day of
         the first Interest Period relating thereto ending during the
         continuance of any Default of which officers of the Administrative
         Agent active upon the Borrowers' account have actual knowledge. In the
         event that the Borrowers fail to provide any such notice with respect
         to the continuation of any Eurodollar Rate Loan as such, then such
         Eurodollar Rate Loan shall be automatically converted to a Base Rate
         Loan on the last day of the first Interest Period relating thereto. The
         Administrative Agent shall notify the Lenders promptly when any such
         automatic conversion contemplated by this ss.2.10.2 is scheduled to
         occur.

2.10.3.  EURODOLLAR RATE LOANS. Any conversion to or from Eurodollar Rate Loans
         shall be in such amounts and be made pursuant to such elections so
         that, after giving effect thereto, the aggregate principal amount of
         all Eurodollar Rate Loans having the same Interest Period shall not be
         less than $1,000,000 or an integral multiple of $1,000,000 in excess
         thereof. No more than 5 Eurodollar Rate Loans having different Interest
         Periods may be outstanding at any time.

2.11.  FUNDS FOR REVOLVING CREDIT LOAN.

2.11.1.  FUNDING PROCEDURES. Not later than 3:00 p.m. (Boston time) on the
         proposed Drawdown Date of any Revolving Credit Loans, each of the
         Revolving Credit Lenders will make available to the Administrative
         Agent, at the Administrative Agent's Office, in immediately available
         funds, the amount of such Revolving Credit Lender's Commitment
         Percentage of the amount of the requested Revolving Credit Loans. Upon
         receipt from each Revolving Credit Lender of such amount, and upon
         receipt of the documents required by ss.ss.11 and 12 and the
         satisfaction of the other conditions set forth therein, to the extent
         applicable, the Administrative Agent will make available to the
         Borrowers' Representative the aggregate amount of such Revolving Credit
         Loans made available to the Administrative Agent by the Revolving
         Credit Lenders. The failure or refusal of any Revolving Credit Lender
         to make available to the Administrative Agent at the aforesaid time and
         place on any Drawdown Date the amount of its Commitment Percentage of
         the requested Revolving Credit Loans shall not relieve any other
         Revolving Credit Lender from its several obligation hereunder to make
         available to the Administrative Agent the amount of such other
         Revolving Credit Lender's Commitment Percentage of any requested
         Revolving Credit Loans.

2.11.2.  ADVANCES BY ADMINISTRATIVE AGENT. The Administrative Agent may, unless
         notified to the contrary by any Revolving Credit Lender prior to a
         Drawdown Date, assume that such Revolving Credit Lender has made

                                      -30-
<PAGE>

         available to the Administrative Agent on such Drawdown Date the amount
         of such Revolving Credit Lender's Commitment Percentage of the
         Revolving Credit Loans to be made on such Drawdown Date, and the
         Administrative Agent may (but it shall not be required to), in reliance
         upon such assumption, make available to the Borrowers a corresponding
         amount. If any Revolving Credit Lender makes available to the
         Administrative Agent such amount on a date after such Drawdown Date,
         such Revolving Credit Lender shall pay to the Administrative Agent on
         demand all such costs and expenses as may be incurred by the
         Administrative Agent in the enforcement of the Administrative Agent's
         rights against such Revolving Credit Lender plus an amount equal to the
         greater of (a) the amount of interest actually paid by the Borrowers on
         account of such amounts or (b) the product of (i) the average computed
         for the period referred to in clause (iii) below, of the weighted
         average interest rate paid by the Administrative Agent for federal
         funds acquired by the Administrative Agent during each day included in
         such period, TIMES (ii) the amount of such Revolving Credit Lender's
         Commitment Percentage of such Revolving Credit Loans, TIMES (iii) a
         fraction, the numerator of which is the number of days that elapse from
         and including such Drawdown Date to the date on which the amount of
         such Revolving Credit Lender's Commitment Percentage of such Revolving
         Credit Loans shall become immediately available to the Administrative
         Agent, and the denominator of which is 360. A statement of the
         Administrative Agent submitted to such Revolving Credit Lender with
         respect to any amounts owing under this paragraph shall be PRIMA FACIE
         evidence of the amount due and owing to the Revolving Credit
         Administrative Agent by such Revolving Credit Lender. If the amount of
         such Lender's Commitment Percentage of such Revolving Credit Loans is
         not made available to the Administrative Agent by such Revolving Credit
         Lender within three (3) Business Days following such Drawdown Date, the
         Administrative Agent shall be entitled to recover such amount from the
         Borrowers on demand, with interest thereon at the rate per annum
         applicable to the Revolving Credit Loans made on such Drawdown Date.

2.11.3.  LIMITATION OF LIABILITY. There shall not be any recourse to or
         liability of the Administrative Agent or any Lender, on account of: (a)
         any delay in the making of any Revolving Credit Loan, (b) any delay by
         any bank or other depository institution in treating the proceeds of
         any such Revolving Credit Loan as collected funds or (c) any delay in
         the receipt, and/or any loss, of funds which constitute a Revolving
         Credit Loan, the wire transfer of which was properly initiated by the
         Administrative Agent in accordance with wire instructions provided to
         the Administrative Agent by the Borrowers.

2.12.   BORROWING BASE/REDUCTIONS TO AVAILABILITY.

2.12.1.  CHANGE IN BORROWING BASE. The Borrowing Base shall be determined weekly
         (or at such other interval as may be specified pursuant to ss.8.4(f))
         by the Administrative Agent by reference to the Borrowing Base Report,
         commercial finance and collateral audit reports, and the appraisals of
         Eligible Fixed Assets, Inventory and Private Label Accounts delivered
         to the Lenders and the Administrative Agent pursuant to ss.8.4(h) and
         other information obtained by or provided to the Administrative Agent.
         Without in any way limiting the Administrative Agent's right to modify
         them at any time in the future, as of the Closing Date the current
         Reserves are as set forth on SCHEDULE 2.12.1 hereto. In determining
         whether to reduce the lending formula(s), the Administrative Agent may
         consider events, conditions, contingencies or risks which are also

                                      -31-
<PAGE>

         considered in determining Eligible Accounts Receivable, Eligible
         Inventory or in establishing the Reserves; PROVIDED, HOWEVER, that such
         reduction lending formula shall not be based upon any event, condition,
         contingency or risk to the extent that a Reserve has been established.
         The Administrative Agent shall give to the Borrowers' Representative
         five (5) days written notice of its determination of the actual
         Borrowing Base and Availability taking into account such Reserves as
         the Administrative Agent may reasonably determine as being applicable
         thereto and shall have discussed its basis for such determination with
         the Borrowers' Representative if the Borrowers' Representative shall so
         request.

2.12.2.  RISK OF VALUE OF COLLATERAL. The Administrative Agent's reference to a
         given asset in connection with the making of Loans and advances and the
         providing of financial accommodations under this Agreement and/or the
         monitoring of compliance with the provisions hereof shall not be deemed
         a determination by the Administrative Agent or any Lender relative to
         the actual value of the asset in question. All risks concerning the
         value of the Collateral are and remain upon the Borrowers. All
         Collateral secures the prompt, punctual, and faithful performance of
         the Obligations whether or not relied upon by the Administrative Agent
         in connection with the making of Loans, credits, and advances and the
         providing of financial accommodations under this Agreement.

2.12.3.  REDUCTIONS TO AVAILABILITY. In the determination of Availability, the
         Administrative Agent may deem fees, service charges, accrued interest,
         and other payments which will be due and payable between the date of
         such determination and the first day of the then next succeeding month
         as having been advanced as Revolving Credit Loans whether or not such
         amounts are then due and payable.

2.13.  SETTLEMENTS.

2.13.1.  GENERAL. On each Settlement Date, the Administrative Agent shall, not
         later than 12:00 noon (Boston time), give telephonic or facsimile
         notice (a) to the Revolving Credit Lenders and the Borrowers of the
         respective outstanding amount of Revolving Credit Loans made by the
         Administrative Agent on behalf of the Revolving Credit Lenders from the
         immediately preceding Settlement Date through the close of business on
         the prior day and the amount of any Eurodollar Rate Loans to be made
         (following the giving of notice pursuant to ss.2.9.1) on such date
         pursuant to a Loan Request and (b) to the Revolving Credit Lenders of
         the amount (a "SETTLEMENT AMOUNT") that each Revolving Credit Lender (a
         "SETTLING LENDER") shall pay to effect a Settlement of any Revolving
         Credit Loan. A statement of the Administrative Agent submitted to the
         Revolving Credit Lenders and the Borrowers or to the Revolving Credit
         Lenders with respect to any amounts owing under this ss.2.13.1 shall be
         PRIMA FACIE evidence of the amount due and owing (absent manifest
         error). Each Settling Lender shall, not later than 3:00 p.m. (Boston
         time) on such Settlement Date, effect a wire transfer of immediately
         available funds to the Administrative Agent in the amount of the
         Settlement Amount for such Settling Lender. All funds advanced by any
         Lender as a Settling Lender pursuant to this ss.2.13.1 shall for all
         purposes be treated as a Revolving Credit Loan made by such Settling
         Lender to the Borrowers and all funds received by any Revolving Credit
         Lender pursuant to this ss.2.13.1 shall for all purposes be treated as
         repayment of amounts owed with respect to Revolving Credit Loans made
         by such Revolving Credit Lender. In the event that any bankruptcy,
         reorganization, liquidation, receivership or similar cases or

                                      -32-
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         proceedings in which any Borrower is a debtor prevent a Settling Lender
         from making any Revolving Credit Loan to effect a Settlement as
         contemplated hereby, such Settling Lender will make such dispositions
         and arrangements with the other Revolving Credit Lenders with respect
         to such Revolving Credit Loans, either by way of purchase of
         participations, distribution, PRO TANTO assignment of claims,
         subrogation or otherwise as shall result in each Revolving Credit
         Lender's share of the outstanding Revolving Credit Loans being equal,
         as nearly as may be, to such Revolving Credit Lender's Commitment
         Percentage of the outstanding amount of the Revolving Credit Loans.

2.13.2.  FAILURE TO MAKE FUNDS AVAILABLE. The Administrative Agent may, unless
         notified to the contrary by any Settling Lender prior to a Settlement
         Date, assume that such Settling Lender has made or will make available
         to the Administrative Agent on such Settlement Date the amount of such
         Settling Lender's Settlement Amount, and the Administrative Agent may
         (but it shall not be required to), in reliance upon such assumption,
         make available to the Borrowers a corresponding amount. If any Settling
         Lender makes available to the Administrative Agent such amount on a
         date after such Settlement Date, such Settling Lender shall pay to the
         Administrative Agent on demand an amount equal to the product of (a)
         the average computed for the period referred to in clause (c) below, of
         the weighted average interest rate paid by the Administrative Agent for
         federal funds acquired by the Administrative Agent during each day
         included in such period, times (b) the amount of such Settlement
         Amount, times (c) a fraction, the numerator of which is the number of
         days that elapse from and including such Settlement Date to the date on
         which the amount of such Settlement Amount shall become immediately
         available to the Administrative Agent, and the denominator of which is
         360. A statement of the Administrative Agent submitted to such Settling
         Lender with respect to any amounts owing under this ss.2.13.2 shall be
         prima facie evidence of the amount due and owing to the Administrative
         Agent by such Settling Lender (absent manifest error). If such Settling
         Lender's Settlement Amount is not made available to the Administrative
         Agent by such Settling Lender within three (3) Business Days following
         such Settlement Date, the Administrative Agent shall be entitled to
         recover such amount from the Borrowers on demand, with interest thereon
         at the rate per annum applicable to the Revolving Credit Loans as of
         such Settlement Date.

2.13.3.  NO EFFECT ON OTHER LENDERS. The failure or refusal of any Settling
         Lender to make available to the Administrative Agent at the aforesaid
         time and place on any Settlement Date the amount of such Settling
         Lender's Settlement Amount shall not (a) relieve any other Settling
         Lender from its several obligations hereunder to make available to the
         Administrative Agent the amount of such other Settling Lender's
         Settlement Amount or (b) impose upon any Lender, other than the
         Settling Lender so failing or refusing, any liability with respect to
         such failure or refusal or otherwise increase the Commitment of such
         other Lender.

2.14.  REPAYMENTS OF REVOLVING CREDIT LOANS ABSENT AN EVENT OF DEFAULT.

2.14.1.  CREDIT FOR FUNDS RECEIVED IN CONCENTRATION ACCOUNT. (a) All funds and
         cash proceeds in the form of money, checks and like items received in
         the Fleet Concentration Account as contemplated by ss.8.14 shall be
         credited, on the next Business Day on which the Administrative Agent
         determines that good collected funds have been received, and, prior to
         the receipt of good collected funds, on a provisional basis until final
         receipt of good collected funds, and applied as contemplated by
         ss.2.14.2, or as applicable, ss.13.4, (b) all funds and cash proceeds
         in the form of a wire transfer received in the Fleet Concentration
         Account as contemplated by ss.8.14 shall be credited on the next
         Business Day as the Administrative Agent's receipt of such amounts (or

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<PAGE>

         up to such later date as the Administrative Agent determines that good
         collected funds have been received), and applied as contemplated by
         ss.2.14.2, or as applicable, ss.13.4, and (c) all funds and cash
         proceeds in the form of an automated clearing house transfer received
         in the Fleet Concentration Account as contemplated by ss.8.14 shall be
         credited, on the next Business Day following the Administrative Agent's
         receipt of such amounts (or up to such later date as the Administrative
         Agent determines that good collected funds have been received), and
         applied as contemplated by ss.2.14.2, or as applicable, ss.13.4. For
         purposes of the foregoing provisions of this ss.2.14.1, the
         Administrative Agent shall not be deemed to have received any such
         funds or cash proceeds on any day unless received by the Administrative
         Agent before 2:00 p.m. (Boston time) on such day. The Borrowers further
         acknowledge and agree that any such provisional credits or credits in
         respect of wire or automatic clearing house funds transfers shall be
         subject to reversal if final collection in good funds of the related
         item is not received by, or final settlement of the funds transfer is
         not made in favor of, the Administrative Agent in accordance with the
         Administrative Agent's customary procedures and practices for
         collecting provisional items or receiving settlement of funds
         transfers. No Revolving Credit Lender shall have any interest in, or
         right to receive any part of any interest which reflects amounts
         described in the provisions of this Section 2.14.1.

2.14.2.  APPLICATION OF PAYMENTS ABSENT AN EVENT OF DEFAULT.

                           (a) Absent an Event of Default of which the account
                  officers of the Administrative Agent active on the Borrowers'
                  account have knowledge, all funds transferred to the Fleet
                  Concentration Account and for which the Borrowers have
                  received credits shall be applied to the Obligations as
                  follows:

                                    (i) first, to pay amounts then due and
                           payable under this Agreement, the Notes and the other
                           Loan Documents;

                                    (ii) second, to reduce Swing Line Loans made
                           by the Administrative Agent and for which Settlement
                           has not then been made;

                                    (iii) third, to reduce other Revolving
                           Credit Loans which are Base Rate Loans;

                                    (iv) fourth, to reduce Revolving Credit
                           Loans which are Eurodollar Rate Loans; and

                                    (v) fifth, except as otherwise required
                           by ss.2.14.2(b) and (c), to the Operating Account.

                           (b) All prepayments of Eurodollar Rate Loans prior to
                  the end of an Interest Period shall obligate the Borrowers to
                  pay any breakage costs associated with such Eurodollar Rate
                  Loans in accordance with ss.5.9. Prior to the occurrence of an
                  Event of Default, the Borrowers may elect to avoid such
                  breakage costs by providing to the Administrative Agent cash
                  in an amount sufficient to cash collateralize such Eurodollar
                  Rate Loans, but in no event shall the Borrowers be deemed to
                  have paid such Eurodollar Rate Loans until such cash has been
                  paid to the Administrative Agent for application to such

                                      -34-
<PAGE>

                  Eurodollar Rate Loans. The Administrative Agent may elect to
                  cause such cash collateral to be deposited into a cash
                  collateral account pursuant to the terms of a cash collateral
                  agreement executed by the Borrowers and the Administrative
                  Agent and in form and substance satisfactory to the
                  Administrative Agent. In each such case, the Borrowers agree
                  to execute and deliver to the Administrative Agent such
                  instruments and documents, including Uniform Commercial Code
                  financing statements and agreements with any third party
                  depository banks, as the Administrative Agent may request.

                           (c) All prepayments of the Revolving Credit Loans
                  pursuant to this ss.2.14.2 shall be allocated among the
                  Revolving Credit Lenders making such Revolving Credit Loans,
                  in proportion, as nearly as practicable, to the respective
                  unpaid principal amount of such Revolving Credit Loans
                  outstanding, with adjustments to the extent practicable to
                  equalize any prior payments or repayments not exactly in
                  proportion. Prior to any Settlement Date, however, all
                  prepayments of the Revolving Credit Loans shall be applied in
                  accordance with this ss.2.14.2, first to outstanding Revolving
                  Credit Loans of the Administrative Agent.

2.15. REPAYMENTS OF REVOLVING CREDIT LOANS AFTER EVENT OF DEFAULT. Following the
occurrence and during the continuance of an Event of Default of which the
account officers of the Administrative Agent active on the Borrower's account
have knowledge, all funds transferred to the Fleet Concentration Account and for
which the Borrowers have received credits shall be applied to the Obligations in
accordance with ss.13.4.

2.16. OVERLOANS AND PROTECTIVE OVERADVANCES.

2.16.1.  PROTECTIVE OVERADVANCES. NOTWITHSTANDING ANY PROVISION CONTAINED IN
         THIS AGREEMENT TO THE CONTRARY, THE ADMINISTRATIVE AGENT MAY (WITHOUT
         ANY OBLIGATION TO DO SO) IN ITS SOLE AND ABSOLUTE DISCRETION MAKE
         PROTECTIVE OVERADVANCES TO THE BORROWERS WHICH WOULD CONSTITUTE
         OVERLOANS.

2.16.2.  OVERLOANS. Each Revolving Credit Lender recognizes that subsequent to
         the making of a Revolving Credit Loan which does not constitute a
         Protective OverAdvance, Availability may be less than $0 on account of
         changed circumstances beyond the control of the Administrative Agent
         (such as a drop in collateral value).

2.16.3.  NO OBLIGATION TO PROVIDE OVERLOANS. The Administrative Agent's and the
         Revolving Credit Lenders' providing of an OverLoan or Protective
         OverAdvance on any one occasion does not affect the obligations of the
         Borrowers hereunder (including the Borrowers' obligation to immediately
         repay any amount which otherwise constitutes an OverLoan) nor obligate
         the Revolving Credit Lenders or the Administrative Agent to do so on
         any other occasion.

                           3. THE TRANCHE B FACILITY.

3.1. COMMITMENT TO LEND. Subject to the terms and conditions set forth in this
Agreement, the Tranche B Lender agrees to lend to the Borrowers on the Closing
Date the principal amount of $12,500,000.

3.2. THE TRANCHE B LOAN NOTE. The Tranche B Loan shall be evidenced by a
separate promissory note of the Borrowers in substantially the form of EXHIBIT C
hereto (the "TRANCHE B NOTE"), dated the Closing Date, and completed with
appropriate insertions. The Borrowers irrevocably authorize the Tranche B Lender
to make or cause to be made a notation on the Tranche B Lender's records
reflecting the original principal amount of the Tranche B Loan and, at or about
the time of the Tranche B Lender's receipt of any principal payment on the
Tranche B Loan Note, an appropriate notation on the Tranche B Lender's records
reflecting such payment. The aggregate unpaid amount set forth on the Tranche B

                                      -35-
<PAGE>

Lender's records shall be PRIMA FACIE evidence of the principal amount thereof
owed and unpaid on the Tranche B Loan, but the failure to record, or any error
in so recording, any such amount on the Tranche B Lender's records shall not
affect the obligations of the Borrowers hereunder or under the Tranche B Loan
Note to make payments of principal of and interest on the Tranche B Loan Note
when due.

3.3. PAYMENTS OF PRINCIPAL OF TRANCHE B LOAN. Except as contemplated by ss.13.4,
the Borrowers may not make any principal payments on account of the Tranche B
Loan until the Borrowers' Obligations to the Revolving Credit Lenders have been
paid in full and the Commitments have been terminated; PROVIDED, HOWEVER, the
Borrowers may prepay the Tranche B Loan in its entirety if at such time (i) a
Default does not exist and one would not result from such prepayment, (ii) after
giving effect to such payment Availability is in excess of $10,000,00 and (iii)
the Borrowers shall have delivered to the Administrative Agent pro forma
financial statements for the next 12 months demonstrating, in form and substance
satisfactory to the Administrative Agent, that Availability will exceed
$10,000,000 at all times during the next 12 months after giving effect to the
prepayment of the Tranche B Loan. The Borrowers jointly and severally promise to
pay on the Maturity Date, and there shall become absolutely due and payable on
the Maturity Date, all of the Tranche B Loans outstanding on such date, together
with any and all accrued and unpaid interest thereon. If the Borrowers prepay
the Tranche B Loans in whole or in part, the Borrowers shall pay a premium with
respect to each such prepayment (the "TRANCHE B EARLY TERMINATION FEE") in an
amount determined in accordance with the percentages set forth in the following
table opposite the period during which such prepayment is made:

<TABLE>
<CAPTION>

                       PERIOD                                          PREPAYMENT PREMIUM
                       ------                                          ------------------
<S>                                                              <C>
Closing Date through the ninetieth (90th)                    (a) 4% of amount prepaid if an Approved
day following the Closing Date                          Recapitalization has not occurred or an Event of
                                                       Default exists and (b) 2% of the amount prepaid if
                                                            an Approved Recapitalization has occurred

Ninety first (91st) day following
the Closing Date up to the first anniversary of the
Closing Date                                                          4% of amount prepaid

First anniversary of
Closing Date up to the second
anniversary of Closing Date                                           3% of amount prepaid

Second anniversary of
Closing Date up to the third
anniversary of Closing Date                                           2% of amount prepaid

Thereafter                                                                     -0-

</TABLE>

3.4. INTEREST ON TRANCHE B LOAN. Except as otherwise provided in ss.ss.3.4(c)
and 16.12(c)(iv), the outstanding amount of the Tranche B Loan shall be

                                      -36-
<PAGE>

calculated on the basis of a three hundred sixty (360) day year and actual days
elapsed and shall bear interest until repaid at the rate per annum equal to
sixteen and one half percent (16.5%) prior to an Approved Recapitalization and
sixteen percent (16.0%) following an Approved Recapitalization (the "TRANCHE B
LOAN INTEREST RATE"). The Tranche B Loan Interest Rate, shall be payable as
follows:

         (a)      Accrued interest on the unpaid principal balance of the
                  Tranche B Loan at a rate per annum equal to thirteen and three
                  quarter percent (13.75%) prior to an Approved Recapitalization
                  and thirteen and one half percent (13.50%) following an
                  Approved Recapitalization ("TRANCHE B LOAN CURRENT PAY
                  INTEREST") shall be payable monthly in arrears, on the first
                  Business Day of each month (the "TRANCHE B LOAN INTEREST
                  PAYMENT DATE"), and on the Maturity Date.

         (b)      Accrued interest on the unpaid principal balance of the
                  Tranche B Loan in excess of Tranche B Loan Current Pay
                  Interest (which excess is referred to herein as "TRANCHE B
                  LOAN PIK INTEREST") shall be payable as follows:

                           (i)      Unless the payment would cause an OverLoan
                                    or the Tranche B Lender has been given
                                    written notice by the Borrowers'
                                    Representative at least three (3) Business
                                    Days prior to the relevant Tranche B Loan
                                    Interest Payment Date that the Borrowers are
                                    exercising their option to pay interest in
                                    kind (the "PIK ELECTION"), the Tranche B
                                    Loan PIK Interest will be due on such date
                                    in cash.

                           (ii)     If the Tranche B Lender has received a PIK
                                    Election or the payment would cause an
                                    OverLoan, all or any part of Tranche B Loan
                                    PIK Interest shall be paid by adding the
                                    same to the principal balance of the Tranche
                                    B Loan Note on that Tranche B Loan Interest
                                    Payment Date.

                           (iii)    At the direction of the Tranche B Lender,
                                    following the occurrence of any Default, all
                                    interest shall be paid in cash on each
                                    Tranche B Loan Interest Payment Date.

                  (c)      Following the occurrence of any Event of Default, at
                           the direction of the Tranche B Loan Lender, interest
                           shall accrue and shall be payable on the unpaid
                           principal balance of the Tranche B Loan at the
                           aggregate of the Tranche B Loan Interest Rate plus
                           three percent (3%) per annum.

3.5. TRANCHE B LOAN ANNIVERSARY FEE. Until the Tranche B Loan has been paid in
full, on each anniversary of the Closing Date the Borrowers shall pay an
anniversary fee to the Tranche B Lender as set forth in the Tranche B Fee
Letter.

3.6. PAYMENTS ON ACCOUNT OF TRANCHE B LOAN. The Borrowers authorize the
Administrative Agent to determine and to pay over directly to the Tranche B
Lender any and all amounts due and payable from time to time under or on account
of the Tranche B Loan as advances under the Revolving Credit Loans IT BEING
UNDERSTOOD, HOWEVER, that the authorization of the Administrative Agent provided
in this ss. 3.6 shall not excuse the Borrowers from fulfilling their obligations
to the Tranche B Lender on account of the Tranche B Loan nor place any
obligation on the Administrative Agent to do so. The Administrative Agent shall

                                      -37-
<PAGE>

provide prompt advice to the Borrowers of any amount which is so paid over by
the Administrative Agent to the Tranche B Lender pursuant to this ss.3.6. The
Borrowers shall not be entitled to any credit, rebate or repayment of any fee or
assessment previously earned by the Tranche B Lender pursuant to this Agreement
notwithstanding any termination of this Agreement or suspension or termination
of the Administrative Agent's and any Lender's respective obligation to make
loans and advances hereunder.

3.7. BUYOUT OPTION. At any time during any Buyout Exercise Period the Tranche B
Lender may (but shall not be obligated to) give notice to the Administrative
Agent (the "Buyout Acceptance Notice") of its intent to cause the assignment to
the Tranche B Lender, or its designee, by the Revolving Credit Lenders, of all
right, title and interest in, to, arising under or in respect of all Obligations
of the Revolving Credit Lenders. Such assignments shall be effected on the
Business Day which is not more than three (3) Business Days following the Buyout
Acceptance Notice by the execution, by the Revolving Credit Lenders, of an
Assignment and Acceptance in exchange for the payment, in immediately available
funds, of the amount of the Obligations in respect of the Revolving Credit Loans
(excluding the Revolving Credit Early Termination Fee) as of the date on which
such assignment is made. The Tranche B Lender's buy out right under this ss.3.7
may only be exercised completely with respect to all of the Obligations of the
Revolving Credit Lenders. Following its exercise of the buy out right under this
ss.3.7, the Tranche B Lender shall (a) not waive or alter the Revolving Credit
Early Termination Fee or alter the payment provisions in ss.13.4 to change when
the Revolving Credit Early Termination Fee would be paid and (b) upon receipt of
any amounts on account of the Revolving Credit Early Termination Fee, pay such
amounts to the Administrative Agent for the account of the Revolving Credit
Lenders in accordance with their Commitment Percentages as of the date of the
buy out under this ss.3.7.

                              4. LETTERS OF CREDIT.

4.1.  LETTER OF CREDIT COMMITMENTS.

4.1.1.   COMMITMENT TO ISSUE LETTERS OF CREDIT. Subject to the terms and
         conditions hereof and the execution and delivery by the Borrowers'
         Representative of a letter of credit application on the Letter of
         Credit Issuer's customary form (a "LETTER OF CREDIT APPLICATION"), the
         Borrowers' Representative may request that Administrative Agent cause
         the Letter of Credit Issuer to issue on behalf of the Revolving Credit
         Lenders and in reliance upon the agreement of the Revolving Credit
         Lenders set forth in ss.4.1.4 and upon the representations and
         warranties of the Borrowers contained herein, in its individual
         capacity, to issue, extend and renew for the account of the Borrowers
         one or more standby or documentary letters of credit (individually, a
         "LETTER OF CREDIT"), in such form as may be requested from time to time
         by the Borrowers' Representative and agreed to by the Letter of Credit
         Issuer; PROVIDED, HOWEVER, that, after giving effect to such request,
         (a) the sum of the aggregate Maximum Drawing Amount and all Unpaid
         Reimbursement Obligations shall not exceed $10,000,000 at any one time,
         (b) Availability is greater than $1 and (c) there are no OverLoans. In
         addition to the Letter of Credit Application, the Borrowers'
         Representative shall execute such other documents required by the
         Letter of Credit Issuer to apply for and support the issuance of a
         Letter of Credit. There shall not be any recourse to, nor liability of,
         the Administrative Agent or any Lender or Letter of Credit Issuer on
         account of any delay or refusal by any Letter of Credit Issuer to issue
         a Letter of Credit.

                  4.1.2. LETTER OF CREDIT APPLICATIONS. Each Letter of Credit
         Application shall be completed to the satisfaction of the
         Administrative Agent and the Letter of Credit Issuer. In the event that

                                      -38-
<PAGE>

         any provision of any Letter of Credit Application shall be inconsistent
         with any provision of this Agreement, then the provisions of this
         Agreement shall, to the extent of any such inconsistency, govern.

4.1.3.   TERMS OF LETTERS OF CREDIT. Each Letter of Credit issued, extended or
         renewed hereunder shall, among other things, (a) provide for the
         payment of sight drafts for honor thereunder when presented in
         accordance with the terms thereof and when accompanied by the documents
         described therein, and (b) have an expiry date no later than the
         earlier of (i) the date which is fourteen (14) days (or, if the Letter
         of Credit is confirmed by a confirmer or otherwise provides for one or
         more nominated persons, forty-five (45) days) prior to the Maturity
         Date and (ii) with respect to (A) standby Letters of Credit one (1)
         year after the date of issuance and (B) documentary Letters of Credit
         sixty (60) after the date of issuance . Each Letter of Credit so
         issued, extended or renewed shall be subject to the Uniform Customs and
         Practice for Documentary Credits (1993 Revision), International Chamber
         of Commerce Publication No. 500 or any successor version thereto
         adopted by the Letter of Credit Issuer in the ordinary course of its
         business as a letter of credit issuer and in effect at the time of
         issuance of such Letter of Credit (the "UNIFORM CUSTOMS") or, in the
         case of a standby Letter of Credit, either the Uniform Customs or the
         International Standby Practices (ISP98), International Chamber of
         Commerce Publication No. 590, or any successor code of standby letter
         of credit practices among banks adopted by the Letter of Credit Issuer
         in the ordinary course of its business as a standby letter of credit
         issuer and in effect at the time of issuance of such Letter of Credit.

4.1.4.   REIMBURSEMENT OBLIGATIONS OF REVOLVING CREDIT LENDERS. Each Revolving
         Credit Lender severally agrees that it shall be absolutely liable,
         without regard to whether a Default exists or any other condition
         precedent whatsoever, to the extent of such Revolving Credit Lender's
         Commitment Percentage, to reimburse the Letter of Credit Issuer and/or
         the Administrative Agent on demand for the amount of each draft paid by
         the Letter of Credit Issuer under each Letter of Credit to the extent
         that such amount is not reimbursed by the Borrowers pursuant to ss.4.2
         (such agreement for a Lender being called herein the "LETTER OF CREDIT
         PARTICIPATION" of such Revolving Credit Lender).

4.1.5.   PARTICIPATIONS OF REVOLVING CREDIT LENDERS. Each such payment made by a
         Revolving Credit Lender shall be treated as the purchase by such
         Revolving Credit Lender of a participating interest in the Borrowers'
         Reimbursement Obligation under ss.4.2 in an amount equal to such
         payment. Each Revolving Credit Lender shall share in accordance with
         its participating interest in any interest which accrues pursuant to
         ss.4.2.

4.2. REIMBURSEMENT OBLIGATION OF THE BORROWERS. In order to induce the
Administrative Agent to cause the Letter of Credit Issuer to issue, extend and
renew each Letter of Credit and the Revolving Credit Lenders to participate
therein, the Borrowers hereby jointly and severally agree to reimburse or pay to
the Administrative Agent and the Letter of Credit Issuer, for the account of the
Administrative Agent and the Letter of Credit Issuer or (as the case may be) the
Revolving Credit Lenders, with respect to each Letter of Credit issued, extended
or renewed by the Letter of Credit Issuer hereunder,

                  (a) except as otherwise expressly provided in ss.4.2(b) and
         (c), on each date that any draft presented under such Letter of Credit
         is honored by the Letter of Credit Issuer, or the Letter of Credit
         Issuer otherwise makes a payment with respect thereto, (i) the amount
         paid by the Letter of Credit Issuer under or with respect to such
         Letter of Credit, and (ii) the amount of any taxes, reasonable fees,
         charges or other costs and expenses whatsoever incurred by the Letter

                                      -39-
<PAGE>

         of Credit Issuer, the Administrative Agent or any Lender in connection
         with any payment made by the Letter of Credit Issuer, the
         Administrative Agent or any Revolving Credit Lender under, or with
         respect to, such Letter of Credit,

                  (b) upon the reduction (but not termination) of the Total
         Commitment to an amount less than the Maximum Drawing Amount, an amount
         equal to such difference, which amount shall be held by the
         Administrative Agent for the benefit of the Letter of Credit Issuer,
         the Revolving Credit Lenders and the Administrative Agent as cash
         collateral for all Reimbursement Obligations, and

                  (c) upon the termination of the Total Commitment, or the
         acceleration of the Reimbursement Obligations with respect to all
         Letters of Credit in accordance with ss.13, an amount equal to the then
         Maximum Drawing Amount on all Letters of Credit, which amount shall be
         held by the Administrative Agent for the benefit of the Letter of
         Credit Issuer, the Revolving Credit Lenders and the Administrative
         Agent as cash collateral for all Reimbursement Obligations.

         Each such payment shall be made to the Administrative Agent at the
Administrative Agent's Office in immediately available funds. Interest on any
and all amounts remaining unpaid by the Borrowers under this ss.4.2 at any time
from the date such amounts become due and payable (whether as stated in this
ss.4.2, by acceleration or otherwise) until payment in full (whether before or
after judgment) shall be payable to the Administrative Agent on demand at the
rate specified in ss.5.10 for overdue principal on the Revolving Credit Loans.
Notwithstanding the foregoing, the Administrative Agent, without the request of
the Borrowers, may advance Revolving Credit Loans in the amount of any honoring
of any Letter of Credit and other amount for which the Borrowers, the Letter of
Credit Issuer, the Administrative Agent or the Revolving Credit Lenders become
obligated on account of, or in respect to, any Letter of Credit. Such advance
shall be made whether or not a Default exists or such advance would result in an
OverLoan. Such action shall not constitute a waiver of the Administrative
Agent's and the Revolving Credit Lenders' rights under this Section 4.

4.3. LETTER OF CREDIT PAYMENTS. If any draft shall be presented or other demand
for payment shall be made under any Letter of Credit, the Letter of Credit
Issuer shall notify the Borrowers' Representative of the date and amount of the
draft presented or demand for payment and of the date and time when it expects
to pay such draft or honor such demand for payment. If the Borrowers'
Representative fails to reimburse the Letter of Credit Issuer and the
Administrative Agent as provided in ss.4.2 on or before the date that such draft
is paid or other payment is made by the Letter of Credit Issuer, the
Administrative Agent may at any time thereafter notify the Revolving Credit
Lenders of the amount of any such Unpaid Reimbursement Obligation. No later than
3:00 p.m. (Boston time) on the Business Day next following the receipt of such
notice, each Revolving Credit Lender shall make available to the Letter of
Credit Issuer in immediately available funds, such Revolving Credit Lender's
Commitment Percentage of such Unpaid Reimbursement Obligation, together with an
amount equal to the product of (a) the average, computed for the period referred

                                      -40-
<PAGE>

to in clause (c) below, of the weighted average interest rate paid by the Letter
of Credit Issuer for federal funds acquired by the Letter of Credit Issuer
during each day included in such period, TIMES (b) the amount equal to such
Revolving Credit Lender's Commitment Percentage of such Unpaid Reimbursement
Obligation, TIMES (c) a fraction, the numerator of which is the number of days
that elapse from and including the date the Letter of Credit Issuer paid the
draft presented for honor or otherwise made payment to the date on which such
Revolving Credit Lender's Commitment Percentage of such Unpaid Reimbursement
Obligation shall become immediately available to the Letter of Credit Issuer,
and the denominator of which is 360. The responsibility of the Administrative
Agent and the Letter of Credit Issuer to the Borrowers and the Revolving Credit
Lenders shall be only to determine that the documents (including each draft)
delivered under each Letter of Credit in connection with such presentment shall
be in conformity in all material respects with such Letter of Credit.

4.4. OBLIGATIONS ABSOLUTE. The Borrowers' obligations under this ss.4 shall be
absolute and unconditional under any and all circumstances and irrespective of
whether a Default exists or any condition precedent whatsoever or any setoff,
counterclaim or defense to payment which the Borrowers may have or have had
against the Letter of Credit Issuer, the Administrative Agent, any Revolving
Credit Lender or any beneficiary of a Letter of Credit. The Borrowers further
agree with the Letter of Credit Issuer, the Administrative Agent and the
Revolving Credit Lenders that the Letter of Credit Issuer, the Administrative
Agent and the Revolving Credit Lenders shall not be responsible for, and the
Borrower's Reimbursement Obligations under ss.4.2 shall not be affected by,
among other things, the validity or genuineness of documents or of any
endorsements thereon, even if such documents should in fact prove to be in any
or all respects invalid, fraudulent or forged, or any dispute between or among
the Borrowers, the beneficiary of any Letter of Credit or any financing
institution or other party to which any Letter of Credit may be transferred or
any claims or defenses whatsoever of the Borrowers against the beneficiary of
any Letter of Credit or any such transferee. The Letter of Credit Issuer, the
Administrative Agent and the Revolving Credit Lenders shall not be liable for
any error, omission, interruption or delay in transmission, dispatch or delivery
of any message or advice, however transmitted, in connection with any Letter of
Credit. The Borrowers agree that any action taken or omitted by the Letter of
Credit Issuer, the Administrative Agent or any Revolving Credit Lender under or
in connection with each Letter of Credit and the related drafts and documents,
if done in good faith, shall be binding upon the Borrowers and shall not result
in any liability on the part of the Letter of Credit Issuer, the Administrative
Agent or any Revolving Credit Lender to the Borrowers.

4.5. RELIANCE BY ISSUER. To the extent not inconsistent with ss.4.4, the Letter
of Credit Issuer and the Administrative Agent shall be entitled to rely, and
shall be fully protected in relying upon, any Letter of Credit, draft, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person or Persons and upon advice and statements of legal
counsel, independent accountants and other experts selected by the Letter of
Credit Issuer or the Administrative Agent. The Letter of Credit Issuer and the
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement unless it shall first have received such advice or
concurrence of the Required Lenders as it reasonably deems appropriate or it
shall first be indemnified to its reasonable satisfaction by the Revolving
Credit Lenders against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action. The Letter of

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Credit Issuer and the Administrative Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement in accordance with
a request of the Required Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon the Lenders and all future
holders of the Revolving Credit Notes or of a Letter of Credit Participation.
Unless otherwise agreed to, in the particular instance, the Borrowers hereby
authorize any Letter of Credit Issuer to select an advising bank, if any, select
a paying bank, if any and Select a negotiating bank.

4.6. LETTER OF CREDIT FEE. The Borrowers shall, on monthly in arrears on the
first day of each month and on the Maturity Date pay a fee (in each case, a
"LETTER OF CREDIT FEE") to the Administrative Agent (a) in respect of each
standby Letter of Credit an amount equal to two and one quarter percent (2.25%)
per annum of the face amount of such standby Letter of Credit for the accounts
of the Revolving Credit Lenders in accordance with their respective Commitment
Percentages and (b) in respect of each documentary Letter of Credit an amount
equal to two and one quarter percent (2.25%) points per annum of the face amount
of such documentary Letter of Credit shall be for the accounts of the Revolving
Credit Lenders in accordance with their respective Commitment Percentages.
Following the occurrence of any Event of Default, the Letter of Credit Fees
shall be increased by 200 basis points per annum. In respect of each Letter of
Credit, the Borrowers shall also pay to the Letter of Credit Issuer for the
Letter of Credit Issuer's own account, at such other time or times as such
charges are customarily made by the Letter of Credit Issuer, the Letter of
Credit Issuer's customary issuance, amendment, negotiation or document
examination and other reasonable administrative fees as in effect from time to
time.

                         5. CERTAIN GENERAL PROVISIONS.

5.1. ADMINISTRATIVE AGENT FEES. The Borrowers jointly and severally agree to pay
to the Administrative Agent, for the Administrative Agent's own account, the
fees as set forth in the FRFI Fee Letter (the "ADMINISTRATIVE AGENT FEES").

5.2. TRANCHE B LENDER FEES. The Borrowers jointly and severally agree to pay to
the Tranche B Lender, for the Tranche B Lender's own account, the fees as set
forth in the Tranche B Fee Letter (the "TRANCHE B LENDER FEES").

5.3. FUNDS FOR PAYMENTS.

5.3.1.   PAYMENTS TO ADMINISTRATIVE AGENT. All payments of principal, interest,
         Reimbursement Obligations, Fees and any other amounts due hereunder or
         under any of the other Loan Documents shall be made on the due date
         thereof to the Administrative Agent in Dollars, for the respective
         accounts of the Lenders and the Administrative Agent, at the
         Administrative Agent's Office or at such other place that the
         Administrative Agent may from time to time designate, in each case at
         or about 12:00 noon (Boston time or other local time at the place of
         payment) and in immediately available funds.

5.3.2.   NO OFFSET, ETC. All payments by the Borrowers hereunder and under any
         of the other Loan Documents shall be made without recoupment, setoff or
         counterclaim and free and clear of and without deduction for any taxes,
         levies, imposts, duties, charges, reasonable fees, deductions,
         withholdings, compulsory loans, restrictions or conditions of any
         nature now or hereafter imposed or levied by any jurisdiction or any
         political subdivision thereof or taxing or other authority therein
         unless the Borrowers are compelled by law to make such deduction or
         withholding. If any such obligation is imposed upon the Borrowers with
         respect to any amount payable by it hereunder or under any of the other
         Loan Documents, the Borrowers will pay to the Administrative Agent, for
         the account of the Lenders or (as the case may be) the Administrative
         Agent, on the date on which such amount is due and payable hereunder or
         under such other Loan Document, such additional amount in Dollars as
         shall be necessary to enable the Lenders or the Administrative Agent to
         receive the same net amount which the Lenders or the Administrative
         Agent would have received on such due date had no such obligation been
         imposed upon the Borrowers. Where taxes, deductions or withholdings are
         imposed upon the Borrowers with respect to any amount payable by the
         Borrowers hereunder or under any of the other Loan Documents as a
         result of characteristics of the Administrative Agent, a Lender or a

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         Participant, no payment of additional amounts is required under this
         ss.5.3.2, in respect of such taxes, deductions or withholdings to the
         extent that such Administrative Agent, Lender or Participant (as the
         case may be) was subject to such taxes, deductions or withholdings
         under the law in effect at the time that it became an Administrative
         Agent, Lender or Participant or subsequently became subject to such
         taxes, deductions or withholdings other than as a result of a change in
         law or any actions of the Borrowers. In addition, no payment of
         additional amounts is required under this ss.5.3.2 in respect of taxes,
         deductions or withholdings to the extent that such taxes, deductions or
         withholdings are imposed as a result of a failure by the Administrative
         Agent, a Lender, a Participant or any person in the chain of payment
         between the Borrowers and the Administrative Agent, Lender or
         Participant, as the case may be, to provide, in accordance with
         applicable procedures, properly completed and executed tax forms that
         they are legally permitted to provide. The Borrowers will deliver
         promptly to the Administrative Agent certificates or other valid
         vouchers reasonably available to them for all taxes or other charges
         deducted from or paid with respect to payments made by the Borrowers
         hereunder or under such other Loan Document.

5.4. COMPUTATIONS. All computations of interest on the Loans and of Fees shall
be based on a 360-day year and paid for the actual number of days elapsed.
Except as otherwise provided in the definition of the term "INTEREST PERIOD"
with respect to Eurodollar Rate Loans, whenever a payment hereunder or under any
of the other Loan Documents becomes due on a day that is not a Business Day, the
due date for such payment shall be extended to the next succeeding Business Day,
and interest shall accrue during such extension. The outstanding amount of the
Loans as reflected on the Revolving Credit Note Records and the Tranche B
Lenders records and from time to time shall be considered correct and binding on
the Borrowers unless within five (5) Business Days after receipt of any notice
by the Administrative Agent or any of the Lenders of such outstanding amount,
the Administrative Agent or such Lender shall notify the Borrowers
Representative to the contrary.

5.5. INABILITY TO DETERMINE EURODOLLAR RATE. In the event, prior to the
commencement of any Interest Period relating to any Eurodollar Rate Loan, the
Administrative Agent shall in good faith determine that (a) adequate and
reasonable methods do not exist for ascertaining the Eurodollar Rate that would
otherwise determine the rate of interest to be applicable to any Eurodollar Rate
Loan during any Interest Period or (b) the Eurodollar Rate determined or to be
determined for such Interest Period will not adequately and fairly reflect the
cost to the Revolving Credit Lenders of making or maintaining their Eurodollar
Rate Loans during such period, the Administrative Agent shall forthwith give
notice of such determination (which shall be conclusive and binding on the
Borrowers and the Revolving Credit Lenders) to the Borrowers' Representative and
the Revolving Credit Lenders. In such event (i) any Loan Request or Conversion
Request with respect to Eurodollar Rate Loans shall be automatically withdrawn
and shall be deemed a request for Base Rate Loans, (ii) each Eurodollar Rate
Loan will automatically, on the last day of the then current Interest Period
relating thereto, become a Base Rate Loan, and (iii) the obligations of the
Revolving Credit Lenders to make Eurodollar Rate Loans shall be suspended until

                                      -43-
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the Administrative Agent determines that the circumstances giving rise to such
suspension no longer exist, whereupon the Administrative Agent shall so notify
the Borrowers' Representative and the Revolving Credit Lenders.

5.6. ILLEGALITY. Notwithstanding any other provisions herein, if any future law,
regulation, treaty or directive or the interpretation or application thereof
shall make it unlawful for any Revolving Credit Lender to make or maintain
Eurodollar Rate Loans, such Revolving Credit Lender shall forthwith give notice
of such circumstances to the Borrowers' Representative and the other Revolving
Credit Lenders and thereupon (a) the commitment of such Revolving Credit Lender
to make Eurodollar Rate Loans or convert Base Rate Loans to Eurodollar Rate
Loans shall forthwith be suspended and (b) such Revolving Credit Lender's
Revolving Credit Loans then outstanding as Eurodollar Rate Loans, if any, shall
be converted automatically to Base Rate Loans on the last day of each Interest
Period applicable to such Eurodollar Rate Loans or within such earlier period as
may be required by law. The Borrowers hereby agree promptly to pay the
Administrative Agent for the account of such Revolving Credit Lender, upon
demand by such Revolving Credit Lender, any additional amounts reasonably
necessary to compensate such Revolving Credit Lender for any costs incurred by
such Revolving Credit Lender in making any conversion in accordance with this
ss.5.6, including any interest or reasonable fees payable by such Revolving
Credit Lender to lenders of funds obtained by it in order to make or maintain
its Eurodollar Rate Loans hereunder.

5.7. ADDITIONAL COSTS, ETC. If any future applicable law, which expression, as
used herein, includes statutes, rules and regulations thereunder and
interpretations thereof after the date hereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Lender or the Administrative Agent by any central bank
or other fiscal, monetary or other authority (whether or not having the force of
law), shall:

                  (a) subject any Lender or the Administrative Agent to any tax,
         levy, impost, duty, charge, fee, deduction or withholding of any nature
         with respect to this Agreement, the other Loan Documents, any Letters
         of Credit, such Lender's Commitment or the Loans (other than taxes
         based upon or measured by the income or profits of such Lender or the
         Administrative Agent), or

                  (b) materially change the basis of taxation (except for
         changes in taxes on income or profits or taxes referred to in the first
         sentence of ss.5.3.2, which shall be taken into account in the manner
         provided by ss.5.3.2) of payments to any Lender of the principal of or
         the interest on any Loans or any other amounts payable to any Lender or
         the Administrative Agent under this Agreement or any of the other Loan
         Documents, or

                  (c) impose or increase or render applicable (other than to the
         extent specifically provided for elsewhere in this Agreement) any
         special deposit, reserve, assessment, liquidity, capital adequacy or
         other similar requirements (whether or not having the force of law)
         against assets held by, or deposits in or for the account of, or loans
         by, or letters of credit issued by, or commitments of an office of any
         Lender, or

                  (d) impose on any Lender or the Administrative Agent any other
         conditions or requirements with respect to this Agreement, the other
         Loan Documents, any Letters of Credit, the Loans, such Lender's

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<PAGE>

         Commitment, or any class of loans, letters of credit or commitments of
         which any of the Loans or such Lender's Commitment forms a part, and
         the result of any of the foregoing is

                           (i) to increase the cost to any Lender of making,
                  funding, issuing, renewing, extending or maintaining any of
                  the Loans or such Lender's Commitment or any Letter of Credit,
                  or

                           (ii) to reduce the amount of principal, interest,
                  Reimbursement Obligation or other amount payable to such
                  Lender or the Administrative Agent hereunder on account of
                  such Lender's Commitment, any Letter of Credit or any of the
                  Loans, or

                           (iii) to require such Lender or the Administrative
                  Agent to make any payment or to forego any interest or
                  Reimbursement Obligation or other sum payable hereunder, the
                  amount of which payment or foregone interest or Reimbursement
                  Obligation or other sum is calculated by reference to the
                  gross amount of any sum receivable or deemed received by such
                  Lender or the Administrative Agent from the Borrowers
                  hereunder,

then, and in each such case, the Borrowers will, upon demand made by such Lender
or (as the case may be) the Administrative Agent at any time and from time to
time and as often as the occasion therefor may arise, pay to such Lender or the
Administrative Agent such additional amounts as will be sufficient to compensate
such Lender or the Administrative Agent for such additional cost, reduction,
payment or foregone interest or Reimbursement Obligation or other sum.

5.8. CERTIFICATE. A certificate setting forth any additional amounts payable
pursuant to ss.5.7 and a brief explanation of such amounts which are due,
submitted by any Lender or the Administrative Agent to the Borrowers'
Representative, shall be conclusive, absent manifest error, that such amounts
are due and owing.

5.9. INDEMNITY. The Borrowers agree to indemnify each Revolving Credit Lender
and to hold each Lender harmless from and against any loss, cost or expense or
other "breakage fees" (so-called) (including loss of anticipated profits) that
such Revolving Credit Lender may sustain or incur as a consequence of (a)
default by the Borrowers in payment of the principal amount of or any interest
on any Eurodollar Rate Loans as and when due and payable, including any such
loss or expense arising from interest or reasonable fees payable by such
Revolving Credit Lender to banks of funds obtained by it in order to maintain
its Eurodollar Rate Loans, (b) default by the Borrowers in making a borrowing or
conversion after the Borrowers' Representative has given (or is deemed to have
given) a Loan Request or a Conversion Request relating thereto in accordance
with ss.2.9 or ss.2.10 or (c) the making of any payment of a Eurodollar Rate
Loan or the making of any conversion of any such Loan to a Base Rate Loan on a
day that is not the last day of the applicable Interest Period with respect
thereto, including interest or reasonable fees payable by such Lender to lenders
of funds obtained by it in order to maintain any such Loans.

5.10. INTEREST AFTER DEFAULT. During the continuance of a Default (and whether
or not the Administrative Agent exercises the Administrative Agent's rights on
account thereof) the principal of the Revolving Credit Loans shall, at the
option of the Administrative Agent or at the instruction of the SuperMajority
Lenders, until such Default has been cured or remedied or such Default has been

                                      -45-
<PAGE>

waived by the Required Revolving Credit Lenders pursuant to ss.16.12, bear
interest at a rate per annum equal to two percent (2%) above the rate of
interest otherwise applicable to such Revolving Credit Loans pursuant to ss.2.8.

5.11. FEES NON-REFUNDABLE. The Borrowers shall not be entitled to any credit,
rebate or repayment of any fee earned by the Administrative Agent or any Lender
pursuant to this Agreement or any Loan Document notwithstanding any termination
of this Agreement or suspension or termination of the Administrative Agent's and
any Lender's respective obligation to make loans and advances hereunder.

5.12.  CONCERNING JOINT AND SEVERAL LIABILITY OF THE BORROWERS.

                  (a) Each of the Borrowers is accepting joint and several
         liability hereunder in consideration of the financial accommodations to
         be provided by the Administrative Agent, the Issuing Bank and the
         Lenders under this Agreement, for the mutual benefit, directly and
         indirectly, of each of the Borrowers and in consideration of the
         undertakings of each of the Borrowers to accept joint and several
         liability for the obligations of each of them.

                  (b) Each of the Borrowers, jointly and severally, hereby
         irrevocably and unconditionally accepts, not merely as a surety but
         also as a co-debtor, joint and several liability with each other
         Borrower, with respect to the payment and performance of all of the
         Obligations, it being the intention of the parties hereto that all the
         Obligations shall be the joint and several obligations of all of the
         Borrowers without preferences or distinction among them.

                  (c) If and to the extent that any of the Borrowers shall fail
         to make any payment with respect to any of the Obligations as and when
         due or to perform any of such Obligations in accordance with the terms
         thereof, then in each such event each other Borrower will make such
         payment with respect to, or perform, such Obligation.

                  (d) The obligations of each Borrower under the provisions of
         this ss.5.12 constitute the absolute and unconditional obligations of
         such Borrower enforceable against it to the full extent permitted under
         the terms hereof, irrespective of the validity, regularity or
         enforceability of this Credit Agreement or any other circumstance
         whatsoever.

                  (e) Except as otherwise expressly provided for herein, each
         Borrower hereby waives notice of acceptance of its joint and several
         liability, notice of the Loans made under this Credit Agreement, notice
         of the occurrence of any Default, or of any demand for any payment
         under this Agreement, notice of any action at any time taken or omitted
         by the Administrative Agent, the Issuing Bank or the Lenders under or
         in respect of any of the Obligations, any requirement of diligence or
         to mitigate damages and, generally, all demands, notices and other
         formalities of every kind in connection with this Credit Agreement.
         Each Borrower hereby assents to, and waives notice of, any extension or
         postponement of the time for the payment of any of the Obligations, the
         acceptance of any partial payment thereon, any waiver, consent or other
         action or acquiescence by the Administrative Agent, the Issuing Bank or
         the Lenders at any time or times in respect of any default by any
         Borrowers or Guarantors in the performance or satisfaction of any term,
         covenant, condition or provision of this Credit Agreement, any and all
         other indulgences whatsoever by the Administrative Agent, the Issuing
         Bank or the Lenders in respect of any of the obligations hereunder, and
         the taking, addition, substitution or release, in whole or in part, at
         any time or times, of any security for any of such obligations or the
         addition, substitution or release, in whole or in part, of any Borrower
         or any Guarantor. Without limiting the generality of the foregoing,

                                      -46-
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         each Borrower assents to any other action or delay in acting or failure
         to act on the part of the Administrative Agent, the Issuing Bank or the
         Lenders including, without limitation, any failure strictly or
         diligently to assert any right or to pursue any remedy or to comply
         fully with Applicable Laws thereunder, which might, but for the
         provisions of this ss.5.12, afford grounds for terminating, discharging
         or relieving such Borrower, in whole or in part, from any of its
         Obligations under this ss.5.12, it being the intention of each Borrower
         that, so long as any of the Obligations remain unsatisfied, the
         Obligations of such Borrower under this ss.5.12 shall not be discharged
         except by performance and then only to the extent of such performance.
         Except as otherwise expressly provided for herein, the joint and
         several liability of the Borrowers hereunder shall continue in full
         force and effect notwithstanding any absorption, merger, amalgamation
         or any other change whatsoever in the name, membership, constitution or
         place of formation of any Borrower or the Administrative Agent, the
         Issuing Bank or the Lenders. If at any time, any payment, or any part
         thereof, made in respect of any of the Obligations, is rescinded or
         must otherwise be restored or returned by the Administrative Agent, the
         Issuing Bank or the Lenders upon the insolvency, bankruptcy or
         reorganization of any of the Borrowers, or otherwise, the provisions of
         this ss.5.12 will forthwith be reinstated in effect, as though such
         payment had not been made.

                  (f) Each Borrower appoints the Borrowers' Representative as
         its authorized representative to make loan request, receive funds and
         notice and to take all other actions under this Agreement and the other
         Loan Documents on its behalf.

                     6. COLLATERAL SECURITY AND GUARANTIES.

6.1. GRANT OF SECURITY INTEREST. The Borrowers each hereby grant to the
Administrative Agent, for the benefit of the Lenders and the Administrative
Agent, to secure the payment and performance in full of all of the Obligations,
a security interest in and so pledges and assigns to the Administrative Agent,
for the benefit of the Lenders and the Administrative Agent, the following
properties, assets and rights of the Borrowers, wherever located, whether now
owned or hereafter acquired or arising, and all proceeds and products thereof
(all of the same along with any other property, rights and interests of the
Borrowers that are or are intended to be subject to the Liens created by the
Security Documents being hereinafter called the "COLLATERAL"): all personal and
fixture property of every kind and nature including without limitation all goods
(including inventory, equipment and any accessions thereto), instruments
(including promissory notes), documents, accounts (including
health-care-insurance receivables), chattel paper (whether tangible or
electronic), deposit accounts, letter-of-credit rights (whether or not the
letter of credit is evidenced by a writing), commercial tort claims, securities
and all other investment property, supporting obligations, any other contract
rights or rights to the payment of money, insurance claims and proceeds, all
general intangibles (including all payment intangibles) and the Israeli
Subsidiary Assets. The Administrative Agent acknowledges that the attachment of
its security interest in any commercial tort claim as original collateral is
subject to the Company's compliance with ss.6.3.7.

6.2. AUTHORIZATION TO FILE FINANCING STATEMENTS. The Borrowers hereby
irrevocably authorize the Administrative Agent at any time and from time to time

                                      -47-
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to file in any filing office in any Uniform Commercial Code jurisdiction any
initial financing statements and amendments thereto that (a) indicate the
Collateral (i) as all assets of the Borrowers or words of similar effect,
regardless of whether any particular asset comprised in the Collateral falls
within the scope of Article 9 of the Uniform Commercial Code of the State or
such jurisdiction, or (ii) as being of an equal or lesser scope or with greater
detail, and (b) provide any other information required by part 5 of Article 9 of
the Uniform Commercial Code of the State or such other jurisdiction for the
sufficiency or filing office acceptance of any financing statement or amendment,
including (i) whether the Borrowers are an organization, the type of
organization and any organizational identification number issued to the
Borrowers and, (ii) in the case of a financing statement filed as a fixture
filing or indicating Collateral as as-extracted collateral or timber to be cut,
a sufficient description of real property to which the Collateral relates. The
Borrowers agree to furnish any such information to the Administrative Agent
promptly upon the Administrative Agent's request. The Borrowers also ratify
their authorization for the Administrative Agent to have filed in any Uniform
Commercial Code jurisdiction any like initial financing statements or amendments
thereto if filed prior to the date hereof.

6.3. OTHER ACTIONS. Further to insure the attachment, perfection and first
priority of, and the ability of the Administrative Agent to enforce, the
Administrative Agent's security interest in the Collateral, the Borrowers agree,
in each case at the Borrowers' expense, to take the following actions with
respect to the following Collateral and without limitation on the Borrowers'
other obligations contained in this Agreement:

6.3.1.   PROMISSORY NOTES AND TANGIBLE CHATTEL PAPER. If the Borrowers shall,
         now or at any time hereafter, hold or acquire any promissory notes or
         tangible chattel paper, the Borrowers shall forthwith endorse, assign
         and deliver the same to the Administrative Agent, accompanied by such
         instruments of transfer or assignment duly executed in blank as the
         Administrative Agent may from time to time specify.

6.3.2.   DEPOSIT ACCOUNTS. For each deposit account that any Borrower, now or at
         any time hereafter, opens or maintains (each a "Deposit Account"), the
         Borrowers shall (other than with respect to Local Accounts not with
         Bank of America, N.A., SunTrust Bank/Miami, N.A. and SunTrust
         Bank/Atlanta, N.A.), pursuant to an agreement in form and substance
         satisfactory to the Administrative Agent (each a "CONTROL AGREEMENT"),
         either (a) cause the depositary bank to agree to comply, without
         further consent of the Borrowers, at any time with instructions from
         the Administrative Agent to such depositary bank directing the
         disposition of funds from time to time credited to such deposit
         account, or (b) arrange for the Administrative Agent to become the
         customer of the depositary bank with respect to the deposit account,
         with the Borrowers being permitted, only with the consent of the
         Administrative Agent, to exercise rights to withdraw funds from such
         deposit account. The provisions of this paragraph shall not apply to
         (i) a deposit account for which the Administrative Agent is the
         depositary bank and is in automatic control, and (ii) Exempt DDA.

6.3.3.   INVESTMENT PROPERTY. If the Borrowers shall, now or at any time
         hereafter, hold or acquire any certificated securities, the Borrowers
         shall forthwith endorse, assign and deliver the same to the
         Administrative Agent, accompanied by such instruments of transfer or
         assignment duly executed in blank as the Administrative Agent may from
         time to time specify. If any securities now or hereafter acquired by
         the Borrowers are uncertificated and are issued to the Borrowers or
         their nominee directly by the issuer thereof, the Borrowers shall

                                      -48-
<PAGE>

         immediately notify the Administrative Agent thereof and, at the
         Administrative Agent's request and option, pursuant to an agreement in
         form and substance satisfactory to the Administrative Agent, either (a)
         cause the issuer to agree to comply without further consent of the
         Borrowers or such nominee, at any time with instructions from the
         Administrative Agent as to such securities, or (b) arrange for the
         Administrative Agent to become the registered owner of the securities.
         If any securities, whether certificated or uncertificated, or other
         investment property now or hereafter acquired by the Borrowers are held
         by the Borrowers or their nominee through a securities intermediary or
         commodity intermediary, the Borrowers shall immediately notify the
         Administrative Agent thereof and, at the Administrative Agent's request
         and option, pursuant to an agreement in form and substance satisfactory
         to the Administrative Agent, either (i) cause such securities
         intermediary or (as the case may be) commodity intermediary to agree to
         comply, in each case without further consent of the Borrowers or such
         nominee, at any time with entitlement orders or other instructions from
         the Administrative Agent to such securities intermediary as to such
         securities or other investment property, or (as the case may be) to
         apply any value distributed on account of any commodity contract as
         directed by the Administrative Agent to such commodity intermediary, or
         (ii) in the case of financial assets or other investment property held
         through a securities intermediary, arrange for the Administrative Agent
         to become the entitlement holder with respect to such investment
         property, with the Borrowers being permitted, only with the consent of
         the Administrative Agent, to exercise rights to withdraw or otherwise
         deal with such investment property. The provisions of this paragraph
         shall not apply to any financial assets credited to a securities
         account for which the Administrative Agent is the securities
         intermediary.

6.3.4.   COLLATERAL IN THE POSSESSION OF A BAILEE. If any Collateral is, now or
         at any time hereafter, in the possession of a bailee, the Borrowers
         shall promptly notify the Administrative Agent thereof and, at the
         Administrative Agent's request and option, shall promptly obtain an
         acknowledgement from the bailee, in form and substance satisfactory to
         the Administrative Agent, that the bailee holds such Collateral for the
         benefit of the Administrative Agent and such bailee's agreement to
         comply, without further consent of the Borrowers, at any time with
         instructions of the Administrative Agent as to such Collateral.

6.3.5.   ELECTRONIC CHATTEL PAPER AND TRANSFERABLE RECORDS. If the Borrowers,
         now or at any time hereafter, hold or acquire an interest in any
         electronic chattel paper or any "transferable record," as that term is
         defined in Section 201 of the federal Electronic Signatures in Global
         and National Commerce Act, or in ss.16 of the Uniform Electronic
         Transactions Act as in effect in any relevant jurisdiction, the
         Borrowers shall promptly notify the Administrative Agent thereof and,
         at the request and option of the Administrative Agent, shall take such
         action as the Administrative Agent may reasonably request to vest in
         the Administrative Agent control, under ss.9-105 of the Uniform
         Commercial Code, of such electronic chattel paper or control under
         Section 201 of the federal Electronic Signatures in Global and National
         Commerce Act or, as the case may be, ss.16 of the Uniform Electronic
         Transactions Act, as so in effect in such jurisdiction, of such
         transferable record.

6.3.6.   LETTER-OF-CREDIT RIGHTS. If the Borrowers are, now or at any time
         hereafter, a beneficiary under a letter of credit now or hereafter, the
         Borrowers shall promptly notify the Administrative Agent thereof and,
         at the request and option of the Administrative Agent, the Borrowers
         shall, pursuant to an agreement in form and substance satisfactory to
         the Administrative Agent, either (a) arrange for the issuer and any
         confirmer or other nominated person of such letter of credit to consent

                                      -49-
<PAGE>

         to an assignment to the Administrative Agent of the proceeds of the
         letter of credit or (b) arrange for the Administrative Agent to become
         the transferee beneficiary of the letter of credit, with the
         Administrative Agent agreeing, in each case, that the proceeds of the
         letter of credit are to be applied in accordance with ss.ss.2.14 and
         2.15.

6.3.7.   COMMERCIAL TORT CLAIMS. If the Borrowers shall, now or at any time
         hereafter, hold or acquire a commercial tort claim, the Borrowers shall
         immediately notify the Administrative Agent in a writing signed by the
         Borrowers' Representative of the particulars thereof and grant to the
         Administrative Agent, for the benefit of the Lenders and the
         Administrative Agent, in such writing a security interest therein and
         in the proceeds thereof, all upon the terms of this Agreement, with
         such writing to be in form and substance satisfactory to the
         Administrative Agent.

6.3.8.   OTHER ACTIONS AS TO ANY AND ALL COLLATERAL. The Borrowers further
         agrees, upon the request of the Administrative Agent and at the
         Administrative Agent's option, to take any and all other actions as the
         Administrative Agent may determine to be necessary or useful for the
         attachment, perfection and first priority of, and the ability of the
         Administrative Agent to enforce, the Administrative Agent's security
         interest in any and all of the Collateral, including, without
         limitation, (a) executing, delivering and, where appropriate, filing
         financing statements and amendments relating thereto under the Uniform
         Commercial Code, to the extent, if any, that the Borrowers' signature
         thereon is required therefor, (b) causing the Administrative Agent's
         name to be noted as secured party on any certificate of title for a
         titled good if such notation is a condition to attachment, perfection
         or priority of, or ability of the Administrative Agent to enforce, the
         Administrative Agent's security interest in such Collateral, (c)
         complying with any provision of any statute, regulation or treaty of
         the United States as to any Collateral if compliance with such
         provision is a condition to attachment, perfection or priority of, or
         ability of the Administrative Agent to enforce, the Administrative
         Agent's security interest in such Collateral, (d) obtaining
         governmental and other third party waivers, consents and approvals, in
         form and substance satisfactory to the Administrative Agent, including,
         without limitation, any consent of any licensor, lessor or other person
         obligated on Collateral, (e) obtaining waivers from mortgagees and
         landlords in form and substance satisfactory to the Administrative
         Agent and (f) taking all actions under any earlier versions of the
         Uniform Commercial Code or under any other law, as reasonably
         determined by the Administrative Agent to be applicable in any relevant
         Uniform Commercial Code or other jurisdiction, including any foreign
         jurisdiction.

6.4. RELATION TO OTHER SECURITY DOCUMENTS. The provisions of this Agreement
supplement the provisions of any real estate mortgage or deed of trust granted
by the Borrowers to the Administrative Agent, for the benefit of the Lenders and
the Administrative Agent, and which secures the payment or performance of any of
the Obligations. Nothing contained in any such real estate mortgage or deed of
trust shall derogate from any of the rights or remedies of the Administrative
Agent or any of the Lenders hereunder. In addition, to the provisions of this
Agreement being so read and construed with any such mortgage or deed of trust,
the provisions of this Agreement shall be read and construed with the other
Security Documents referred to below in the manner so indicated.

6.4.1.   STOCK PLEDGE AGREEMENT. Concurrently herewith certain of the Borrowers
         are executing and delivering to the Administrative Agent, for the
         benefit of the Lenders and the Administrative Agent, stock pledge
         agreement(s) pursuant to which the Borrowers are pledging to the
         Administrative Agent all of the shares of the capital stock of the

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         Borrowers' Subsidiary or Subsidiaries. Such pledge(s) shall be governed
         by the terms of such stock pledge agreement(s) and not by the terms of
         this Agreement.

6.4.2.   TRADEMARK ASSIGNMENTS. Concurrently herewith the Borrowers are
         executing and delivering to the Administrative Agent, for the benefit
         of the Lenders and the Administrative Agent, the Trademark Assignment
         pursuant to which the Borrowers are assigning to the Administrative
         Agent, for the benefit of the Lenders and the Administrative Agent,
         certain Collateral consisting of trademarks, service marks and
         trademark and service mark rights, together with the goodwill
         appurtenant thereto. The provisions of the Trademark Assignment are
         supplemental to the provisions of this Agreement, and nothing contained
         in the Trademark Assignment shall derogate from any of the rights or
         remedies of the Administrative Agent or any of the Lenders hereunder.
         Neither the delivery of, nor anything contained in, the Trademark
         Assignment shall be deemed to prevent or postpone the time of
         attachment or perfection of any security interest in such Collateral
         created hereby.

                       7. REPRESENTATIONS AND WARRANTIES.

         The Borrowers represent and warrant to the Lenders and the
Administrative Agent as follows:

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<PAGE>

7.1.  CORPORATE AUTHORITY.

7.1.1.   INCORPORATION; GOOD STANDING. Each of the Borrowers and their
         Subsidiaries (a) is a corporation (or similar business entity) duly
         organized, validly existing and in good standing under the laws of its
         jurisdiction of incorporation or formation, (b) has all requisite
         corporate (or the equivalent company) power to own its property and
         conduct its business as now conducted and as presently contemplated,
         and (c) is in good standing as a foreign corporation (or similar
         business entity) and is duly authorized to do business in each
         jurisdiction where such qualification is necessary except where a
         failure to be so qualified would not have a Material Adverse Effect.

7.1.2.   AUTHORIZATION. The execution, delivery and performance of this
         Agreement and the other Loan Documents to which each Borrower or any of
         its Subsidiaries is or is to become a party and the transactions
         contemplated hereby and thereby (a) are within the corporate (or the
         equivalent company) authority of such Person, (b) have been duly
         authorized by all necessary corporate (or the equivalent company)
         proceedings, (c) do not and will not conflict with or result in any
         breach or contravention of any provision of law, statute, rule or
         regulation to which the Borrowers or any of their Subsidiaries is
         subject or any judgment, order, writ, injunction, license or permit
         applicable to the Borrowers or any of their Subsidiaries and (d) do not
         conflict with any provision of the Governing Documents of, or any
         agreement or other instrument binding upon, the Borrowers or any of
         their Subsidiaries.

7.1.3.   ENFORCEABILITY. The execution and delivery of this Agreement and the
         other Loan Documents to which each Borrower or any of its Subsidiaries
         is or is to become a party will result in valid and legally binding
         obligations of such Person enforceable against it in accordance with
         the respective terms and provisions hereof and thereof, except as
         enforceability is limited by bankruptcy, insolvency, reorganization,
         moratorium or other laws relating to or affecting generally the
         enforcement of creditors' rights and except to the extent that
         availability of the remedy of specific performance or injunctive relief
         is subject to the discretion of the court before which any proceeding
         therefor may be brought.

7.2. GOVERNMENTAL APPROVALS. The execution, delivery and performance by each
Borrower and any of its Subsidiaries of this Agreement and the other Loan
Documents to which such Borrower or any of its Subsidiaries is or is to become a
party and the transactions contemplated hereby and thereby do not require the
approval or consent of, or filing with, any governmental agency or authority
other than those already obtained.

7.3. TITLE TO PROPERTIES; LEASES. Except as indicated on SCHEDULE 7.3 hereto,
each Borrower and its Subsidiaries own all of the assets reflected in the
consolidated balance sheet of the Borrowers' Representative and its Subsidiaries
as at the Balance Sheet Date or acquired since that date (except property and
assets sold or otherwise disposed of in the ordinary course of business since
that date), subject to no Liens or other rights of others, except Permitted
Liens. Except as set forth on SCHEDULE 7.3 hereto, each of such Leases and
Capital Leases listed in the Perfection Certificate is in full force and effect.
No party to any such Lease or Capital Lease is in default or material violation
of any such Lease or Capital Lease, except for violations that would not have a
Material Adverse Effect. The Borrowers have not received any notice or threat of
cancellation of any such Lease or Capital Lease. The Borrowers hereby authorize
the Administrative Agent at any time and from time to time to contact any of the
Borrowers' landlords in order to confirm the Borrowers' continued compliance
with the terms and conditions of the Lease(s) between the Borrowers and that

                                      -52-
<PAGE>

landlord and to discuss such issues, concerning the Borrowers' occupancy under
such Lease(s), as the Administrative Agent may determine.

7.4. FINANCIAL STATEMENTS AND PROJECTIONS.

7.4.1.   FISCAL YEAR. Each of the Borrowers and each of their Subsidiaries has a
         fiscal year which is the twelve months ending on the Saturday of each
         year closest to January 31.

7.4.2.   FINANCIAL STATEMENTS. There has been furnished to each of the Lenders a
         consolidated balance sheet of the Borrowers' Representative and its
         Subsidiaries as at the Balance Sheet Date, and a consolidated statement
         of income of the Borrowers' Representative and its Subsidiaries for the
         fiscal year then ended, certified by Deloitte & Touche LLP. Such
         balance sheet and statement of income have been prepared in accordance
         with GAAP and fairly present the financial condition of the Borrowers
         as at the close of business on the date thereof and the results of
         operations for the fiscal year then ended. There are no contingent
         liabilities of the Borrowers' Representative or any of its Subsidiaries
         as of such date involving material amounts, known to the officers of
         the Borrowers, which were not disclosed in such balance sheet and the
         notes related thereto.

7.4.3.   PROJECTIONS. The projections of the annual operating budgets of the
         Borrowers' Representative and its Subsidiaries on a consolidated basis,
         balance sheets and cash flow statements for the fiscal year ended
         February, 2003, copies of which have been delivered to each Lender,
         disclose all assumptions made with respect to general economic,
         financial and market conditions used in formulating such projections.
         As of the Closing Date, to the knowledge of the Borrowers or any of
         their Subsidiaries, no facts exist that (individually or in the
         aggregate) would result in any material change in any of such
         projections. The projections are based upon reasonable estimates and
         assumptions, have been prepared on the basis of the assumptions stated
         therein and reflect the reasonable estimates of the Borrowers and their
         Subsidiaries of the results of operations and other information
         projected therein.

7.5. NO MATERIAL ADVERSE CHANGES, ETC. Except as set forth on SCHEDULE 7.5
hereto, since the Balance Sheet Date there has been no event or occurrence which
has had a Material Adverse Effect. Since the Balance Sheet Date, the Borrowers
have not made any Restricted Payment.

7.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. The Borrowers and each of their
Subsidiaries possesses all franchises, patents, copyrights, trademarks, trade
names, licenses and permits, and rights in respect of the foregoing, adequate
for the conduct of its business substantially as now conducted without known
material conflict with any rights of others.

7.7. LITIGATION. There are no actions, suits, proceedings or investigations of
any kind pending or threatened against the Borrowers or any of their
Subsidiaries before any Governmental Authority, that, (a) if adversely
determined, would, either in any case or in the aggregate, have a Material
Adverse Effect, or (b) which question the validity of this Agreement or any of
the other Loan Documents, or any action taken or to be taken pursuant hereto or
thereto.

7.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Borrowers nor any of
their Subsidiaries is subject to any Governing Document or other legal
restriction, or any judgment, decree, order, law, statute, rule or regulation
that has or is expected in the future to have a Material Adverse Effect. Except
as set forth on SCHEDULE 7.8 hereto, neither the Borrowers nor any of their

                                      -53-
<PAGE>

Subsidiaries is a party to any contract or agreement that has or is expected, in
the judgment of the Borrowers' officers, to have any Material Adverse Effect.

7.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Neither the Borrowers nor any
of their Subsidiaries is in violation of any provision of its Governing
Documents, or any agreement or instrument to which it may be subject or by which
it or any of its properties may be bound or any decree, order, judgment,
statute, license, rule or regulation, in any of the foregoing cases in a manner
that could result in the imposition of substantial penalties or have a Material
Adverse Effect.

7.10. TAX STATUS. Except as set forth on SCHEDULE 7.10 hereto, the Borrowers and
their Subsidiaries (a) have made or filed all federal, state and foreign income
and all other tax returns, reports and declarations required by any jurisdiction
to which any of them is subject, (b) have paid all taxes and other governmental
assessments and charges shown or determined to be due on such returns, reports
and declarations, except those being contested in good faith and by appropriate
proceedings and (c) have set aside on their books provisions reasonably adequate
for the payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. There are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction,
and none of the officers of the Borrowers know of any basis for any such claim.
The Borrowing Base Report most recently delivered to the Administrative Agent
sets forth the amount of reserves established by the Borrowers and each of their
Subsidiaries to cover the Borrowers' or such Subsidiary's sales or use tax
obligations in each jurisdiction where the Borrowers or such Subsidiary is
required to pay such taxes. Such reserves are adequate for the payment of all of
such obligations.

7.11.  IN DEFAULT.   No Default exists.

7.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the Borrowers nor any
of their Subsidiaries is a "HOLDING COMPANY", or a "SUBSIDIARY COMPANY" of a
"HOLDING COMPANY", or an "AFFILIATE" of a "HOLDING COMPANY", as such terms are
defined in the Public Utility Holding Company Act of 1935; nor is it an
"INVESTMENT COMPANY", or an "AFFILIATED COMPANY" or a "PRINCIPAL UNDERWRITER" of
an "INVESTMENT COMPANY", as such terms are defined in the Investment Company Act
of 1940.

7.13. ABSENCE OF FINANCING STATEMENTS, ETC. Except with respect to Permitted
Liens, there is no financing statement, security agreement, chattel mortgage,
real estate mortgage or other document filed or recorded with any filing
records, registry or other public office, that purports to cover, affect or give
notice of any present or possible future Lien on any assets or property of the
Borrowers or any of their Subsidiaries or any rights relating thereto.

7.14.  COLLATERAL.

7.14.1.  PERFECTION CERTIFICATE. The Borrowers has previously delivered to the
         Administrative Agent a certificate signed by the Borrowers and entitled
         "Perfection Certificate" (the "PERFECTION CERTIFICATE"). The Borrowers
         represent and warrant to the Lenders and the Administrative Agent as
         follows: (a) each of the Borrowers' exact legal name is that indicated
         on the Perfection Certificate and on the signature page hereof, (b) the
         Borrowers are an organization of the type, and are organized in the
         jurisdiction, set forth in the Perfection Certificate, (c) the
         Perfection Certificate accurately sets forth the Borrowers'
         organizational identification number or accurately states that the
         Borrowers have none, (d) the Perfection Certificate accurately sets
         forth each Borrower's place of business or, if more than one, its chief
         executive office, as well as each Borrower's mailing address, if

                                      -54-
<PAGE>

         different, (e) all other information set forth on the Perfection
         Certificate pertaining to the Borrowers is accurate and complete and
         (f) there has been no change in any of such information since the date
         on which the Perfection Certificate was signed by the Borrowers.

7.14.2.  NATURE OF COLLATERAL. The Borrowers are the owners of the Collateral,
         free from any right or claim of any person or any adverse Lien, except
         for the security interest created by this Agreement, (b) none of the
         Collateral constitutes, or is the proceeds of, "farm products" as
         defined in ss.9-102(a)(34) of the Uniform Commercial Code of the State,
         (c) none of the account debtors or other persons obligated on any of
         the Collateral is a governmental authority covered by the Federal
         Assignment of Claims Act or like federal, state or local statute or
         rule in respect of such Collateral, (d) the Borrowers hold no
         commercial tort claim except as indicated on the Perfection
         Certificate, (e) the Borrowers have at all times operated their
         business in compliance with all applicable provisions of the federal
         Fair Labor Standards Act, as amended, and with all applicable
         provisions of federal, state and local statutes and ordinances dealing
         with the control, shipment, storage or disposal of hazardous materials
         or substances, (f) all other information set forth on the Perfection
         Certificate pertaining to the Collateral is accurate and complete, and
         (g) there has been no change in any of such information since the date
         on which the Perfection Certificate was signed by the Borrowers.

7.14.3.  PERFECTION OF SECURITY INTEREST. All filings, assignments, pledges and
         deposits of documents or instruments have been made and all other
         actions have been taken that are necessary or advisable, under
         applicable law, to establish and perfect the Administrative Agent's
         security interest in the Collateral. The Collateral and the
         Administrative Agent's rights with respect to the Collateral are not
         subject to any setoff, claims, withholdings or other defenses. The
         Borrowers are the owners of the Collateral free from any Lien, except
         for Permitted Liens.

7.15. CERTAIN TRANSACTIONS. None of the officers, directors, or employees of the
Borrowers or any of their Subsidiaries is presently a party to any transaction
with the Borrowers or any of their Subsidiaries (other than for services as
employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the
Borrowers, any corporation, partnership, trust or other entity in which any
officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.

7.16. EMPLOYEE BENEFIT PLANS.

7.16.1.  IN GENERAL. Each Employee Benefit Plan and each Guaranteed Pension Plan
         has been maintained and operated in compliance in all material respects
         with the provisions of ERISA and all Applicable Pension Legislation
         and, to the extent applicable, the Code, including but not limited to
         the provisions thereunder respecting prohibited transactions and the
         bonding of fiduciaries and other persons handling plan funds as
         required by ss.412 of ERISA. The Borrowers have heretofore delivered to
         the Administrative Agent the most recently completed annual report,
         Form 5500, with all required attachments, and actuarial statement
         required to be submitted under ss.103(d) of ERISA, with respect to each
         Guaranteed Pension Plan.

7.16.2.  TERMINABILITY OF WELFARE PLANS. No Employee Benefit Plan, which is an
         employee welfare benefit plan within the meaning of ss.3(1) or
         ss.3(2)(B) of ERISA, provides benefit coverage subsequent to
         termination of employment, except as required by Title I, Part 6 of
         ERISA or the applicable state insurance laws. The Borrowers may

                                      -55-
<PAGE>

         terminate each such Plan at any time (or at any time subsequent to the
         expiration of any applicable bargaining agreement) in the discretion of
         the Borrowers without liability to any Person other than for claims
         arising prior to termination.

7.16.3.  GUARANTEED PENSION PLANS. Each contribution required to be made to a
         Guaranteed Pension Plan, whether required to be made to avoid the
         incurrence of an accumulated funding deficiency, the notice or lien
         provisions of ss.302(f) of ERISA, or otherwise, has been timely made.
         No waiver of an accumulated funding deficiency or extension of
         amortization periods has been received with respect to any Guaranteed
         Pension Plan, and neither the Borrowers nor any ERISA Affiliate is
         obligated to or has posted security in connection with an amendment to
         a Guaranteed Pension Plan pursuant to ss.307 of ERISA or ss.401(a)(29)
         of the Code. No liability to the PBGC (other than required insurance
         premiums, all of which have been timely paid) has been incurred by the
         Borrowers or any ERISA Affiliate with respect to any Guaranteed Pension
         Plan and there has not been any ERISA Reportable Event (other than an
         ERISA Reportable Event as to which the requirement of 30 days notice
         has been waived under PBGC ss.4043), or any other event or condition
         which presents a material risk of termination of any Guaranteed Pension
         Plan by the PBGC. Based on the latest valuation of each Guaranteed
         Pension Plan (which in each case occurred within twelve months of the
         date of this representation), and on the actuarial methods and
         assumptions employed for that valuation, the aggregate benefit
         liabilities of all such Guaranteed Pension Plans within the meaning of
         ss.4001 of ERISA did not exceed the aggregate value of the assets of
         all such Guaranteed Pension Plans, disregarding for this purpose the
         benefit liabilities and assets of any Guaranteed Pension Plan with
         assets in excess of benefit liabilities, by more than $500,000.

7.16.4.  MULTIEMPLOYER PLANS. Neither the Borrowers nor any ERISA Affiliate has
         incurred any material liability (including secondary liability) to any
         Multiemployer Plan as a result of a complete or partial withdrawal from
         such Multiemployer Plan under ss.4201 of ERISA or as a result of a sale
         of assets described in ss.4204 of ERISA. Neither the Borrowers nor any
         ERISA Affiliate has been notified that any Multiemployer Plan is in
         reorganization or insolvent under and within the meaning of ss.4241 or
         ss.4245 of ERISA or is at risk of entering reorganization or becoming
         insolvent, or that any Multiemployer Plan intends to terminate or has
         been terminated under ss.4041A of ERISA.

7.17.  USE OF PROCEEDS.

7.17.1.  GENERAL. The proceeds of the Loans shall be used solely to refinance
         existing Indebtedness of the Borrowers for working capital and general
         corporate purposes. The Borrowers will obtain Letters of Credit solely
         in accordance in the ordinary course of business. No proceeds of the
         Loans may be used, nor shall any be requested, with a view towards the
         accumulation of any general fund or funded reserve of the Borrowers
         other than in the ordinary course of the Borrowers' business and
         consistent with the provisions of this Agreement.

7.17.2.  REGULATIONS U AND X. No portion of any Loan is to be used, and no
         portion of any Letter of Credit is to be obtained, for the purpose of
         purchasing or carrying any "MARGIN SECURITY" or "MARGIN STOCK" as such
         terms are used in Regulations U and X of the Board of Governors of the
         Federal Reserve System, 12 C.F.R. Parts 221 and 224.

7.18. ENVIRONMENTAL COMPLIANCE. The Borrowers have taken all commercially
reasonable steps to investigate the past and present condition and usage of the

                                      -56-
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Real Estate and the operations conducted thereon and, based upon such diligent
investigation, has determined that:

                  (a) none of the Borrowers, their Subsidiaries or any operator
         of the Real Estate or any operations thereon is in violation, or
         alleged violation, of any judgment, decree, order, law, license, rule
         or regulation pertaining to environmental matters, including without
         limitation, those arising under the Resource Conservation and Recovery
         Act ("RCRA"), the Comprehensive Environmental Response, Compensation
         and Liability Act of 1980 as amended ("CERCLA"), the Superfund
         Amendments and Reauthorization Act of 1986 ("SARA"), the Federal Clean
         Water Act, the Federal Clean Air Act, the Toxic Substances Control Act,
         or any state, local or foreign law, statute, regulation, ordinance,
         order or decree relating to health, safety or the environment
         (hereinafter "ENVIRONMENTAL LAWS"), which violation would have a
         material adverse effect on the environment or a Material Adverse
         Effect;

                  (b) neither the Borrowers nor any of their Subsidiaries has
         received notice from any third party including, without limitation, any
         Governmental Authority, (i) that any one of them has been identified by
         the United States Environmental Protection Agency ("EPA") as a
         potentially responsible party under CERCLA with respect to a site
         listed on the National Priorities List, 40 C.F.R. Part 300 Appendix B;
         (ii) that any hazardous waste, as defined by 42 U.S.C. ss.6903(5), any
         hazardous substances as defined by 42 U.S.C. ss.9601(14), any pollutant
         or contaminant as defined by 42 U.S.C. ss.9601(33) and any toxic
         substances, oil or hazardous materials or other chemicals or substances
         regulated by any Environmental Laws ("HAZARDOUS SUBSTANCES") which any
         one of them has generated, transported or disposed of has been found at
         any site at which a Governmental Authority has conducted or has ordered
         that any Borrowers or any of their Subsidiaries conduct a remedial
         investigation, removal or other response action pursuant to any
         Environmental Law; or (iii) that it is or shall be a named party to any
         claim, action, cause of action, complaint, or legal or administrative
         proceeding (in each case, contingent or otherwise) arising out of any
         third party's incurrence of costs, expenses, losses or damages of any
         kind whatsoever in connection with the release of Hazardous Substances;

                  (c) except as set forth on SCHEDULE 7.18 attached hereto: (i)
         no portion of the Real Estate currently owned or leased or, to the best
         of the Borrowers' knowledge, formerly owned or leased has been used for
         the handling, processing, storage or disposal of Hazardous Substances
         except in accordance with applicable Environmental Laws; and no
         underground tank or other underground storage receptacle for Hazardous
         Substances is located on any portion of the Real Estate; (ii) in the
         course of any activities conducted by the Borrowers, their Subsidiaries
         or operators of its properties, no Hazardous Substances have been
         generated or are being used on the Real Estate except in accordance
         with applicable Environmental Laws; (iii) to the best of the Borrowers'
         knowledge, there have been no releases (i.e. any past or present
         releasing, spilling, leaking, pumping, pouring, emitting, emptying,
         discharging, injecting, escaping, disposing or dumping) or threatened
         releases of Hazardous Substances on, upon, into or from the properties
         of the Borrowers or their Subsidiaries, which releases would have a

                                      -57-
<PAGE>

         material adverse effect on the value of any of the Real Estate or
         adjacent properties or the environment; (iv) to the best of the
         Borrowers' knowledge, there have been no releases on, upon, from or
         into any real property in the vicinity of any of the Real Estate which,
         through soil or groundwater contamination, may have come to be located
         on, and which would have a material adverse effect on the value of, the
         Real Estate; and (v) in addition, any Hazardous Substances that have
         been generated on any of the Real Estate have been transported offsite
         only by carriers having an identification number issued by the EPA (or
         the equivalent thereof in any foreign jurisdiction), treated or
         disposed of only by treatment or disposal facilities maintaining valid
         permits as required under applicable Environmental Laws, which
         transporters and facilities have been and are, to the best of the
         Borrowers' knowledge, operating in compliance with such permits and
         applicable Environmental Laws; and

                  (d) none of the Borrowers and their Subsidiaries, any
         Mortgaged Property or any of the other Real Estate is subject to any
         applicable Environmental Law requiring the performance of Hazardous
         Substances site assessments, or the removal or remediation of Hazardous
         Substances, or the giving of notice to any Governmental Authority or
         the recording or delivery to other Persons of an environmental
         disclosure document or statement by virtue of the transactions set
         forth herein and contemplated hereby, or as a condition to the
         recording of any Mortgage or to the effectiveness of any other
         transactions contemplated hereby.

                  (e) the Borrowers have furnished to the Administrative Agent
         all environmental reports, audits and any other material environmental
         documents relating to the Real Estate of the Borrowers and their
         Subsidiaries which are in the Borrowers' possession or under their
         reasonable control.

                                      -58-
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7.19. SUBSIDIARIES, ETC. Mayor's has no Subsidiaries other than the other
Borrowers and Subsidiaries that are not Domestic Subsidiaries listed in SCHEDULE
7.19 hereto. Except as set forth on SCHEDULE 7.19 hereto, neither the Borrowers
nor any Subsidiary of the Borrowers is engaged in any joint venture or
partnership with any other Person. The jurisdiction of incorporation/formation
and principal place of business of each Subsidiary of Mayor's is listed on
SCHEDULE 7.19 hereto. Except for the Israeli Subsidiary Assets, the Subsidiaries
of Mayor's other than the Domestic Subsidiaries do not have any assets having an
aggregate value in excess of $25,000.

7.20. BANK ACCOUNTS; CREDIT CARD ARRANGEMENTS. SCHEDULE 7.20(A) sets forth the
account numbers and location of all Deposit Accounts and classifies such Deposit
Accounts as Local Accounts and Interim Concentration Accounts. SCHEDULE 7.20(B)
sets forth all arrangements to which the Borrowers are a party with respect to
the payment to the Borrowers of the proceeds of credit card charges for sales by
the Borrowers.

7.21. LABOR RELATIONS. The Borrowers have not been and are not presently a party
to any collective bargaining or other labor contract. No event has occurred or
circumstance exists which is likely to provide the basis for any work stoppage
or other labor dispute. The Borrowers have complied in all material respects
with all Applicable Laws relating to employment, equal employment opportunity,
nondiscrimination, immigration, wages, hours, benefits, collective bargaining,
the payment of social security and similar taxes, occupational safety and
health, and plant closing. There is not presently pending and, to the Borrowers'
knowledge, there is not threatened any of the following:

                  (a) Any strike, slowdown, picketing, work stoppage, or
         employee grievance process.

                  (b) Any proceeding against or affecting the Borrowers relating
         to the alleged violation of any Applicable Law pertaining to labor
         relations or before National Labor Relations Board, the Equal
         Employment Opportunity Commission, or any comparable governmental body,
         organizational activity, or other labor or employment dispute against
         or affecting the Borrowers, which, if determined adversely to the
         Borrowers would have a Material Adverse Effect on the Borrowers.

                  (c) Any lockout of any employees by the Borrowers (and no such
         action is contemplated by the Borrowers).

                  (d) Any application for the certification of a collective
         bargaining agent.

7.22. DISCLOSURE. None of this Agreement or any of the other Loan Documents
contains any untrue statement of a material fact or omits to state a material
fact (known to the Borrowers or any of their Subsidiaries in the case of any
document or information not furnished by it or any of their Subsidiaries)
necessary in order to make the statements herein or therein not misleading.
There is no fact known to the Borrowers or any of their Subsidiaries which has a
Material Adverse Effect, or which is reasonably likely in the future to have a
Material Adverse Effect, exclusive of effects resulting from changes in general
economic conditions, legal standards or regulatory conditions.

                            8. AFFIRMATIVE COVENANTS.

         The Borrowers covenant and agree that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Lender

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has any obligation to make any Loans or the Administrative Agent has any
obligation to issue, extend or renew any Letters of Credit:

8.1. PUNCTUAL PAYMENT. The Borrowers will duly and punctually pay or cause to be
paid the principal and interest on the Loans, all Reimbursement Obligations, the
Fees, and all other amounts provided for in this Agreement and the other Loan
Documents to which the Borrowers or any of their Subsidiaries is a party, all in
accordance with the terms of this Agreement and such other Loan Documents.

8.2. NOTICE OF CHANGE OF ORGANIZATION/MAINTENANCE OF OFFICE. The Borrowers
will maintain their chief executive offices in Sunrise, Florida, or at such
other place in the United States of America as the Borrowers' Representative
shall designate upon written notice to the Administrative Agent, where notices,
presentations and demands to or upon the Borrowers in respect of the Loan
Documents to which the Borrowers is a party may be given or made. Each Borrower
will provide the Administrative Agent at least thirty (30) days prior written
notice of such Borrower changing its name, its place of business or, if more
than one, chief executive office, or its mailing address or organizational
identification number if it has one. If any Borrower does not have an
organizational identification number and later obtains one, such Borrower will
forthwith notify the Administrative Agent of such organizational identification
number. No Borrower will change its type of organization, jurisdiction of
organization or other legal structure.

8.3. RECORDS AND ACCOUNTS. The Borrowers will (a) keep, and cause each of their
Subsidiaries to keep, true and accurate records and books of account in which
full, true and correct entries will be made in accordance with GAAP, (b)
maintain adequate accounts and reserves for all taxes (including income taxes),
depreciation, depletion, obsolescence and amortization of its properties and the
properties of its Subsidiaries, contingencies, and other reserves, and (c) at
all times engage Deloitte & Touche LLP or other independent certified public
accountants satisfactory to the Administrative Agent as the independent
certified public accountants of the Borrowers and their Subsidiaries and will
not permit more than thirty (30) days to elapse between the cessation of such
firm's (or any successor firm's) engagement as the independent certified public
accountants of the Borrowers and their Subsidiaries and the appointment in such
capacity of a successor firm as shall be satisfactory to the Administrative
Agent.

8.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Borrowers will
deliver to each of the Lenders:

                  (a) as soon as practicable, but in any event not later than
         one hundred and five (105) days after the end of each fiscal year of
         the Borrowers, the consolidated balance sheet of the Borrowers'
         Representative and its Subsidiaries as at the end of such year, and the
         related consolidated statement of income and consolidated statement of
         cash flow for such year, each setting forth in comparative form the
         figures for the previous fiscal year and all such consolidated
         statements to be in reasonable detail, prepared in accordance with
         GAAP, and certified, without qualification and without an expression of
         uncertainty as to the ability of the Borrowers' Representative or any
         of its Subsidiaries to continue as going concerns, by Deloitte & Touche
         LLP or by other independent certified public accountants satisfactory
         to the Administrative Agent, together with a written statement from
         such accountants to the effect that they have read a copy of this
         Agreement, and that, in making the examination necessary to said
         certification, they have obtained no knowledge of any Default, or, if
         such accountants shall have obtained knowledge of any then existing

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         Default they shall disclose in such statement any such Default;
         PROVIDED that such accountants shall not be liable to the Lenders for
         failure to obtain knowledge of any Default;

                  (b) as soon as practicable, but in any event not later than
         forty-five (45) days after the end of each of the fiscal quarters of
         the Borrowers, copies of the unaudited consolidated balance sheet of
         the Borrowers' Representative and its Subsidiaries as at the end of
         such quarter, and the related consolidated statement of income and
         consolidated statement of cash flow for the portion of the Borrowers'
         fiscal year then elapsed, all in reasonable detail and prepared in
         accordance with GAAP, together with a certification by the principal
         financial or accounting officer of the Borrowers that the information
         contained in such financial statements fairly presents the financial
         position of the Borrowers' Representative and its Subsidiaries on the
         date thereof (subject to year-end adjustments);

                  (c) as soon as practicable, but in any event within thirty
         (30) days after the end of each month in each fiscal year of the
         Borrowers, unaudited monthly consolidated financial statements of the
         Borrowers' Representative and its Subsidiaries for such month prepared
         in accordance with GAAP, together with a certification by the principal
         financial or accounting officer of the Borrowers that the information
         contained in such financial statements fairly presents the financial
         condition of the Borrowers' Representative and its Subsidiaries on the
         date thereof (subject to year-end adjustments);

                  (d) simultaneously with the delivery of the financial
         statements referred to in subsections (a) and (b) above, a statement
         certified by the principal financial or accounting officer of the
         Borrowers' Representative in substantially the form of EXHIBIT E hereto
         (a "COMPLIANCE CERTIFICATE") and setting forth in reasonable detail
         computations evidencing compliance with the covenants contained in
         ss.10 and (if applicable) reconciliations to reflect changes in GAAP
         since the Balance Sheet Date;

                  (e) promptly after the filing or mailing thereof, copies of
         all material of a financial nature filed with the Securities and
         Exchange Commission or sent to the stockholders of Mayor's. Further,
         the Borrowers shall add the Administrative Agent as an addressee on all
         mailing lists maintained by or for the Borrowers;

                  (f) on Wednesday of each week or at such other time as the
         Administrative Agent may reasonably request, (i) a Borrowing Base
         Report setting forth the Borrowing Base as at the end of the week most
         recently ended or other date so requested by the Administrative Agent
         (to the extent requested more frequently such Borrowing Base Report to
         be based upon a roll forward of sales and purchases) and (ii) a sales
         audit report and a flash collateral report (each in such form as may be
         specified from time to time by the Administrative Agent);

                  (g) on Wednesday of each week or at such other time as the
         Administrative Agent may reasonably request, an Accounts Receivable
         aging report;

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<PAGE>

                  (h) from time to time upon request of the Administrative
         Agent, projections of the Borrowers' Representative and its
         Subsidiaries updating those projections delivered to the Lenders and
         referred to in ss.7.4.3 or, if applicable, updating any later such
         projections delivered in response to a request pursuant to this
         ss.8.4(h);

                  (i)      such other reports listed on SCHEDULE 8.4(I) hereto;

                  (j) from time to time such other financial data, information
         (including accountants, management letters) and copies of advertising
         (including copies of all print advertising and duplicate tapes of all
         video and radio advertising) as the Administrative Agent or any Lender
         may reasonably request.

8.5.  NOTICES.

8.5.1.   DEFAULTS. The Borrowers will promptly notify the Administrative Agent
         and each of the Lenders if the Borrowers are in Default, together with
         a reasonably detailed description thereof, and the actions the
         Borrowers propose to take with respect thereto. If any Person shall
         give any notice or take any other action in respect of a claimed
         default (whether or not constituting a Default) under this Agreement or
         any other note, evidence of indebtedness, indenture or other obligation
         to which or with respect to which the Borrowers or any of their
         Subsidiaries is a party or obligor, whether as principal, guarantor,
         surety or otherwise, the Borrowers shall forthwith give written notice
         thereof to the Administrative Agent and each of the Lenders, describing
         the notice or action and the nature of the claimed default.

8.5.2.   ENVIRONMENTAL EVENTS. The Borrowers will promptly give notice to the
         Administrative Agent and each of the Lenders (a) of any violation of
         any Environmental Law that the Borrowers or any of their Subsidiaries
         reports in writing or is reportable by such Person in writing (or for
         which any written report supplemental to any oral report is made) to
         any Governmental Authority and (b) upon becoming aware thereof, of any
         inquiry, proceeding, investigation, or other action, including a notice
         from any agency of potential environmental liability, of any
         Governmental Authority that could reasonably have a Material Adverse
         Effect.

8.5.3.   NOTIFICATION OF CLAIM AGAINST COLLATERAL. The Borrowers will,
         immediately upon becoming aware thereof, notify the Administrative
         Agent and each of the Lenders in writing of any setoff, claims
         (including, with respect to the Real Estate, environmental claims),
         withholdings or other defenses to which any of the Collateral, or the
         Administrative Agent's rights with respect to the Collateral, are
         subject.

8.5.4.   NOTICE OF LITIGATION AND JUDGMENTS. The Borrowers will, and will cause
         each of their Subsidiaries to, give notice to the Administrative Agent
         and each of the Lenders in writing within fifteen (15) days of becoming
         aware of any litigation or proceedings threatened in writing or any
         pending litigation and proceedings affecting the Borrowers or any of
         their Subsidiaries or to which the Borrowers or any of their
         Subsidiaries is or becomes a party involving an uninsured claim against
         the Borrowers or any of their Subsidiaries that could reasonably be
         expected to have a Material Adverse Effect and stating the nature and
         status of such litigation or proceedings. The Borrowers will, and will

                                      -62-
<PAGE>

         cause each of their Subsidiaries to, give notice to the Administrative
         Agent and each of the Lenders, in writing, in form and detail
         satisfactory to the Administrative Agent, within ten (10) days of any
         judgment not covered by insurance, final or otherwise, against the
         Borrowers or any of their Subsidiaries in an amount in excess of
         $750,000.

8.5.5.   NOTICES CONCERNING INVENTORY COLLATERAL. The Borrowers shall provide to
         the Administrative Agent and the Tranche B Lender prompt notice of (a)
         any physical count of the Borrowers' or any of their Subsidiaries'
         inventory, together with a copy of the results thereof certified by the
         Borrowers or such Subsidiary, (b) any determination by the Borrowers or
         any of their Subsidiaries that the inventory levels of the Borrowers or
         such Subsidiary are not adequate to meet the sales projections of the
         Borrowers or such Subsidiary, (c) details of all credit card
         arrangements to which the Borrowers or any of their Subsidiaries is
         from time to time a party, including details relating to the Borrowers'
         or such Subsidiary's compliance with the terms of payment to the Fleet
         Concentration Account of the proceeds of all credit card charges for
         sales by the Borrowers or such Subsidiary, and (d) any failure of the
         Borrowers or any of their Subsidiaries to pay rent at any location,
         which failure continues for more than three days following the day on
         which such rent is due and payable by the Borrowers or such Subsidiary.
         If so requested by the Administrative Agent or any Lender, the
         Borrowers shall provide to the Administrative Agent or such Lender
         copies of all advertising by the Borrowers or any of their Subsidiaries
         including copies of all print advertising and duplicate tapes of all
         video and radio advertising.

8.5.6.   CHANGE IN OFFICERS OR ACCOUNTANTS. The Borrowers shall provide to the
         Administrative Agent prompt notice of any change in the Borrowers'
         President, chief executive officer, chief operating officer, and chief
         financial officer (without regard to the title(s) actually given to the
         Persons discharging the duties customarily discharged by officers with
         those titles) or any intention on the part of the Borrowers to
         discharge the Borrowers' present independent accountants or any
         withdrawal or resignation by such independent accountants from their
         acting in such capacity.

8.6. LEGAL EXISTENCE; MAINTENANCE OF PROPERTIES. The Borrowers will do or cause
to be done all things commercially reasonable to preserve and keep in full force
and effect their legal existence, rights and franchises and those of their
Subsidiaries and will not, and will not cause or permit any of their
Subsidiaries to, convert to a limited liability company or a limited liability
partnership; PROVIDED, HOWEVER, Mayor's may, upon notice to the Administrative
Agent, dissolve Subsidiaries other than Mayor's Fla if the dissolution is, in
the judgment of the Borrowers, desirable and would not have a Material Adverse
Effect. Each (i) will cause all of its properties and those of its Subsidiaries
used or useful in the conduct of its business or the business of its
Subsidiaries to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment, (ii) will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Borrowers may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times, and (iii) will, and will cause each of its Subsidiaries to,
continue to engage primarily in the businesses now conducted by them and in
related businesses; PROVIDED that nothing in this ss.8.6 shall prevent the
Borrowers from discontinuing the operation and maintenance of any of their
properties or any of those of its Subsidiaries if such discontinuance is, in the
judgment of the Borrowers, desirable in the conduct of its or their business and
that do not in the aggregate have a Material Adverse Effect.

8.7.  INSURANCE.

8.7.1.   MAINTENANCE OF INSURANCE. SCHEDULE 8.7.1 hereto, is a schedule of all
         insurance policies owned by the Borrowers or under which the Borrowers
         are the named insured. Each of such policies is in full force and

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         effect. The Borrowers will maintain with financially sound and
         reputable insurers insurance with respect to its properties and
         business against such casualties and contingencies as shall be in
         accordance with general practices of businesses engaged in similar
         activities in similar geographic areas. Such insurance shall be in such
         minimum amounts that the Borrowers will not be deemed a co-insurer
         under applicable insurance laws, regulations and policies and otherwise
         shall be in such amounts, contain such terms, be in such forms and be
         for such periods as may be reasonably satisfactory to the
         Administrative Agent. In addition, all such insurance shall be payable
         to the Administrative Agent as loss payee under a "standard" or "New
         York" loss payee clause for the benefit of the Lenders and the
         Administrative Agent and shall not include an endorsement in favor of
         any other Person. Without limiting the foregoing, the Borrowers will
         (a) keep all of their physical property insured with casualty or
         physical hazard insurance on an "all risks" basis, with broad form
         flood and earthquake coverages and electronic data processing coverage,
         with a full replacement cost endorsement and an "agreed amount" clause
         in an amount equal to 100% of the full replacement cost of such
         property, (b) maintain all such workers' compensation or similar
         insurance as may be required by law and (c) maintain, in amounts and
         with deductibles equal to those generally maintained by businesses
         engaged in similar activities in similar geographic areas, general
         public liability insurance against claims of bodily injury, death or
         property damage occurring, on, in or about the properties of the
         Borrowers; business interruption insurance; and product liability
         insurance.

8.7.2.   INSURANCE PROCEEDS. The proceeds of any casualty insurance in respect
         of any casualty loss of any of the Collateral shall, subject to the
         rights, if any, of other parties with an interest having priority in
         the property covered thereby, (a) so long as no Default exists and to
         the extent that the amount of such proceeds is less than $1,000,000, be
         disbursed to the Borrowers for direct application by the Borrowers
         solely to the repair or replacement of the Borrowers' property so
         damaged or destroyed and (b) in all other circumstances, be held by the
         Administrative Agent as cash collateral for the Obligations. The
         Administrative Agent may, at its sole option, disburse from time to
         time all or any part of such proceeds so held as cash collateral, upon
         such terms and conditions as the Administrative Agent may reasonably
         prescribe, for direct application by the Borrowers solely to the repair
         or replacement of the Borrowers' property so damaged or destroyed, or
         the Administrative Agent may apply all or any part of such proceeds to
         the Obligations with the Commitment (if not then terminated) being
         reduced by the amount so applied to the Obligations.

8.7.3.   CONTINUATION OF INSURANCE. All policies of insurance shall provide for
         at least sixty (60) days prior written cancellation notice to the
         Administrative Agent. In the event of failure by the Borrowers to
         provide and maintain insurance as herein provided, the Administrative
         Agent may, at its option, provide such insurance and charge the amount
         thereof to the Borrowers. The Borrowers shall furnish the
         Administrative Agent with certificates of insurance and policies
         evidencing compliance with the foregoing insurance provision.

8.8. TAXES. The Borrowers will, and will cause each of their Subsidiaries to,
duly pay and discharge, or cause to be paid and discharged, before the same
shall become overdue, all taxes, assessments and other governmental charges
imposed upon it and its Real Estate, sales and activities, or any part thereof,
or upon the income or profits therefrom, as well as all claims for labor,
materials, or supplies that if unpaid would by law become a Lien or charge upon
any of its property; PROVIDED that any such tax, assessment, charge, levy or

                                      -64-
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claim need not be paid if the validity or amount thereof shall currently be
contested in good faith by appropriate proceedings and if the Borrowers or such
Subsidiary shall have set aside on its books adequate reserves with respect
thereto; and PROVIDED FURTHER that the Borrowers and each Subsidiary of the
Borrowers will pay all such taxes, assessments, charges, levies or claims
forthwith upon the commencement of proceedings to foreclose any Lien that may
have attached as security therefor.

8.9.  INSPECTION OF PROPERTIES AND BOOKS, ETC.

8.9.1.   GENERAL. The Borrowers shall permit the Lenders, through the
         Administrative Agent or any of the Lenders' other designated
         representatives, to visit and inspect any of the properties of the
         Borrowers or any of their Subsidiaries, to examine the books of account
         of the Borrowers and their Subsidiaries (and to make copies thereof and
         extracts therefrom, duplicate, cause to be reduced to hard copy, run
         off, draw off, and otherwise use any and all computer or electronically
         stored information or data which relates to the Borrowers, or any
         service bureau, contractor, accountant, or other person), and to
         discuss the affairs, finances and accounts of the Borrowers and their
         Subsidiaries with, and to be advised as to the same by, its and their
         officers, and to conduct examinations and verifications (whether by
         internal commercial finance examiners or independent auditors) of all
         components included in the Borrowing Base, all at such reasonable times
         and intervals as the Administrative Agent or any Lender may reasonably
         request. The Administrative Agent may, at the Borrowers' expense,
         participate in or observe any physical count of inventory included in
         the Collateral.

8.9.2    COLLATERAL REPORTS; PHYSICAL INVENTORIES.

                           (a) Not less frequent than four times during each
                  calendar year, upon the request of the Administrative Agent,
                  the Borrowers will obtain and deliver to the Administrative
                  Agent, or, if the Administrative Agent so elects, will
                  cooperate with the Administrative Agent in the Administrative
                  Agent's obtaining, a report of an independent collateral
                  auditor satisfactory to the Administrative Agent (which may be
                  affiliated with one of the Lenders) with respect to the
                  Accounts Receivable and inventory components included in the
                  Borrowing Base, which report shall indicate whether or not the
                  information set forth in the Borrowing Base Report most
                  recently delivered is accurate and complete in all material
                  respects based upon a review by such auditors of the Accounts
                  Receivable (including verification with respect to the amount,
                  aging, identity and credit of the respective account debtors
                  and the billing practices of the Borrowers or their applicable
                  Subsidiary) and inventory (including verification as to the
                  value, location and respective types). All such collateral
                  value reports shall be conducted and made at the expense of
                  the Borrowers.

                           (b) The Borrowers, at their own expense, shall cause
                  not less than two (2) physical inventories to be undertaken in
                  each twelve (12) month period during which this Agreement is
                  in effect (the spacing of the scheduling of which inventories
                  shall be subject to the Administrative Agent's reasonable
                  discretion) conducted by such inventory takers as are
                  satisfactory to the Administrative Agent and following such
                  methodology as may be satisfactory to the Administrative
                  Agent. The Borrowers shall provide the Administrative Agent
                  with a copy of the preliminary results of each such inventory
                  (as well as of any other physical inventory undertaken by the

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                  Borrowers) within ten (10) days following the completion of
                  such inventory. The Borrowers, within thirty (30) days
                  following the completion of such inventory, shall provide the
                  Administrative Agent with a reconciliation of the results of
                  each such inventory (as well as of any other physical
                  inventory undertaken by the Borrowers) and shall post such
                  results to the Borrowers' stock ledger and, as applicable to
                  the Borrowers' other financial books and records. The
                  Administrative Agent, in its reasonable discretion, if a
                  Default exist, may cause such additional inventories to be
                  taken as the Administrative Agent determines (each, at the
                  expense of the Borrowers).

8.9.3.   APPRAISALS. Not less frequently than four times during each calendar
         year, the Borrowers will obtain and deliver to the Administrative Agent
         appraisal reports in form and substance satisfactory to the
         Administrative Agent stating the then current fair market orderly
         liquidation and forced liquidation values of all or any portion of the
         Inventory and Private Label Accounts. Upon the request of the
         Administrative Agent or the Tranche B Lender, the Borrowers will obtain
         and deliver to the Administrative Agent appraisal reports in form and
         substance and from appraisers satisfactory to the Administrative Agent,
         stating (a) the then current fair market, orderly liquidation and
         forced liquidation values of all or any portion of the inventory,
         Accounts Receivable, the equipment or real estate owned by the
         Borrowers or any of their Subsidiaries and (b) the then current
         business value of each of the Borrowers and their Subsidiaries. All
         such appraisals shall be conducted and made at the expense of the
         Borrowers.

8.9.4.   ENVIRONMENTAL ASSESSMENTS. Whether or not a Default exist, the
         Administrative Agent may, from time to time, in its reasonable
         discretion for the purpose of assessing and ensuring the value of any
         Mortgaged Property, obtain one or more environmental assessments or
         audits of such Mortgaged Property prepared by a hydrogeologist, an
         independent engineer or other qualified consultant or expert approved
         by the Administrative Agent to evaluate or confirm (a) whether any
         Hazardous Materials are present in the soil or water at such Mortgaged
         Property and (b) whether the use and operation of such Mortgaged
         Property complies with all Environmental Laws. Environmental
         assessments may include without limitation detailed visual inspections
         of such Mortgaged Property including any and all storage areas, storage
         tanks, drains, dry wells and leaching areas, and the taking of soil
         samples, surface water samples and ground water samples, as well as
         such other investigations or analyses as the Administrative Agent deems
         appropriate. All such environmental assessments shall be conducted and
         made at the expense of the Borrowers.

8.9.5.   COMMUNICATIONS WITH ACCOUNTANTS AND OTHER PERSONS. Upon prior notice to
         the Borrowers' Representative, the Borrowers authorize the
         Administrative Agent and, if accompanied by the Administrative Agent,
         the Lenders to communicate directly with the Borrowers' independent
         certified public accountants, service bureau, contractors and other
         Persons, and authorizes such accountants, service bureaus, contractors
         and other Persons to disclose to the Administrative Agent and the
         Lenders any and all financial statements and other supporting financial
         documents and schedules including copies of any management letter with
         respect to the business, financial condition and other affairs of the
         Borrowers or any of their Subsidiaries. At the request of the
         Administrative Agent, the Borrowers shall deliver a letter addressed to

                                      -66-
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         such accountants, service bureaus, contractors and other Persons
         instructing them to comply with the provisions of this ss.8.9.5.

8.9.6.   RESTRUCTURING ADVISOR. The Borrowers authorize the Administrative Agent
         and, if accompanied by the Administrative Agent, any of the Lenders, to
         communicate directly with the Restructuring Advisor and to have the
         Restructuring Advisor update the Administrative Agent on the status of
         the Borrowers' attempts to achieve an Approved Recapitalization.

8.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. Except as set
forth on SCHEDULE 8.10 hereto, the Borrowers will, and will cause each of their
Subsidiaries to, comply with (a) the applicable laws and regulations wherever
its business is conducted, including all Environmental Laws, (b) the provisions
of its Governing Documents, (c) all agreements and instruments by which it or
any of its properties may be bound and (d) all applicable decrees, orders, and
judgments. If any authorization, consent, approval, permit or license from any
officer, agency or instrumentality of any government shall become necessary or
required in order that the Borrowers or any of their Subsidiaries may fulfill
any of its obligations hereunder or any of the other Loan Documents to which the
Borrowers or such Subsidiary is a party, the Borrowers will, or (as the case may
be) will cause such Subsidiary to, immediately take or cause to be taken all
reasonable steps within the power of the Borrowers or such Subsidiary to obtain
such authorization, consent, approval, permit or license and furnish the
Administrative Agent and the Lenders with evidence thereof.

8.11. EMPLOYEE BENEFIT PLANS. The Borrowers will (a) promptly upon request of
the Administrative Agent, furnish to the Administrative Agent a copy of the most
recent actuarial statement required to be submitted under ss.103(d) of ERISA and
Annual Report, Form 5500, with all required attachments, in respect of each
Guaranteed Pension Plan, and (b) promptly upon receipt or dispatch, furnish to
the Administrative Agent any notice, report or demand sent or received in
respect of a Guaranteed Pension Plan under ss.ss.302, 4041, 4042, 4043, 4063,
4065, 4066 and 4068 of ERISA, or in respect of a Multiemployer Plan under
ss.4041A, 4202, 4219, 4242, or 4245 of ERISA.

8.12. USE OF PROCEEDS. The Borrowers will use the proceeds of the Loans and
obtain Letters of Credit solely for the purposes set forth in ss.7.17.1.

8.13. ADDITIONAL MORTGAGED PROPERTY. If, after the Closing Date, the Borrowers
or any of its Subsidiaries acquires Real Estate used as a manufacturing or
warehouse facility, the Borrowers shall, or shall cause such Subsidiary to,
forthwith deliver to the Administrative Agent a fully executed mortgage or deed
of trust over such Real Estate, in form and substance satisfactory to the
Administrative Agent, together with title insurance policies, surveys, evidences
of insurance with the Administrative Agent named as loss payee and additional
insured, legal opinions and other documents and certificates with respect to
such Real Estate as was required for Real Estate of the Borrowers or such
Subsidiary as of the Closing Date. The Borrowers further agree that, following
the taking of such actions with respect to such Real Estate, the Administrative
Agent shall have for the benefit of the Lenders and the Administrative Agent a
valid and enforceable first priority mortgage or deed of trust over such Real
Estate, free and clear of all Liens except for Permitted Liens. If, after an
Event of Default, the Borrowers or any of their Subsidiaries lease Real Estate
used as a manufacturing or warehouse facility, the Borrowers shall, or shall
cause such Subsidiary to, forthwith deliver to the Administrative Agent a
landlord waiver relating to such property in form and substance satisfactory to
the Administrative Agent.

8.14. BANK ACCOUNTS.

                                      -67-
<PAGE>

8.14.1.  GENERAL. On or prior to the Closing Date, the Borrowers will, and will
         cause each of its Subsidiaries to, (a) establish a depository account
         (the "FLEET CONCENTRATION ACCOUNT") under the control of the
         Administrative Agent for the benefit of the Lenders and the
         Administrative Agent, in the name of the Borrowers, (b) to cause all
         Receipts or cash proceeds of Accounts Receivable to be deposited only
         into Local Accounts or Interim Concentration Accounts and, if
         applicable, lock box agreements or the Fleet Concentration Account, (c)
         direct all depository institutions with Local Accounts to cause all
         funds held in each such Local Account to be transferred no less
         frequently than once each day to, and only to, an Interim Concentration
         Account or the Fleet Concentration Account, (d) direct all depository
         institutions with Interim Concentration Accounts to cause all funds of
         the Borrowers and their Subsidiaries held in such Interim Concentration
         Accounts to be transferred daily to, and only to, the Fleet
         Concentration Account, and (e) at all times ensure that immediately
         upon the Borrowers' or any of their Subsidiaries' receipt of any funds
         constituting or cash proceeds of any Collateral, all such amounts shall
         have been deposited in a Local Account, an Interim Concentration
         Account or the Fleet Concentration Account.

8.14.2.  ACKNOWLEDGMENT OF APPLICATION. The Borrowers hereby agree that all
         amounts received by the Administrative Agent in the Fleet Concentration
         Account will be the sole and exclusive property of the Administrative
         Agent, for the accounts of the Lenders and the Administrative Agent, to
         be applied in accordance ss.2.14.2 or ss.2.15 as applicable.

8.15. COVENANTS CONCERNING COLLATERAL, ETC. The Borrowers further covenant with
the Lenders and the Administrative Agent as follows: (a) the Collateral, to the
extent not delivered to the Administrative Agent pursuant to ss.6, will be kept
at those locations listed on the Perfection Certificate and the Borrowers will
not remove the Collateral from such locations, without providing at least 30
days prior written notice to the Administrative Agent, (b) except for the
security interest herein granted, the Borrowers shall be the owners of the
Collateral free from any right or claim of any other person or any Lien, and the
Borrowers shall defend the same against all claims and demands of all persons at
any time claiming the same or any interests therein adverse to the
Administrative Agent or any of the Lenders, (c) the Borrowers shall not pledge,
mortgage or create, or suffer to exist any right of any person in or claim by
any person to the Collateral, or any Lien in the Collateral in favor of any
person, other than the Administrative Agent and the Permitted Liens, (d) the
Borrowers will keep the Collateral in good order and repair and will not use the
same in violation of law or any policy of insurance thereon, (e) the Borrowers
will pay promptly when due all taxes, assessments, governmental charges and
levies upon the Collateral or incurred in connection with the use or operation
of the Collateral or incurred in connection with this Agreement and (f) the
Borrowers will continue to operate, their business in compliance with all
applicable provisions of the federal Fair Labor Standards Act, as amended, and
with all applicable provisions of federal, state and local statutes and
ordinances dealing with the control, shipment, storage or disposal of hazardous
materials or substances. No sale of Inventory shall be on consignment, approval,
or under any other circumstances such that, with the exception of the Borrowers'
customary return policy applicable to the return of inventory purchased by the
Borrowers' retail customers in the ordinary course, such Inventory may be
returned to the Borrowers without the consent of the Administrative Agent. The
Borrowers may grant such allowances or other adjustments to the Borrowers'
account debtors as the Borrowers may reasonably deem to accord with sound
business practice, PROVIDED, HOWEVER, the authority granted the Borrowers

                                      -68-
<PAGE>

pursuant to this Section 8.15 may be limited or terminated by the Administrative
Agent at any time in the Administrative Agent's reasonable discretion.

8.16. FURTHER ASSURANCES. The Borrowers will, and will cause each of their
Subsidiaries to, cooperate with the Lenders and the Administrative Agent and
execute such further instruments and documents as the Lenders or the
Administrative Agent shall reasonably request to carry out to their satisfaction
the transactions contemplated by this Agreement and the other Loan Documents.

                         9. CERTAIN NEGATIVE COVENANTS.

         The Borrowers covenant and agree that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Lender
has any obligation to make any Loans or the Administrative Agent has any
obligations to issue, extend or renew any Letters of Credit:

9.1. RESTRICTIONS ON INDEBTEDNESS. The Borrowers will not, and will not permit
any of their Subsidiaries to, create, incur, assume, guarantee or be or remain
liable, contingently or otherwise, with respect to any Indebtedness other than:

                  (a) Indebtedness to the Lenders and the Administrative Agent
         arising under any of the Loan Documents;

                  (b) endorsements for collection, deposit or negotiation and
         warranties of products or services, in each case incurred in the
         ordinary course of business;

                  (c) Indebtedness incurred in connection with the acquisition
         after the date hereof of any real or personal property by the Borrowers
         or such Subsidiary or under any Capitalized Lease, PROVIDED that the
         aggregate principal amount of such Indebtedness of the Borrowers and
         their Subsidiaries shall not exceed the aggregate amount of $7,500,000
         at any one time;

                  (d) Indebtedness existing on the date hereof and listed and
         described on SCHEDULE 9.1 hereto;

                  (e) Approved Recapitalization Liabilities; and

                  (f) Indebtedness of a Borrower to another Borrower or of a
         Subsidiary of the Borrowers existing on the date hereof to the
         Borrowers.

9.2. RESTRICTIONS ON LIENS.

9.2.1.   PERMITTED LIENS. The Borrowers will not, and will not permit any of
         their Subsidiaries to, (a) create or incur or suffer to be created or
         incurred or to exist any Lien upon any of their property or assets of
         any character whether now owned or hereafter acquired, or upon the
         income or profits therefrom; (b) transfer any of such property or
         assets or the income or profits therefrom for the purpose of subjecting
         the same to the payment of Indebtedness or performance of any other
         obligation in priority to payment of its general creditors; (c)
         acquire, or agree or have an option to acquire, any property or assets
         upon conditional sale or other title retention or purchase money
         security agreement, device or arrangement; (d) suffer to exist for a
         period of more than thirty (30) days after the same shall have been
         incurred any Indebtedness or claim or demand against it that if unpaid
         could by law or upon bankruptcy or insolvency, or otherwise, be given
         any priority whatsoever over its general creditors; or (e) sell,

                                      -69-
<PAGE>

         assign, pledge or otherwise transfer any "RECEIVABLES" as defined in
         clause (g) of the definition of the term "INDEBTEDNESS," with or
         without recourse; PROVIDED that the Borrowers or any of their
         Subsidiaries may create or incur or suffer to be created or incurred or
         to exist:

                           (i) Liens in favor of the Borrowers on all or part of
                  the assets of Subsidiaries of the Borrowers securing
                  Indebtedness owing by Subsidiaries of the Borrowers to the
                  Borrowers;

                           (ii) Liens to secure taxes, assessments and other
                  government charges in respect of obligations not overdue or
                  Liens on properties to secure claims for labor, material or
                  supplies in respect of obligations not overdue;

                           (iii) deposits or pledges made in connection with, or
                  to secure payment of, workmen's compensation, unemployment
                  insurance, old age pensions or other social security
                  obligations;

                           (iv) Liens on properties in respect of judgments or
                  awards that have been in force for less than the applicable
                  period for taking an appeal so long as execution is not levied
                  thereunder or in respect of which the Borrowers or such
                  Subsidiary shall at the time in good faith be prosecuting an
                  appeal or proceedings for review and in respect of which a
                  stay of execution shall have been obtained pending such appeal
                  or review;

                           (v) Liens of carriers, warehousemen, mechanics and
                  materialmen, and other like Liens on properties, in existence
                  less than 120 days from the date of creation thereof in
                  respect of obligations not overdue;

                           (vi) encumbrances on Real Estate consisting of
                  easements, rights of way, zoning restrictions, restrictions on
                  the use of real property and defects and irregularities in the
                  title thereto, landlord's or lessor's liens and other minor
                  Liens, PROVIDED that none of such Liens (A) interferes
                  materially with the use of the property affected in the
                  ordinary conduct of the business of the Borrowers and their
                  Subsidiaries, and (B) individually or in the aggregate have a
                  Material Adverse Effect;

                           (vii) Liens existing on the date hereof and listed on
                  SCHEDULE 9.2 hereto;

                           (viii) purchase money security interests in or
                  purchase money mortgages on real or personal property acquired
                  after the date hereof to secure purchase money Indebtedness of
                  the type and amount permitted by ss.9.1(c), incurred in
                  connection with the acquisition of such property, which
                  security interests or mortgages cover only the real or
                  personal property so acquired;

                                      -70-
<PAGE>

                           (ix) Liens in favor of the Administrative Agent for
                  the benefit of the Lenders and the Administrative Agent under
                  the Loan Documents;

                           (x) The Rolex Liens;

                           (xi) Liens of a bank or financial institution with
                  respect to funds deposited with such institution;

                           (xii) Liens in favor of Citicorp USA, Inc. in
                  existence immediately prior to the Closing Date that are paid
                  and satisfied in full and released on the Closing Date as a
                  result of the application of a Borrower's cash on hand on the
                  Closing Date and/or the proceeds of the Revolving Credit Loan
                  or the Tranche B Loan being made on the Closing Date.

9.2.2.   RESTRICTIONS ON NEGATIVE PLEDGES AND UPSTREAM LIMITATIONS. The
         Borrowers will not, nor will it permit any of their Subsidiaries to (a)
         enter into or permit to exist any arrangement or agreement (excluding
         the Agreement and the other Loan Documents) which directly or
         indirectly prohibits the Borrowers or any of their Subsidiaries from
         creating, assuming or incurring any Lien upon its properties, revenues
         or assets or those of any of their Subsidiaries whether now owned or
         hereafter acquired, or (b) enter into any agreement, contract or
         arrangement (excluding the Agreement and the other Loan Documents)
         restricting the ability of any Subsidiary of the Borrowers to pay or
         make dividends or distributions in cash or kind to the Borrowers, to
         make loans, advances or other payments of whatsoever nature to the
         Borrowers, or to make transfers or distributions of all or any part of
         its assets to the Borrowers; in each case other than (i) restrictions
         on specific assets which assets are the subject of purchase money
         security interests to the extent permitted under ss.9.2.1, and (ii)
         customary anti-assignment provisions contained in leases and licensing
         agreements entered into by the Borrowers or such Subsidiary in the
         ordinary course of its business.

9.3. RESTRICTIONS ON INVESTMENTS. The Borrowers will not, and will not permit
any of their Subsidiaries to, make or permit to exist or to remain outstanding
any Investment except Investments in:

                  (a) Cash Equivalents;

                  (b) Investments existing on the date hereof and listed on
         SCHEDULE 9.3 hereto;

                  (c) Investments with respect to Indebtedness permitted
         by ss.9.1(f) so long as such entities remain Subsidiaries of the
         Borrowers;

                  (d) Investments by the Borrowers in each other existing on the
         Closing Date;

                  (e) Investments consisting of promissory notes received as
         proceeds of asset dispositions permitted by ss.9.5.2; and

                  (f) Investments consisting of loans and advances to employees
         for moving, entertainment, travel and other similar expenses in the

                                      -71-
<PAGE>

         ordinary course of business not to exceed $250,000 in the aggregate at
         any time outstanding;

PROVIDED, HOWEVER, that, such Investments will be considered Investments
permitted by this ss.9.3 only if all actions have been taken to the satisfaction
of the Administrative Agent to provide to the Administrative Agent, for the
benefit of the Lenders and the Administrative Agent, a first priority perfected
security interest in all of such Investments free of all Liens other than
Permitted Liens.

                                      -72-
<PAGE>

9.4.  RESTRICTED PAYMENTS.  The Borrowers will not make any Restricted Payments.

9.5.  MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.

9.5.1.   MERGERS AND ACQUISITIONS. The Borrowers will not, and will not permit
         any of their Subsidiaries to, become a party to any merger,
         amalgamation or consolidation, or agree to or effect any asset
         acquisition or stock acquisition (other than the acquisition of assets
         in the ordinary course of business consistent with past practices)
         except the merger or consolidation of one or more of the Subsidiaries
         of the Borrowers with and into one of the Borrowers, or the merger or
         consolidation of two or more Subsidiaries of the Borrowers.

9.5.2.   DISPOSITION OF ASSETS. The Borrowers will not, and will not permit any
         of their Subsidiaries to, become a party to or agree to or effect any
         disposition of assets, other than (a) the sale of inventory, the
         licensing of intellectual property and the disposition of obsolete
         assets, in each case in the ordinary course of business consistent with
         past practices, (b) the sale of the Headquarters Facility so long (i)
         such sale is not to an Affiliate of any of the Borrowers and is
         otherwise for fair value on an arms length basis, (ii) no Default
         exists at the time the Borrowers enter into a binding contract to sell
         the Headquarters Facility and (iii) the sale price shall not be less
         than $5,600,000 and (c) the Borrowers may sell inventory and other
         assets outside the ordinary course of business in connection with
         Permitted Store Closings so long as the liquidation is conducted by a
         liquidator and is otherwise on terms and conditions acceptable to the
         Administrative Agent.

9.6. SALE AND LEASEBACK. The Borrowers will not, and will not permit any of
their Subsidiaries to, enter into any arrangement, directly or indirectly,
whereby the Borrowers or any Subsidiary of the Borrowers shall sell or transfer
any property owned by it in order then or thereafter to lease such property or
lease other property that the Borrowers or any Subsidiary of the Borrowers
intends to use for substantially the same purpose as the property being sold or
transferred.

9.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Borrowers will not, and will not
permit any of their Subsidiaries to, (a) use any of the Real Estate or any
portion thereof for the handling, processing, storage or disposal of Hazardous
Substances, (b) cause or permit to be located on any of the Real Estate any
underground tank or other underground storage receptacle for Hazardous
Substances, (c) generate any Hazardous Substances on any of the Real Estate, (d)
conduct any activity at any Real Estate or use any Real Estate in any manner so
as to cause a release (i.e., releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, disposing or
dumping) or threatened release of Hazardous Substances on, upon or into the Real
Estate or (e) otherwise conduct any activity at any Real Estate or use any Real
Estate in any manner that would violate any Environmental Law or bring such Real
Estate in violation of any Environmental Law.

9.8. EMPLOYEE BENEFIT PLANS. Neither the Borrowers nor any ERISA Affiliate will:

                  (a) engage in any "PROHIBITED TRANSACTION" within the meaning
         of ss.406 of ERISA or ss.4975 of the Code which could result in a
         material liability for the Borrower or any of its Subsidiaries; or

                  (b) permit any Guaranteed Pension Plan to incur an
         "ACCUMULATED FUNDING DEFICIENCY", as such term is defined in ss.302 of
         ERISA, whether or not such deficiency is or may be waived; oR

                  (c) fail to contribute to any Guaranteed Pension Plan to an
         extent which, or terminate any Guaranteed Pension Plan in a manner
         which, could result in the imposition of a lien or encumbrance on the

                                      -73-
<PAGE>

         assets of the Borrowers or any of their Subsidiaries pursuant to
         ss.302(f) or ss.4068 of ERISA; or

                  (d) amend any Guaranteed Pension Plan in circumstances
         requiring the posting of security pursuant to ss.307 of ERISA
         or ss.401(a)(29) of the Code;

                  (e) permit or take any action which would result in the
         aggregate benefit liabilities (with the meaning of ss.4001 of ERISA) of
         all Guaranteed Pension Plans exceeding the value of the aggregate
         assets of such Plans, disregarding for this purpose the benefit
         liabilities and assets of any such Plan with assets in excess of
         benefit liabilities, by more than the amount set forth in ss.7.16.3; or

                  (f) permit or take any action which would contravene any
Applicable Pension Legislation.

9.9. BUSINESS ACTIVITIES; PERMITTED STORE CLOSINGS. The Borrowers will not, and
will not permit any of their Subsidiaries to, (a) engage directly or indirectly
(whether through Subsidiaries or otherwise) in any type of business other than
the businesses conducted by them on the Closing Date and in related businesses,
(b) execute, alter, modify, or amend any Lease; PROVIDED, HOWEVER, the
Borrower's may terminate the leases on the retail locations (i) listed on
SCHEDULE 9.9 hereto so long as the Borrowers have received Net Proceeds from the
sale or issuance of Approved Recapitalization Liabilities in an amount not less
than the amount which the Borrowers are required to pay to the landlord under
such leases in connection with the termination of such leases or (ii) which
otherwise constitute a Permitted Store Closing and are not listed on SCHEDULE
9.9, (c) except as provided in part (b) hereof, commit to, or open or close any
location at which the Borrowers maintains, offers for sales, or stores any of
the Collateral or (d) possess inventory on consignment in excess of $6,000,000
from February 1 to September 30 of each year, $9,000,000 from October 1 to
December 31 of each year, and $8,000,000 from January 1 to January 31 of each
year.

9.10. FISCAL YEAR. The Borrowers will not, and will not permit any of their
Subsidiaries to, change the date of the end of its fiscal year from that set
forth in ss.7.4.1.

9.11. TRANSACTIONS WITH AFFILIATES. Each Affiliate of the Borrowers is listed on
SCHEDULE 7.19. The Borrowers shall provide the Administrative Agent with prior
written notice of any entity's becoming or ceasing to be an Affiliate. The
Borrowers will not, and will not permit any of their Subsidiaries to, engage in
any transaction with any Affiliate (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
such Affiliate or, to the knowledge of the Borrowers, any corporation,
partnership, trust or other entity in which any such Affiliate has a substantial
interest or is an officer, director, trustee or partner, on terms more favorable
to such Person than would have been obtainable on an arm's-length basis in the
ordinary course of business.

9.12. BANK ACCOUNTS. The Borrowers will not, and will not permit any of their
Subsidiaries to, (a) establish any bank accounts, credit card clearinghouse or
processors, other than those Deposit Accounts, clearinghouses and processors and
other accounts, all listed on SCHEDULE 7.20, without the Administrative Agent's
prior written consent, (b) violate directly or indirectly any Control Agreement
or other bank agency or lock box agreement in favor of the Administrative Agent

                                      -74-
<PAGE>

for the benefit of the Lenders and the Administrative Agent with respect to such
account, (c) deposit into any of the payroll accounts listed on SCHEDULE 7.20
any amounts in excess of amounts necessary to pay current payroll obligations
from such accounts or (d) change any direction or designation relating to any
credit card clearinghouse or processor.

                            10. FINANCIAL COVENANTS.

         The Borrowers covenant and agree that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Lender
has any obligation to make any Loans or the Administrative Agent has any
obligation to issue, extend or renew any Letters of Credit:

         10.1. MINIMUM INVENTORY PURCHASES. The Borrowers will at all times
cause Inventory for at least one calendar week out of every two calendar weeks
to exceed the amounts listed below opposite the period during which such week
began. Compliance with this ss.10.1 shall be determined by the Administrative
Agent based upon the Borrowing Base Certificates each week delivered to the
Administrative Agent pursuant to ss.8.4(f) of this Agreement and Inventory shall
be valued at cost pursuant to the Borrowers' ESSBASE stock ledger.

<TABLE>
<CAPTION>

------------------------------------------------------- -----------------------------------------------------
                        Period                                        Minimum Inventory Amount
------------------------------------------------------- -----------------------------------------------------
<S>                                                                         <C>
           December 16 through September 30                                 $68,000,000
------------------------------------------------------- -----------------------------------------------------
             October 1 through October 31                                   $70,000,000
------------------------------------------------------- -----------------------------------------------------
            November 1 through December 15                                  $74,000,000
------------------------------------------------------- -----------------------------------------------------

</TABLE>

10.2 CAPITAL EXPENDITURES. The Borrowers will not make, or permit any Subsidiary
of the Borrowers to make, Capital Expenditures in any fiscal year that exceed,
in the aggregate, $4,000,000 for such fiscal year.

                             11. CLOSING CONDITIONS

         The obligations of the Lenders to make the initial Revolving Credit
Loans and the Tranche B Loan and of the Administrative Agent to issue any
initial Letters of Credit shall be subject to the satisfaction of the following
conditions precedent on or prior to May 30, 2002:

                                      -75-
<PAGE>

11.1. LOAN DOCUMENTS. Each of the Loan Documents shall have been duly executed
and delivered by the respective parties thereto, shall be in full force and
effect and shall be in form and substance satisfactory to each of the Lenders.
Each Lender shall have received a fully executed copy of each such document.

11.2. CERTIFIED COPIES OF GOVERNING DOCUMENTS. Each of the Lenders shall have
received from the Borrowers a copy, certified by a duly authorized officer of
such Person to be true and complete on the Closing Date, of each of its
Governing Documents as in effect on such date of certification.

11.3. CORPORATE OR OTHER ACTION. All corporate (or other) action necessary for
the valid execution, delivery and performance by the Borrowers and each their
Subsidiaries of this Agreement and the other Loan Documents to which it is or is
to become a party shall have been duly and effectively taken, and evidence
thereof satisfactory to the Lenders shall have been provided to each of the
Lenders.

11.4. INCUMBENCY CERTIFICATE. Each of the Lenders shall have received from the
Borrowers and each of their Subsidiaries an incumbency certificate, dated as of
the Closing Date, signed by a duly authorized officer of the Borrowers or such
Subsidiary, and giving the name and bearing a specimen signature of each
individual who shall be authorized: (a) to sign, in the name and on behalf of
each of the Borrowers of such Subsidiary, each of the Loan Documents to which
the Borrowers or such Subsidiary is or is to become a party; (b) in the case of
the Borrowers' Representative, to make Loan Requests and Conversion Requests and
to apply for Letters of Credit; and (c) to give notices and to take other action
on its behalf under the Loan Documents.

11.5. VALIDITY OF LIENS. The Security Documents shall be effective to create in
favor of the Administrative Agent a legal, valid and enforceable first (except
for Permitted Liens entitled to priority under applicable law) security interest
in and Lien upon the Collateral. All filings, recordings, deliveries of
instruments and other actions necessary or desirable in the opinion of the
Administrative Agent to protect and preserve such security interests shall have
been duly effected. The Administrative Agent shall have received evidence
thereof in form and substance satisfactory to the Administrative Agent.

11.6. PERFECTION CERTIFICATES AND UCC SEARCH RESULTS. The Administrative Agent
shall have received from each of the Borrowers a completed and fully executed
Perfection Certificate and the results of UCC searches (and the equivalent
thereof in all applicable foreign jurisdictions) with respect to the Collateral,
indicating no Liens other than Permitted Liens and otherwise in form and
substance satisfactory to the Administrative Agent.

11.7. TAXES. The Administrative Agent shall have received evidence of payment of
real estate taxes and municipal charges on all Real Estate not delinquent on or
before the Closing Date.

11.8. TITLE INSURANCE. The Administrative Agent shall have received a Title
Policy covering each Mortgaged Property (or commitments to issue such policies,
with all conditions to issuance of the Title Policy deleted by an authorized
agent of the Title Insurance Company) together with proof of payment of all fees
and premiums for such policies, from the Title Insurance Company and in amounts
satisfactory to the Administrative Agent, insuring the interest of the
Administrative Agent and each of the Lenders as mortgagee under the Mortgages.

11.9. CERTIFICATES OF INSURANCE. The Administrative Agent shall have received
(a) a certificate of insurance from an independent insurance broker dated as of
the Closing Date, identifying insurers, types of insurance, insurance limits,
and policy terms, and otherwise describing the insurance obtained in accordance
with this Agreement and (b) certified copies of all policies evidencing such
insurance (or certificates therefore signed by the insurer or an agent
authorized to bind the insurer).

                                      -76-
<PAGE>

11.10. CONTROL AGREEMENTS; CREDIT CARD CLEARING HOUSE. The Borrowers shall have
established the Fleet Concentration Account, and the Administrative Agent shall
have received a Control Agreement executed by each depository institution with
an Interim Concentration Account or Local Account with Bank of America, N.A.,
SunTrust Bank/Miami, N.A. and SunTrust Bank,/Atlanta, N.A.. The Borrowers shall
deliver to the Administrative Agent, notification, executed on behalf of the
Borrowers, to each of the Borrowers' credit card clearinghouses and processors
of notice (in form satisfactory to the Administrative Agent), which notice
provides that payment of all credit card charges submitted by the Borrowers to
that clearinghouse or other processor and any other amount payable to the
Borrowers by such clearinghouse or other processor shall be directed to the
Fleet Concentration Account or as otherwise designated from time to time by the
Administrative Agent.

11.11. BORROWING BASE REPORT. The Administrative Agent shall have received from
the Borrowers the initial Borrowing Base Report dated as of the Closing Date.

11.12. MINIMUM DAY ONE AVAILABILITY. After giving effect to the first funding of
the Revolving Credit Loans and the Tranche B Loan; all then held checks (if
any); accounts payable which are beyond credit terms then accorded the
Borrowers; overdrafts; any charges to the Loan Account made in connection with
the establishment of the credit facility contemplated hereby; and Letter's of
Credit to be issued at, or immediately subsequent to, such establishment,
Availability shall not be less than $5,500,000.

11.13. ACCOUNTS RECEIVABLE AGING REPORT. The Administrative Agent shall have
received from the Borrowers the most recent Accounts Receivable aging report of
the Borrowers and their Subsidiaries dated as of a date which shall be no more
than five (5) days prior to the Closing Date and the Borrowers shall have
notified the Administrative Agent in writing on the Closing Date of any material
deviation from the Accounts Receivable values reflected in such Accounts
Receivable aging report and shall have provided the Administrative Agent with
such supplementary documentation as the Administrative Agent may reasonably
request.

11.14. HAZARDOUS WASTE ASSESSMENTS. The Administrative Agent shall have received
hazardous waste site assessments from environmental engineers and in form and
substance satisfactory to the Administrative Agent, covering the Headquarters
Facility.

11.15. APPRAISALS OF ELIGIBLE FIXED ASSETS. The Administrative Agent shall have
received appraisal reports in form and substance and from appraisers
satisfactory to the Administrative Agent, stating the then current fair market,
forced liquidation value of all Eligible Fixed Assets.

11.16. OPINION OF COUNSEL. Each of the Lenders and the Administrative Agent
shall have received a favorable legal opinion addressed to the Lenders and the
Administrative Agent, dated as of the Closing Date, in form and substance
satisfactory to the Lenders and the Administrative Agent, from:

                  (a) Morgan, Lewis & Bockius LLP, counsel to the Borrowers and
         their Subsidiaries; and

                  (b) local counsel to the Administrative Agent.

11.18. PAYMENT OF FEES. The Borrowers shall have paid to the Lenders or the
Administrative Agent, as appropriate, the Fees pursuant to ss.5.1 and 5.2.

11.19. PAYOFF LETTER. The Administrative Agent shall have received a payoff
letter from Citicorp USA, Inc., indicating the amount of the loan obligations of
the Borrowers to Citicorp USA, Inc. to be discharged on the Closing Date and an
acknowledgment by Citicorp USA, Inc. that upon receipt of such funds it will

                                      -77-
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forthwith execute and deliver to the Administrative Agent for filing all
termination statements and take such other actions as may be necessary to
discharge all mortgages, deeds of trust and security interests granted by the
Borrowers or any of their Subsidiaries in favor of Citicorp USA, Inc.

11.20. ROLEX AGREEMENTS. To the extent that there are Rolex Liens on the Closing
Date, the liens shall be on terms and conditions satisfactory to the
Administrative Agent.

                        12. CONDITIONS TO ALL BORROWINGS.

         The obligations of the Lenders to make any Loan, including the
Revolving Credit Loan and the Tranche B Loan, and of the Administrative Agent to
issue, extend or renew any Letter of Credit, in each case whether on or after
the Closing Date, shall also be subject to the satisfaction of the following
conditions precedent:

                                      -78-
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12.1. REPRESENTATIONS TRUE; NOT IN DEFAULT. Each of the representations and
warranties of any of the Borrowers and their Subsidiaries contained in this
Agreement, the other Loan Documents or in any document or instrument delivered
pursuant to or in connection with this Agreement shall be true as of the date as
of which they were made and shall also be true at and as of the time of the
making of such Loan or the issuance, extension or renewal of such Letter of
Credit, with the same effect as if made at and as of that time (except to the
extent of changes resulting from transactions contemplated or permitted by this
Agreement and the other Loan Documents and changes occurring in the ordinary
course of business that singly or in the aggregate are not materially adverse,
and to the extent that such representations and warranties relate expressly to
an earlier date) and no Default shall exist.

12.2. NO LEGAL IMPEDIMENT. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Lender would make it illegal for such Lender to make such Loan or to
participate in the issuance, extension or renewal of such Letter of Credit or in
the reasonable opinion of the Administrative Agent would make it illegal for the
Administrative Agent to issue, extend or renew such Letter of Credit.

12.3. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
transactions contemplated by this Agreement, the other Loan Documents and all
other documents incident thereto shall be satisfactory in substance and in form
to the Lenders and to the Administrative Agent and the Administrative Agent's
Special Counsel, and the Lenders, the Administrative Agent and such counsel
shall have received all information and such counterpart originals or certified
or other copies of such documents as the Administrative Agent may reasonably
request.

12.4. BORROWING BASE REPORT. The Administrative Agent shall have received the
most recent Borrowing Base Report required to be delivered to the Administrative
Agent in accordance with ss.8.4(f).

12.5. MATERIAL ADVERSE CHANGE. There shall have been no material adverse change
in the Borrowers' financial condition from the most recent financial information
furnished to the Administrative Agent or any Lender pursuant to this Agreement.

12.6. SALES TAXES. If requested by the Administrative Agent all or a portion of
any Loan will be set aside by the Borrowers to cover the Borrowers' obligations
for sales tax on account of sales since the then most recent borrowing pursuant
to the Loans Credit.

                    13. EVENTS OF DEFAULT; ACCELERATION; ETC.

13.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the following events
("EVENTS OF DEFAULT") shall occur:

                  (a) the Borrowers shall fail to pay any principal of the Loans
         or any Reimbursement Obligation when the same shall become due and
         payable, whether at the stated date of maturity or any accelerated date
         of maturity or at any other date fixed for payment;

                  (b) the Borrowers or any of their Subsidiaries shall fail to
         pay any interest on the Loans, any Fees, or other sums due hereunder or
         under any of the other Loan Documents, when the same shall become due
         and payable, whether at the stated date of maturity or any accelerated
         date of maturity or at any other date fixed for payment;

                  (c) the Borrowers shall fail to comply with any of their
         covenants contained inss.ss.8, 9 or 10;

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                  (d) the Borrowers or any of their Subsidiaries shall fail to
         perform any term, covenant or agreement contained herein or in any of
         the other Loan Documents (other than those specified elsewhere in this
         ss.13.1) for fifteen (15) days after written notice of such failure has
         been given to the Borrowers' Representative by the Administrative
         Agent;

                  (e) any representation or warranty of the Borrowers or any of
         their Subsidiaries in this Agreement or any of the other Loan Documents
         or in any other document or instrument delivered pursuant to or in
         connection with this Agreement shall prove to have been false in any
         material respect upon the date when made or deemed to have been made or
         repeated;

                  (f) the Borrowers or any of their Subsidiaries shall fail to
         pay at maturity, or within any applicable period of grace, any
         obligation for borrowed money or credit received, in respect of any
         Capitalized Leases or Lease, or fail to observe or perform any material
         term, covenant or agreement contained in any agreement by which it is
         bound, evidencing or securing borrowed money or credit received, in
         respect of any Capitalized Leases or Lease for such period of time as
         would permit (assuming the giving of appropriate notice if required)
         the holder or holders thereof or of any obligations issued thereunder
         to accelerate the maturity thereof, or any such holder or holders shall
         rescind or shall have a right to rescind the purchase of any such
         obligations;

                  (g) the Borrowers or any of their Subsidiaries shall make an
         assignment for the benefit of creditors, or admit in writing its
         inability to pay or generally fail to pay its debts as they mature or
         become due, or shall petition or apply for the appointment of a trustee
         or other custodian, liquidator or receiver of the Borrowers or any of
         their Subsidiaries or of any substantial part of the assets of the
         Borrowers or any of their Subsidiaries or shall commence any case or
         other proceeding relating to the Borrowers or any of their Subsidiaries
         under any bankruptcy, reorganization, arrangement, insolvency,
         readjustment of debt, dissolution or liquidation or similar law of any
         jurisdiction, now or hereafter in effect, or shall take any action to
         authorize or in furtherance of any of the foregoing, or if any such
         petition or application shall be filed or any such case or other
         proceeding shall be commenced against the Borrowers or any of their
         Subsidiaries and the Borrowers or any of their Subsidiaries shall
         indicate its approval thereof, consent thereto or acquiescence therein
         or such petition or application shall not have been dismissed within
         forty-five (45) days following the filing thereof;

                  (h) a decree or order is entered appointing any such trustee,
         custodian, liquidator or receiver or adjudicating the Borrowers or any
         of their Subsidiaries bankrupt or insolvent, or approving a petition in
         any such case or other proceeding, or a decree or order for relief is
         entered in respect of the Borrowers or any Subsidiary of the Borrowers
         in an involuntary case under federal bankruptcy laws as now or
         hereafter constituted;

                  (i) there shall remain in force, undischarged, unsatisfied and
         unstayed, for more than thirty days, whether or not consecutive, any
         final judgment against the Borrowers or any of their Subsidiaries that,
         with other outstanding final judgments, undischarged, against the
         Borrowers or any of their Subsidiaries exceeds in the aggregate
         $500,000;

                                      -80-
<PAGE>

                  (j) if any of the Loan Documents shall be cancelled,
         terminated, revoked or rescinded or the Administrative Agent's security
         interests, mortgages or liens in a substantial portion of the
         Collateral shall cease to be perfected, or shall cease to have the
         priority contemplated by this Agreement and the Security Documents, in
         each case otherwise than in accordance with the terms thereof or with
         the express prior written agreement, consent or approval of the
         Lenders, or any action at law, suit or in equity or other legal
         proceeding to cancel, revoke or rescind any of the Loan Documents shall
         be commenced by or on behalf of the Borrowers or any of their
         Subsidiaries party thereto or any of their respective stockholders, or
         any court or any other governmental or regulatory authority or agency
         of competent jurisdiction shall make a determination that, or issue a
         judgment, order, decree or ruling to the effect that, any one or more
         of the Loan Documents is illegal, invalid or unenforceable in
         accordance with the terms thereof;

                  (k) the Borrowers or any ERISA Affiliate incurs any liability
         to the PBGC or a Guaranteed Pension Plan pursuant to Title IV of ERISA
         in an aggregate amount exceeding $100,000, or the Borrowers or any
         ERISA Affiliate is assessed withdrawal liability pursuant to Title IV
         of ERISA by a Multiemployer Plan requiring aggregate annual payments
         exceeding $100,000, or any of the following occurs with respect to a
         Guaranteed Pension Plan: (i) an ERISA Reportable Event, or a failure to
         make a required installment or other payment (within the meaning of
         ss.302(f)(1) of ERISA), PROVIDED that the Administrative Agent
         determines in its reasonable discretion that such event (A) could be
         expected to result in liability of the Borrowers or any of their
         Subsidiaries to the PBGC or such Guaranteed Pension Plan in an
         aggregate amount exceeding $* and (B) could constitute grounds for the
         termination of such Guaranteed Pension Plan by the PBGC, for the
         appointment by the appropriate United States District Court of a
         trustee to administer such Guaranteed Pension Plan or for the
         imposition of a lien in favor of such Guaranteed Pension Plan; or (ii)
         the appointment by a United States District Court of a trustee to
         administer such Guaranteed Pension Plan; or (iii) the institution by
         the PBGC of proceedings to terminate such Guaranteed Pension Plan;

                  (l) the Borrowers or any of their Subsidiaries shall be
         enjoined, restrained or in any way prevented by the order of any
         Governmental Authority from conducting (i) any material part of its
         business or (ii) business at more than five (5) retail locations or the
         Headquarters Facility, and such order shall continue in effect for more
         than fifteen (15) days;

                  (m) there shall occur any material damage to, or loss, theft
         or destruction of, any Collateral, whether or not insured, or any
         strike, lockout, labor dispute, embargo, condemnation, act of God or
         public enemy, or other casualty, which in any such case causes, for
         more than fifteen (15) consecutive days, the cessation or substantial
         curtailment of revenue producing activities at more than five (5)
         retail locations not covered by business interruption insurance or the
         Headquarters Facility;

                  (n) there shall occur the loss, suspension or revocation of,
         or failure to renew, any license or permit now held or hereafter
         acquired by the Borrowers or any of their Subsidiaries if such loss,
         suspension, revocation or failure to renew would have a Material
         Adverse Effect;

                                      -81-
<PAGE>

                  (o) the Borrowers or any of their Subsidiaries shall be
         indicted for a state or federal crime, or any civil or criminal action
         shall otherwise have been brought or threatened against the Borrowers
         or any of their Subsidiaries, a punishment for which in any such case
         could include the forfeiture of any assets of the Borrowers or such
         Subsidiary included in the Borrowing Base or any assets of the
         Borrowers or such Subsidiary not included in the Borrowing Base but
         having a fair market value in excess of $500,000 (unless covered by
         insurance);

                  (p) the Chief Executive of Officer of Mayor's is not either
         Joseph Cicio or Thomas Andruskevich or David Boudreau shall cease to be
         employed as Chief Financial Officer of Mayor's, and in each case an
         individual acceptable to the Administrative Agent shall not have been
         hired within 45 days to replace such person; or

                  (q) a Change of Control shall occur;

then, and in any such event, so long as the same may be continuing, the
Administrative Agent may, and shall upon the request of (i) the SuperMajority
Lenders or, (ii) following the Standstill Termination Date, the Tranche B
Lender, by notice in writing to the Borrowers Representative declare all amounts
owing with respect to this Agreement, the Loan Account, the Notes and the other
Loan Documents and all Reimbursement Obligations to be, and they shall thereupon
forthwith become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived by
the Borrowers; PROVIDED that in the event of any Event of Default specified in
ss.ss.13.1(g), 13.1(h) or 13.1(j), all such amounts shall become immediately due
and payable automatically and without any requirement of notice from the
Administrative Agent or any Lender. Following the Standstill Termination Date,
if requested by the Tranche B Lender the Administrative Agent will exercise
those rights accorded to the Collateral Agent under the Loan Documents as a
creditor of the Borrowers looking towards the realization on the Collateral (a
"LIQUIDATION"). Notwithstanding the foregoing, the Administrative Agent shall
have the sole authority to determine the procedures to effect a Liquidation.

                                      -82-
<PAGE>

13.2. TERMINATION OF COMMITMENTS. If any one or more of the Events of Default
specified in ss.13.1(g), ss.13.1(h) or ss.13.1(j) shall occur, any unused
portion of the credit hereunder shall forthwith terminate and each of the
Lenders shall be relieved of all further obligations to make Loans to the
Borrowers and the Administrative Agent shall be relieved of all further
obligations to issue, extend or renew Letters of Credit. If any other Event of
Default shall have occurred and be continuing, or if on any Drawdown Date or
other date for issuing, extending or renewing any Letter of Credit the
conditions precedent to the making of the Loans to be made on such Drawdown Date
or (as the case may be) to issuing, extending or renewing such Letter of Credit
on such other date are not satisfied, the Administrative Agent may and, upon the
request of the SuperMajority Lenders shall, by notice to the Borrowers'
Representative, terminate the unused portion of the credit hereunder, and upon
such notice being given such unused portion of the credit hereunder shall
terminate immediately and each of the Lenders shall be relieved of all further
obligations to make Loans and the Administrative Agent shall be relieved of all
further obligations to issue, extend or renew Letters of Credit. No termination
of the credit hereunder shall relieve the Borrowers or any of their Subsidiaries
of any of the Obligations.

13.3.  REMEDIES.

13.3.1.  GENERAL.

                  (a) In case any one or more of the Events of Default shall
         have occurred and be continuing, and whether or not the Lenders shall
         have accelerated the maturity of the Loans pursuant to ss.13.1, each
         Lender, if owed any amount with respect to the Loans or the
         Reimbursement Obligations, may, with the consent of the SuperMajority
         Lenders or the Administrative Agent but not otherwise, proceed to
         protect and enforce its rights by suit in equity, action at law or
         other appropriate proceeding, whether for the specific performance of
         any covenant or agreement contained in this Agreement and the other
         Loan Documents or any instrument pursuant to which the Obligations to
         such Lender are evidenced, including as permitted by applicable law the
         obtaining of the EX PARTE appointment of a receiver, and, if such
         amount shall have become due, by declaration or otherwise, proceed to
         enforce the payment thereof or any other legal or equitable right of
         such Lender. No remedy herein conferred upon any Lender or the
         Administrative Agent or the holder of any Note or purchaser of any
         Letter of Credit Participation is intended to be exclusive of any other
         remedy and each and every remedy shall be cumulative and shall be in
         addition to every other remedy given hereunder or now or hereafter
         existing at law or in equity or by statute or any other provision of
         law.

                  (b) If a Default has occurred, the Administrative Agent,
         without any other notice to or demand upon the Borrowers, shall have in
         any jurisdiction in which enforcement hereof is sought, in addition to
         all other rights and remedies, the rights and remedies of a secured
         party under the Uniform Commercial Code of the State and any additional
         rights and remedies as may be provided to a secured party in any
         jurisdiction in which Collateral is located, including, without
         limitation, the right to take possession of the Collateral, and for
         that purpose the Administrative Agent may, so far as the Borrowers can
         give authority therefor, enter upon any premises on which the
         Collateral may be situated and remove the same therefrom. The
         Administrative Agent may in its reasonable discretion require the
         Borrowers to assemble all or any part of the Collateral at such

                                      -83-
<PAGE>

         location or locations within the jurisdiction(s) of the Company's
         principal office(s) or at such other locations as the Administrative
         Agent may reasonably designate. Unless the Collateral is perishable or
         threatens to decline speedily in value or is of a type customarily sold
         on a recognized market, the Administrative Agent shall give to the
         Borrowers at least five (5) Business Days prior written notice of the
         time and place of any public sale of Collateral or of the time after
         which any private sale or any other intended disposition is to be made.
         The Borrowers hereby acknowledges that five (5) Business Days prior
         written notice of such sale or sales shall be reasonable notice. In
         addition, the Borrowers waive any and all rights that they may have to
         a judicial hearing in advance of the enforcement of any of the
         Administrative Agent's rights and remedies hereunder, including,
         without limitation, its right if a Default exists to take immediate
         possession of the Collateral and to exercise its rights and remedies
         with respect thereto.

13.3.2.  SECURITIES AND DEPOSITS. The Administrative Agent may at any time, at
         its option, transfer to itself or any nominee any securities
         constituting Collateral, receive any income thereon and hold such
         income as additional Collateral or apply it to the Obligations. Whether
         or not any Obligations are due, the Administrative Agent may demand,
         sue for, collect, or make any settlement or compromise which it deems
         desirable with respect to the Collateral. Regardless of the adequacy of
         Collateral or any other security for the Obligations, any deposits or
         other sums at any time credited by or due from the Administrative Agent
         or any Lender to the Borrowers may at any time be applied to or set off
         against any of the Obligations.

13.3.3.  NOTIFICATION TO ACCOUNT DEBTORS AND OTHER PERSONS OBLIGATED ON
         COLLATERAL. The Borrowers shall, at the request and option of the
         Administrative Agent, notify account debtors and other persons
         obligated on any of the Collateral of the security interest of the
         Administrative Agent in any account, chattel paper, general intangible,
         instrument or other Collateral and that payment thereof is to be made
         directly to the Administrative Agent or to any financial institution
         designated by the Administrative Agent as the Administrative Agent's
         agent therefor, and the Administrative Agent may itself, without notice
         to or demand upon the Borrowers, so notify account debtors and other
         persons obligated on Collateral. After the making of such a request or
         the giving of any such notification, the Borrowers shall hold any
         proceeds of collection of accounts, chattel paper, general intangibles,
         instruments and other Collateral received by the Borrowers as trustee
         for the Administrative Agent, for the benefit of the Lenders and the
         Administrative Agent, without commingling the same with other funds of
         the Borrowers and shall turn the same over to the Administrative Agent
         in the identical form received, together with any necessary
         endorsements or assignments. The Administrative Agent shall apply the
         proceeds of collection of accounts, chattel paper, general intangibles,
         instruments and other Collateral received by the Administrative Agent
         to the Obligations, such proceeds to be immediately credited after
         final payment in cash or other immediately available funds of the items
         giving rise to them.

13.3.4.  STANDARDS FOR EXERCISING RIGHTS AND REMEDIES. To the extent that
         applicable law imposes duties on the Administrative Agent to exercise
         remedies in a commercially reasonable manner, the Borrowers acknowledge
         and agree that it is not commercially unreasonable for the
         Administrative Agent (a) to fail to incur expenses reasonably deemed
         significant by the Administrative Agent to prepare Collateral for
         disposition or otherwise to fail to complete raw material or work in
         process into finished goods or other finished products for disposition,
         (b) to fail to obtain third party consents for access to Collateral to
         be disposed of, or to obtain or, if not required by other law, to fail
         to obtain governmental or third party consents for the collection or
         disposition of Collateral to be collected or disposed of, (c) to fail
         to exercise collection remedies against account debtors or other
         persons obligated on Collateral or to fail to remove Liens on or any

                                      -84-
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         adverse claims against Collateral, (d) to exercise collection remedies
         against account debtors and other persons obligated on Collateral
         directly or through the use of collection agencies and other collection
         specialists, (e) to advertise dispositions of Collateral through
         publications or media of general circulation, whether or not the
         Collateral is of a specialized nature, (f) to contact other persons,
         whether or not in the same business as the Borrowers, for expressions
         of interest in acquiring all or any portion of the Collateral, (g) to
         hire one or more professional auctioneers to assist in the disposition
         of Collateral, whether or not the collateral is of a specialized
         nature, (h) to dispose of Collateral by utilizing internet sites that
         provide for the auction of assets of the types included in the
         Collateral or that have the reasonable capability of doing so, or that
         match buyers and sellers of assets, (i) to dispose of assets in
         wholesale rather than retail markets, (j) to disclaim disposition
         warranties, (k) to purchase insurance or credit enhancements to insure
         the Administrative Agent against risks of loss, collection or
         disposition of Collateral or to provide to the Administrative Agent a
         guaranteed return from the collection or disposition of Collateral, or
         (l) to the extent deemed appropriate by the Administrative Agent, to
         obtain the services of brokers, investment bankers, consultants and
         other professionals to assist the Administrative Agent in the
         collection or disposition of any of the Collateral, or (m) conduct
         going out of business sales and otherwise liquidate the inventory. The
         Borrowers acknowledge that the purpose of this ss.13.3.4 is tO provide
         non-exhaustive indications of what actions or omissions by the
         Administrative Agent would fulfill the Administrative Agent's duties
         under the Uniform Commercial Code of the Commonwealth of Massachusetts
         or any other relevant jurisdiction in the Administrative Agent's
         exercise of remedies against the Collateral and that other actions or
         omissions by the Administrative Agent shall not be deemed to fail to
         fulfill such duties solely on account of not being indicated in this
         ss.13.3.4. WithouT limitation upon the foregoing, nothing contained in
         this ss.13.3.4. shall be construed to grant any rightS to the Borrowers
         or to impose any duties on the Administrative Agent that would not have
         been granted or imposed by this Agreement or by applicable law in the
         absence of this ss.13.3.4.

13.4. DISTRIBUTION OF COLLATERAL PROCEEDS. In the event that, an Event of
Default exists, the Administrative Agent or any Lender, as the case may be,
receives any monies in connection with the enforcement of this Agreement or any
the Security Documents, or otherwise with respect to the realization upon, or
disposition of, any of the Collateral, such monies shall be distributed for
application as follows:

                  (a) First, to the payment of, or (as the case may be) the
         reimbursement of the Administrative Agent for or in respect of all
         reasonable costs, expenses, disbursements and losses which shall have
         been incurred or sustained by the Administrative Agent in connection
         with the collection of such monies by the Administrative Agent or, the
         Administrative Agent's Special Counsel or Lender's Special Counsel, for
         the exercise, protection or enforcement by the Administrative Agent,
         the Administrative Agent's Special Counsel or Lender's Special Counsel
         of all or any of the rights, remedies, powers and privileges of the
         Administrative Agent, the Administrative Agent's Special Counsel or

                                      -85-
<PAGE>

         Lender's Special Counsel under this Agreement or any of the other Loan
         Documents or in respect of the Collateral or in support of any
         provision of adequate indemnity to the Administrative Agent against any
         taxes or liens which by law shall have, or may have, priority over the
         rights of the Administrative Agent to such monies;

                  (b) Second, to all Obligations owing to the Revolving Credit
         Lenders and the Administrative Agent (including the making allowance to
         take into account for any Obligations not then due and payable (i.e.,
         to cash collateralize up to 105% of the Maximum Drawing Amount) and
         excluding the Revolving Credit Early Termination Fee, Obligations under
         Interest Rate Agreements and Obligations pursuant to subsection (b) of
         the definition of Obligations to the extent that they do not relate to
         cash management or similar services) in such order or preference as the
         Required Revolving Credit Lenders may determine; PROVIDED, HOWEVER,
         that (i) distributions shall be made (A) PARI PASSU among Obligations
         with respect to the Administrative Agent's Monitoring Fee and all other
         Obligations owed to the Revolving Credit Lenders and (B) with respect
         to each type of Obligation owing to the Revolving Credit Lenders, such
         as interest, principal, reasonable fees and expenses, among the
         Revolving Credit Lenders PRO RATA, and (ii) the Administrative Agent
         may in its reasonable discretion make proper allowance to take into
         account any Obligations not then due and payable;

                  (c) Third, to all Obligations owing to the Tranche B Lender
         (excluding the Tranche B Early Termination Fee);

                  (d) Fourth, to the Administrative Agent and the Revolving
         Credit Lenders on account of Obligations relating to the Revolving
         Credit Early Termination Fee;

                  (e) Fifth, to the Tranche B Lender on account of all other
         Obligations owing to the Tranche B Lender;

                  (f) Sixth, to all other Obligations owing to the Revolving
         Credit Lenders; and

                  (g) Seventh, upon payment and satisfaction in full or other
         provisions for payment in full satisfactory to the Lenders and the
         Administrative Agent of all of the Obligations, to the payment of any
         obligations required to be paid pursuant to ss.9-608(a)(1)(C) or
         9-615(a)(3) of the Uniform CommerciaL Code of the Commonwealth of
         Massachusetts; and

                  (h) Seventh, the excess, if any, shall be returned to the
         Borrowers or to such other Persons as are entitled thereto.

                         14. THE ADMINISTRATIVE AGENT.

14.1.  AUTHORIZATION.

                  (a) The Administrative Agent is authorized to take such action
         on behalf of each of the Lenders and to exercise all such powers as are
         hereunder and under any of the other Loan Documents and any related
         documents delegated to the Administrative Agent, together with such
         powers as are reasonably incident thereto, including the authority,
         without the necessity of any notice to or further consent of the
         Lenders, from time to time to take any action with respect to any
         Collateral or the Security Documents which may be necessary to perfect,

                                      -86-
<PAGE>

         maintain perfected or insure the priority of the security interest in
         and liens upon the Collateral granted pursuant to the Security
         Documents, PROVIDED that no duties or responsibilities not expressly
         assumed herein or therein shall be implied to have been assumed by the
         Administrative Agent.

                  (b) The relationship between the Administrative Agent and each
         of the Lenders is that of an independent contractor. The use of the
         term "ADMINISTRATIVE AGENT" is for convenience only and is used to
         describe, as a form of convention, the independent contractual
         relationship between the Administrative Agent and each of the Lenders.
         Nothing contained in this Agreement nor the other Loan Documents shall
         be construed to create an agency, trust or other fiduciary relationship
         between the Administrative Agent and any of the Lenders.

                  (c) As an independent contractor empowered by the Lenders to
         exercise certain rights and perform certain duties and responsibilities
         hereunder and under the other Loan Documents, the Administrative Agent
         is nevertheless a "REPRESENTATIVE" of the Lenders, as that term is
         defined in Article 1 of the Uniform Commercial Code, for purposes of
         actions for the benefit of the Lenders and the Administrative Agent
         with respect to all collateral security and guaranties contemplated by
         the Loan Documents. Such actions include the designation of the
         Administrative Agent as "SECURED PARTY", "MORTGAGEE" or the like on all
         financing statements and other documents and instruments, whether
         recorded or otherwise, relating to the attachment, perfection, priority
         or enforcement of any security interests, mortgages or deeds of trust
         in collateral security intended to secure the payment or performance of
         any of the Obligations, all for the benefit of the Lenders and the
         Administrative Agent.

14.2. EMPLOYEES AND ADMINISTRATIVE AGENTS. The Administrative Agent may exercise
its powers and execute its duties by or through employees or agents and shall be
entitled to take, and to rely on, advice of counsel concerning all matters
pertaining to its rights and duties under this Agreement and the other Loan
Documents. The Administrative Agent may utilize the services of such Persons as
the Administrative Agent in its sole discretion may reasonably determine, and
all reasonable fees and expenses of any such Persons shall be paid by the
Borrowers.

14.3. NO LIABILITY. Neither the Administrative Agent nor any of its
shareholders, directors, officers or employees nor any other Person assisting
them in their duties nor any agent or employee thereof, shall be liable for any
waiver, consent or approval given or any action taken, or omitted to be taken,
in good faith by it or them hereunder or under any of the other Loan Documents,
or in connection herewith or therewith, or be responsible for the consequences
of any oversight or error of judgment whatsoever, except that the Administrative
Agent or such other Person, as the case may be, may be liable for losses due to
its willful misconduct or gross negligence. The burden of establishing that the
Administrative Agent has at any time failed to act in a reasonable manner in the
exercise of its discretion shall be on the Borrowers and may only be made on
clear and convincing evidence.

14.4.  NO REPRESENTATIONS.

14.4.1.  GENERAL. The Administrative Agent shall not be responsible for the
         execution or validity or enforceability of this Agreement, the Notes,
         the Letters of Credit, any of the other Loan Documents or any
         instrument at any time constituting, or intended to constitute,
         collateral security for the Notes, or for the value of any such
         collateral security or for the validity, enforceability or
         collectability of any such amounts owing with respect to the Notes, or
         for any recitals or statements, warranties or representations made
         herein or in any of the other Loan Documents or in any certificate or

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         instrument hereafter furnished to it by or on behalf of the Borrowers
         or any of their Subsidiaries, or be bound to ascertain or inquire as to
         the performance or observance of any of the terms, conditions,
         covenants or agreements herein or in any instrument at any time
         constituting, or intended to constitute, collateral security for the
         Notes or to inspect any of the properties, books or records of the
         Borrowers or any of their Subsidiaries. The Administrative Agent shall
         not be bound to ascertain whether any notice, consent, waiver or
         request delivered to it by the Borrowers or any holder of any of the
         Notes shall have been duly authorized or is true, accurate and
         complete. The Administrative Agent has not made nor does it now make
         any representations or warranties, express or implied, nor does it
         assume any liability to the Lenders, with respect to the credit
         worthiness or financial conditions of the Borrowers or any of their
         Subsidiaries. Each Lender acknowledges that it has, independently and
         without reliance upon the Administrative Agent or any other Lender, and
         based upon such information and documents as it has deemed appropriate,
         made its own credit analysis and decision to enter into this Agreement.

14.4.2.  CLOSING DOCUMENTATION, ETC. For purposes of determining compliance with
         the conditions set forth in ss.11, each Lender that has executed this
         Agreement shall be deemed to have consented to, approved oR accepted,
         or to be satisfied with, each document and matter either sent, or made
         available, by the Administrative Agent to such Lender for consent,
         approval, acceptance or satisfaction, or required thereunder to be to
         be consent to or approved by or acceptable or satisfactory to such
         Lender, unless an officer of the Administrative Agent active upon the
         Borrowers' account shall have received notice from such Lender not less
         than two days prior to the Closing Date specifying such Lender's
         objection thereto and such objection shall not have been withdrawn by
         notice to the Administrative Agent to such effect on or prior to the
         Closing Date.

14.5.  PAYMENTS.

14.5.1.  PAYMENTS TO ADMINISTRATIVE AGENT. A payment by the Borrowers to the
         Administrative Agent hereunder or any of the other Loan Documents for
         the account of any Lender shall constitute a payment to such Lender.
         The Administrative Agent agrees promptly to distribute to each Lender
         such Lender's PRO RATA share of payments received by the Administrative
         Agent for the account of the Lenders except as otherwise expressly
         provided herein or in any of the other Loan Documents.

14.5.2.  DISTRIBUTION BY ADMINISTRATIVE AGENT. If in the reasonable opinion of
         the Administrative Agent the distribution of any amount received by it
         in such capacity hereunder, under the Notes or under any of the other
         Loan Documents might involve it in liability, it may refrain from
         making distribution until its right to make distribution shall have
         been adjudicated by a court of competent jurisdiction. If a court of
         competent jurisdiction shall adjudge that any amount received and
         distributed by the Administrative Agent is to be repaid, each Person to
         whom any such distribution shall have been made shall either repay to
         the Administrative Agent its proportionate share of the amount so
         adjudged to be repaid or shall pay over the same in such manner and to
         such Persons as shall be determined by such court.

14.5.3.  DELINQUENT LENDERS. Notwithstanding anything to the contrary contained
         in this Agreement or any of the other Loan Documents, any Revolving
         Credit Lender that fails (a) to make available to the Administrative
         Agent its PRO RATA share of any Revolving Credit Loan or to purchase

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         any Letter of Credit Participation or (b) to comply with the provisions
         of ss.16.1 with respect to making dispositions and arrangements witH
         the other Revolving Credit Lenders, where such Revolving Credit
         Lender's share of any payment received, whether by setoff or otherwise,
         is in excess of its PRO RATA share of such payments due and payable to
         all of the Revolving Credit Lenders, in each case as, when and to the
         full extent required by the provisions of this Agreement, shall be
         deemed delinquent (a "DELINQUENT LENDER") and shall be deemed a
         Delinquent Lender until such time as such delinquency is satisfied. A
         Delinquent Lender shall be deemed to have assigned any and all payments
         due to it from the Borrowers, whether on account of outstanding Loans,
         Unpaid Reimbursement Obligations, interest, reasonable fees or
         otherwise, to the remaining nondelinquent Revolving Credit Lenders for
         application to, and reduction of, their respective PRO RATA shares of
         all outstanding Loans and Unpaid Reimbursement Obligations. The
         Delinquent Lender hereby authorizes the Administrative Agent to
         distribute such payments to the nondelinquent Revolving Credit Lenders
         in proportion to their respective PRO RATA shares of all outstanding
         Revolving Credit Loans and Unpaid Reimbursement Obligations. A
         Delinquent Lender shall be deemed to have satisfied in full a
         delinquency when and if, as a result of application of the assigned
         payments to all outstanding Loans and Unpaid Reimbursement Obligations
         of the nondelinquent Lenders, the Revolving Credit Lenders' respective
         PRO RATA shares of all outstanding Revolving Credit Loans and Unpaid
         Reimbursement Obligations have returned to those in effect immediately
         prior to such delinquency and without giving effect to the nonpayment
         causing such delinquency.

14.6. HOLDERS OF NOTES. The Administrative Agent may deem and treat the payee of
any Note or the purchaser of any Letter of Credit Participation as the absolute
owner or purchaser thereof for all purposes hereof until it shall have been
furnished in writing with a different name by such payee or by a subsequent
holder, assignee or transferee.

14.7. INDEMNITY. The Lenders ratably agree hereby to indemnify and hold harmless
the Administrative Agent and its affiliates from and against any and all claims,
actions and suits (whether groundless or otherwise), losses, damages, costs,
expenses (including any expenses for which the Administrative Agent or such
affiliate has not been reimbursed by the Borrowers as required by ss.16.2), and
liabilities of every nature and character arising ouT of or related to this
Agreement, the Notes, or any of the other Loan Documents or the transactions
contemplated or evidenced hereby or thereby, or the Administrative Agent's
actions taken hereunder or thereunder, except to the extent that any of the same
shall be directly caused by the Administrative Agent's willful misconduct or
gross negligence.

14.8. ADMINISTRATIVE AGENT AS LENDER. In its individual capacity, FRFI shall
have the same obligations and the same rights, powers and privileges in respect
to its Commitment and the Loans made by it, and as the holder of any of the
Notes and as the purchaser of any Letter of Credit Participations, as it would
have were it not also the Administrative Agent.

14.9. RESIGNATION. The Administrative Agent may resign at any time by giving
sixty (60) days prior written notice thereof to the Lenders and the Borrowers'
Representative. Upon any such resignation, the Required Lenders and the Tranche
B Lender shall have the right to appoint a successor Administrative Agent.
Unless a Default or Event of Default shall have occurred and be continuing, such
successor Administrative Agent shall be reasonably acceptable to the Borrowers.
If no successor Administrative Agent shall have been so appointed by the
Required Lenders and the Tranche B Lender and shall have accepted such
appointment within thirty (30) days after the retiring Administrative Agent's

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giving of notice of resignation, then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent, which shall be
(a) a financial institution having a rating of not less than A or its equivalent
by S&P or (b) following the exercise of the buyout option set forth in ss.3.7,
the Tranche B Lender or any other Person appointed by the Tranche B Lender. Upon
thE acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon 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. After any
retiring Administrative Agent's resignation, the provisions of this Agreement
and the other Loan Documents 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.

14.10. NOTIFICATION IF DEFAULT EXISTS. Each Lender hereby agrees that, upon
learning of the existence of a Default or an Event of Default, it shall promptly
notify the Administrative Agent thereof. The Administrative Agent hereby agrees
that upon receipt of any notice under this ss.14.10 it shall promptly notify the
other LenderS that the a Default exist.

14.11. DUTIES IN THE CASE OF ENFORCEMENT. In case one of more Events of Default
have occurred and shall be continuing, and whether or not acceleration of the
Obligations shall have occurred, the Administrative Agent shall, if (a) so
requested by the SuperMajority Lenders or, following the Standstill Termination
Date, the Tranche B Lender, and (b) the Lenders have provided to the
Administrative Agent such additional indemnities and assurances against expenses
and liabilities as the Administrative Agent may reasonably request, proceed to
enforce the provisions of this Agreement and the other Security Documents
authorizing the sale or other disposition of all or any part of the Collateral
and exercise all or any such other legal and equitable and other rights or
remedies as it may have in respect of such Collateral. The SuperMajority Lenders
or, following the Standstill Termination Date if the SuperMajority Lenders have
not already done so, the Tranche B Lender, may direct the Administrative Agent
in writing as to the method and the extent of any such sale or other
disposition, the Lenders hereby agreeing to indemnify and hold the
Administrative Agent, harmless from all liabilities incurred in respect of all
actions taken or omitted in accordance with such directions, PROVIDED that the
Administrative Agent need not comply with any such direction to the extent that
the Administrative Agent reasonably believes the Administrative Agent's
compliance with such direction to be unlawful or commercially unreasonable in
any applicable jurisdiction.

14.12. ADMINISTRATIVE AGENT'S OBLIGATIONS AND DUTIES WITH REGARD TO COLLATERAL.
Anything herein to the contrary notwithstanding, the Borrowers shall remain
obligated and liable under each contract or agreement comprised in the
Collateral to be observed or performed by the Borrowers thereunder. Neither the
Administrative Agent nor any Lender shall have any obligation or liability under
any such contract or agreement by reason of or arising out of this Agreement or
the receipt by the Administrative Agent or any Lender of any payment relating to
any of the Collateral, nor shall the Administrative Agent or any Lender be
obligated in any manner to perform any of the obligations of the Borrowers under
or pursuant to any such contract or agreement, to make inquiry as to the nature
or sufficiency of any payment received by the Administrative Agent or any Lender
in respect of the Collateral or as to the sufficiency of any performance by any
party under any such contract or agreement, to present or file any claim, to

                                      -90-
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take any action to enforce any performance or to collect the payment of any
amounts which may have been assigned to the Administrative Agent or to which the
Administrative Agent or any Lender may be entitled at any time or times. The
Administrative Agent's sole duty with respect to the custody, safe keeping and
physical preservation of the Collateral in its possession, under ss.9-207 of the
Uniform Commercial Code of thE State or otherwise, shall be to deal with such
Collateral in the same manner as the Administrative Agent deals with similar
property for its own account. In connection with any sale of assets permitted by
this Agreement, the Administrative Agent is authorized to release the liens
granted by the Borrowers to the Administrative Agent.

                        15. ASSIGNMENT AND PARTICIPATION.

15.1.  CONDITIONS TO ASSIGNMENT.

15.1.1   CONDITIONS TO ASSIGNMENT BY REVOLVING CREDIT LENDERS. Except as
         provided herein, each Revolving Credit Lender may assign to one or more
         commercial banks, other financial institutions or other Persons, all or
         a portion of its interests, rights and obligations under this Agreement
         (including all or a portion of its Commitment Percentage and Commitment
         and the same portion of the Revolving Credit Loans at the time owing to
         it, the Notes held by it and its participating interest in the risk
         relating to any Letters of Credit); PROVIDED that (a) the
         Administrative Agent and, so long as no Default exists, the Borrowers'
         Representative, shall have given their prior written consent to such
         assignment, such consent not to be unreasonably withheld; except that
         the consent of the Administrative Agent or the Borrowers'
         Representative shall not be required in connection with any assignment
         by a Lender to (i) an existing Lender or (ii) a Lender Affiliate of
         such Lender, (b) each such assignment shall be of a constant, and not a
         varying, percentage of all the assigning Revolving Credit Lender's
         rights and obligations under this Agreement, it being understood that
         non-PRO RATA assignments of the Commitments and the Revolving Credit
         Loans are not permitted, (c) each assignment (or, in the case of
         assignments by a Revolving Credit Lender to its Lender Affiliates, the
         aggregate holdings of such Revolving Credit Lender and its Lender
         Affiliates after giving effect to such assignments), shall be in an
         amount that is not less than $10,000,000 or a whole multiple of
         $1,000,000 in excess thereof (or such lesser amount as shall constitute
         the aggregate holdings of such Lender and (d) the parties to such
         assignment shall execute and deliver to the Administrative Agent, for
         recording in the Register (as hereinafter defined), an Assignment and
         Acceptance, substantially in the form of EXHIBIT F(I) hereto (an
         "ASSIGNMENT AND ACCEPTANCE"), together with any Notes subject to such
         assignment. Upon such execution, delivery, acceptance and recording,
         from and after the effective date specified in each Assignment and
         Acceptance, which effective date shall be at least five (5) Business
         Days after the execution thereof, (y) the assignee thereunder shall be
         a party hereto and, to the extent provided in such Assignment and
         Acceptance, have the rights and obligations of a Revolving Credit
         Lender hereunder, and (z) the assigning Revolving Credit Lender shall,
         to the extent provided in such assignment and upon payment to the
         Administrative Agent of the registration fee referred to in ss.15.3, be
         released from its obligationS under this Agreement. In connection with
         each assignment the Assigning Lender agrees to pay to the
         Administrative Agent a registration fee in the sum of $3,500.

         15.1.2. CONDITIONS TO ASSIGNMENT BY TRANCHE B LENDER. The Tranche B
         Lender may assign to one or more commercial banks, other financial
         institutions or other Persons, all or a portion of its interests,
         rights and obligations under this Agreement; PROVIDED that (a) the
         Administrative Agent shall have given its prior written consent to such
         assignment, such consent not to be unreasonably withheld; except that

                                      -91-
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         the consent of the Administrative Agent shall not be required in
         connection with any assignment by the Tranche B Lender (i) if an Event
         of Default exists, (ii) to an existing Lender or (iii) to a Lender
         Affiliate of such Tranche B Lender and (b) the parties to such
         assignment shall execute and deliver to the Administrative Agent for
         recording in the Register an Assignment and Acceptance substantially in
         the form of EXHIBIT F(II).

15.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS. By
executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:

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

                  (b) the assigning Lender makes no representation or warranty
         and assumes no responsibility with respect to the financial condition
         of the Borrowers and their Subsidiaries or any other Person primarily
         or secondarily liable in respect of any of the Obligations, or the
         performance or observance by the Borrowers and their Subsidiaries or
         any other Person primarily or secondarily liable in respect of any of
         the Obligations of any of their obligations under this Agreement or any
         of the other Loan Documents or any other instrument or document
         furnished pursuant hereto or thereto;

                  (c) such assignee confirms that it has received a copy of this
         Agreement, together with copies of the most recent financial statements
         referred to in ss.7.4 and ss.8.4 and such other documents And
         information as it has deemed appropriate to make its own credit
         analysis and decision to enter into such Assignment and Acceptance;

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

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

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

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                  (g) such assignee represents and warrants that it is legally
         authorized to enter into such Assignment and Acceptance; and

                  (h) such assignee acknowledges that it has made arrangements
         with the assigning Revolving Credit Lender satisfactory to such
         assignee with respect to its PRO RATA share of Letter of Credit Fees in
         respect of outstanding Letters of Credit.

15.3. NEW NOTES. Upon its receipt of an Assignment and Acceptance executed by
the parties to such assignment, together with each Note subject to such
assignment, the Administrative Agent shall (a) record the information contained
therein in the Loan Account and the Register, and (b) give prompt notice thereof
to the Borrowers and the Lenders (other than the assigning Lender). Within five
(5) Business Days after receipt of such notice from the Assignee, the Borrowers,
at their own expense, shall execute and deliver to the Administrative Agent, in
exchange for each surrendered Note, a new Note to the order of such Assignee in
an amount equal to the amount assumed by such Assignee pursuant to such
Assignment and Acceptance and, if the assigning Revolving Credit Lender has
retained some portion of its obligations hereunder, a new Note to the order of
the assigning Revolving Credit Lender in an amount equal to the amount retained
by it hereunder. Such new Notes shall provide that they are replacements for the
surrendered Notes, shall be in an aggregate principal amount equal to the
aggregate principal amount of the surrendered Notes, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of the assigned Notes. Within five (5) days of issuance
of any new Notes pursuant to this ss.15.3, the Borrowers shall deliver upon the
request of the Lender an opinion oF counsel, addressed to the Lenders and the
Administrative Agent, relating to the due authorization, execution and delivery
of such new Notes and the legality, validity and binding effect thereof, in form
and substance satisfactory to the Lenders. The surrendered Notes shall be
cancelled and returned to the Borrowers.

15.4. PARTICIPATIONS. Each Lender may sell participations to one or more Lenders
or other entities in all or a portion of such Lender's rights and obligations
under this Agreement and the other Loan Documents; PROVIDED that (a) (i) with
respect to Revolving Credit Lenders, each such participation shall be in an
amount of not less than $5,000,000 and (ii) with respect to the Tranche B
Lender, each such participation shall be in an amount of not less than
$1,000,000, (b) any such sale or participation shall not affect the rights and
duties of the selling Lender hereunder to the Borrowers, (c) the only rights
granted to the participant pursuant to such participation arrangements with
respect to waivers, amendments or modifications of the Loan Documents shall be
the rights to approve waivers, amendments or modifications that (i) with respect
to the Revolving Credit Lenders, would reduce the principal of or the interest
rate on any Loans, extend the term or increase the amount of the Commitment of
such Lender as it relates to such participant, reduce the amount of any Unused
Fee or Letter of Credit Fees to which such participant is entitled or extend any
regularly scheduled payment date for principal or interest and (ii) with respect
to the Tranche B Lender, would reduce the principal, interest or fees payable on
the Tranche B Loan, postpone any scheduled payment of any principal, interest or
fees on account of the Tranche B Loan or release Collateral which would cause an
OverLoan and (d) except for Gordon Brothers, no such sale may be to a person
whose business is the retail sale of jewelry.

15.5. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWERS. If any assignee
Lender is an Affiliate of the Borrowers, then any such assignee Lender shall
have no right to vote as a Lender hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan Documents or

                                      -93-
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for purposes of making requests to the Administrative Agent pursuant to ss.13.1
or ss.13.2, and the determination of the Required Lenders, Required Revolving
Credit Lenders And SuperMajority Lenders shall for all purposes of this
Agreement and the other Loan Documents be made without regard to such assignee
Lender's interest in any of the Loans or Reimbursement Obligations. If any
Lender sells a participating interest in any of the Loans or Reimbursement
Obligations to a participant, and such participant is the Borrowers or an
Affiliate of the Borrowers, then such transferor Lender shall promptly notify
the Administrative Agent of the sale of such participation. A transferor Lender
shall have no right to vote as a Lender hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or modifications to any of the Loan Documents or for
purposes of making requests to the Administrative Agent pursuant to ss.13.1 or
ss.13.2 to the extent that such participation is beneficially owned by the
Borrowers or any Affiliate of the Borrowers, and the determination of the
Required Lenders, Required Revolving Credit Lenders and SuperMajority Lenders
shall for all purposes of this Agreement and the other Loan Documents be made
without regard to the interest of such transferor Lender in the Loans or
Reimbursement Obligations to the extent of such participation.

15.6. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Lender shall retain its
rights to be indemnified pursuant to ss.16.3 with respect to any claims or
actions arising prior to the date of such assignment. AnythinG contained in this
ss.15 to the contrary notwithstanding, any Lender may at any time pledge or
assign a securitY interest in all or any portion of its interest and rights
under this Agreement (including all or any portion of its Notes) to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to (a) any of the twelve Federal Reserve Banks organized under ss.4
of the Federal Reserve Act, 12 U.S.C. ss.341 and (b) with respect to any Lender
that is a fund that invests in bank loans, to any lender or any trustee for, or
any other representative of, holders of obligations owed or securities issued by
such fund as security for such obligations or securities or any institutional
custodian for such fund or for such lender. Any foreclosure or similar action by
any Person in respect of such pledge or assignment shall be subject to the other
provisions of this ss.15. No such pledge or the enforcement thereof shall
release the pledgor Lender from its obligationS hereunder or under any of the
other Loan Documents, provide any voting rights hereunder to the pledgee
thereof, or affect any rights or obligations of the Borrowers or Administrative
Agent hereunder.

15.7. ASSIGNMENT BY BORROWERS. The Borrowers shall not assign or transfer any of
their rights or obligations under any of the Loan Documents without the prior
written consent of each of the Lenders.

                     16. PROVISIONS OF GENERAL APPLICATIONS.

16.1. SETOFF. The Borrowers hereby grant to the Administrative Agent and each of
the Lenders a continuing lien, security interest and right of setoff as security
for all liabilities and obligations to the Administrative Agent and each Lender,
whether now existing or hereafter arising, upon and against all deposits,
credits, collateral and property, now or hereafter in the possession, custody,
safekeeping or control of the Administrative Agent or such Lender or any Lender
Affiliate and their successors and assigns or in transit to any of them.
Regardless of the adequacy of any collateral, if any of the Obligations are due
and payable and have not been paid or any Event of Default shall have occurred,
any deposits or other sums credited by or due from any of the Lenders to the
Borrowers and any securities or other property of the Borrowers in the
possession of such Lender may be applied to or set off by such Lender against

                                      -94-
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the payment of Obligations and any and all other liabilities, direct, or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of the Borrowers to such Lender. ANY AND ALL RIGHTS TO
REQUIRE ANY LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER
COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF
SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE BORROWERS
ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED. Each of the Lenders
agree with each other Lender that (a) if an amount to be set off is to be
applied to Indebtedness of the Borrowers to such Lender, other than Indebtedness
constituting Obligations owed to such Lender, such amount shall be applied
ratably to such other Indebtedness and to the Obligations owed to such Lender,
and (b) if such Lender shall receive from the Borrowers, whether by voluntary
payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim constituting the Obligation owed to such Lender by
proceedings against the Borrowers at law or in equity or by proof thereof in
bankruptcy, reorganization, liquidation, receivership or similar proceedings, or
otherwise, and shall retain and apply to the payment of Obligations owed to such
Lender any amount in excess of its "ratable portion" of the payments received by
all of the Lenders with respect to the Obligations owed to all of the Lenders,
such Lender will make such disposition and arrangements with the other Lenders
with respect to such excess, either by way of distribution, PRO TANTO assignment
of claims, subrogation or otherwise as shall result in each Lender receiving in
respect of the Obligations owed it its "ratable portion" as contemplated by this
Agreement; PROVIDED that if all or any part of such excess payment is thereafter
recovered from such Lender, such disposition and arrangements shall be rescinded
and the amount restored to the extent of such recovery, but without interest. As
used here in "ratable portion" shall mean the amounts such Lender would have
received if the amounts had been applied in accordance with ss.13.4.

16.2. EXPENSES. The Borrowers jointly and severally agree to pay (a) the
reasonable costs of producing and reproducing this Agreement, the other Loan
Documents and the other agreements and instruments mentioned herein, (b) any
taxes (including any interest and penalties in respect thereto) payable by the
Administrative Agent or any of the Lenders (other than taxes based upon the
Administrative Agent's or any Lender's or any interestholder in a Lender's net
income or profits and other than any taxes referred to in the first sentence of
ss.5.3.2, whicH shall be taken into account in the manner provided by ss.5.3.2)
on or with respect to the transactions contemplateD by this Agreement (the
Borrowers hereby agreeing to indemnify the Administrative Agent and each Lender
with respect thereto), (c) the reasonable fees, expenses and disbursements of
the Administrative Agent's Special Counsel, counsel to the Tranche B Lender or
any local counsel to the Administrative Agent incurred in connection with the
preparation, syndication, administration or interpretation of the Loan Documents
and other instruments mentioned herein, each closing hereunder, any amendments,
modifications, approvals, consents or waivers hereto or hereunder, or the
cancellation of any Loan Document upon payment in full in cash of all of the
Obligations or pursuant to any terms of such Loan Document for providing for
such cancellation, (d) the reasonable fees, expenses and disbursements of the
Administrative Agent, the Tranche B Lender or any of their affiliates incurred
by the Administrative Agent, the Tranche B Lender or any such affiliate in
connection with the preparation, syndication, administration or interpretation
of the Loan Documents and other instruments mentioned herein, including all
title insurance premiums and surveyor, engineering, appraisal and examination
charges, (e) any reasonable fees, costs, expenses and bank charges, including
bank charges for returned checks, incurred by the Administrative Agent in
establishing, maintaining or handling agency accounts, lock box accounts and
other accounts for the collection of any of the Collateral, (f) all reasonable
out-of-pocket expenses (including without limitation the Administrative Agent's

                                      -95-
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and the Tranche B Lender's travel costs and reasonable attorneys' fees and
costs, which attorneys may be employees of the Administrative Agent or the
Tranche B Lender, and reasonable consulting, accounting, appraisal, investment
bankruptcy and similar professional fees and charges) incurred by the
Administrative Agent, the Tranche B Lender, the Administrative Agent's Special
Counsel, counsel to the Tranche B Lender or Lender's Special Counsel in
connection with (i) the enforcement of or preservation of rights under any of
the Loan Documents against the Borrowers or any of their Subsidiaries or the
administration thereof after a Default exists and (ii) any litigation,
proceeding or dispute whether arising hereunder or otherwise, in any way related
to any Lender's or the Administrative Agent's relationship with the Borrowers or
any of their Subsidiaries and (g) all reasonable fees, expenses and
disbursements of the Administrative Agent incurred in connection with UCC
searches, UCC filings, intellectual property searches, intellectual property
filings or mortgage recordings. In the Administrative Agent's reasonable
discretion, if the Borrowers fail to do so, the Administrative Agent may
discharge taxes and other encumbrances at any time levied or placed on any of
the Collateral, maintain any of the Collateral, make repairs thereto and pay any
necessary filing fees or insurance premiums. The Borrowers agree to reimburse
the Administrative Agent on demand for all expenditures so made. The
Administrative Agent shall have no obligation to the Borrowers to make any such
expenditures, nor shall the making thereof be construed as a waiver or cure if a
Default exist. The covenants contained in this ss.16.2 shall survive payment or
satisfaction in full of all other obligations. As used herein, "Lenders' SpeciaL
Counsel" shall mean a single counsel, selected by the Required Revolving Credit
Lenders following the occurrence of an Event of Default, to represent the
interests of the Lenders in connection with the enforcement, attempted
enforcement, or preservation of any rights and remedies under this, or any other
Loan Document, as well as in connection with any "workout", forbearance, or
restructuring of the credit facility contemplated hereby.

16.3. INDEMNIFICATION. The Borrowers agree to indemnify and hold harmless the
Administrative Agent, its affiliates and the Lenders from and against any and
all claims, actions and suits whether groundless or otherwise, and from and
against any and all liabilities, losses, damages and reasonable expenses of
every nature and character arising out of this Agreement or any of the other
Loan Documents or the transactions contemplated hereby including, without
limitation, (a) any actual or proposed use by the Borrowers or any of their
Subsidiaries of the proceeds of any of the Loans or Letters of Credit, (b) the
reversal or withdrawal of any provisional credits granted by the Administrative
Agent upon the transfer of funds from lock box, bank agency, concentration
accounts or otherwise under any cash management arrangements with the Borrowers
or any Subsidiary or in connection with the provisional honoring of funds
transfers, checks or other items, (c) any actual or alleged infringement of any
trademark, service mark or similar right of the Borrowers or any of their
Subsidiaries comprised in the Collateral, (d) the Borrowers or any of their
Subsidiaries entering into or performing this Agreement or any of the other Loan
Documents or (e) with respect to the Borrowers and their Subsidiaries and their
respective properties and assets, the violation of any Environmental Law, the
presence, disposal, escape, seepage, leakage, spillage, discharge, emission,
release or threatened release of any Hazardous Substances or any action, suit,
proceeding or investigation brought or threatened with respect to any Hazardous
Substances (including, but not limited to, claims with respect to wrongful
death, personal injury or damage to property), in each case including, without
limitation, the reasonable fees and disbursements of counsel and allocated costs
of internal counsel incurred in connection with any such investigation,
litigation or other proceeding. In litigation, or the preparation therefor, the
Lenders, the Tranche B Lender and the Administrative Agent and its affiliates
shall be entitled to select their own counsel and, in addition to the foregoing
indemnity, the Borrowers agree to pay promptly the reasonable fees and expenses
of such counsel. If, and to the extent that the obligations of the Borrowers
under this ss.16.3 are unenforceable for any reason, the BorrowerS hereby agrees
to make the maximum contribution to the payment in satisfaction of such

                                      -96-
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obligations which is permissible under applicable law. The covenants contained
in this ss.16.3 shall survive payment or satisfaction iN full of all other
Obligations. The Borrowers acknowledge and agree that (a) Gordon Brothers has in
the past provided services to the Borrowers and their Subsidiaries and the
Administrative Agent and the Lenders, (b) Gordon Brothers may in the future
provide additional services to the Borrowers and their Affiliates and/or the
Administrative Agent and the Lenders, (c) Gordon Brothers may become a Lender or
a participant in the Loans and (d) the indemnity contained in this ss.16.3 shall
apply to any of the relationships among the Borrowers and theiR Subsidiaries,
the Administrative Agent, the Lenders and Gordon Brothers.

16.4.  TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.

16.4.1.  CONFIDENTIALITY. Each of the Lenders and the Administrative Agent
         agrees, on behalf of itself and each of its affiliates, directors,
         officers, employees and representatives, to use reasonable precautions
         to keep confidential, in accordance with their customary procedures for
         handling confidential information of the same nature and in accordance
         with safe and sound banking practices, any non-public information
         supplied to it by the Borrowers or any of their Subsidiaries pursuant
         to this Agreement. The Borrowers and each Lender will maintain, as
         confidential, all of the following:(i) proprietary approaches,
         techniques, and methods of analysis which are applied by the
         Administrative Agent in the administration of the credit facility
         contemplated by this Credit Agreement, (ii) proprietary forms and
         formats utilized by the Administrative Agent in providing reports to
         the Lenders pursuant hereto, which forms or formats are not of general
         currency. Notwithstanding the foregoing, nothing herein shall limit the
         disclosure of any such information (a) after such information shall
         have become public other than through a violation of this ss.16.4, or
         becomes available to any of the Lenders or the AdministrativE Agent on
         a nonconfidential basis from a source other than the Borrowers, (b) to
         the extent required by statute, rule, regulation or judicial process,
         (c) to counsel for any of the Lenders or the Administrative Agent, (d)
         to bank examiners or any other regulatory authority having jurisdiction
         over any Lender or the Administrative Agent, or to auditors or
         accountants, (e) to the Administrative Agent, any Lender or any
         Financial Affiliate, (f) in connection with any litigation to which any
         one or more of the Lenders, the Administrative Agent or any Financial
         Affiliate is a party, or in connection with the enforcement of rights
         or remedies hereunder or under any other Loan Document, (g) to a Lender
         Affiliate or a Subsidiary or affiliate of the Administrative Agent, (h)
         to any actual or prospective assignee or participant or any actual or
         prospective counterparty (or its advisors) to any swap or derivative
         transactions referenced to credit or other risks or events arising
         under this Agreement or any other Loan Document so long as such
         assignee, participant or counterparty, as the case may be, agrees to be
         bound by the provisions of ss.16.4 or (i) with the consent of the
         Borrowers' Representative. Moreover, each of the Administrative Agent,
         the Lenders and any Financial Affiliate is hereby expressly permitted

                                      -97-
<PAGE>

         by the Borrowers to refer to any of the Borrowers and their
         Subsidiaries in connection with any advertising, promotion or marketing
         undertaken by the Administrative Agent, such Lender or such Financial
         Affiliate and, for such purpose, the Administrative Agent, such Lender
         or such Financial Affiliate may utilize any trade name, trademark, logo
         or other distinctive symbol associated with the Borrowers or any of
         their Subsidiaries or any of their businesses.

16.4.2.  PRIOR NOTIFICATION. Unless specifically prohibited by applicable law or
         court order, each of the Lenders and the Administrative Agent shall,
         prior to disclosure thereof, notify the Borrowers' Representative of
         any request for disclosure of any such non-public information 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 pursuant to legal process.

16.4.3.  OTHER. In no event shall any Lender or the Administrative Agent be
         obligated or required to return any materials furnished to it or any
         Financial Affiliate by the Borrowers or any of their Subsidiaries. The
         obligations of each Lender under this ss.16.4 shall supersede and
         replace the obligations of such LendeR under any confidentiality letter
         in respect of this financing signed and delivered by such Lender to the
         Borrowers prior to the date hereof and shall be binding upon any
         assignee of, or purchaser of any participation in, any interest in any
         of the Loans or Reimbursement Obligations from any Lender. All
         appraisals, inventories, analysis, financial information, and other
         materials which the Administrative Agent and the Lenders may obtain,
         develop, or receive with respect to the Borrowers are confidential to
         the Administrative Agent and the Lenders and that, except as otherwise
         provided herein, the Borrowers are not entitled to receipt of any of
         such appraisals, inventories, analysis, financial information, and
         other materials, nor copies or extracts thereof or therefrom.

16.5. SURVIVAL OF COVENANTS, ETC. All covenants, agreements, representations and
warranties made herein, in the Notes, in any of the other Loan Documents or in
any documents or other papers delivered by or on behalf of the Borrowers or any
of their Subsidiaries pursuant hereto shall be deemed to have been relied upon
by the Lenders and the Administrative Agent, notwithstanding any investigation
heretofore or hereafter made by any of them, and shall survive the making by the
Lenders of any of the Loans and the issuance, extension or renewal of any
Letters of Credit, as herein contemplated, and shall continue in full force and
effect so long as any Letter of Credit or any amount due under this Agreement or
the Notes or any of the other Loan Documents remains outstanding or any Lender
has any obligation to make any Loans or the Administrative Agent has any
obligation to issue, extend or renew any Letter of Credit, and for such further
time as may be otherwise expressly specified in this Agreement. All statements
contained in any certificate or other paper delivered to any Lender or the
Administrative Agent at any time by or on behalf of the Borrowers or any of
their Subsidiaries pursuant hereto or in connection with the transactions
contemplated hereby shall constitute representations and warranties by the
Borrowers or such Subsidiary hereunder.

16.6. NOTICES. Except as otherwise expressly provided in this Agreement, all
notices and other communications made or required to be given pursuant to this
Agreement or the Notes or any Letter of Credit Applications shall be in writing
and shall be delivered in hand, mailed by United States registered or certified
first class mail, postage prepaid, sent by overnight courier, or sent by
telegraph, telecopy, facsimile or telex and confirmed by delivery via courier or
postal service, addressed as follows:

                  (a) if to the Borrowers, to the Borrowers' Representative at
         14051 Northwest 14th Street, Sunrise, FL 33323, Attention: Mr. David
         Boudreau, Chief Financial Officer, or at such other address for notice

                                      -98-
<PAGE>

         as the Borrowers' Representative shall last have furnished in writing
         to the Person giving the notice;

                  (b) if to the Administrative Agent, at 40 Broad Street,
         Boston, Massachusetts 02109, USA, Attention: Keith F. Vercauteren,
         Assistant Vice President, or such other address for notice as the
         Administrative Agent shall last have furnished in writing to the Person
         giving the notice with a copy to Robert A.J. Barry, Bingham Dana LLP,
         150 Federal Street, Boston, MA 02110; and

                  (c) if to the Tranche B Lender, at 40 Broad Street, Boston,
         Massachusetts 02109, USA, Attention: Mark J. Forti, Director, or such
         other address for notice as the Administrative Agent shall last have
         furnished in writing to the Person giving the notice with a copy to
         Andrew P. Strehle, Brown Rudnick Berlack Israels LLP, One Financial
         Center, Boston, MA 02111; and

                  (d) if to any Lender, at such Lender's address set forth on
         SCHEDULE 1 hereto, or such other address for notice as such Lender
         shall have last furnished in writing to the Person giving the notice.

         Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof. Any notice or other
communication to be made hereunder or under the Notes or any Letter of Credit
Applications, even if otherwise required to be in writing under other provisions
of this Agreement, the Notes or any Letter of Credit Applications, may
alternatively be made in an electronic record transmitted electronically under
such authentication and other procedures as the parties hereto may from time to
time agree in writing (but not an electronic record), and such electronic
transmission shall be effective at the time set forth in such procedures. Unless
otherwise expressly provided in such procedures, such an electronic record shall
be equivalent to a writing under the other provisions of this Agreement, the
Notes or any Letter of Credit Applications, and such authentication, if made in
compliance with the procedures so agreed by the parties hereto in writing (but
not an electronic record), shall be equivalent to a signature under the other
provisions of this Agreement, the Notes or any Letter of Credit Applications.

16.7. GOVERNING LAW. THIS AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY
PROVIDED THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS
OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWERS
AGREE THAT ANY SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS
OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE
JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE
UPON THE BORROWERS BY MAIL AT THE ADDRESS SPECIFIED IN SS.16.6. THE BORROWERS
HEREBY WAIVE ANY OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE TO THE VENUE OF

                                      -99-
<PAGE>

ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT
COURT.

16.8. HEADINGS. The captions in this Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.

16.9. COUNTERPARTS. This Agreement and any amendment hereof may be executed in
several counterparts and by each party on a separate counterpart, each of which
when executed and delivered shall be an original, and all of which together
shall constitute one instrument. In proving this Agreement it shall not be
necessary to produce or account for more than one such counterpart signed by the
party against whom enforcement is sought. Delivery by facsimile by any of the
parties hereto of an executed counterpart hereof or of any amendment or waiver
hereto shall be as effective as an original executed counterpart hereof or of
such amendment or waiver and shall be considered a representation that an
original executed counterpart hereof or such amendment or waiver, as the case
may be, will be delivered.

16.10. ENTIRE AGREEMENT, ETC. The Loan Documents and any other documents
executed in connection herewith or therewith express the entire understanding of
the parties with respect to the transactions contemplated hereby. Neither this
Agreement nor any term hereof may be changed, waived, discharged or terminated,
except as provided in ss.16.12.

16.11. WAIVER OF JURY TRIAL. THE BORROWERS HEREBY WAIVE THEIR RIGHT TO A JURY
TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN DOCUMENTS,
ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH
RIGHTS AND OBLIGATIONS OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING ANY COURSE OF
CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF THE ADMINISTRATIVE AGENT
OR ANY LENDER RELATING TO THE ADMINISTRATION OF THE LOANS OR ENFORCEMENT OF THE
LOAN DOCUMENTS AND AGREES THAT IT WILL NOT SEEK TO CONSOLIDATE ANY SUCH ACTION
WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.
Except as prohibited by law, the Borrowers hereby waive any right they may have
to claim or recover in any litigation referred to in the preceding sentence any
special, exemplary, punitive or consequential damages or any damages other than,
or in addition to, actual damages. The Borrowers (a) certify that no
representative, agent or attorney of any Lender or the Administrative Agent has
represented, expressly or otherwise, that such Lender or the Administrative
Agent would not, in the event of litigation, seek to enforce the foregoing
waivers and (b) acknowledges that the Administrative Agent and the Lenders have
been induced to enter into this Agreement, the other Loan Documents to which it
is a party and the Subordination Documents to which it is a party by, among
other things, the waivers and certifications contained herein.

16.12. CONSENTS, AMENDMENTS, WAIVERS, ETC. Any consent or approval required or
permitted by this Agreement to be given by the Lenders may be given, and any
term of this Agreement, the other Loan Documents or any other instrument related
hereto or mentioned herein may be amended, and the performance or observance by
the Borrowers or any of their Subsidiaries of any terms of this Agreement, the
other Loan Documents or such other instrument or the continuance of any Default
or Event of Default may be waived (either generally or in a particular instance

                                     -100-
<PAGE>

and either retroactively or prospectively) with, but only with, the written
consent of the Borrowers and the consent of the Required Lenders.
Notwithstanding the foregoing, no amendment, modification or waiver shall:

                  (a) without the written consent of the Borrowers'
         Representative and each Lender directly affected thereby:

                           (i) reduce or forgive the principal amount of any
                  Loans or Reimbursement Obligations, or reduce the rate of
                  interest on the Notes or the amount of the Unused Fee or
                  Letter of Credit Fees (other than) interest accruing pursuant
                  to ss.5.10 following the effective date of anY waiver by the
                  Required Revolving Credit Lenders of the Default or Event of
                  Default relating thereto;

                           (ii) increase the amount of such Lender's Commitment
                  or extend the expiration date of such Lender's Commitment;

                           (iii) postpone or extend any regularly scheduled
                  dates for payments of interest on the Loans or any Fees or
                  other amounts (other than principal or Reimbursement
                  Obligations) payable to such Lender (it being understood that
                  a waiver of the application of the default rate of interest
                  pursuant to ss.5.10 shall only require the consent of the
                  Required Revolving Credit Lenders);

                  (b) without the written consent of the Borrowers'
         Representative and each Lender:

                           (i) postpone or extend the Maturity Date or any other
                  regularly scheduled dates for payments of principal of the
                  Loans or Reimbursement Obligations (it being understood that
                  any vote to rescind any acceleration made pursuant to ss.13.1
                  of amounts owing with respect to thE Revolving Credit Loans
                  and other Obligations owing to the Revolving Credit Lenders
                  shall only require the consent of the SuperMajority Lenders
                  or, if the acceleration was initiated by the Tranche B Lender,
                  the Supermajority Lenders and the Tranche B Lender);

                           (ii) other than pursuant to a transaction permitted
                  by the terms of this Agreement or to facilitate a liquidation,
                  release all or substantially all of the Collateral;

                           (iii) amend the definitions of "Borrowing Base" or
                  "Availability" or of any definition of any component thereof,
                  such that more credit would be available to the Borrowers,
                  based on the same assets, as would have been available to the
                  Borrowers immediately prior to such amendment, IT BEING
                  UNDERSTOOD, HOWEVER, that: the foregoing shall not (i) limit
                  the adjustment by the Administrative Agent of any Reserve in
                  the Administrative Agent's administration of the Revolving
                  Credit Loans as otherwise permitted by this Agreement or (ii)
                  prevent the Administrative Agent, in its administration of the
                  Revolving Credit Loans, from restoring any component of
                  Borrowing Base which had been lowered by the Administrative
                  Agent back to the value of such component, as stated in this
                  Agreement or to an intermediate value;

                                     -101-
<PAGE>

                           (iv) amend or waive ss.13.4, this ss.16.12 or the
                  definitions of Required LendeRs, Required Revolving Credit
                  Lenders, SuperMajority Lenders or Maturity Date;

                           (v) increase the amount of the Total Commitment;

                  (c) without the written consent of the Tranche B Lender:

                           (i) amend, modify or waive ss.ss.3, 10.1, 13.1, 14.9,
                  15.1.2 or 15.4;

                           (ii) amend the definitions of "Tranche B Borrowing
                  Base", "Standstill Termination Date", "Buyout Exercise
                  Period", "Buyout Exercise Notice", "Buyout Acceptance Notice"
                  or "Protective OverAdvance";

                           (iii) change the Tranche B Lender's reporting or
                  monitoring rights, or the conditions of assignment of the
                  Tranche B Loan;

                           (iv) increase the Applicable Margin (other than an
                  increase to the default rate in accordance with ss.5.10) by
                  more than two percent (2%); provided that in any event any
                  increasE in such rate shall result in an equal increase in the
                  rate of interest applicable to the Tranche B Loan and any
                  increased or additional fees paid to the Revolving Credit
                  Lenders (other than fees paid solely to the Administrative
                  Agent) shall result in pro rata increased or additional fees
                  paid to the Tranche B Lender;

                           (v) allow the Total Commitment to exceed $70,000,000;

                           (vi) amend, modify or waive ss.9.5;

                           (vii) accelerate the scheduled dates of principal or
                  interest payments, or the maturity of the Revolving Credit
                  Loans (other than following a Default), PROVIDED, HOWEVER,
                  that the foregoing shall not in any way limit the rights of
                  the Administrative Agent and the Revolving Credit Lenders to
                  make adjustments to Reserves or otherwise modify the Borrowing
                  Base and Tranche B Borrowing Base as permitted by this
                  Agreement;

                  (d) without the written consent of the Administrative Agent,
         amend or waive ss.2.9.2., ss.15, The amount or time of payment of the
         Administrative Agent Fee or any Letter of Credit Fees payable for the
         Administrative Agent's account or any other provision applicable to the
         Administrative Agent.

No waiver shall extend to or affect any obligation not expressly waived or
impair any right consequent thereon. No course of dealing or delay or omission
on the part of the Administrative Agent or any Lender in exercising any right
shall operate as a waiver thereof or otherwise be prejudicial thereto. No notice
to or demand upon the Borrowers shall entitle the Borrowers to other or further
notice or demand in similar or other circumstances. The Administrative Agent may
deem a Lender to have granted its consent or approval of a course of action
proposed by the Administrative Agent unless the Administrative Agent has
received objection for such Lender seven (7) Business Days after notice has been
given to such Lender of the Administrative Agent's request for a consent or
approval of a proposed course of action to be followed by the Administrative
Agent, PROVIDED THAT the Administrative Agent may rely on such passage of time

                                     -102-
<PAGE>

as consent by a only if such notice states that consent will be deemed effective
if no objection is received within such time period. Notwithstanding anything
contained in this Agreement to the contrary, the Administrative Agent shall have
the authority to consent to the Borrowers selling, or entering into agreements
to sell, assets of the Borrowers (a) without the consent of the Revolving Credit
Lenders so long as (i) no OverLoan exists, or is projected to exist, upon the
completion of such sale or transfer or (ii) the Borrowers receive, or under the
terms of the agreements are projected to receive, net proceeds from such sales
or transfers (A) at least equal to the amount by which the Borrowing Base will
be decreased as a result of such sale or transfer or (B) sufficient to pay in
full all principal, interest, fees and other amounts due to the Revolving Credit
Lenders and cash collateralize the Maximum Drawing Amount or (b) without the
consent of the Tranche B Lender so long as (i) no OverLoan exists, will exist,
or is projected to exist, upon the completion of such sale or transfer or (ii)
the Tranche B Lender has received a Buyout Exercise Notice with respect to such
sale or transfer and either (A) the Administrative Agent shall not have received
a Buyout Acceptance Notice from the Tranche B Lender within ten (10) days
following the Tranche B Lender's receipt of such Buyout Exercise Notice or (B)
the Tranche B Lender shall have delivered a Buyout Acceptance Notice to the
Administrative Agent, but the Tranche B Lender shall have failed to complete the
assignment contemplated by ss.3.7 within three (3) Business Days following the
Buyout Acceptance Notice.

16.13.  POWER OF ATTORNEY.

16.13.1. APPOINTMENT AND POWERS OF ADMINISTRATIVE AGENT. The Borrowers hereby
         irrevocably constitute and appoint the Administrative Agent and any
         officer or agent thereof, with full power of substitution, as their
         true and lawful attorneys-in-fact with full irrevocable power and
         authority in the place and stead of the Borrowers or in the
         Administrative Agent's own name, for the purpose of carrying out the
         terms of this Agreement, to take any and all appropriate action and to
         execute any and all documents and instruments that may be necessary or
         useful to accomplish the purposes of this Agreement and, without
         limiting the generality of the foregoing, hereby gives said attorneys
         the power and right, on behalf of the Borrowers, without notice to or
         assent by the Borrowers, to do the following:

                           (a) if a Default exist, generally to sell, transfer,
                  pledge, make any agreement with respect to or otherwise
                  dispose of or deal with any of the Collateral in such manner
                  as is consistent with the Uniform Commercial Code of the State
                  and as fully and completely as though the Administrative Agent
                  were the absolute owner thereof for all purposes, and to do,
                  at the Borrowers' expense, at any time, or from time to time,
                  all acts and things which the Administrative Agent deems
                  necessary or useful to protect, preserve or realize upon the
                  Collateral and the Administrative Agent's security interest
                  therein, in order to effect the intent of this Agreement, all
                  no less fully and effectively as the Borrowers might do,
                  including, without limitation, (i) the filing and prosecuting
                  of registration and transfer applications with the appropriate

                                     -103-
<PAGE>

                  federal, state or local agencies or authorities with respect
                  to trademarks, copyrights and patentable inventions and
                  processes, (ii) upon written notice to the Borrower's
                  Representative, the exercise of voting rights with respect to
                  voting securities, which rights may be exercised, if the
                  Administrative Agent so elects, with a view to causing the
                  liquidation of assets of the issuer of any such securities and
                  (iii) the execution, delivery and recording, in connection
                  with any sale or other disposition of any Collateral, of the
                  endorsements, assignments or other instruments of conveyance
                  or transfer with respect to such Collateral; and

                           (b) to the extent that the Borrowers' authorization
                  given in ss.6.2 is noT sufficient, to file such financing
                  statements with respect hereto, with or without the Borrowers'
                  signature, or a photocopy of this Agreement in substitution
                  for a financing statement, as the Administrative Agent may
                  deem appropriate and to execute in the Borrowers' name such
                  financing statements and amendments thereto and continuation
                  statements which may require the Borrowers' signature.

16.13.2. RATIFICATION BY BORROWERS. To the extent permitted by law, the
         Borrowers hereby ratify all that said attorneys shall lawfully do or
         cause to be done by virtue hereof. This power of attorney is a power
         coupled with an interest and is irrevocable.

16.13.3. NO DUTY ON ADMINISTRATIVE AGENT. The powers conferred on the
         Administrative Agent hereunder are solely to protect the interests of
         the Administrative Agent and the Lenders in the Collateral and shall
         not impose any duty upon the Administrative Agent to exercise any such
         powers. The Administrative Agent shall be accountable only for the
         amounts that it actually receives as a result of the exercise of such
         powers, and neither it nor any of its officers, directors, employees or
         agents shall be responsible to the Borrowers for any act or failure to
         act, except for the Administrative Agent's own gross negligence or
         willful misconduct.

16.14. SURETYSHIP WAIVERS BY THE BORROWERS. The Borrowers waive demand, notice,
protest, notice of acceptance of this Agreement, notice of loans made, credit
extended, Collateral received or delivered or other action taken in reliance
hereon and all other demands and notices of any description. With respect to
both the Obligations and the Collateral, the Borrowers assent to any extension
or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of or failure to perfect any security interest
in any Collateral, to the addition or release of any party or person primarily
or secondarily liable, to the acceptance of partial payment thereon and the
settlement, compromising or adjusting of any thereof, all in such manner and at
such time or times as the Administrative Agent may deem advisable. The
Administrative Agent shall have no duty as to the collection or protection of
the Collateral or any income therefrom, the preservation of rights against prior
parties, or the preservation of any rights pertaining thereto beyond the safe
custody thereof as set forth in ss.14.12. The Borrowers further waive any and
all other suretyship defenses.

16.15. MARSHALLING. Neither the Administrative Agent nor any Lender shall be
required to marshal any present or future collateral security (including but not
limited to the Collateral) for, or other assurances of payment of, the
Obligations or any of them or to resort to such collateral security or other
assurances of payment in any particular order, and all of the rights and
remedies of the Administrative Agent or any Lender hereunder and of the
Administrative Agent or any Lender in respect of such collateral security and
other assurances of payment shall be cumulative and in addition to all other
rights and remedies, however existing or arising. To the extent that it lawfully
may, the Borrowers hereby agree that they will not invoke any law relating to
the marshalling of collateral which might cause delay in or impede the
enforcement of the Administrative Agent's rights and remedies under this

                                     -104-
<PAGE>

Agreement or under any other instrument creating or evidencing any of the
Obligations or under which any of the Obligations is outstanding or by which any
of the Obligations is secured or payment thereof is otherwise assured, and, to
the extent that it lawfully may, the Borrowers hereby irrevocably waive the
benefits of all such laws.

16.16. SEVERABILITY. The provisions of this Agreement are severable and if any
one clause or provision hereof shall be held invalid or unenforceable in whole
or in part in any jurisdiction, then such invalidity or unenforceability shall
affect only such clause or provision, or part thereof, in such jurisdiction, and
shall not in any manner affect such clause or provision in any other
jurisdiction, or any other clause or provision of this Agreement in any
jurisdiction.

                                     -105-
<PAGE>

         IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as a sealed instrument as of the date first set forth above.

                         "BORROWERS"

                         MAYOR'S JEWELERS, INC.

                         By: _______________________________________________
                                Name:
                                Title:

                         MAYOR'S JEWELERS, INC.

                         By: _______________________________________________
                                Name:
                                Title:

                         JBM RETAIL COMPANY, INC.

                         By: _______________________________________________
                                Name:
                                Title:

                         JBM VENTURE CO., INC.

                         By: _______________________________________________
                                Name:
                                Title:

                         MAYOR'S JEWELERS INTELLECTUAL PROPERTY HOLDING COMPANY

                         By: _______________________________________________
                                Name:
                                Title:

                                     -106-
<PAGE>

                          "ADMINISTRATIVE AGENT"

                          FLEET RETAIL FINANCE INC.

                          By: _______________________________________________
                                 Name:
                                 Title:

                                     -107-
<PAGE>

                          "REVOLVING CREDIT LENDERS"

                          FLEET RETAIL FINANCE INC.

                          By: _______________________________________________
                                 Name:
                                 Title:

                          NATIONAL CITY COMMERCIAL FINANCE, INC.

                          By: _______________________________________________
                                 Name:
                                 Title:

                          WELLS FARGO RETAIL FINANCE, LLC

                          By: _______________________________________________
                                 Name:
                                 Title:

                          "TRANCHE B LENDER"

                          BACK BAY CAPITAL FUNDING LLC

                          By: _______________________________________________
                                 Name:
                                 Title:
Date:  June 18, 2002

                                     -108-<PAGE>

                 AMENDMENT NUMBER 4 TO NOTE PURCHASE AGREEMENT

         AMENDMENT NUMBER 4 TO NOTE PURCHASE AGREEMENT (this "Amendment"), dated
as of April 27, 2002 among BELK, INC., a Delaware corporation, as debtor (in
such capacity, the "Debtor"), THE BELK CENTER, INC., a North Carolina
corporation, as servicer (the "Servicer" or "Belk Center"), ENTERPRISE FUNDING
CORPORATION, a Delaware corporation (the "Company") and BANK OF AMERICA, N.A., a
national banking association ("Bank of America"), as agent for the Company and
the Bank Investors (in such capacity, the "Agent") and as a Bank Investor
amending that certain Note Purchase Agreement dated as of May 3, 1999, as
amended prior to the date hereof (the "Note Purchase Agreement").

         WHEREAS, the Debtor has requested that the Note Purchase Agreement be
amended to reflect an extension of the Commitment Termination Date;

         WHEREAS, Bank of America solely constitutes the Majority Investors (as
defined in the Note Purchase Agreement); and

         WHEREAS, the parties hereto have agreed to make certain amendments to
the Note Purchase Agreement.

         NOW, THEREFORE, the parties hereby agree as follows:

         SECTION 1. Defined Terms. As used in this Amendment, capitalized terms
shall have the same meanings assigned thereto in the Note Purchase Agreement.

         SECTION 2. Amendment to Definitions.

         (a) The definition of "Commitment Termination Date" is hereby amended
to read as follows (solely for convenience, changed text is italicized):

         ""Commitment Termination Date" means April 26, 2003, or such later date
         to which the Commitment Termination Date may be extended by Debtor, the
         Agent and the Bank Investors not later than 30 days prior to the then
         current Commitment Termination Date."
<PAGE>

         SECTION 3. Representations and Warranties. The Debtor hereby makes to
the Company on and as of the date hereof, the following representations and
warranties:

                  (a) Authority. The Debtor has the requisite corporate power
         and authority to execute and deliver this Amendment and to perform its
         obligations hereunder and under the Note Purchase Agreement (as amended
         hereby). The execution, delivery and performance by the Debtor of this
         Amendment and the performance of the Note Purchase Agreement (as
         amended hereby) have been duly approved by all necessary corporate
         action and no other corporate proceedings are necessary to consummate
         such transactions;

                  (b) Enforceability. This Amendment has been duly executed and
         delivered by the Debtor. The Note Purchase Agreement (as amended
         hereby) is the legal, valid and binding obligation of the Debtor
         enforceable against the Debtor in accordance with its terms, and is in
         full force and effect; and

                  (c) Representations and Warranties. The representations and
         warranties of the Debtor contained in the Note Purchase Agreement
         (other than any such representations or warranties that, by their
         terms, are specifically made as of a date other than the date hereof)
         are correct on and as of the date hereof as though made on and as of
         the date hereof.

         SECTION 4. Limited Scope. This amendment is specific to the
circumstances described above and does not imply any future amendment or waiver
of rights allocated to the Company under the Note Purchase Agreement.

         SECTION 5. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

         SECTION 6. Severability; Counterparts. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
instrument. Any provisions of this Amendment which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability

                                       2

<PAGE>

without invalidating the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

         SECTION 7. Ratification. Except as expressly affected by the provisions
hereof, the Note Purchase Agreement as amended shall remain in full force and
effect in accordance with its terms and is hereby ratified and confirmed by the
parties hereto. On and after the date hereof, each reference in the Note
Purchase Agreement to "this Agreement", "hereunder", "herein" or words of like
import shall mean and be a reference to the Note Purchase Agreement as amended
by this Amendment.

             [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                       3

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment Number 4 as of the date first written above.

                                             BELK, INC., as Debtor

                                             By: /s/ Brian T. Marley
                                                 ------------------------------
                                             Name:   Brian T. Marley
                                             Title:  Executive Vice-President

                                             THE BELK CENTER, INC.,
                                               as Servicer

                                             By: /s/ Oakley M. Orser
                                                 ------------------------------
                                             Name:   Oakley M. Orser
                                             Title:  Vice-President, Credit

                                             ENTERPRISE FUNDING CORPORATION,
                                               as Company

                                             By: /s/ Andrew L. Stidd
                                                 ------------------------------
                                             Name:   Andrew L. Stidd
                                             Title:  President

                                             BANK OF AMERICA, N.A.,
                                               as Agent and as a Bank Investor

                                             By: /s/ Elliott Lemon
                                                 ------------------------------
                                             Name:   Elliott Lemon
                                             Title:  Vice President

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