Document:

EXHIBIT 10.43

                                                                  EXECUTION COPY

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                                 AMERIPATH, INC.

                                CREDIT AGREEMENT

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

                                BANKBOSTON, N.A.,
                              Administrative Agent

                              BANK OF AMERICA, N.A.
                            d/b/a NationsBank, N.A.,
                                Syndication Agent

                                  BANK ONE, NA,
                                    Co-Agent

                           FIRST UNION NATIONAL BANK,
                                    Co-Agent

                       BANCBOSTON ROBERTSON STEPHENS INC.,
                                    Arranger

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<PAGE>
                                TABLE OF CONTENTS
                                                                           PAGE
                                                                           ----

1.       Restatement; Definitions...........................................-1-
         1.1.     Restatement...............................................-1-
         1.2.     Definitions; Certain Rules of Construction................-1-

2.       The Credits.......................................................-23-
         2.1.     Revolving Credit.........................................-24-
                  2.1.1.   Revolving Loan..................................-24-
                  2.1.2.   Maximum Amount of Revolving Credit..............-24-
                  2.1.3.   Borrowing Requests..............................-24-
                  2.1.4.   Loan Account; Notes.............................-25-
         2.2.     Swingline Credit.........................................-25-
                  2.2.1.   Swingline Loan..................................-25-
                  2.2.2.   Borrowing Requests..............................-25-
                  2.2.3.   Swingline Loan Account; Swingline Notes.........-25-
                  2.2.4.   Conversion of Swingline Loan into Revolving
                           Loan............................................-26-
         2.3.     Letters of Credit........................................-27-
                  2.3.1.   Issuance of Letters of Credit...................-27-
                  2.3.2.   Requests for Letters of Credit..................-27-
                  2.3.3.   Form and Expiration of Letters of Credit........-27-
                  2.3.4.   Lenders' Participation in Letters of Credit.....-27-
                  2.3.5.   Presentation....................................-28-
                  2.3.6.   Payment of Drafts...............................-28-
                  2.3.7.   Uniform Customs and Practice....................-28-
                  2.3.8.   Subrogation.....................................-29-
                  2.3.9.   Modification, Consent, etc......................-30-
         2.4.     Application of Proceeds..................................-30-
                  2.4.1.   Revolving Loan..................................-30-
                  2.4.2.   Swingline Loan..................................-30-
                  2.4.3.   Letters of Credit...............................-30-
                  2.4.4.   Specifically Prohibited Applications............-30-
         2.5.     Nature of Obligations of Lenders to Make Extensions
                  of Credit................................................-30-

3.       Interest; LIBOR Pricing Options; Fees.............................-31-
         3.1.     Interest.................................................-31-
         3.2.     LIBOR Pricing Options....................................-31-
                  3.2.1.   Election of LIBOR Pricing Options...............-31-
                  3.2.2.   Notice to Lenders and the Borrower..............-32-
                  3.2.3.   Selection of LIBOR Interest Periods.............-32-
                  3.2.4.   Additional Interest.............................-32-

                                      -i-
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                                                                           ----

                  3.2.5.   Violation of Legal Requirements.................-33-
                  3.2.6.   Funding Procedure...............................-33-
         3.4.     Commitment Fees..........................................-34-
         3.5.     Letter of Credit Fees....................................-34-
         3.6.     Changes in Circumstances; Yield Protection...............-34-
                  3.6.1.   Reserve Requirements, etc.......................-34-
                  3.6.2.   Taxes...........................................-35-
                  3.6.3.   Capital Adequacy................................-35-
                  3.6.4.   Regulatory Changes..............................-35-
                  3.6.5.   Compensation Claims.............................-36-
         3.7.     Computations of Interest and Fees........................-36-

4.       Payment...........................................................-36-
         4.1.     Payment at Maturity......................................-36-
         4.2.     Contingent Required Prepayments..........................-36-
                  4.2.1.   Excess Credit Exposure..........................-37-
                  4.2.2.   Letter of Credit Exposure.......................-37-
                  4.2.3.   Net Equity Proceeds.............................-37-
         4.3.     Voluntary Prepayments....................................-37-
         4.4.     Letters of Credit........................................-37-
         4.5.     Reborrowing; Application of Payments, etc................-38-

5.       Conditions to Extending Credit....................................-38-
         5.1.     Conditions on Initial Closing Date.......................-38-
                  5.1.1.   Notes...........................................-38-
                  5.1.2.   Perfection of Security..........................-38-
                  5.1.3.   Legal Opinions..................................-38-
                  5.1.4.   Payment of Fee..................................-39-
                  5.1.5.   Adverse Market Change...........................-39-
         5.2.     Conditions to Each Extension of Credit...................-39-
                  5.2.1.   Officer's Certificate...........................-39-
                  5.2.2.   Legality, etc...................................-39-
                  5.2.3.   Proper Proceedings..............................-40-
                  5.2.4.   Conditions to Making Each Permitted
                           Acquisition Advance.............................-40-
                  5.2.5.   General.........................................-40-

6.       General Covenants.................................................-40-
         6.1.     Taxes and Other Charges; Accounts Payable................-40-
                  6.1.1.   Taxes and Other Charges.........................-40-
                  6.1.2.   Accounts Payable................................-41-
         6.2.     Conduct of Business, etc.................................-41-

                                      -ii-
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                  6.2.1.   Types of Business...............................-41-
                  6.2.2.   Maintenance of Properties.......................-41-
                  6.2.3.   Statutory Compliance............................-41-
                  6.2.4.   No Subsidiaries.................................-42-
                  6.2.5.   Compliance with Material Agreements.............-42-
         6.3.     Insurance................................................-42-
                  6.3.1.   Property Insurance..............................-42-
                  6.3.2.   Liability Insurance.............................-42-
                  6.3.3.   Key Executive Life .............................-43-
                  6.3.4.   Flood Insurance.................................-43-
         6.4.     Financial Statements and Reports.........................-43-
                  6.4.1.   Annual Reports..................................-43-
                  6.4.2.   Quarterly Reports...............................-44-
                  6.4.3.   Other Reports...................................-45-
                  6.4.4.   Notice of Litigation, Defaults, etc.............-46-
                  6.4.5.   ERISA Reports...................................-46-
                  6.4.6.   Other Information; Audit........................-47-
         6.5.     Certain Financial Tests..................................-47-
                  6.5.1.   Consolidated Total Debt Coverage................-47-
                  6.5.2.   Consolidated Interest Expense...................-48-
                  6.5.3.   Consolidated Operating Cash Flow................-48-
         6.6.     Indebtedness.............................................-48-
         6.7.     Guarantees; Letters of Credit............................-49-
         6.8.     Liens....................................................-49-
         6.9.     Investments and Permitted Acquisitions...................-51-
         6.10.    Distributions............................................-51-
         6.11.    Asset Dispositions and Mergers...........................-52-
         6.12.    Lease Obligations........................................-52-
         6.13.    Issuance of Stock by Subsidiaries; Subsidiary
                  Distributions............................................-52-
                  6.13.1.   Issuance of Stock by Subsidiaries of
                            the Company....................................-52-
                  6.13.2.   No Restrictions on Subsidiary
                            Distributions..................................-53-
         6.14.    Voluntary Prepayments of Other Indebtedness..............-53-
         6.15.    Derivative Contracts.....................................-53-
         6.16.    Negative Pledge Clauses..................................-53-
         6.17.    ERISA, etc...............................................-54-
         6.18.    Transactions with Affiliates.............................-54-
         6.19.    Interest Rate Protection.................................-54-
         6.20.    Environmental Laws.......................................-54-
                  6.20.1.   Compliance with Law and Permits................-54-
                  6.20.2.   Notice of Claims, etc..........................-55-
         6.21.    Permitted Acquisitions; General..........................-55-

                                      -iii-
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         6.22.    Year 2000 Compliant......................................-57-

7.       Representations and Warranties....................................-57-
         7.1.     Organization and Business................................-57-
                  7.1.1.   The Borrower....................................-57-
                  7.1.2.   Subsidiaries....................................-58-
                  7.1.3.   Qualification...................................-58-
                  7.1.4.   Capitalization..................................-58-
         7.2.     Financial Statements and Other Information;
                  Material Agreements......................................-59-
                  7.2.1.   Financial Statements and Other Information......-59-
                  7.2.2.   Material Agreements.............................-60-
         7.3.     Agreements Relating to Financing Debt,
                  Investments, etc.........................................-60-
         7.4.     Changes in Condition.....................................-60-
         7.5.     Title to Assets..........................................-60-
         7.6.     Operations in Conformity With Law, etc...................-60-
         7.7.     Litigation...............................................-60-
         7.8.     Authorization and Enforceability.........................-61-
         7.9.     No Legal Obstacle to Agreements..........................-61-
         7.10.    Defaults.................................................-62-
         7.11.    Licenses, etc............................................-62-
         7.12.    Tax Returns..............................................-62-
         7.13.    Certain Business Representations.........................-62-
                  7.13.1.   Labor Relations................................-62-
                  7.13.2.   Antitrust......................................-63-
                  7.13.3.   Consumer Protection............................-63-
                  7.13.4.   Burdensome Obligations.........................-63-
                  7.13.5.   Future Expenditures............................-63-
         7.14.    Environmental Regulations................................-63-
                  7.14.1.   Environmental Compliance.......................-63-
                  7.14.2.   Environmental Litigation.......................-64-
                  7.14.3.   Environmental Condition of Properties..........-64-
         7.15.    Pension Plans............................................-64-
         7.16.    Acquisition Agreement, etc...............................-64-
         7.17.    Foreign Trade Regulations; Government Regulation;
                  Margin Stock.............................................-65-
                  7.17.1.   Foreign Trade Regulations......................-65-
                  7.17.2.   Government Regulation..........................-65-
                  7.17.3.   Margin Stock...................................-65-
         7.18.    Disclosure...............................................-65-

8.       Defaults..........................................................-66-
         8.1.     Events of Default........................................-66-

                                      -iv-
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                  8.1.1.    Payment........................................-66-
                  8.1.2.    Specified Covenants............................-66-
                  8.1.3.    Other Covenants................................-66-
                  8.1.4.    Representations and Warranties.................-67-
                  8.1.5.    Cross Default, etc.............................-67-
                  8.1.6.    Ownership; Liquidation; etc....................-67-
                  8.1.7.    Enforceability, etc............................-68-
                  8.1.8.    Judgments......................................-68-
                  8.1.9.    ERISA..........................................-68-
                  8.1.10.   Bankruptcy, etc................................-68-
                  8.1.11.   Acquisitions...................................-69-
         8.2.     Certain Actions Following an Event of Default............-69-
                  8.2.1.    Terminate Obligation to Extend Credit..........-69-
                  8.2.2.    Specific Performance; Exercise of Rights.......-69-
                  8.2.3.    Acceleration...................................-70-
                  8.2.4.    Enforcement of Payment; Credit Security;
                            Setoff.........................................-70-
                  8.2.5.    Cumulative Remedies............................-70-
                  8.2.6.    Exercise of Call Right.........................-70-
         8.3.     Annulment of Defaults....................................-71-
         8.4.     Waivers..................................................-71-

9.       Guarantees........................................................-71-
         9.1.     Guarantees of Credit Obligations.........................-72-
         9.2.     Continuing Obligation....................................-72-
         9.3.     Waivers with Respect to Credit Obligations...............-73-
         9.4.     Lenders' Power to Waive, etc.............................-74-
         9.5.     Information Regarding the Borrower, etc..................-75-
         9.6.     Certain Guarantor Representations........................-75-
         9.7.     Subrogation..............................................-76-
         9.8.     Subordination............................................-76-
         9.9.     Further Assurances.......................................-76-

10.      Security..........................................................-77-
         10.1.    Credit Security..........................................-77-
                  10.1.1.   Tangible Personal Property.....................-77-
                  10.1.2.   Rights to Payment of Money.....................-77-
                  10.1.3.   Intangibles....................................-77-
                  10.1.4.   Pledged Stock..................................-77-
                  10.1.5.   Pledged Rights.................................-78-
                  10.1.6.   Pledged Indebtedness...........................-78-
                  10.1.7.   Chattel Paper, Instruments and
                            Documents......................................-78-

                                       -v-
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                  10.1.8.   Leases.........................................-78-
                  10.1.9.   Deposit Accounts...............................-78-
                  10.1.10.  Collateral.....................................-78-
                  10.1.11.  Books and Records..............................-78-
                  10.1.12.  Insurance......................................-78-
                  10.1.13.  Investment Property............................-79-
                  10.1.14.  All Other Property.............................-79-
                  10.1.15.  Proceeds and Products..........................-79-
                  10.1.16.  Excluded Property..............................-79-
         10.2.    Additional Credit Security...............................-79-
                  10.2.1.   Real Property..................................-80-
                  10.2.2.   Motor Vehicles and Aircraft....................-80-
         10.3.    Representations, Warranties and Covenants with
                  Respect to Credit Security...............................-80-
                  10.3.1.   Pledged Stock..................................-80-
                  10.3.2.   Accounts and Pledged Indebtedness..............-80-
                  10.3.3.   No Liens or Restrictions on Transfer or
                            Change of Control..............................-81-
                  10.3.4.   Location of Credit Security....................-81-
                  10.3.5.   Trade Names....................................-81-
                  10.3.6.   Insurance......................................-81-
                  10.3.7.   Modifications to Credit Security...............-82-
                  10.3.8.   Delivery of Documents..........................-82-
                  10.3.9.   Perfection of Credit Security..................-82-
         10.4.    Administration of Credit Security........................-83-
                  10.4.1.   Use of Credit Security.........................-83-
                  10.4.2.   Deposits; Accounts.............................-83-
                  10.4.3.   Pledged Securities.............................-84-
         10.5.    Right to Realize upon Credit Security....................-84-
                  10.5.1.   Assembly of Credit Security; Receiver..........-84-
                  10.5.2.   General Authority..............................-85-
                  10.5.3.   Marshaling, etc................................-85-
                  10.5.4.   Sales of Credit Security.......................-86-
                  10.5.5.   Sale without Registration......................-87-
                  10.5.6.   Application of Proceeds........................-87-
         10.6.    Custody of Credit Security...............................-88-

11.      Expenses; Indemnity...............................................-88-
         11.1.    Expenses.................................................-88-
         11.2.    General Indemnity........................................-89-
         11.3.    Indemnity With Respect to Letters of Credit..............-89-

                                      -vi-
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12.      Operations; Agent..................................................-89-
         12.1.    Interests in Credits......................................-89-
         12.2.    Agent's Authority to Act, etc.............................-90-
         12.3.    Borrower to Pay Agent, etc................................-90-
         12.4.    Lender Operations for Advances, Letters of Credit, etc....-90-
                  12.4.1.   Advances........................................-90-
                  12.4.2.   Letters of Credit...............................-90-
                  12.4.3.   Agent to Allocate Payments, etc.................-91-
                  12.4.4.   Delinquent Lenders; Nonperforming Lenders.......-91-
         12.5.    Sharing of Payments, etc..................................-92-
         12.6.    Actions by Agent, Amendments, Consents, Waivers, etc......-93-
         12.7.    Agent's Resignation.......................................-94-
         12.8.    Concerning the Agent......................................-94-
                  12.8.1.   Action in Good Faith, etc.......................-94-
                  12.8.2.   No Implied Duties, etc..........................-94-
                  12.8.3.   Validity, etc...................................-95-
                  12.8.4.   Compliance......................................-95-
                  12.8.5.   Employment of Agents and Counsel................-95-
                  12.8.6.   Reliance on Documents and Counsel...............-95-
                  12.8.7.   Agent's Reimbursement...........................-96-
                  12.8.8.   Conveying Reports to Lenders....................-96-
         12.9.    Rights as a Lender........................................-96-
         12.10.   Independent Credit Decision...............................-96-
         12.11.   Indemnification...........................................-97-

13.      Successors and Assigns; Lender Assignments and Participations......-97-
         13.1.    Assignments by Lenders....................................-97-
                  13.1.1.   Assignees and Assignment Procedures.............-97-
                  13.1.2.   Terms of Assignment and Acceptance..............-98-
                  13.1.3.   Register........................................-99-
                  13.1.4.   Acceptance of Assignment and Assumption.........-99-
                  13.1.5.   Federal Reserve Bank...........................-100-
                  13.1.6.   Further Assurances.............................-100-
         13.2.    Credit Participants......................................-100-
         13.3.    Replacement of Lender....................................-101-
         13.4.    Foreign Lenders..........................................-102-

14.      Confidentiality...................................................-103-

15.      Acknowledgments and Consents......................................-103-

                                      -vii-
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16.      Notices...........................................................-103-

17.      Course of Dealing; Amendments and Waivers.........................-104-

18.      Defeasance........................................................-104-

19.      Venue; Service of Process.........................................-105-

20.      WAIVER OF JURY TRIAL..............................................-105-

21.      No Strict Construction............................................-106-

22.      General...........................................................-106-

                                     -viii-

<PAGE>

                                    EXHIBITS

1              -  Applicable Interest Rates

2.1.4          -  Revolving Note

2.2.3          -  Swingline Note

5.2.1          -  Officer's Certificate

6.6            -  Existing Indebtedness

6.8            -  Existing Liens

6.11           -  Asset Dispositions and Mergers

6.18           -  Transactions with Affiliates

6.21.1(a)      -  Subordination Agreement

6.21.1(b)      -  Joinder Agreement

6.21.1(f)      -  6.21.1 Permitted Acquisition Compliance Certificate

6.21.2(d)      -  6.21.2 Permitted Acquisition Compliance Certificate

7.1            -  Company and its Subsidiaries

7.1.4          -  Stockholders of the Company

7.2.2          -  Material Agreements

7.3            -  Financing Debt, Certain Investments, etc.

7.4            -  Changes in Condition

7.7            -  Litigation

7.14           -  Environmental

7.15           -  Multi-employer and Defined Benefit Plans

10.4.2         -  Depository Institutions

12.1           -  Interests in Credits

13.1.1         -  Assignment and Acceptance

                                      -ix-

<PAGE>

                                 AMERIPATH, INC.

                                CREDIT AGREEMENT

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

1.       RESTATEMENT; DEFINITIONS.

         1.1. RESTATEMENT. Effective as of the Initial Closing Date, this
Agreement amends and restates in its entirety the Credit Agreement dated as of
May 29, 1996, as previously amended and in effect on the date hereof, among the
Company, its Subsidiaries and a group of lenders for which BankBoston is acting
as agent. Amounts in respect of interest, commitment fees, Letter of Credit fees
and other amounts payable hereunder shall be payable in accordance with the
terms of this Agreement as in effect prior to the amendment and restatement on
the Initial Closing Date for periods prior to the Initial Closing Date and in
accordance with this Agreement as amended and restated hereby for periods from
and after the Initial Closing Date.

         1.2. DEFINITIONS; CERTAIN RULES OF CONSTRUCTION. Certain capitalized
terms are used in this Agreement and in the other Credit Documents with the
specific meanings defined below in this Section 1. Except as otherwise
explicitly specified to the contrary or unless the context clearly requires
otherwise, (a) the capitalized term "Section" refers to sections of this
Agreement, (b) the capitalized term "Exhibit" refers to exhibits to this
Agreement, (c) references to a particular Section include all subsections
thereof, (d) the word "including" shall be construed as "including without
limitation", (e) accounting terms not otherwise defined herein have the meaning
provided under GAAP, (f) terms defined in the UCC and not otherwise defined
herein have the meaning provided under the UCC, (g) references to a particular
statute or regulation include all rules and regulations thereunder and any
successor statute, regulation or rules, in each case as from time to time in
effect and (h) references to a particular Person include such Person's
successors and assigns to the extent not prohibited by this Agreement and the
other Credit Documents. References to "the date hereof" mean December [16],
1999.

         "ACCOUNTS" is defined in Section 10.1.2.

         "ACCUMULATED BENEFIT OBLIGATIONS" means the actuarial present value of
the accumulated benefit obligations under any Plan, calculated in accordance
with Statement No. 87 of the Financial Accounting Standards Board.

<PAGE>

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

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

         "ACQUISITION AGREEMENT" means the documentation pursuant to which the
Borrower commits itself to make a Permitted Acquisition.

         "ACQUISITION CLOSING DATE" is defined in Section 6.21.1(a).

         "AFFECTED LENDER" is defined in Section 13.3.

         "AFFILIATE" means, with respect to the Borrower (or any other specified
Person), any other Person directly or indirectly controlling, controlled by or
under direct or indirect common control with the Borrower (or such specified
Person), and shall include (a) any officer or director or general partner of the
Borrower (or such specified Person) and (b) any Person of which the Borrower (or
such specified Person) or any Affiliate (as defined in clause (a) above) of the
Borrower (or such specified Person) shall, directly or indirectly, beneficially
own either (i) at least 5% of the outstanding equity securities having the
general power to vote or (ii) at least 5% of all equity interests.

         "AGENT" means BankBoston in its capacity as administrative agent for
the Lenders hereunder, as well as its successors and assigns in such capacity
pursuant to Section 12.7.

         "AGGREGATE PERCENTAGE INTEREST" means, with respect to the Loan, the
ratio that the respective Commitments of the Lenders bear to the total
Commitments of all Lenders as from time to time in effect and reflected in the
Register.

                                      -2-
<PAGE>

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

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

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

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

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

                  Changes in the Applicable Rate shall occur on each Pricing
                  Reset Date; PROVIDED, HOWEVER, that in the event that the
                  financial statements required to be delivered pursuant to
                  Section 6.4.1 or 6.4.2, as applicable, are not

                                      -3-
<PAGE>

                  delivered by the Late Delivery Date and, if upon delivery of
                  such financial statements, it is determined that delivery of
                  such financial statements on the Late Delivery Date would have
                  resulted in an increase in the Applicable Margin on the Late
                  Pricing Reset Date such increase will be deemed effective as
                  of the Late Pricing Reset Date.

         "ARRANGER" means BancBoston Robertson Stephens Inc.

         "ASSIGNEE" is defined in Section 13.1.1.

         "ASSIGNMENT AND ACCEPTANCE" is defined in Section 13.1.1.

         "BANKBOSTON" means BankBoston, N.A., a national banking association.

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

         "BANKRUPTCY CODE" means Title 11 of the United States Code.

         "BANKRUPTCY DEFAULT" means an Event of Default referred to in Section
8.1.10.

         "BASE RATE" means, on any date, the greater of (a) the rate of interest
announced by BankBoston at the Boston Office as its Base Rate or (b) the sum of
1/2% PLUS the Federal Funds Rate.

         "BORROWER" means the Company.

         "BOSTON OFFICE" means the principal banking office of BankBoston in
Boston, Massachusetts.

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

         "CAPITAL EXPENDITURES" means, for any period, amounts added or required
to be added to the property, plant and equipment or other fixed assets account
on the Consolidated balance sheet of the Company and its Subsidiaries, prepared
in accordance with GAAP, in respect of (a) the acquisition, construction,
improvement or replacement of land, buildings, machinery, equipment, leaseholds
and any other real or personal property, (b) to the extent not included in
clause (a) above, materials, contract labor and direct labor relating thereto

                                      -4-
<PAGE>

(excluding amounts properly expensed as repairs and maintenance in accordance
with GAAP) and (c) software development costs to the extent not expensed.

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

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

         "CASH EQUIVALENTS" means:

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

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

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

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

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

                                      -5-
<PAGE>

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

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

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

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

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

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

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

         "COMPANY" means AmeriPath, Inc., a Delaware corporation.

         "COMPUTATION COVENANTS" means Sections 6.5, 6.6.7, 6.6.11, 6.9.5, 6.10,
6.11, 6.12, 6.17 and 6.21.

         "CONSOLIDATED" and "CONSOLIDATING", when used with reference to any
term, mean that term as applied to the accounts of the Company (or other
specified Person) and all of its Subsidiaries (or other specified group of
Persons), or such of its Subsidiaries as may be specified, consolidated (or
combined) or consolidating (or combining), as the case may be, in

                                      -6-
<PAGE>

accordance with GAAP and with appropriate deductions for minority interests in
Subsidiaries.

         "CONSOLIDATED ADJUSTED EBITDA" means, for any period, an amount equal
to the sum of (a) Consolidated Net Income of the Company and its Subsidiaries
for such period PLUS (b) all amounts deducted in computing such Consolidated Net
Income in respect of (i) taxes based upon or measured by income, (ii)
Consolidated Interest Expense and (iii) depreciation and amortization expense
PLUS (c) any Acquired Party EBITDA Adjustment.

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

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

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

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

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

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

                  (d) extraordinary and nonrecurring gains;

                  (e) the income of any Subsidiary to the extent the payment of
         such income in the form of a Distribution or repayment of Indebtedness
         to such Person is not permitted, whether on account of any Charter or
         By-law restriction, any agreement,

                                      -7-
<PAGE>

         instrument, deed or lease or any law, statute, judgment, decree or
         governmental order, rule or regulation applicable to such Subsidiary;
         and

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

         "CONSOLIDATED OPERATING CASH FLOW" means, for any period, the total of
(i) Consolidated EBITDA MINUS (ii) taxes, based upon or measured by net taxable
income, paid in cash by the Company and its Subsidiaries MINUS (iii) Capital
Expenditures.

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

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

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

         "CONSOLIDATED TOTAL LIABILITIES" means, at any date, all Indebtedness
of the Company and its Subsidiaries on a Consolidated basis.

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

         "CREDIT DOCUMENTS" means:

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

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

                                      -8-
<PAGE>

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

         "CREDIT OBLIGATIONS" means all present and future liabilities,
obligations and Indebtedness of the Company, any of its Subsidiaries or any
other Obligor owing to the Agent or any Lender under or in connection with this
Agreement or any other Credit Document, including obligations in respect of
principal, interest, reimbursement obligations under Letters of Credit and
Interest Rate Protection Agreements provided by a Lender (or an affiliate of a
Lender), commitment fees, Letter of Credit fees, amounts provided for in
Sections 3.2.4, 3.5 and 11 and other fees, charges, indemnities and expenses
from time to time owing hereunder or under any other Credit Document (whether
accruing before or after a Bankruptcy Default).

         "CREDIT PARTICIPANT" is defined in Section 13.2.

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

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

         "DELINQUENCY PERIOD" is defined in Section 12.4.4.

         "DELINQUENT LENDER" is defined in Section 12.4.4.

         "DELINQUENT PAYMENT" is defined in Section 12.4.4.

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

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

                  (b)      the purchase or redemption of any shares of any class
         of capital stock of or other equity interest in the Company (or such
         specified Person) or of options,

                                      -9-
<PAGE>

         warrants or other rights for the purchase of such shares, directly,
         indirectly through a Subsidiary or otherwise;

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

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

                  (e)      any payment, loan or advance by the Company (or such
         specified Person) to, or any other Investment by the Company (or such
         specified Person) in, the holder of any shares of any class of capital
         stock of or equity interest in the Company (or such specified Person),
         or any Affiliate of such holder;

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

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

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

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

                                      -10-
<PAGE>

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

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

         "EVENT OF DEFAULT" is defined in Section 8.1.

         "EXCHANGE ACT" means the federal Securities Exchange Act of 1934.

         "FEDERAL FUNDS RATE" means, for any day, the rate equal to the weighted
average (rounded upward to the nearest 1/8%) of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged by
federal funds brokers, (a) as such weighted average is published for such day
(or, if such day is not a Banking Day, for the immediately preceding Banking
Day) by the Federal Reserve Bank of New York or (b) if such rate is not so
published for such Banking Day, as determined by the Agent using any reasonable
means of determination. Each determination by the Agent of the Federal Funds
Rate shall, in the absence of manifest error, be conclusive.

         "FINAL MATURITY DATE" means the fifth anniversary of the date hereof.

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

         "FINANCING DEBT" means each of the items described in clauses (a)
through (e) of the definition of the term "Indebtedness."

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

                  (g) "FRIENDLY ACQUISTION" means any acquisition which has
         received the prior approval of the board of directors of the Person
         being acquired.

         "FUNDING LIABILITY" means (a) any LIBOR deposit which was used (or
deemed by Section 3.2.6 to have been used) to fund any portion of the Loan
subject to a LIBOR Pricing

                                      -11-
<PAGE>

Option, and (b) any portion of the Loan subject to a LIBOR Pricing Option funded
(or deemed by Section 3.2.6 to have been funded) with the proceeds of any such
LIBOR deposit.

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

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

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

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

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

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

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

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

         whether or not any of the foregoing are reflected on the balance sheet
         of the Company (or such specified Person) or in a footnote thereto;
         PROVIDED, HOWEVER, that the term "Guarantee" shall not include
         endorsements for collection or deposit in the ordinary course of
         business. The amount of any Guarantee and the amount of Indebtedness

                                      -12-
<PAGE>

         resulting from such Guarantee shall be the maximum amount that the
         guarantor may become obligated to pay in respect of the obligations
         (whether or not such obligations are outstanding at the time of
         computation).

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

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

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

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

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

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

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

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

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

                  (a) borrowed money;

                                      -13-
<PAGE>

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

                  (c) Capitalized Lease Obligations;

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

                  (e) unfunded pension liabilities;

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

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

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

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

         "INDEMNIFIED PARTY" is defined in Section 11.2.

         "INITIAL CLOSING DATE" means the first date on or prior to December 31,
1999, on which all the conditions set forth in Section 5.1 have been satisfied.

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

         "INTEREST RATE PROTECTION AGREEMENT" means any interest rate swap,
interest rate cap, interest rate hedge or other contractual arrangement that
converts variable interest rates into fixed interest rates, fixed interest rates
into variable interest rates or other similar arrangements.

                                      -14-
<PAGE>

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

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

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

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

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

                  (e) any other similar investment.

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

                  In determining the amount of outstanding Investments:

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

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

                           (C) no Investment shall be increased as the result of
                  an increase in the undistributed retained earnings of the
                  Person in which the Investment was

                                      -15-
<PAGE>

                  made or decreased as a result of an equity interest in the
                  losses of such Person.

         "LATE DELIVERY DATE" is defined in the definition of Applicable
Commitment Fee Rate.

         "LATE PRICING RESET DATE" is defined in the definition of Applicable
Commitment Fee Rate.

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

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

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

         "LETTER OF CREDIT" is defined in Section 2.3.1.

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

         "LETTER OF CREDIT ISSUER" means, for any Letter of Credit, BankBoston
or, in the event BankBoston does not for any reason issue a requested Letter of
Credit, another Lender with a Percentage Interest in the Revolving Loan willing
to issue such Letter of Credit in accordance with Section 2.3 and who is
reasonably acceptable to the Agent.

         "LIBOR BASE RATE" means, for any LIBOR Interest Period, the average
(rounded upward to the nearest whole multiple of one sixteenth of one percent
(1/16 of 1%)) of the rate of interest per annum at which deposits in United
States Dollars in a principal amount approximately equal to the principal amount
of the portion of the Loan to be subject to such

                                      -16-
<PAGE>

Interest Period would be quoted on Telerate page 3750 (or such other page as may
replace the 3750 page on the Telerate Service or such other service or services
as may be nominated by the British Bankers' Association for United States Dollar
deposits) as of 11:00 A.M., London time, at least two London banking days prior
to the first day of the LIBOR Interest Period, the determination of which by the
Agent shall, in the absence of manifest error, be conclusive.

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

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

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

         "LIBOR RATE" for any LIBOR Interest Period means the rate, rounded
upward to the nearest 1/100%, obtained by dividing (a) the LIBOR Base Rate for
such LIBOR Interest Period by (b) an amount equal to 1 MINUS the LIBOR Reserve
Rate; PROVIDED, HOWEVER, that if at any time during such LIBOR Interest Period
the LIBOR Reserve Rate applicable to any outstanding LIBOR Pricing Option
changes, the LIBOR Rate for such LIBOR Interest Period shall automatically be
adjusted to reflect such change, effective as of the date of such change.

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

                                      -17-
<PAGE>

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

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

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

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

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

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

         "LOAN" means the Revolving Loan.

         "LOAN ACCOUNT" is defined in Section 2.1.4.

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

         "MANDATORY BORROWING" is defined in Section 2.2.4.

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

         "MATERIAL ADVERSE CHANGE" means, since any specified date or from the
circumstances existing immediately prior to the happening of any specified
event, a material adverse change in (a) the business, assets, financial
condition, income or prospects of the Company (on an individual basis) or the
Company and its Subsidiaries (on a Consolidated basis), whether as a result of
(i) general economic conditions affecting the industry in which the Company and
its Subsidiaries are engaged, (ii) difficulties in obtaining supplies and raw
materials, (iii) fire, flood or other natural calamities, (iv) environmental
pollution, (v) regulatory changes,

                                      -18-
<PAGE>

judicial decisions, war or other governmental action or (vi) any other event or
development, whether or not related to those enumerated above or (b) the ability
of the Obligors to perform their obligations under the Credit Documents or (c)
the rights and remedies of the Agent and the Lenders under the Credit Documents.

         "MATERIAL AGREEMENTS" is defined in Section 7.2.2.

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

         "MAXIMUM AMOUNT OF REVOLVING CREDIT" is defined in Section 2.1.2.

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

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

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

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

                  (b) extraordinary and nonrecurring gains;

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

         "NONPERFORMING LENDER" is defined in Section 12.4.4.

         "NOTES" means each of the Revolving Notes.

         "OBLIGORS" means the Company and each Guarantor, each individually an
"OBLIGOR".

         "OPERATING EARNINGS" means, with respect to any Person, the sum of (a)
the Net Income of such Person plus (b) all amounts deducted in computing such
Net Income in respect of (i) taxes based upon or measured by income, (ii)
Interest Expense, (iii) normalized

                                      -19-
<PAGE>

salaries, benefits, and other compensation to be paid to physicians employed by,
or serving as consultants or independent contractors to, such Person plus (c) in
the case of subsidiaries that are not required to pay 100% of Operating Earnings
under a Management Services Agreement, any other amounts paid to physicians
employed by, or serving as consultants or independent contractors to, such
Person.

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

         "OVERDUE REIMBURSEMENT RATE" means, at any date, the highest Applicable
Rate then in effect.

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

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

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

         "PERFORMING LENDER" is defined in Section 12.4.4.

         "PERMITTED ACQUISITION" means an Investment by the Borrower permitted
under Section 6.9.5.

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

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

         "PLEDGED INDEBTEDNESS" is defined in Section 10.1.6.

         "PLEDGED RIGHTS" is defined in Section 10.1.5.

         "PLEDGED SECURITIES" means the Pledged Stock, the Pledged Rights and
the Pledged Indebtedness, collectively.

         "PLEDGED STOCK" is defined in Section 10.1.4.

                                      -20-
<PAGE>

         "PRICING GRID" means the pricing grid matrix set forth on Exhibit 1.

         "PRICING RESET DATE" means the first Banking Day after annual or
quarterly financial statements have been furnished to the Lenders in accordance
with Sections 6.4.1 and 6.4.2 from time to time.

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

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

         "RCRA" means the federal Resource Conservation and Recovery Act, 42
U.S.C.ss.690, ET SEQ.

         "REGISTER" is defined in Section 13.1.3.

         "REPLACEMENT LENDER" is defined in Section 13.3.

         "RESTRUCTURED SELLER NOTES" means notes issued in exchange for
Contingent Notes or existing Restructured Seller Notes; PROVIDED, HOWEVER, that,

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

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

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

         (d) such new notes are either:

                           (i) new contingent notes for which:

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

                                      -21-
<PAGE>

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

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

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

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

         "REVOLVING LOAN" is defined in Section 2.1.4.

         "REVOLVING NOTES" is defined in Section 2.1.4.

         "SECURITIES ACT" means the federal Securities Act of 1933.

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

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

         "SUBORDINATION AGREEMENT" shall be an agreement in form and substance
substantially similar to Exhibit 6.21.1(a).

                                      -22-
<PAGE>

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

         "SWINGLINE BORROWER" means the Borrower.

         "SWINGLINE LENDER" means BankBoston, in its capacity as swingline
lender hereunder.

         "SWINGLINE LOAN" is defined in Section 2.2.3.

         "SWINGLINE LOAN ACCOUNT" is defined in Section 2.2.3.

         "SWINGLINE NOTE" is defined in Section 2.2.3.

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

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

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

         "UNIFORM CUSTOMS AND PRACTICE" is defined in Section 2.3.7.

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

                                      -23-
<PAGE>

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

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

2.       THE CREDITS.

         2.1. REVOLVING CREDIT.

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

                  2.1.2. MAXIMUM AMOUNT OF REVOLVING CREDIT. The term "MAXIMUM
         AMOUNT OF REVOLVING CREDIT" means on any date, the lesser of (a)
         $230,000,000 or such higher amount up to $300,000,000 as equals the
         aggregate amount of the Commitments then in effect, or (b) the amount
         (in an integral multiple of $1,000,000) to which the then applicable
         amount shall have been irrevocably reduced from time to time by notice
         from the Company to the Agent.

                  2.1.3. BORROWING REQUESTS. The Borrower may from time to time
         request a loan under Section 2.1.1 by providing to the Agent a notice
         (which may be given by a telephone call received by a Lending Officer
         if promptly confirmed in writing). Such notice must be not later than
         noon (Boston time) on the first Banking Day (third Banking Day if any
         portion of such loan will be subject to a LIBOR Pricing Option on the
         requested Closing Date) prior to the requested Closing Date for such
         loan. If such notice requested that a loan, or any portion thereof, be
         made subject to a LIBOR Pricing Option, and the Agent shall have
         notified the Borrower pursuant to Section 3.2.2 that such election did
         not become effective, the notice shall be deemed

                                      -24-
<PAGE>

         to have been made for a loan at the Base Rate. The notice must specify
         (a) the amount of the requested loan (which shall be not less than
         $100,000 and an integral multiple of $50,000), (b) the requested
         Closing Date therefor (which shall be a Banking Day) and (c) the
         portion of the requested loan that is to be used for working capital.
         Upon receipt of such notice, the Agent will promptly inform each other
         Lender with Percentage Interests in the Revolving Loan (by telephone or
         otherwise). Each such loan will be made at the Boston Office by
         depositing the amount thereof to the general account of the Borrower
         with the Agent. In connection with each such loan, the Borrower shall
         furnish to the Agent a certificate in substantially the form of Exhibit
         5.2.1.

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

         2.2. SWINGLINE CREDIT.

                  2.2.1. SWINGLINE LOAN. Subject to all the terms and conditions
         of this Agreement and so long as no Default exists, from time to time
         on and after the Initial Closing Date and prior to the Final Maturity
         Date, the Swingline Lender will make loans to the Borrower in such
         amounts as may be requested by the Borrower in accordance with Section
         2.2.2. The sum of the aggregate principal amount of loans made under
         this Section 2.2 at any one time outstanding PLUS the Revolving Loan
         PLUS the Letter of Credit Exposure shall in no event exceed the Maximum
         Amount of Revolving Credit. In no event will the principal amount of
         loans made pursuant to this Section 2.2 at any one time outstanding
         exceed $10,000,000.

                  2.2.2. BORROWING REQUESTS. The Borrower may from time to time
         request a loan under Section 2.2.1 by providing to the Swingline Lender
         a notice (which may be given by a telephone call received by a Lending
         Officer of the Swingline Lender). Such notice must be not later than
         2:00 P.M. (Boston time) on the requested Closing

                                      -25-
<PAGE>

         Date (which must be a Banking Day) for such loan. The notice must
         specify the amount of the requested loan. Each such loan will be made
         at the Boston office by depositing the amount thereof to the general
         account of the Borrower with the Swingline Lender. In connection with
         each such loan, the Borrower shall furnish to the Swingline Lender a
         certificate in substantially the form of Exhibit 5.2.1.

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

                  2.2.4. CONVERSION OF SWINGLINE LOAN INTO REVOLVING LOAN. On
         any Banking Day after the occurrence and during the continuance of an
         Event of Default, the Swingline Lender may, in its sole discretion,
         give notice to the other Lenders and the Borrower that the Swingline
         Loan shall be paid in full with a special mandatory borrowing under the
         Revolving Loan (the "MANDATORY BORROWING"). Such a notice of a
         Mandatory Borrowing shall be deemed to have been automatically given
         upon a Bankruptcy Default or upon the exercise of any of the remedies
         provided in Section 8.2. Upon the giving of any such notice or deemed
         notice, a Mandatory Borrowing under the Revolving Loan in the amount of
         the Swingline Loan shall be made on the next Banking Day from all
         Lenders in accordance with their respective Percentage Interests in the
         Revolving Loan, the proceeds thereof shall be applied to the Swingline
         Lender as a repayment of the Swingline Loan and the Revolving Loan
         resulting from such Mandatory Borrowing shall bear interest at the
         rates applicable to Revolving Loans. Each Lender irrevocably agrees to
         make such loan pursuant to each such Mandatory Borrowing notice in the
         amount and in the manner specified above in this Section 2.2.4,
         notwithstanding (a) whether any conditions specified in Section 5 have
         been satisfied, (b) that a Default or an Event of Default has occurred
         and is continuing or (c) the date of such Mandatory Borrowing. In the
         event that any Mandatory Borrowing cannot for any reason be made on the
         date required above (including as a result of the commencement of a
         proceeding under the Bankruptcy Code), each Lender shall promptly
         purchase from the Swingline Lender as of the date the Mandatory
         Borrowing otherwise would have occurred such participation in the
         Swingline Loan as shall be necessary to cause the Lenders to share in
         the Swingline Loan ratably based upon their respective Percentage
         Interests in the Revolving Loan.

                                      -26-
<PAGE>

         In the event of such participations, all interest payable on the
         Swingline Loan shall be for the account of the Swingline Lender until
         the date on which the participations are required to be purchased and,
         to the extent attributable to the purchased participations, shall be
         payable to the participants from and after such date. At the time any
         such purchase of participations is actually made, the purchasing Lender
         shall pay the Swingline Lender interest on the principal amount of the
         participation purchased at the overnight Federal Funds Rate for each
         day, commencing with the date the Mandatory Borrowing otherwise would
         have occurred to the date of payment for such participation. In no
         event shall any Lender be required to make any Revolving Loan,
         including, pursuant to a Mandatory Borrowing, if the making of such
         Revolving Loan would cause the outstanding principal amount of such
         Lender's Revolving Loan to exceed such Lender's Commitment.

         2.3. LETTERS OF CREDIT.

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

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

                  2.3.3. FORM AND EXPIRATION OF LETTERS OF CREDIT. Each Letter
         of Credit issued under this Section 2.3 and each draft accepted or paid
         under such a Letter of Credit shall be issued, accepted or paid, as the
         case may be, by the Letter of Credit Issuer at its principal office. No
         Letter of Credit shall provide for the payment of drafts drawn
         thereunder, and no draft shall be payable, at a date which is later
         than the earlier of (a) the date 12 months after the date of issuance
         of such Letter of Credit or (b) the Final Maturity Date. Each Letter of
         Credit and each draft accepted under a Letter of Credit shall be in
         such form and minimum amount, and shall contain such terms, as the
         Letter of Credit Issuer and the Borrower may agree upon at the time

                                      -27-
<PAGE>

         such Letter of Credit is issued, including a requirement of not less
         than three Banking Days after presentation of a draft before payment
         must be made thereunder.

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

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

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

                  2.3.7. UNIFORM CUSTOMS AND PRACTICE. The Uniform Customs and
         Practice for Documentary Credits (1993 Revision), International Chamber
         of Commerce Publication No. 500, and any subsequent revisions thereof
         approved by a Congress of the International Chamber of Commerce and
         adhered to by the Letter of Credit Issuer (the "UNIFORM CUSTOMS AND
         PRACTICE"), shall be binding on the Company and the

                                      -28-
<PAGE>

         Letter of Credit Issuer except to the extent otherwise provided herein,
         in any Letter of Credit or in any other Credit Document. Anything in
         the Uniform Customs and Practice to the contrary notwithstanding:

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

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

                           (i) the genuineness of any signature;

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

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

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

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

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

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

                  (d) The Borrower will promptly examine (i) each Letter of
         Credit (and any amendments thereof) sent to it by the Letter of Credit
         Issuer and (ii) all instruments and documents delivered to it from time
         to time by the Letter of Credit Issuer. The Borrower will notify the
         Letter of Credit Issuer of any claim of noncompliance by notice
         actually received within three Banking Days after receipt of any of the
         foregoing documents, the Borrower being conclusively deemed to have
         waived any such claim against such Letter of Credit Issuer and its
         correspondents unless such notice is given. The Letter of Credit Issuer
         shall have no obligation or responsibility

                                      -29-
<PAGE>

         to send any such Letter of Credit or any such instrument or document to
         the Borrower.

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

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

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

         2.4. APPLICATION OF PROCEEDS.

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

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

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

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

                                      -30-
<PAGE>

         2.5. NATURE OF OBLIGATIONS OF LENDERS TO MAKE EXTENSIONS OF CREDIT. The
Lenders' obligations to extend credit under this Agreement are several and are
not joint or joint and several. If on any Closing Date any Lender shall fail to
perform its obligations under this Agreement, the aggregate amount of
Commitments to make the extensions of credit under this Agreement shall be
reduced by the amount of unborrowed Commitment of the Lender so failing to
perform and the Percentage Interests in the portion of the Loan to which such
Commitment relates shall be appropriately adjusted. Lenders that have not failed
to perform their obligations to make the extensions of credit contemplated by
Section 2 may, if any such Lender so desires, assume, in such proportions as the
Required Lenders may agree, the obligations of any Lender who has so failed and
the Percentage Interests in the portion of the Loan to which such obligations
relate shall be appropriately adjusted. The provisions of this Section 2.5 shall
not affect the rights of the Borrower against any Lender failing to perform its
obligations hereunder. The obligation to make a Swingline Loan shall be an
obligation solely of the Swingline Lender.

3. INTEREST; LIBOR PRICING OPTIONS; FEES.

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

         3.2. LIBOR PRICING OPTIONS.

                  3.2.1. ELECTION OF LIBOR PRICING OPTIONS. Subject to all of
         the terms and conditions hereof and so long as no Default exists, the
         Borrower may from time to time, by irrevocable notice to the Agent
         actually received not less than three Banking

                                      -31-
<PAGE>

         Days prior to the commencement of the LIBOR Interest Period selected in
         such notice, elect to have such portion of the Loan as the Borrower may
         specify in such notice accrue and bear interest during the LIBOR
         Interest Period so selected at the Applicable Rate computed on the
         basis of the LIBOR Rate. No such election shall become effective:

                  (a) if, prior to the commencement of any such LIBOR Interest
         Period, the Agent determines that (i) the electing or granting of the
         LIBOR Pricing Option in question would violate a Legal Requirement,
         (ii) LIBOR deposits in an amount comparable to the principal amount of
         the Loan as to which such LIBOR Pricing Option has been elected and
         which have a term corresponding to the proposed LIBOR Interest Period
         are not readily available in the inter-bank LIBOR market, or (iii) by
         reason of circumstances affecting the inter-bank LIBOR market, adequate
         and reasonable methods do not exist for ascertaining the interest rate
         applicable to such deposits for the proposed LIBOR Interest Period; or

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

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

                  3.2.3. SELECTION OF LIBOR INTEREST PERIODS. LIBOR Interest
         Periods shall be selected so that:

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

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

                                      -32-
<PAGE>

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

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

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

                  3.2.6. FUNDING PROCEDURE. The Lenders may fund any portion of
         the Loan subject to a LIBOR Pricing Option out of any funds available
         to the Lenders. Regardless of the source of the funds actually used by
         any of the Lenders to fund any portion of the Loan subject to a LIBOR
         Pricing Option, however, all amounts payable

                                      -33-
<PAGE>

         hereunder, including the interest rate applicable to any such portion
         of the Loan and the amounts payable under Sections 3.2.4 or 3.5, shall
         be computed as if each Lender had actually funded such Lender's
         Percentage Interest in such portion of the Loan through the purchase of
         deposits in such amount of the type by which the LIBOR Base Rate was
         determined with a maturity the same as the applicable LIBOR Interest
         Period relating thereto and through the transfer of such deposits from
         an office of the Lender having the same location as the applicable
         LIBOR Office to one of such Lender's offices in the United States of
         America.

         3.3 INTEREST ON SWINGLINE LOAN. The Swingline Loan shall accrue and
bear interest at a rate per annum which shall at all times equal the Swingline
Rate. Interest on the Swingline Loan shall be calculated on a daily basis and on
the basis of a year of 360 days. Prior to any stated or accelerated maturity of
the Swingline Loan, the Swingline Borrower will on each Payment Date, beginning
on the first Payment Date after the Initial Closing Date, pay the accrued and
unpaid interest on such Indebtedness. On any stated or accelerated maturity of
the Swingline Loan all accrued and unpaid interest thereon shall be forthwith
due and payable. All payments of interest hereunder in respect of the Swingline
Loan shall be made by the Swingline Borrower to the Agent for the account of the
Swingline Lender.

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

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

                                      -34-
<PAGE>

         3.6. CHANGES IN CIRCUMSTANCES; YIELD PROTECTION.

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

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

                  3.6.3. CAPITAL ADEQUACY. If any Lender shall determine that
         compliance by such Lender with any Legal Requirement regarding capital
         adequacy of banks or bank holding companies has or would have the
         effect of reducing the rate of return on the capital of such Lender and
         its Affiliates as a consequence of such Lender's commitment to make the
         extensions of credit contemplated hereby, or such Lender's maintenance
         of the extensions of credit contemplated hereby, to a level below that
         which such Lender could have achieved but for such compliance (taking
         into consideration the policies of such Lender and its Affiliates with
         respect to capital

                                      -35-
<PAGE>

         adequacy immediately before such compliance and assuming that the
         capital of such Lender and its Affiliates was fully utilized prior to
         such compliance) by an amount deemed by such Lender to be material,
         then, the Lender may claim compensation under Section 3.6.5.

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

                  3.6.5. COMPENSATION CLAIMS. If a Lender makes a determination
         that it will seek compensation pursuant to any of Sections 3.6.1,
         3.6.2, 3.6.3 and 3.6.4, such Lender shall promptly thereafter give
         notice thereof to the Company. Promptly after the receipt by the
         Company of any such notice, the Company and the Lender shall attempt to
         negotiate in good faith an adjustment to the amount payable by the
         Borrower to the Lender under the relevant Section, which amount shall
         be sufficient to compensate the Lender for such reduced return. If the
         Company and the Lender are unable to agree to such adjustment within
         thirty days of the date upon which the Company receives such notice,
         then the Borrower will, on demand by the Lender, pay to the Lender such
         additional amount as shall be sufficient, in the Lender's reasonable
         determination, to compensate the Lender for such reduced return,
         together with interest at the Overdue Reimbursement Rate from the 30th
         day until payment in full thereof. The determination by such Lender of
         the amount to be paid to it and the basis for computation thereof
         shall, in the absence of manifest error, be conclusive. In determining
         such amount, such Lender may use any reasonable averaging, allocation
         and attribution methods. The Borrower shall be entitled to replace any
         such Lender in accordance with Section 13.3.

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

                                      -36-
<PAGE>

during which payment is extended at the Applicable Rate or the applicable
commitment fee or letter of credit fee rate.

4. PAYMENT.

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

         4.2. CONTINGENT REQUIRED PREPAYMENTS.

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

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

                  4.2.3. NET EQUITY PROCEEDS. Within three Banking Days after
         the receipt of Net Equity Proceeds, the Borrower shall pay to the Agent
         as a prepayment of the Loan, to be applied as provided in Section 4.5,
         the lesser of (a) the amount of Net Equity Proceeds or (b) the amount
         of the Loan. The Company shall give the Agent at least five Banking
         Days' prior notice of its intention to prepay the Loans, or any portion
         thereof, under this Section 4.3.3.

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

                                      -37-
<PAGE>

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

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

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

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

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

5. CONDITIONS TO EXTENDING CREDIT.

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

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

                                      -38-
<PAGE>

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

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

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

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

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

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

                  5.1.5. ADVERSE MARKET CHANGE. Since September 29, 1999, no
         material adverse change shall have occurred in the syndication markets
         for credit facilities similar in nature to this Agreement, and no
         material disruption for or material adverse change in the financial,
         banking or capital markets that would have an adverse effect on such
         syndication market shall have occurred, in each case as determined by
         the Agent and the Arranger in their sole discretion.

         5.2. CONDITIONS TO EACH EXTENSION OF CREDIT. The obligations of the
Lenders to make any extension of credit pursuant to Section 2 shall be subject
to the satisfaction, on or before the Closing Date for such extension of credit,
of the following conditions:

                  5.2.1. OFFICER'S CERTIFICATE. The representations and
         warranties contained in Sections 7 and 10.3 shall be true and correct
         on and as of such Closing Date with the

                                      -39-
<PAGE>

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

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

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

                  5.2.4. CONDITIONS TO MAKING EACH PERMITTED ACQUISITION
         ADVANCE. In the case of any loan contemplated by Section 2.1 to fund a
         Permitted Acquisition, the Borrower shall have complied with all of the
         requirements of Section 6.21 with respect to the Permitted Acquisition.

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

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

                                      -40-
<PAGE>

         6.1. TAXES AND OTHER CHARGES; ACCOUNTS PAYABLE.

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

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

         6.2. CONDUCT OF BUSINESS, ETC.

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

                  6.2.2. MAINTENANCE OF PROPERTIES. Each of the Borrower and its
         Subsidiaries:

                  (a) shall keep its properties in such repair, working order
         and condition, and shall from time to time make such repairs,
         replacements, additions and improvements thereto as are necessary for
         the efficient operation of its businesses and shall comply at all times
         in all material respects with all franchises, licenses, leases and
         other material agreements to which it is party so as to prevent any
         loss or forfeiture thereof or thereunder, except where (i) compliance
         is at the time being contested in good faith by appropriate proceedings
         or (ii) failure to comply with the provisions being contested has not
         resulted, or does not create a material risk of resulting, in the

                                      -41-
<PAGE>

         aggregate in any Material Adverse Change; PROVIDED, HOWEVER, that this
         Section 6.2.2(a) shall not apply to assets or entities disposed of in
         transactions permitted by Section 6.11; and

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

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

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

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

         6.3. INSURANCE.

                  6.3.1. PROPERTY INSURANCE. Each of the Borrower and its
         Subsidiaries shall keep its assets which are of an insurable character
         insured by financially sound and reputable insurers against theft and
         fraud and against loss or damage by fire, explosion and hazards and
         such other extended coverage risks insured against by

                                      -42-
<PAGE>

         extended coverage to the extent, in amounts and with deductibles at
         least as favorable as those generally maintained by businesses of
         similar size engaged in similar activities in similar localities.

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

                  6.3.3. KEY EXECUTIVE LIFE INSURANCE. The Borrower and its
         Subsidiaries shall collaterally assign to the Agent for the benefit of
         the Lenders all life insurance policies for which any of the Borrower
         and its Subsidiaries are the beneficiary, on each officer or doctor
         employed by the Borrower or any of its Subsidiaries.

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

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

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

                                      -43-
<PAGE>

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

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

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

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

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

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

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

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

                                      -44-
<PAGE>

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

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

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

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

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

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

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

                  (f) In the event of a change in GAAP after the Initial Closing
         Date, computations by the Borrower, certified by a Financial Officer,
         reconciling the

                                      -45-
<PAGE>

         financial statements referred to above with financial statements
         prepared in accordance with GAAP as applied to the other covenants in
         Section 6 and related definitions.

                  6.4.3. OTHER REPORTS. The Borrower shall promptly furnish to
         the Agent:

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

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

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

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

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

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

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

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

                  6.4.4. NOTICE OF LITIGATION, DEFAULTS, ETC. Each of the
         Borrower and its Subsidiaries shall promptly furnish to the Agent
         notice of any litigation or any administrative or arbitration
         proceeding including the impanneling of a grand jury, (a) which creates
         a material risk of resulting, after giving effect to any applicable
         insurance, in the payment by the Borrower or any of its Subsidiaries of
         more than

                                      -46-
<PAGE>

         $100,000 or (b) which results, or creates a material risk of resulting,
         in a Material Adverse Change. Within five Banking Days after acquiring
         knowledge thereof, the Borrower shall notify the Lenders of the
         existence of any Default or Material Adverse Change, specifying the
         nature thereof and what action the Borrower or such Subsidiary has
         taken, is taking or proposes to take with respect thereto.

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

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

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

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

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

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

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

                                      -47-
<PAGE>

         and is continuing in which event the Borrower shall bear all reasonable
         expenses of any reasonable number of reviews.

         6.5. CERTAIN FINANCIAL TESTS.

                  6.5.1. CONSOLIDATED TOTAL DEBT COVERAGE. At all times, the
         amount of (a) Consolidated Total Debt minus (b) that portion of the
         outstanding principal amount of any Contingent Notes and Restructured
         Seller Notes to the extent that such portion is not required to be
         reflected on the financial statements of the Borrower in accordance
         with GAAP, shall not exceed 300% of the Consolidated Adjusted EBITDA
         for the period of four consecutive fiscal quarters most recently ended.

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

                  6.5.3. CONSOLIDATED OPERATING CASH FLOW. On the last day of
         each fiscal quarter of the Borrower, Consolidated Operating Cash Flow
         for the period of four consecutive fiscal quarters then ending shall be
         at least 125% of the sum of (i) Consolidated Total Debt Service for
         such period MINUS (ii) voluntary prepayments of the Loan.

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

                  6.6.1. Indebtedness in respect of the Credit Obligations.

                  6.6.2. Guarantees permitted by Section 6.7.

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

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

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

                  6.6.6. Indebtedness in respect of judgments or awards (a)
         which have been in force for less than the applicable appeal period or
         (b) in respect of which the Borrower or any of its Subsidiaries shall
         at the time in good faith be prosecuting an

                                      -48-
<PAGE>

         appeal or proceedings for review and, in the case of each of clauses
         (a) and (b), the Borrower or such Subsidiary shall have taken
         appropriate reserves therefor in accordance with GAAP and execution of
         such judgment or award shall not be levied.

                  6.6.7. To the extent permitted by Section 6.8.9, Indebtedness
         in respect of Capitalized Lease Obligations or secured by purchase
         money security interests; PROVIDED, HOWEVER, that the aggregate
         principal amount of all Indebtedness permitted by this Section 6.6.7 at
         any one time outstanding shall not exceed $1,000,000.

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

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

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

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

                  6.6.12. Contingent Notes and Restructured Seller Notes.

                  6.6.13. Indebtedness to the extent set forth on EXHIBIT 6.6.

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

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

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

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

                                      -49-
<PAGE>

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

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

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

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

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

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

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

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

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

                  6.8.9. Liens constituting (a) purchase money security
         interests (including mortgages, conditional sales, Capitalized Leases
         and any other title retention or deferred purchase devices) in real
         property, interests in leases or tangible personal property (other than
         inventory) existing or created on the date on which such property is
         acquired, and (b) the renewal, extension or refunding of any security
         interest referred to in the foregoing clause (a) in an amount not to
         exceed the amount thereof

                                      -50-
<PAGE>

         remaining unpaid immediately prior to such renewal, extension or
         refunding; PROVIDED, HOWEVER, that (i) each such security interest
         shall attach solely to the particular item of property so acquired, and
         the principal amount of Indebtedness (including Indebtedness in respect
         of Capitalized Lease Obligations) secured thereby shall not exceed the
         cost (including all such Indebtedness secured thereby, whether or not
         assumed) of such item of property, and (ii) the aggregate principal
         amount of all Indebtedness secured by Liens permitted by this Section
         6.8.9 shall not exceed the amount permitted by Section 6.6.7.

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

         6.9. INVESTMENTS AND PERMITTED ACQUISITIONS. Neither the Borrower nor
any of its Subsidiaries shall have outstanding, acquire, commit itself to
acquire or hold any Investment (including any Investment consisting of the
Permitted Acquisition of any business) except for the following:

                  6.9.1. Cash Investments of the Borrower in its Subsidiaries.

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

                  6.9.3. Investments in Cash Equivalents.

                  6.9.4. Guarantees permitted by Section 6.7.

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

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

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

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

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

                                      -51-
<PAGE>

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

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

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

         6.11. ASSET DISPOSITIONS AND MERGERS. Except as otherwise set forth in
EXHIBIT 6.11, neither the Borrower nor any of its Subsidiaries shall merge or
enter into a consolidation or sell, lease, sell and lease back, sublease or
otherwise dispose of any of its assets, except the following:

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

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

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

                  6.12.1. Capitalized Leases permitted by Sections 6.6.7 and
         6.8.9.

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

         6.13. ISSUANCE OF STOCK BY SUBSIDIARIES; SUBSIDIARY DISTRIBUTIONS.

                                      -52-
<PAGE>

                  6.13.1. ISSUANCE OF STOCK BY SUBSIDIARIES OF THE COMPANY. No
         Subsidiary shall issue or sell any shares of its capital stock or other
         evidence of beneficial ownership to any Person other than the Borrower
         or any other Wholly-Owned Subsidiary of the Borrower, which shares
         shall have been pledged to the Agent as part of the Credit Security;
         PROVIDED, HOWEVER, that (i) in the event that applicable state law or
         regulation prohibits the Company from directly holding the capital
         stock of a medical practice that is a Subsidiary of the Company, such
         shares may be issued or sold to a trust or similar entity controlled
         solely by the Borrower or a Wholly-Owned Subsidiary of the Borrower,
         (ii) James E. Dunnington, M.D. may hold one share of AmeriPath
         Kentucky, Inc., so long as the Shareholders' Agreement among James E.
         Dunnington, M.D., the Company and AmeriPath Kentucky, Inc. remains in
         full force and effect, (iii) Alan Levin, M.D. may hold all the issued
         and outstanding Shares of AmeriPath Pittsburgh, P.C. so long as the
         Shareholder's Agreement among Alan Levin, M.D., the Company and
         AmeriPath Pittsburgh, P.C. remains in full force and effect, (iv) H.
         Michael Jones, M.D. may hold all the issued and outstanding Shares of
         AmeriPath Consulting Pathology Services, P.A. so long as the
         Shareholders' Agreement among H. Michael Jones, M.D., the Company and
         AmeriPath Consulting Pathology Services, P.A. remains in full force and
         effect, (v) Alan Levin, M.D. may hold all the issued and outstanding
         Shares of Consulting Pathologists of Pennsylvania, P.C. so long as the
         Shareholders' Agreement among Alan Levin, M.D., the Company and
         Consulting Pathologists of Pennsylvania, P.C. remains in full force and
         effect, (vi) Winston N. Hollister, M.D. may hold all the issued and
         outstanding Shares of AmeriPath Milwaukee, S.C. so long as the
         Shareholders' Agreement among Winston N. Hollister, M.D., the company
         and AmeriPath Milwaukee, S.C. remains in full force and effect, and
         (vii) Alan Levin, M.D. may hold all the issued and outstanding Shares
         of JJ Humes M.D. and Associates/AmeriPath, P.C. so long as the
         Shareholders' Agreement among Alan Levin, M.D., the Company and JJ
         Humes M.D. and Associates/AmeriPath, P.C. remains in full force and
         effect.

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

         6.14. VOLUNTARY PREPAYMENTS OF OTHER INDEBTEDNESS. Neither the Borrower
nor any of its Subsidiaries shall make any voluntary prepayment of principal of
or interest on any Financing Debt (other than the Credit Obligations) or make
any voluntary redemptions or repurchases of Financing Debt (other than the
Credit Obligations) without the prior written consent of the Required Lenders.

         6.15. DERIVATIVE CONTRACTS. Neither the Borrower nor any of its
Subsidiaries shall enter into any Interest Rate Protection Agreement, foreign
currency exchange contract or

                                      -53-
<PAGE>

other financial or commodity derivative contracts except (i) to provide hedge
protection for an underlying economic transaction in the ordinary course of
business, or (ii) as required by Section 6.19.

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

                  6.16.1. This Agreement and the other Credit Documents.

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

         6.17. ERISA, ETC. Each of the Borrower and its Subsidiaries shall
comply, and shall cause all ERISA Group Persons to comply, in all material
respects, with the provisions of ERISA and the Code applicable to each Plan.
Each of the Borrower and its Subsidiaries shall meet, and shall cause all ERISA
Group Persons to meet, all minimum funding requirements applicable to them with
respect to any Plan pursuant to section 302 of ERISA or section 412 of the Code,
without giving effect to any waivers of such requirements or extensions of the
related amortization periods which may be granted. At no time shall the
Accumulated Benefit Obligations under any Plan that is not a Multiemployer Plan
exceed the fair market value of the assets of such Plan allocable to such
benefits by more than $250,000. The Borrower and its Subsidiaries shall not
withdraw, and shall cause all other ERISA Group Persons not to withdraw, in
whole or in part, from any Multiemployer Plan so as to give rise to withdrawal
liability exceeding $250,000 in the aggregate. At no time shall the actuarial
present value of unfunded liabilities for post-employment health care benefits,
whether or not provided under a Plan, calculated in a manner consistent with
Statement No. 106 of the Financial Accounting Standards Board, exceed $500,000.

         6.18. TRANSACTIONS WITH AFFILIATES. Except with respect to Management
Services Agreements and transactions set forth on EXHIBIT 6.18, neither the
Borrower nor any of its Subsidiaries shall effect any transaction with any of
their respective Affiliates (except for the Borrower and its Subsidiaries) on a
basis less favorable to the Borrower and its Subsidiaries than would be the case
if such transaction had been effected with a non-Affiliate. 1.1.

         6.19. INTEREST RATE PROTECTION. The Borrower shall keep in effect the
existing Interest Rate Protection Agreements.

         6.20. ENVIRONMENTAL LAWS.

                                      -54-
<PAGE>

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

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

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

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

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

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

                  (c) CREDIT SECURITY. Not later than five days after the
         Acquisition Closing Date, the Borrower shall (A) deliver to the Agent
         such financing statements, mortgages and other documentation as the
         Agent shall request to attach a security interest to the assets of such
         new Subsidiary and to perfect such security interests and (B) deliver
         to the Agent all of the capital stock of such new Subsidiary (or make
         other

                                      -55-
<PAGE>

         arrangement reasonably satisfactory to the Agent to perfect the
         security interest of the Lenders in any equity interest in such new
         Subsidiary). The failure of the Borrower to comply with this Section
         6.21.1(c) shall constitute an Event of Default; and

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

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

                  (f) ACQUISITION COMPLIANCE CERTIFICATE. The Borrower provides
         to the Agent, not later than 5 days after the Acquisition Closing Date,
         a certificate in the form of EXHIBIT 6.21.1(F) certifying compliance
         with this Section 6.21.1.

                  6.21.2. In the case of any such acquisition for which the
         Purchase Price is greater than or equal to $5,000,000 and the Cash
         Purchase Price is less than $20,000,000, the Borrower shall comply with
         all the requirements of Section 6.21.1, with the exception of
         6.21.1(f), and:

                  (a) PURCHASE PRICE LIMITATION. The Financing Debt component of
         the consideration for such acquisition shall not exceed the sum of 450%
         of the Pro Forma EBITDA of the Acquired Party for the most recently
         completed period of four consecutive fiscal quarters plus the cash and
         Cash Equivalents of the Acquired Party that are being purchased;

                  (b) ACQUISITION DOCUMENTS. The Borrower shall provide to the
         Agent:

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

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

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

                                      -56-
<PAGE>

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

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

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

                  6.21.3. In the case of any such acquisition for which the Cash
         Purchase Price is equal to or exceeds $20,000,000, in addition to
         meeting the requirements of Sections 6.21.1 and 6.21.2 the Borrower
         shall receive prior written consent of the Required Lenders and provide
         all further documentation and meet all further requirements reasonably
         requested by the Agent.

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

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

         7.1. ORGANIZATION AND BUSINESS.

                  7.1.1. THE BORROWER. The Borrower is a duly organized and
         validly existing corporation, in good standing under the laws of
         Delaware with all power and authority, corporate or otherwise,
         necessary to (a) enter into and perform this

                                      -57-
<PAGE>

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

                  7.1.2. SUBSIDIARIES. Each Subsidiary of the Borrower is duly
         organized, validly existing and in good standing under the laws of the
         jurisdiction in which it is organized, with all power and authority,
         corporate or otherwise, necessary to (a) enter into and perform this
         Agreement and each other Credit Document to which it is party, (b)
         guarantee the Credit Obligations, (c) grant the Lenders the security
         interest in the Credit Security owned by such Subsidiary to secure the
         Credit Obligations and (d) own its properties and carry on the business
         now conducted or proposed to be conducted by it; PROVIDED, HOWEVER,
         that the foregoing clauses (a), (b) and (c) shall not apply to any such
         Subsidiary that is not a Guarantor. Certified copies of the Charter and
         By-laws of each Subsidiary of the Borrower have been previously
         delivered to the Agent and are correct and complete. Exhibit 7.1, as
         from time to time hereafter supplemented in accordance with Sections
         6.4.1 and 6.4.2, sets forth, as of the later of the date hereof or as
         of the end of the most recent fiscal quarter for which financial
         statements are required to be furnished in accordance with such
         Sections, (i) the name and jurisdiction of organization of each
         Subsidiary of the Borrower, (ii) the address of the chief executive
         office and principal place of business of each such Subsidiary, (iii)
         each name under which each such Subsidiary conducts its business; (iv)
         each jurisdiction in which each such Subsidiary keeps tangible personal
         property, and (v) the number of authorized and issued shares and
         ownership of each such Subsidiary.

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

                                      -58-
<PAGE>

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

         7.2. FINANCIAL STATEMENTS AND OTHER INFORMATION; MATERIAL AGREEMENTS.

                  7.2.1. FINANCIAL STATEMENTS AND OTHER INFORMATION. The
         Borrower has previously furnished to the Lenders copies of the
         following:

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

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

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

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

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

                                      -59-
<PAGE>

         reflected in the balance sheets referred to in clauses (a) or (b) above
         (or delivered pursuant to Sections 6.4.1 or 6.4.2) or in the notes
         thereto.

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

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

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

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

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

         7.6. OPERATIONS IN CONFORMITY WITH LAW, ETC. The operations of the
Borrower and its Subsidiaries as now conducted or proposed to be conducted are
not in violation of, nor is the Borrower or any of its Subsidiaries in default
under, any Legal Requirement presently in effect, except for such violations and
defaults as do not and will not, in the aggregate, result, or create a material
risk of resulting, in any Material Adverse Change. Neither the Borrower

                                      -60-
<PAGE>

nor any of its Subsidiaries has received notice of any such violation or default
or has knowledge of any basis on which the operations of the Borrower or its
Subsidiaries, as now conducted and as currently proposed to be conducted after
the date hereof, would be held so as to violate or to give rise to any such
violation or default.

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

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

         7.9. NO LEGAL OBSTACLE TO AGREEMENTS. Neither the execution and
delivery of this Agreement or any other Credit Document, nor the making of any
borrowings hereunder, nor the guaranteeing of the Credit Obligations, nor the
securing of the Credit Obligations with the Credit Security, nor the
consummation of any transaction referred to in or contemplated by this Agreement
or any other Credit Document, nor the fulfillment of the terms hereof or thereof
or of any other agreement, instrument, deed or lease contemplated by this
Agreement or any other Credit Document, has constituted or resulted in or will
constitute or result in:

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

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

                                      -61-
<PAGE>

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

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

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

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

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

         7.12. TAX RETURNS. Each of the Borrower and its Subsidiaries has filed
all material tax and information returns which are required to be filed by it
and has paid, or made adequate provision for the payment of, all taxes which
have or may become due pursuant to such returns or to any assessment received by
it. Neither the Borrower nor any of its

                                      -62-
<PAGE>

Subsidiaries knows of any material additional assessments or any basis therefor.
Neither the Borrower nor any of its Subsidiaries reasonably believes that the
charges, accruals and reserves on the books of the Borrower and its Subsidiaries
in respect of taxes or other governmental charges are adequate.

         7.13. CERTAIN BUSINESS REPRESENTATIONS.

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

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

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

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

                  7.13.5. FUTURE EXPENDITURES. Neither the Borrower nor any of
         its Subsidiaries anticipate that the future expenditures, if any, by
         the Borrower and its Subsidiaries needed to meet the provisions of any
         federal, state or foreign governmental statutes, orders, rules or
         regulations will be so burdensome as to result, or create a material
         risk of resulting, in any Material Adverse Change.

                                      -63-
<PAGE>

         7.14. ENVIRONMENTAL REGULATIONS.

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

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

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

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

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

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

                                      -64-
<PAGE>

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

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

         7.17. FOREIGN TRADE REGULATIONS; GOVERNMENT REGULATION; MARGIN STOCK.

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

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

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

                                      -65-
<PAGE>

         7.18. DISCLOSURE. Neither this Agreement nor any other Credit Document
to be furnished to the Lenders by or on behalf of the Borrower or any of its
Subsidiaries in connection with the transactions contemplated hereby or by such
Credit Document contains any untrue statement of material fact or omits to state
a material fact necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances under which they were made.
No fact is actually known to Borrower or any of its Subsidiaries which has
resulted, or in the future (so far as the Borrower or any of its Subsidiaries
can reasonably foresee) will result, or creates a material risk of resulting, in
any Material Adverse Change, except to the extent that present or future general
economic conditions may result in a Material Adverse Change.

         7.19. YEAR 2000 COMPLIANCE.

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

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

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

8. DEFAULTS.

         8.1. EVENTS OF DEFAULT. The following events are referred to as "EVENTS
OF DEFAULT":

                  8.1.1. PAYMENT. The Borrower shall fail to make any payment in
         respect of: (a) any interest or any fee on or in respect of any of the
         Credit Obligations owed by it as the same shall become due and payable,
         and such failure shall continue for a period of three Banking Days, or
         (b) any Credit Obligation with respect to payments made by any Letter
         of Credit Issuer under any Letter of Credit or any draft drawn

                                      -66-
<PAGE>

         thereunder within three Banking Days after demand therefor by such
         Letter of Credit Issuer or (c) principal of any of the Credit
         Obligations owed by it as the same shall become due, whether at
         maturity or by acceleration or otherwise.

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

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

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

         8.1.5. CROSS DEFAULT, ETC.

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

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

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

                  (d) any Lien on any property of the Borrower or any of its
         Subsidiaries securing any Financing Debt (other than the Credit
         Obligations) outstanding in an

                                      -67-
<PAGE>

         aggregate amount of principal (whether or not due) and accrued interest
         exceeding $250,000 shall be enforced by foreclosure or similar action;
         or

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

                  8.1.6. OWNERSHIP; LIQUIDATION; ETC. Except as permitted by
         either Section 6.11 or Section 6.13:

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

                  (b) any Change of Control shall occur; or

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

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

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

                  8.1.9. ERISA. Any "reportable event" (as defined in section
         4043 of ERISA) shall have occurred that reasonably could be expected to
         result in termination of a Material Plan or the appointment by the
         appropriate United States District Court of a trustee to administer any
         Material Plan or the imposition of a Lien in favor of a Material Plan;
         or any ERISA Group Person shall fail to pay when due amounts
         aggregating in excess of $100,000 which it shall have become liable to
         pay to the PBGC or to a Material Plan under Title IV of ERISA; or
         notice of intent to terminate a Material Plan shall be filed under
         Title IV of ERISA by any ERISA Group Person

                                      -68-
<PAGE>

         or administrator; or the PBGC shall institute proceedings under Title
         IV of ERISA to terminate or to cause a trustee to be appointed to
         administer any Material Plan or a proceeding shall be instituted by a
         fiduciary of any Material Plan against any ERISA Group Person to
         enforce section 515 or 4219(c)(5) of ERISA and such proceeding shall
         not have been dismissed within 30 days thereafter; or a condition shall
         exist by reason of which the PBGC would be entitled to obtain a decree
         adjudicating that any Material Plan must be terminated.

                  8.1.10. BANKRUPTCY, ETC. The Borrower, any of its Subsidiaries
         or any other Obligor shall:

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

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

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

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

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

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

         8.2. CERTAIN ACTIONS FOLLOWING AN EVENT OF DEFAULT. If any one or more
Events of Default shall occur and be continuing, then in each and every such
case:

                                      -69-
<PAGE>

                  8.2.1. TERMINATE OBLIGATION TO EXTEND CREDIT. The Agent on
         behalf of the Lenders may (and upon written request of the Required
         Lenders the Agent shall) terminate the obligations of the Lenders to
         make any further extensions of credit under the Credit Documents by
         furnishing notice of such termination to the Borrower; PROVIDED,
         HOWEVER, that if a Bankruptcy Default shall have occurred, the
         obligations of the Lenders to make any further extensions of credit
         under the Credit Documents shall immediately terminate..

                  8.2.2. SPECIFIC PERFORMANCE; EXERCISE OF RIGHTS. The Agent on
         behalf of the Lenders may (and upon written request of the Required
         Lenders the Agent shall) proceed to protect and enforce the Lenders'
         rights by suit in equity, action at law and/or other appropriate
         proceeding, either for specific performance of any covenant or
         condition contained in this Agreement or any other Credit Document or
         in any instrument or assignment delivered to the Lenders pursuant to
         this Agreement or any other Credit Document, or in aid of the exercise
         of any power granted in this Agreement or any other Credit Document or
         any such instrument or assignment.

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

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

                                      -70-
<PAGE>

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

                  8.2.6. EXERCISE OF CALL RIGHT. The Company shall, upon the
         reasonable request of the Agent, exercise its rights (i) to purchase
         the share of stock of AmeriPath Kentucky, Inc. owned by James E.
         Dunnington, M.D. pursuant to Section 3 of the Shareholders' Agreement
         among AmeriPath Kentucky, Inc., James E. Dunnington, M.D. and the
         Company, (ii) to purchase the shares of stock of AmeriPath Pittsburgh,
         P.C. owned by Alan Levin, M.D. pursuant to the Shareholders Agreement
         among AmeriPath Pittsburgh, P.C., Alan Levin, M.D. and the Company,
         (iii) to purchase the shares of stock of AmeriPath Consulting Pathology
         Services, P.A. owned by H. Michael Jones, M.D. pursuant tot he
         Shareholders' Agreement among AmeriPath Consulting Pathology Services,
         P.A., H. Michael Jones, M.D. and the Company, (iv) to purchase the
         shares of consulting Pathologists of Pennsylvania, P.C. owned by Alan
         Levin, M.D. pursuant to the Shareholders' Agreement among Consulting
         Pathologists of Pennsylvania, P.C., Alan Levin, M.D. and the Company,
         (v) to purchase the shares of stock of AmeriPath Milwaukee, S.C. owned
         by Winston N. Hollister, M.D. pursuant to the Shareholders' Agreement
         among AmeriPath Milwaukee, S.C., Winston N. Hollister, M.D. and the
         Company, and (vi) to purchase the shares of stock of JJ Humes M.D. and
         Associates/AmeriPath, P.C. owned by Alan Levin, M.D. pursuant to the
         Shareholders' Agreement among JJ Humes M.D. and Associates/AmeriPath,
         P.C., Alan Levin, M.D. and the Company

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

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

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

                                      -71-
<PAGE>

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

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

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

9. GUARANTEES.

         9.1. GUARANTEES OF CREDIT OBLIGATIONS. Each Guarantor unconditionally
jointly and severally guarantees that the Credit Obligations will be performed
and will be paid in full in immediately available funds when due and payable,
whether at the stated or accelerated maturity thereof or otherwise, this
guarantee being a guarantee of payment and not of collectability and being
absolute and in no way conditional or contingent. In the event any part of the
Credit Obligations shall not have been so paid in full when due and payable,
each Guarantor will, immediately upon notice by the Agent or, without notice,
immediately upon the occurrence of a Bankruptcy Default, pay or cause to be paid
to the Agent for the account of each Lender in accordance with the Lenders'
respective Aggregate Percentage Interests in the Loan the amount of such Credit
Obligations which are then due and payable and unpaid. The obligations of each
Guarantor hereunder shall not be affected by the invalidity, unenforceability or
irrecoverability of any of the Credit Obligations as against any other Obligor,
any other guarantor thereof or any other Person. For purposes hereof, the Credit
Obligations shall be due and payable when and as the same shall be due and
payable under the terms of this Agreement or any other Credit Document
notwithstanding the fact that the collection or enforcement thereof may be
stayed or enjoined under the Bankruptcy Code or other applicable law.

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

                  (a) if a claim is made upon the Lenders at any time for
         repayment or recovery of any amounts or any property received by the
         Lenders from any source on account of any of the Credit Obligations and
         the Lenders repay or return any amounts or

                                      -72-
<PAGE>

         property so received (including interest thereon to the extent required
         to be paid by the Lenders) or

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

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

         9.3. WAIVERS WITH RESPECT TO CREDIT OBLIGATIONS. Except to the extent
expressly required by this Agreement or any other Credit Document, each
Guarantor waives, to the fullest extent permitted by the provisions of
applicable law, all of the following (including all defenses, counterclaims and
other rights of any nature based upon any of the following):

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

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

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

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

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

                                      -73-
<PAGE>

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

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

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

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

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

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

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

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

                                      -74-
<PAGE>

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

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

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

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

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

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

                                      -75-
<PAGE>

for obtaining from the Borrower all information concerning this Agreement and
all other Credit Documents and all other information as to the Borrower and its
Affiliates or their properties or management as such Guarantor deems necessary
or desirable.

         9.6. CERTAIN GUARANTOR REPRESENTATIONS. Each Guarantor represents that:

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

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

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

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

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

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

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

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

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

                                      -76-
<PAGE>

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

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

10. SECURITY.

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

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

                  10.1.2. RIGHTS TO PAYMENT OF MONEY. All rights to receive the
         payment of money, including accounts (as defined in the UCC) and
         receivables, rights to receive the payment of money under contracts,
         franchises, licenses, permits, subscriptions or other agreements
         (whether or not earned by performance), and rights to receive payments
         from any other source (all such rights, other than Financing Debt,
         being referred to herein as "ACCOUNTS").

                  10.1.3. INTANGIBLES. All of the following (to the extent not
         included in Section 10.1.2): (a) contracts (including the Management
         Services Agreements), franchises, licenses, permits, subscriptions and
         other agreements and all rights thereunder; (b) rights granted by
         others which permit the Obligor to sell or market items of personal
         property; (c) United States and foreign common law and statutory

                                      -77-
<PAGE>

         copyrights and rights in literary property and rights and licenses
         thereunder; (d) trade names, United States and foreign trademarks,
         service marks, any registrations thereof and any related good will; (e)
         United States and foreign patents and patent applications; (f) computer
         software, designs, models, know-how, trade secrets, rights in
         proprietary information, formulae, customer lists, backlog, orders,
         subscriptions, royalties, catalogues, sales material, documents, good
         will, inventions and processes; (g) judgments, causes in action and
         claims, whether or not inchoate, and (h) all other general intangibles
         (as defined in the UCC) and intangible property and all rights
         thereunder.

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

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

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

                  10.1.7. CHATTEL PAPER, INSTRUMENTS AND DOCUMENTS. All chattel
         paper (as defined in the UCC), non-negotiable instruments, negotiable
         instruments (as defined in the UCC) and documents (as defined in the
         UCC).

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

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

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

                                      -78-
<PAGE>

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

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

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

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

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

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

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

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

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

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

                                      -79-
<PAGE>

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

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

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

                  10.2.2. MOTOR VEHICLES AND AIRCRAFT. All motor vehicles and
         aircraft.

         10.3. REPRESENTATIONS, WARRANTIES AND COVENANTS WITH RESPECT TO CREDIT
SECURITY. Each Obligor represents, warrants and covenants that:

                  10.3.1. PLEDGED STOCK. All shares of capital stock, limited
         partnership interests and similar securities included in the Pledged
         Stock are and shall be at all times duly authorized, validly issued,
         fully paid and (in the case of capital stock and limited partnership
         interests) nonassessable. Each Obligor will deliver to the Agent
         certificates representing the Pledged Stock, registered, if the Agent
         so requests, in the name of the Agent or its nominee, as pledgee, or
         accompanied by a stock transfer power executed in blank and, if the
         Agent so requests, with the signature guaranteed, all in form and
         manner satisfactory to the Agent. Pledged Stock that is not evidenced
         by a certificate will be registered in the Agent's name as pledgee on
         the issuer's records, all in form and substance satisfactory to the
         Agent. The Agent may at any time following and during the continuation
         of the occurrence of an Event of Default (but shall not be obligated
         to) transfer into its name or the name of its nominee, as pledgee, any
         Pledged Securities. In the event the Pledged Stock includes any Margin
         Stock, the Obligors will furnish to the Lenders Federal Reserve Form
         U-1 and take such other action as the Agent may request to ensure
         compliance with applicable laws.

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

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

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

                  10.3.5. TRADE NAMES. No Obligor will adopt or do business
         under any name other than its name or names designated in Exhibit 7.1
         or any other name specified by notice actually received by the Agent
         not less than 10 days prior to the conduct of

                                      -81-
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         business under such additional name. Since its incorporation, no
         Obligor has changed its corporate name or adopted or conducted business
         under any trade name other than a name specified on Exhibit 7.1.

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

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

                  10.3.8. DELIVERY OF DOCUMENTS. At the Agent's request, each
         Obligor shall deliver to the Agent, promptly upon such Obligor's
         receipt thereof, copies of any agreements, instruments, documents or
         invoices comprising or relating to the Credit

                                      -82-
<PAGE>

         Security. Pending such request, such Obligor shall keep such items at
         its chief executive office and principal place of business (as
         specified pursuant to Section 10.3.5).

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

         10.4. ADMINISTRATION OF CREDIT SECURITY. The Credit Security shall be
administered as follows, and if an Event of Default shall have occurred, Section
10.5 shall also apply.

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

                  10.4.2. DEPOSITS; ACCOUNTS.

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

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

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

                                      -83-
<PAGE>

                  10.4.3. PLEDGED SECURITIES.

                  (a) DISTRIBUTIONS. (i) Until an Event of Default shall occur,
                  and thereafter once such Event of Default has ceased to exist,
                  the respective Obligors shall be entitled, to the extent
                  permitted by the Credit Documents, to receive all
                  Distributions on or with respect to the Pledged Securities
                  (other than Distributions constituting additional Pledged
                  Securities). All Distributions constituting additional Pledged
                  Securities will be retained by the Agent (or if received by
                  any Obligor shall be held by such Person in trust and shall be
                  immediately delivered by such Person to the Agent in the
                  original form received, endorsed in blank) and held by the
                  Agent as part of the Credit Security.

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

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

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

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

                  10.5.1. ASSEMBLY OF CREDIT SECURITY; RECEIVER. Each of the
         Obligors shall, upon the Agent's request, assemble the Credit Security
         and otherwise make it available to the Agent. The Agent may have a
         receiver appointed for all or any

                                      -84-
<PAGE>

         portion of the Obligor's assets or business which constitutes the
         Credit Security in order to manage, protect, preserve, sell and
         otherwise dispose of all or any portion of the Credit Security in
         accordance with the terms of the Credit Documents, to continue the
         operations of the Obligors and to collect all revenues and profits
         therefrom to be applied to the payment of the Credit Obligations,
         including the compensation and expenses of such receiver.

                  10.5.2. GENERAL AUTHORITY. To the extent specified in written
         notice from the Agent to the Obligor in question, each Obligor grants
         the Agent full and exclusive power and authority, subject to the other
         terms hereof and applicable law, to take any of the following actions
         (for the sole benefit of the Agent on behalf of the Lenders and the
         holders from time to time of any Credit Obligations, but at the
         Obligor's expense):

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

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

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

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

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

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

                  10.5.3. MARSHALING, ETC. Neither the Agent nor the Lenders
         shall be required to make any demand upon, or pursue or exhaust any of
         their rights or

                                      -85-
<PAGE>

         remedies against, any Obligor or any other guarantor, pledgor or any
         other Person with respect to the payment of the Credit Obligations or
         to pursue or exhaust any of their rights or remedies with respect to
         any collateral therefor or any direct or indirect guarantee thereof.
         Neither the Agent nor the Lenders shall be required to marshal the
         Credit Security or any guarantee of the Credit Obligations or to resort
         to the Credit Security or any such guarantee in any particular order,
         and all of its and their rights hereunder or under any other Credit
         Document shall be cumulative. To the extent it may lawfully do so, each
         of the Obligors absolutely and irrevocably waives and relinquishes the
         benefit and advantage of, and covenants not to assert against the Agent
         or the Lenders, any valuation, stay, appraisement, extension,
         redemption or similar laws now or hereafter existing which, but for
         this provision, might be applicable to the sale of any Credit Security
         made under the judgment, order or decree of any court, or privately
         under the power of sale conferred by this Agreement, or otherwise.
         Without limiting the generality of the foregoing, each of the Obligors
         (a) agrees that it will not invoke or utilize any law which might
         prevent, cause a delay in or otherwise impede the enforcement of the
         rights of the Agent or any Lender in the Credit Security, (b) waives
         all such laws, and (c) agrees that it will not invoke or raise as a
         defense to any enforcement by the Agent or any Lender of any rights and
         remedies relating to the Credit Security or the Credit Obligations any
         legal or contractual requirement with which the Agent or any Lender may
         have in good faith failed to comply. In addition, each of the Obligors
         waives any right to prior notice (except to the extent expressly
         required by this Agreement) or judicial hearing in connection with
         foreclosure on or disposition of any Credit Security, including any
         such right which such Obligor would otherwise have under the
         Constitution of the United States of America, any state or territory
         thereof or any other jurisdiction.

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

                                      -86-
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         cause to be executed and delivered such instruments, documents,
         assignments, waivers, certificates and affidavits, will supply or cause
         to be supplied such further information and will take such further
         action as the Agent shall request in connection with any such sale.

                  10.5.5. SALE WITHOUT REGISTRATION. If, at any time when the
         Agent shall determine to exercise its rights hereunder to sell all or
         part of the securities included in the Credit Security, the securities
         in question shall not be effectively registered under the Securities
         Act (or other applicable law), the Agent may, in its sole discretion,
         sell such securities by private or other sale not requiring such
         registration in such manner and in such circumstances as the Agent may
         deem necessary or advisable in order that such sale may be effected in
         accordance with applicable securities laws without such registration
         and the related delays, uncertainty and expense. Without limiting the
         generality of the foregoing, in any event the Agent may, in its sole
         discretion, (a) approach and negotiate with a single purchaser or one
         or more possible purchasers to effect such sale, (b) restrict such sale
         to one or more purchasers each of whom will represent and agree that
         such purchaser is purchasing for its own account, for investment and
         not with a view to the distribution or sale of such securities and (c)
         cause to be placed on certificates representing the securities in
         question a legend to the effect that such securities have not been
         registered under the Securities Act (or other applicable law) and may
         not be disposed of in violation of the provisions thereof. Each of the
         Obligors agrees that such manner of disposition is commercially
         reasonable, that it will upon the Agent's request give any such
         purchaser access to such information regarding the issuer of the
         securities in question as the Agent may reasonably request and that the
         Agent and the Lenders shall not incur any responsibility for selling
         all or part of the securities included in the Credit Security at any
         private or other sale not requiring such registration, notwithstanding
         the possibility that a substantially higher price might be realized if
         the sale were deferred until after registration under the Securities
         Act (or other applicable law) or until made in compliance with certain
         other rules or exemptions from the registration provisions under the
         Securities Act (or other applicable law). Each of the Obligors
         acknowledges that no adequate remedy at law exists for breach by it of
         this Section 10.5.5 and that such breach would not be adequately
         compensable in damages and therefore agrees that this Section 10.5.5
         may be specifically enforced.

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

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

                                      -87-
<PAGE>

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

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

         10.6. CUSTODY OF CREDIT SECURITY. Except as provided by applicable law
that cannot be waived, the Agent will have no duty as to the custody and
protection of the Credit Security, the collection of any part thereof or of any
income thereon or the preservation or exercise of any rights pertaining thereto,
including rights against prior parties, except for the use of reasonable care in
the custody and physical preservation of any Credit Security in its possession.
The Lenders will not be liable or responsible for any loss or damage to any
Credit Security, or for any diminution in the value thereof, by reason of the
act or omission of any agent selected by the Agent acting in good faith.

11. EXPENSES; INDEMNITY.

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

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

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

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

                                      -88-
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         11.2. GENERAL INDEMNITY. The Borrower shall indemnify the Lenders and
the Agent and hold them harmless from any liability, loss or damage resulting
from the violation by the Company of Section 2.3. In addition, the Borrower
shall indemnify each Lender, the Agent, each of the Lenders' or the Agent's
directors, officers and employees, and each Person, if any, who controls any
Lender or the Agent (each Lender, the Agent and each of such directors,
officers, employees and control Persons is referred to as an "INDEMNIFIED
PARTY") and hold each of them harmless from and against any and all claims,
damages, liabilities and reasonable expenses (including reasonable fees and
disbursements of counsel with whom any Indemnified Party may consult in
connection therewith and all reasonable expenses of litigation or preparation
therefor) which any Indemnified Party may incur or which may be asserted against
any Indemnified Party in connection with (a) the Indemnified Party's compliance
with or contest of any subpoena or other process issued against it in any
proceeding involving any of the Obligors or their Affiliates, (b) any litigation
or investigation involving the Obligors or their Affiliates, or any officer,
director or employee thereof, (c) the existence or exercise of any security
rights with respect to the Credit Security in accordance with the Credit
Documents, (d) this Agreement, any other Credit Document or any transaction
contemplated hereby or thereby or (e) the use of or proposed use of proceeds
from this Credit Agreement; PROVIDED, HOWEVER, that the foregoing indemnity
shall not apply to (i) to the extent such loss resulted from the gross
negligence or willful misconduct of the Indemnified Party; or (ii) to litigation
commenced by the Borrower or any Obligor against the Lenders or the Agent which
seeks enforcement of any of the rights of the Borrower or such Obligor hereunder
or under any other Credit Document and is determined adversely to the Lenders or
the Agent in a final nonappealable judgment or to the extent such claims,
damages, liabilities and expenses result from a Lender's or the Agent's gross
negligence or willful misconduct.

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

12. OPERATIONS; AGENT.

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

                                      -89-
<PAGE>

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

         12.3. BORROWER TO PAY AGENT, ETC. The Borrower and each Guarantor shall
be fully protected in making all payments in respect of the Credit Obligations
to the Agent, in relying upon consents, modifications and amendments executed by
the Agent purportedly on the Lenders' behalf, and in dealing with the Agent as
herein provided. The Agent may charge the account of the Borrower, on the dates
when the amounts thereof become due and payable, with the amounts of the
principal of and interest on the Loan, any amounts paid by the Letter of Credit
Issuers to third parties under Letters of Credit or drafts presented thereunder,
commitment fees, Letter of Credit fees and all other fees and amounts owing
under any Credit Document.

         12.4. LENDER OPERATIONS FOR ADVANCES, LETTERS OF CREDIT, ETC.

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

                  12.4.2. LETTERS OF CREDIT. Each of the Lenders authorizes and
         requests each Letter of Credit Issuer to issue the Letters of Credit
         provided for in Section 2.2 and to grant each Lender a participation in
         each of such Letters of Credit in an amount equal to its Percentage
         Interest in the amount of each such Letter of Credit. Promptly upon the
         request of the Letter of Credit Issuer, each Lender shall reimburse the
         Letter of Credit Issuer in immediately available funds for such
         Lender's Percentage Interest in the amount of all obligations to third
         parties incurred by the Letter of Credit Issuer

                                      -90-
<PAGE>

         in respect of each Letter of Credit and each draft accepted under a
         Letter of Credit to the extent not reimbursed by the Borrower. The
         Letter of Credit Issuer will notify each Lender of the issuance of any
         Letter of Credit, the amount and date of payment of any draft drawn or
         accepted under a Letter of Credit and whether in connection with the
         payment of any such draft the amount thereof was added to the Revolving
         Loan or was reimbursed by the Borrower.

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

                  12.4.4. DELINQUENT LENDERS; NONPERFORMING LENDERS. In the
         event that any Lender fails to reimburse the Agent pursuant to Section
         12.4.1 for the Percentage Interest of such lender (a "DELINQUENT
         LENDER") in any credit advanced by the Agent pursuant hereto, overdue
         amounts (the "DELINQUENT PAYMENT") due from the Delinquent Lender to
         the Agent shall bear interest, payable by the Delinquent Lender on
         demand, at a per annum rate equal to (a) the Federal Funds Rate for the
         first three days overdue and (b) the sum of 2% PLUS the Federal Funds
         Rate for any longer period. Such interest shall be payable to the Agent
         for its own account for the period commencing on the date of the
         Delinquent Payment and ending on the date the Delinquent Lender
         reimburses the Agent on account of the Delinquent Payment (to the
         extent not paid by the Company as provided below) and the accrued
         interest thereon (the "DELINQUENCY PERIOD"), whether pursuant to the
         assignments referred to below or otherwise. Upon notice by the Agent,
         the Borrower will pay to the Agent the principal (but not the interest)
         portion of the Delinquent Payment. During the Delinquency Period, in
         order to make reimbursements for the Delinquent Payment and accrued
         interest thereon, the Delinquent Lender shall be deemed to have
         assigned to the Agent all interest, commitment fees and other payments
         made by the Borrower under Section 3 that would have thereafter
         otherwise been payable under the Credit Documents to the Delinquent
         Lender. During any other period in which any Lender is not performing
         its obligations to extend credit under Section 2 (a "NONPERFORMING
         LENDER"), the Nonperforming Lender shall be deemed to have assigned to
         each Lender that is not a Nonperforming Lender (a "PERFORMING LENDER")
         all principal and

                                      -91-
<PAGE>

         other payments made by the Borrower under Section 4 that would have
         thereafter otherwise been payable under the Credit Documents to the
         Nonperforming Lender. The Agent shall credit a portion of such payments
         to each Performing Lender in an amount equal to the Percentage Interest
         of such Performing Lender in the portion of the Loan with respect to
         which there is such nonperformance, in an amount equal to such
         Percentage Interest of such Performing Lender divided by one MINUS the
         Percentage Interest of the Nonperforming Lender in the portion of the
         Loan with respect to which there is such nonperformance, until the
         respective portions of such portion of the Loan owed to all the Lenders
         are the same as the Percentage Interests of the Lenders in such portion
         of the Loan immediately prior to the failure of the Nonperforming
         Lender to perform its obligations under Section 2. The foregoing
         provisions shall be in addition to any other remedies the Agent, the
         Performing Lenders or the Borrower may have under law or equity against
         the Delinquent Lender as a result of the Delinquent Payment or against
         the Nonperforming Lender as a result of its failure to perform its
         obligations under Section 2.

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

                                      -92-
<PAGE>

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

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

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

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

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

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

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

                                      -93-
<PAGE>

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

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

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

         12.8. CONCERNING THE AGENT.

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

                  12.8.2. NO IMPLIED DUTIES, ETC. The Agent shall have and may
         exercise such powers as are specifically delegated to the Agent under
         this Agreement or any other Credit Document together with all other
         powers incidental thereto. The Agent shall have no implied duties to
         any Person or any obligation to take any action under this Agreement or
         any other Credit Document except for action specifically provided for

                                      -94-
<PAGE>

         in this Agreement or any other Credit Document to be taken by the
         Agent. Before taking any action under this Agreement or any other
         Credit Document, the Agent may request an appropriate specific
         indemnity satisfactory to it from each Lender in addition to the
         general indemnity provided for in Section 12.11. Until the Agent has
         received such specific indemnity, the Agent shall not be obligated to
         take (although it may in its sole discretion take) any such action
         under this Agreement or any other Credit Document. Each Lender confirms
         that the Agent does not have a fiduciary relationship to it under the
         Credit Documents. Each of the Obligors party hereto confirms that
         neither the Agent nor any other Lender has a fiduciary relationship to
         it under the Credit Documents.

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

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

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

                  12.8.6. RELIANCE ON DOCUMENTS AND COUNSEL. The Agent shall be
         entitled to rely, and shall be fully protected in relying, upon any
         affidavit, certificate, cablegram, consent, instrument, letter, notice,
         order, document, statement, telecopy, telegram, telex or teletype
         message or writing reasonably believed in good faith by the Agent to be
         genuine and correct and to have been signed, sent or made by the Person
         in question, including any telephonic or oral statement made by such
         Person, and, with

                                      -95-
<PAGE>

         respect to legal matters, upon an opinion or the advice of counsel
         selected by the Agent.

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

                  12.8.8. CONVEYING REPORTS TO LENDERS. The Agent shall provide
         to each of the Lenders, in any reasonable form and reasonably promptly,
         a copy of those communications received from the Company pursuant to
         Sections 4.3.3, 5.2, 6.4 and 6.21.

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

         12.10. INDEPENDENT CREDIT DECISION. Each of the Lenders acknowledges
that it has independently and without reliance upon the Agent, based on the
financial statements and other documents referred to in Section 7.2, on the
other representations and warranties contained herein and on such other
information with respect to the Obligors as such Lender deemed appropriate, made
such Lender's own credit analysis and decision to enter into this Agreement and
to make the extensions of credit provided for hereunder. Each Lender represents
to the Agent that such Lender will continue to make its own independent credit
and other decisions in taking or not taking action under this Agreement or any
other Credit Document. Each Lender expressly acknowledges that neither the Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to such Lender, and no act
by the Agent taken under this Agreement or any other Credit Document, including
any review of the affairs of the

                                      -96-
<PAGE>

Obligors, shall be deemed to constitute any representation or warranty by the
Agent. Except for notices, reports and other documents expressly required to be
furnished to each Lender by the Agent under this Agreement or any other Credit
Document, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, condition, financial or otherwise, or creditworthiness of any Obligor
which may come into the possession of the Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.

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

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

         13.1. ASSIGNMENTS BY LENDERS.

                  13.1.1. ASSIGNEES AND ASSIGNMENT PROCEDURES. Each Lender may
         (a) without the consent of the Agent or the Borrower if the proposed
         assignee is already a Lender hereunder or a Wholly Owned Subsidiary of
         the same corporate parent of which the assigning Lender is a
         Subsidiary, or (b) otherwise with the consents of the Agent and (so
         long as no Event of Default has occurred and is continuing) the
         Borrower (which consents will not be unreasonably withheld), in
         compliance with applicable laws in connection with such assignment,
         assign to one or more commercial banks or other financial institutions
         (each, an "ASSIGNEE") all or a portion of its interests, rights and
         obligations under this Agreement and the other Credit Documents,
         including all or a portion, which need not be pro rata between the Loan
         and the Letter of Credit Exposure, of its Commitment, the portion of
         the Loan and Letter of Credit Exposure

                                      -97-
<PAGE>

         at the time owing to it and the Notes held by it, but excluding its
         rights and obligations as a Letter of Credit Issuer; PROVIDED, HOWEVER,
         that:

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

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

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

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

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

                  13.1.2. TERMS OF ASSIGNMENT AND ACCEPTANCE. By executing and
         delivering an Assignment and Acceptance, the assigning Lender and
         Assignee shall be deemed to confirm to and agree with each other and
         the other parties hereto as follows:

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

                                      -98-
<PAGE>

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

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

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

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

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

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

                  13.1.4. ACCEPTANCE OF ASSIGNMENT AND ASSUMPTION. Upon its
         receipt of a completed Assignment and Acceptance executed by an
         assigning Lender and an Assignee together with the Note or Notes
         subject to such assignment, and the processing and recordation fee
         referred to in Section 13.1.1, the Agent shall (a) accept such
         Assignment and Acceptance, (b) record the information contained therein
         in the Register and (c) give prompt notice thereof to the Borrower.
         Within five

                                      -99-
<PAGE>

         Banking Days after receipt of notice, the Borrower, at their own
         expense, shall execute and deliver to the Agent, in exchange for the
         surrendered Note or Notes, a new Note or Notes to the order of such
         Assignee in a principal amount equal to the applicable Commitment and
         Loan assumed by it pursuant to such Assignment and Acceptance and, if
         the assigning Lender has retained a Commitment and Loan, a new Note or
         Notes to the order of such assigning Lender in a principal amount equal
         to the applicable Commitment and Loan retained by it. Such new Note or
         Notes shall be in an aggregate principal amount equal to the aggregate
         principal amount of such surrendered Note or Notes, respectively, and
         shall be dated the date of the surrendered Notes which they replace.

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

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

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

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

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

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

                  (d) the Borrower, the Agent and the other Lenders shall
         continue to deal solely and directly with such Lender in connection
         with such Lender's rights and obligations under this Agreement, and
         such Lender shall retain the sole right as one of the Lenders to vote
         with respect to the enforcement of the obligations of the Borrower
         relating to the Loan and Letter of Credit Exposure and the approval of
         any

                                     -100-
<PAGE>

         amendment, modification or waiver of any provision of this Agreement
         (other than amendments, modifications, consents or waivers described in
         clause (c) of the proviso to Section 12.6).

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

         13.3. REPLACEMENT OF LENDER. In the event that any Lender or, to the
extent applicable, any Credit Participant (the "AFFECTED LENDER"):

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

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

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

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

                                     -101-
<PAGE>

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

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

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

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

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

                                     -102-
<PAGE>

forms indicating that payments hereunder are not subject to United States
withholding tax or are subject to such tax at a rate reduced by an applicable
tax treaty, the Borrower shall withhold taxes from such payments at the
applicable statutory rate without regard to Section 3.5.2.

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

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

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

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

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

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

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

16. NOTICES. Except as otherwise specified in this Agreement, any notice
required to be given pursuant to this Agreement shall be given in writing. Any
notice, consent, approval, demand or other communication in connection with this
Agreement shall be deemed to be given if given in writing (including telex,
telecopy or similar teletransmission) addressed as provided below (or to the
addressee at such other address as the addressee shall have specified by notice
actually received by the addressor), and if either (a) actually delivered in

                                     -103-
<PAGE>

fully legible form to such address (evidenced in the case of a telex by receipt
of the correct answerback) or (b) in the case of a letter, unless actual receipt
of the notice is required by any Credit Document five days shall have elapsed
after the same shall have been deposited in the United States mails, with
first-class postage prepaid and registered or certified.

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

                  Summit Partners, L.P.
                  600 Atlantic Avenue, Suite 2800
                  Boston, MA  02110
                  Attn:  Thomas S. Roberts

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

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

17. COURSE OF DEALING; AMENDMENTS AND WAIVERS. No course of dealing between any
Lender or the Agent, on one hand, and the Borrower or any other Obligor, on the
other hand, shall operate as a waiver of any of the Lenders' or the Agent's
rights under this Agreement or any other Credit Document or with respect to the
Credit Obligations. Each of the Borrower and the Guarantors acknowledges that if
the Lenders or the Agent, without being required to do so by this Agreement or
any other Credit Document, give any notice or information to, or obtain any
consent from, the Borrower or any other Obligor, the Lenders and the Agent shall
not by implication have amended, waived or modified any provision of this
Agreement or any other Credit Document, or created any duty to give any such
notice or information or to obtain any such consent on any future occasion. No
delay or omission on the part of any Lender of the Agent in exercising any right
under this Agreement or any other Credit Document or with respect to the Credit
Obligations shall operate as a waiver of such right or any other right hereunder
or thereunder. A waiver on any one occasion shall not be construed as a bar to
or waiver of any right or remedy on any future occasion. No waiver, consent or
amendment with respect to this Agreement or any other Credit Document shall be
binding unless it is in writing and signed by the Agent and the Required
Lenders.

18. DEFEASANCE. When all Credit Obligations have been paid, performed and
reasonably determined by the Lenders to have been indefeasibly discharged in
full, and if at the time no Lender continues to be committed to extend any
credit to the Borrower hereunder or under any other Credit Document, this
Agreement shall terminate and, at the Borrower's written request, accompanied by
such certificates and other items as the Agent shall reasonably deem

                                     -104-
<PAGE>

necessary, the Credit Security shall revert to the Obligors and the right, title
and interest of the Lenders therein shall terminate. Thereupon, on the Obligor's
demand and at their cost and expense, the Agent shall execute proper
instruments, acknowledging satisfaction of and discharging this Agreement, and
shall redeliver to the Obligors any Credit Security then in its possession;
PROVIDED, HOWEVER, that Sections 3.2.4, 3.5, 11, 12.8.7, 12.11, 14, 19 and 20
shall survive the termination of this Agreement.

19. VENUE; SERVICE OF PROCESS. Each of the Borrower and the other Obligors:

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

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

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

20. WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT
CANNOT BE WAIVED, EACH OF THE BORROWER, THE OTHER OBLIGORS, THE AGENT AND THE
LENDERS WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF,
DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF
ANY ISSUE, CLAIM OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT OR THE SUBJECT MATTER HEREOF OR THEREOF OR ANY CREDIT OBLIGATION OR IN
ANY WAY CONNECTED WITH THE DEALINGS OF THE LENDERS, THE AGENT, THE BORROWER OR
ANY OTHER OBLIGOR IN CONNECTION WITH ANY OF THE ABOVE, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT, TORT OR OTHERWISE. Each
of the Borrower and the other Obligors acknowledges that it has been informed by
the Agent that the provisions of this Section 20 constitute a material
inducement upon which each of the Lenders has relied and will rely in

                                     -105-
<PAGE>

entering into this Agreement and any other Credit Document, and that it has
reviewed the provisions of this Section 20 with its counsel. Any Lender, the
Agent, the Borrower or any other Obligor may file an original counterpart or a
copy of this Section 20 with any court as written evidence of the consent of the
Borrower, the other Obligors, the Agent and the Lenders to the waiver of their
rights to trial by jury.

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

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

                                     -106-
<PAGE>

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

                                            THE COMPANY

                                            AMERIPATH, INC.

                                            By: /s/ Robert P. Wynn
                                               ----------------------------
                                                 Title:

[AmeriPath Credit Agreement #1]

<PAGE>

                                  THE GUARANTORS

                                  AMERIPATH ALABAMA, INC.
                                  SHOALS PATHOLOGY ASSOCIATES, INC.
                                  AMERIPATH FLORIDA, INC.
                                  LABORATORY PHYSICIANS, JACKSONVILLE, INC.
                                  PASADENA PATHOLOGY EDWARD K MILLER, M.D., INC.
                                  SOUTH FLORIDA PATHOLOGY ASSOCIATES, INC.
                                  HIALEAH PATHOLOGY ASSOCIATES, INC.
                                  OCMULGEE MEDICAL PATHOLOGY ASSOCIATION, INC.
                                  AMERIPATH INDIANA, INC.
                                  AMERIPATH KENTUCKY, INC.
                                  AMERIPATH MICHIGAN, INC.
                                  AMERIPATH MISSISSIPPI, INC.
                                  R.M.C. PATHOLOGY ASSOCIATES, INC.
                                  AMERIPATH NEW YORK, INC.
                                  AMERIPATH NORTH CAROLINA, INC.
                                  AMERIPATH OHIO, INC.
                                  AMERIPATH CINCINNATI, INC.
                                  AMERIPATH CLEVELAND, INC.
                                  AMERIPATH P.C.C., INC.
                                  AMERIPATH YOUNGSTOWN, INC.
                                  AMERIPATH YOUNGSTOWN LABS, INC.
                                  AMERIPATH PENNSYLVANIA, INC.
                                  AMERIPATH PHILADELPHIA, INC.
                                  AMERIPATH 5.01(a) CORPORATION
                                  DFW 5.01(a) CORPORATION
                                  AMERIPATH SAN ANTONIO 5.01(a) CORPORATION
                                  AMERIPATH LUBBOCK 5.01(a) CORPORATION
                                  AMERIPATH TEXAS, INC.
                                  AMERIPATH SHERMAN, INC.
                                  PATHOLOGY AFFILIATED SERVICES, INC.
                                  PLAZA PATHOLOGY, INC.
                                  AMERIPATH PAT, INC.
                                  AMERIPATH WISCONSIN, INC.

                                  By: /s/ Robert P. Wynn
                                     -------------------------------------------
                                     Authorized officer of each of the foregoing
                                     corporations

[AmeriPath Credit Agreement #2]

<PAGE>

                                            BANKBOSTON, N.A., as Agent

                                            By: /s/ James Lau
                                               ---------------------------------
                                                 Title: VP

                                            BANKBOSTON, N.A., as Lender

                                            By: /s/ James Lau
                                               ---------------------------------
                                                 Title: VP

[AmeriPath Credit Agreement #3]

<PAGE>

                                            BANK OF AMERICA, N.A.
                                            d/b/a NationsBank, N.A.,
                                             as Lender and Syndication Agent

                                            By: /s/ Cheryl R. Moncure
                                               ---------------------------------
                                                 Title: Senior Vice President

[AmeriPath Credit Agreement #4]

<PAGE>

                                            BANK ONE, NA, as Lender and Co-Agent

                                            By: /s/ Jason White
                                               ---------------------------------
                                                 Title: Assistant Vice President

[AmeriPath Credit Agreement #5]

<PAGE>

                                        FIRST UNION NATIONAL BANK, as Lender and
                                           Co-Agent

                                        By: /s/ Joyce Barry
                                           -------------------------------------
                                             Title: SVP

[AmeriPath Credit Agreement #6]

<PAGE>

                                            USTRUST

                                            By: /s/ Errin Siagel
                                               ---------------------------------
                                                 Title: VP

[AmeriPath Credit Agreement #7]

<PAGE>

                                            BANK AUSTRIA CREDITANSTALT CORPORATE
                                            FINANCE, INC.

                                            By: /s/ Scott Kray
                                               ---------------------------------
                                                 Title: Vice President

                                            By: /s/ Robert M. B.
                                               ---------------------------------
                                                 Title: Executive Vice President

[AmeriPath Credit Agreement #8]

<PAGE>

                                            SUNTRUST BANK, CENTRAL FLORIDA,
                                               NATIONAL ASSOCIATION

                                            By: /s/ W. David Wisdom
                                               ---------------------------------
                                                 Title: Vice President

[AmeriPath Credit Agreement #9]

<PAGE>

                                            U.S. BANK NATIONAL ASSOCIATION

                                            By: /s/ Forrest Vollrath
                                               ---------------------------------
                                                 Title: Vice President

[AmeriPath Credit Agreement #10]

<PAGE>

                                            AMSOUTH BANK

                                            By: /s/ J. Kenneth F.
                                               ---------------------------------
                                                 Title: VP

[AmeriPath Credit Agreement #11]

<PAGE>

                                            IMPERIAL BANK

                                            By: /s/ Paula J. Barysauskas
                                               ---------------------------------
                                                 Title: First Vice President

[AmeriPath Credit Agreement #12]

<PAGE>

                                            BANKATLANTIC

                                            By: /s/ Ana C. Bolduc
                                               ---------------------------------
                                                 Title: Senior Vice President

[AmeriPath Credit Agreement #13]

<PAGE>
                                                                       EXHIBIT 1
<TABLE>
<CAPTION>
---------  ------------------------------------  --------------------------------  -----------------------------------  ------------
<S>        <C>                                   <C>                               <C>                                  <C>
           Ratio of Consolidated Total Debt to
           Consolidated Adjusted EBITDA for the  Interest Rate on Portions of      Interest Rate on Portions of         Applicable
           most recently completed four fiscal   Revolving Loan Subject to LIBOR   Revolving Loan Not Subject to LIBOR  Commitment
Levels     quarters                              Pricing Option                    Pricing Option                       Fee Rate
---------  ------------------------------------  --------------------------------  -----------------------------------  ------------
Level I    Equal to or greater than 2.5 to 1     LIBOR Rate PLUS 2.25%             Base Rate PLUS 1.00%                 0.50%
---------  ------------------------------------  --------------------------------  -----------------------------------  ------------
Level II   Equal to or greater than 2.0 to 1
           but less than or equal to 2.5 to 1    LIBOR Rate PLUS 2.00%             Base Rate PLUS 0.75%                 0.375%
---------  ------------------------------------  --------------------------------  -----------------------------------  ------------
Level III  Less than or equal to 2.0 to 1        LIBOR Rate PLUS 1.75%             Base Rate PLUS 0.50%                 0.375%
---------  ------------------------------------  --------------------------------  -----------------------------------  ------------
</TABLE>Exhibit 10.10

                         SEVERANCE PROTECTION AGREEMENT

          This Severance Protection Agreement (the "Agreement") is entered into
as of January 1, 2000 (the "Effective Date") between James F. Etter
("Executive") and AmeriVest Properties Inc., a Maryland corporation (the
"Company"). For purposes of this Agreement, each of Executive and the Company is
individually referred as a "Party", and Executive and the Company are referred
to collectively as the "Parties".

Recital
-------

          This Agreement sets forth the understanding between the Company and
the Executive concerning the circumstances under which Executive will be
entitled to receive severance benefits in the event that Executive's employment
with Company terminates under the circumstances identified in this Agreement and
describes the nature and amount of the severance benefits.

Agreement
---------

          In consideration of the premises and the mutual covenants contained in
this Agreement, the Parties agree as follows:

          1. Definitions.

               1.1. Accrued Compensation. For purposes of this Agreement,
     "Accrued Compensation" shall mean an amount which shall include all amounts
     earned or accrued through the date for which the determination is made but
     that is not paid as of that date including (i) base salary, (ii)
     reimbursement for reasonable and necessary expenses incurred by the
     Executive on behalf of the Company during the period ending on the
     Termination Date, and (iii) vacation and sick leave pay (to the extent
     provided by Company policy or applicable law.

               1.2. Base Amount. For purposes of this Agreement, "Base Amount"
     shall mean the Executive's annual base salary at the rate in effect on the
     Termination Date, and shall include all amounts of his base salary that are
     deferred under the qualified and non-qualified employee benefit plans of
     the Company or any other agreement or arrangement.

               1. Cause. For purposes of this Agreement, a termination of
     employment is for "Cause" if the Executive has been convicted of a felony
     involving moral turpitude or the termination is evidenced by a resolution
     adopted in good faith by two-thirds of the Board of Directors of the
     Company (the "Board") that the Executive (a) intentionally and continually
     failed substantially to perform Executive's reasonably assigned duties with
     the Company (other than a failure resulting from the Executive's incapacity
     due to physical or mental illness or from the Executive's assignment of
     duties that would constitute "Good Reason" as hereinafter defined), which
     failure continued for a period of at least 30 days after a written notice

<PAGE>

     of demand for substantial performance has been delivered to the Executive
     specifying the manner in which the Executive has failed substantially to
     perform, or (b) intentionally engaged in conduct which is demonstrably and
     materially injurious to the Company; provided however, that no termination
     of the Executive's employment shall be for Cause until (x) there shall have
     been delivered to the Executive a copy of a written notice setting forth
     that the Executive was guilty of the conduct set forth in this Section 1.4
     and specifying the particulars thereof in detail, and (y) for a 10-day
     period following delivery of the notice, the Executive shall have been
     provided an opportunity to be heard in person by the Board (with the
     assistance of the Executive's counsel if the Executive so desires). Neither
     an act nor a failure to act, on the Executive's part, shall be considered
     "intentional" unless such act or failure to act by the Executive involved a
     lack of good faith and a lack of reasonable belief on the part of the
     Executive that the Executive's action or failure to act was in the best
     interests of the Company. Notwithstanding anything contained in this
     Agreement to the contrary, no failure to perform by the Executive after a
     Notice of Termination is given by the Executive shall constitute Cause for
     purposes of this Agreement. In determining the two-thirds majority of the
     Board required by the provisions of the first sentence of this paragraph,
     the Executive shall not be counted in either the numerator or the
     denominator of the fraction.

               1.5. Company. For purposes of this Agreement, the "Company" shall
     include the Company's "Successors and Assigns" (as hereinafter defined).

               1.6. Disability. For purposes of this Agreement, "Disability"
     shall mean a physical or mental infirmity which impairs the Executive's
     ability to substantially perform his duties with the Company for a period
     of 90 consecutive days and the Executive has not returned to his full time
     employment prior to the Termination Date as stated in the "Notice of
     Termination" (as hereinafter defined).

               1.7. Good Reason.

                    (a) For purposes of this Agreement, "Good Reason" shall mean
          the occurrence of any of the events or conditions described in
          subsections (1) through (9) hereof:

                         (1) a change in the Executive's status, title or
               position to a status, title or position not equal to at least an
               executive vice president, or a change in the Executive's
               responsibilities (including reporting responsibilities) to
               responsibilities other than in one or more of the areas of
               finance, accounting, human resources, senior property management,
               director or senior supervision, property acquisitions, investor
               relations or other public company matters, which, in the
               Executive's reasonable judgment, represents an adverse change
               from his status, title, position or responsibilities; the
               assignment to the Executive of any duties or responsibilities
               which, in the Executive's reasonable judgment, are inconsistent
               with his status, title, position or responsibilities, including
               responsibilities other than in the areas set forth above; or any
               removal of the Executive from or failure to reappoint or reelect
               him to any of such offices or positions, including as a director
               of the Company, except in connection with the termination of his
               employment for Disability, Cause, as a result of his death, or by
               the Executive other than for Good Reason;

                         (2) a reduction in the Executive's base salary or any
               failure to pay the Executive any compensation or benefits to
               which Executive is entitled within five days of notice thereof;

                                       2

<PAGE>

                         (3) during the first three years of this Agreement, the
               Company's requiring the Executive to be based at any place
               outside a 25-mile radius from his current place of employment,
               except for reasonably required travel on the Company's business
               which is not materially greater than such travel requirements
               prior to a Change in Control;

                         (4) the failure by the Company to provide the Executive
               with compensation and employee benefits, in the aggregate, at
               least equal (in terms of benefit levels and/or reward
               opportunities) to the following (collectively, the "Benefits"):
               those paid to other Executives of the Company or of Sheridan
               Realty Advisors, LLC (the "Advisor") at the senior vice-president
               and/or executive vice president level (the "Peer Group);

                         (5) the insolvency or the filing (by any party,
               including the Company) of a petition for bankruptcy of the
               Company, which petition is not dismissed within 60 days;

                         (6) any material breach by the Company of any provision
               of this Agreement;

                         (7) any purported termination of the Executive's
               employment for Cause by the Company which does not comply with
               the terms of Section 1.4;

                         (8) any event or occurrence constituting "good reason,"
               as it may be defined in any agreement between the Executive and
               the Company or any of its affiliates; or

                         (9) the failure of the Company to obtain an agreement,
               satisfactory to the Executive, from any Successors and Assigns to
               assume and agree to perform this Agreement, as contemplated in
               Section 6 hereof.

                    (b) The Executive's right to terminate his employment
          pursuant to this Section 1.7 shall not be affected by his incapacity
          due to a Disability.

               1.8. Notice of Termination. For purposes of this Agreement,
     "Notice of Termination" shall mean a written notice of termination from the
     Company of the Executive's employment which indicates the specific
     termination provision in this Agreement relied upon and which sets forth in
     reasonable detail the facts and circumstances claimed to provide a basis
     for termination of the Executive's employment under the provision so
     indicated.

               1.9. Successors and Assigns. For purposes of this Agreement,
     "Successors and Assigns" shall mean a corporation or other entity acquiring
     all or substantially all the assets and business of the Company whether by
     operation of law or otherwise, and any affiliate of such Successors and
     Assigns.

               1.10. Termination Date. For purposes of this Agreement,
     "Termination Date" shall mean (a) in the case of the Executive's death, his
     date of death, (b) in the case of Good Reason, the last day of his
     employment, and (c) in all other cases, the date specified in the Notice of
     Termination; provided, however, that if the Executive's employment is
     terminated by the Company due to Disability, the date specified in the
     Notice of Termination shall be at least 30 days from the date the Notice of
     Termination is given to the Executive, further provided that in the case of
     Disability the Executive shall not have returned to the full-time
     performance of his duties during such period of at least 30 days.

                                       3
<PAGE>

         2. Termination of Employment.

               2.1 Severance Pay and Benefits. If, during the term of this
     Agreement, the Executive shall cease to be employed by Company, the
     Executive shall be entitled to the compensation and benefits described
     below depending upon the circumstances related to such cessation of
     employment.

                    (a) If the Executive's employment with the Company shall be
          terminated: (i) by the Company for Cause, (ii) by the Executive other
          than for Good Reason, or (iii) by the Executive because of death or
          Disability, the Company shall pay to the Executive the Accrued
          Compensation.

                    (b) If the Executive's employment with the Company shall be
          terminated before the Executive's death (i) by the Company other than
          for Cause or Disability, or (ii) by the Executive for Good Reason, the
          Executive shall be entitled to the following:

                         (1) the Company shall pay the Executive all Accrued
               Compensation;

                         (2) the Company shall pay the Executive or his
               beneficiary as severance pay and in lieu of any further
               compensation for periods subsequent to the Termination Date, for
               a period ending on the earlier to occur of eighteen (18) months
               following the Termination Date or Executive's sixty-fifth (65th)
               birthday (the "Continuation Period"), monthly payments equal to
               one-twelfth (1/12) of the Base Amount; and

                         (3) for the duration of the Continuation Period, the
               Company shall at its expense continue the Benefits on behalf of
               the Executive and Executive's dependents and beneficiaries,
               including the payment of premiums for medical, dental and life
               insurance provided to the Executive or anyone in the Executive's
               Peer Group during the thirty (30) day period prior to the
               Termination Date. The Company's obligation hereunder with respect
               to the foregoing benefits shall be limited to the extent that the
               Executive obtains any such benefits pursuant to a subsequent
               employer's benefit plans, in which case the Company may reduce
               the coverage of any benefits it is required to provide the
               Executive hereunder as long as the aggregate coverages and
               benefits of the combined benefit plans is no less favorable to
               the Executive than the coverages and benefits required to be
               provided hereunder. This subsection (3) shall not be interpreted
               so as to limit any benefits to which the Executive, Executive's
               dependents or beneficiaries may be entitled under any of the
               Company's employee benefit plans, programs or practices following
               the Executive's termination of employment, including without
               limitation, retiree medical and life insurance benefits;

                         (4) all outstanding stock options and warrants
               (consisting of those options and warrants issued to the Executive
               by the Company for compensation and/or incentive purposes and not
               options or warrants purchased by the Executive for investment
               purposes) held by Executive shall become exercisable upon the

                                       4

<PAGE>

               Termination Date, and those options and warrants shall remain
               exercisable until their respective expiration dates without
               regard to the termination of Executive's employment, except that
               any outstanding options held by Executive that are incentive
               stock options in accordance with Section 422 of the Internal
               Revenue Code of 1986, as amended (the "IRC"), shall be deemed to
               be non-qualified options at such time that they may no longer be
               treated as incentive stock options in accordance with Section 422
               of the IRC. The exercisability of any stock options or warrants
               issued to the Advisor and allocated to the benefit of Executive
               shall be governed by the terms of the Equity Compensation
               Agreement between the Executive and the Advisor.

               2.2 Payment Form. The Accrued Compensation to be paid pursuant to
     Sections 2.1(a) or 2.1(b)(1) shall be paid in a single lump sum cash
     payment within 30 business days after the Executive's Termination Date (or
     earlier, if required by applicable law).

               2.3 No mitigation. The Executive shall not be required to
     mitigate the amount of any payment provided for in this Agreement by
     seeking other employment or otherwise, and no such payment shall be offset
     or reduced by the amount of any compensation or benefits provided to the
     Executive in any subsequent employment except as provided in Section
     2.1(b)(3).

               2.4 Other severance arrangements. If the Executive is entitled to
     severance pay and benefits pursuant to this Agreement, the following shall
     apply:

                    (a) The severance pay and benefits provided for in this
          Section 2 shall be reduced by the amount of any other severance or
          termination pay to which the Executive may be entitled under any
          agreement with the Company or any of its Affiliates.

                    (b) The Executive's entitlement to any other compensation or
          benefits or any indemnification shall be determined in accordance with
          the Company's employee benefit plans and other applicable programs,
          policies and practices or any employment agreement or indemnification
          agreement then in effect.

          3. Notice of Termination. Any purported termination of the Executive's
employment by the Company shall be communicated by Notice of Termination to the
Executive. For purposes of this Agreement, no such purported termination shall
be effective without such Notice of Termination.

          4. Excise Tax Limitation.

               4.1 Notwithstanding anything contained in this Agreement to the
     contrary, to the extent that the payments and benefits provided under this
     Agreement and benefits provided to, or for the benefit of, the Executive
     under any other Company plan or agreement (such payments or benefits are
     collectively referred to as the "Payments") would be subject to the excise
     tax (the "Excise Tax") imposed under Section 4999 of the Internal Revenue
     Code of 1986, as amended (the "Code"), the Payments shall be reduced (but
     not below zero) if and to the extent necessary so that no Payment to be
     made or benefit to be provided to the Executive shall be subject to the
     Excise Tax (such reduced amount is hereinafter referred to as the "Limited
     Payment Amount"). Unless the Executive shall have given prior written

                                       5

<PAGE>

     notice specifying a different order to the Company to effectuate the
     foregoing, the Company shall reduce or eliminate the Payments, by first
     reducing or eliminating the portion of the Payments which are not payable
     in cash and then by reducing or eliminating cash payments, in each case in
     reverse order beginning with payments or benefits which are to be paid the
     farthest in time from the Determination (as hereinafter defined). Any
     notice given by the Executive pursuant to the preceding sentence shall take
     precedence over the provisions of any other plan, arrangement or agreement
     governing the Executive's rights and entitlements to any benefits or
     compensation.

               4.2 The determination of whether the Payments shall be reduced to
     the Limited Payment Amount pursuant to this Agreement and the amount of
     such Limited Payment Amount shall be made, at the Company's expense, by an
     accounting firm selected by the Executive which is one of the five largest
     accounting firms in the United States (the "Accounting Firm"). The
     Accounting Firm shall provide its determination (the "Determination"),
     together with detailed supporting calculations and documentation to the
     Company and the Executive within ten days of the Termination Date, if
     applicable, or such other time as requested by the Company or by the
     Executive (provided the Executive reasonably believes that any of the
     Payments may be subject to the Excise Tax) and if the Accounting Firm
     determines that no Excise Tax is payable by the Executive with respect to
     the Payments, it shall furnish the Executive with an opinion reasonably
     acceptable to the Executive that no Excise Tax will be imposed with respect
     to any such Payments. The Determination shall be binding, final and
     conclusive upon the Company and the Executive.

     5. Successors; Binding Agreement.

               5.1. This Agreement shall be binding upon and shall inure to the
     benefit of the Company, its Successors and Assigns, and the Company shall
     require any Successors and Assigns to expressly assume and agree to perform
     this Agreement in the same manner and to the same extent that the Company
     would be required to perform it if no such succession or assignment had
     taken place.

               5.2. Neither this Agreement nor any right or interest hereunder
     shall be assignable or transferable by the Executive, his beneficiaries or
     legal representatives, except by will or by the laws of descent and
     distribution. This Agreement shall inure to the benefit of and be
     enforceable by the Executive's legal personal representative.

          6. Fees and Expenses. If Executive is the prevailing party, the
Company shall pay all legal fees and related expenses (including the costs of
experts, evidence and counsel) reasonably incurred by the Executive as they
become due as a result of (a) the Executive seeking to obtain or enforce any
right or benefit provided by this Agreement (including, but not limited to, any
such fees and expenses incurred in connection with the Dispute), and (b) the
Executive's hearing before the Board as contemplated in Section 1.4 of this
Agreement.

          7. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement (including the Notice of
Termination) shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by certified mail, return receipt requested,
postage prepaid, by overnight courier or by facsimile, addressed to the
respective addresses and facsimile numbers last given by each party to the
other, provided that all notices to the Company shall be directed to the
attention of the Board with a copy to the Secretary of the Company. All notices
and communications shall be deemed to have been received on the date of delivery
thereof or on the third business day after the mailing thereof, except that
notice of change of address shall be effective only upon receipt.

                                       6

<PAGE>

          8. Non-exclusivity of Rights. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any benefit,
bonus, incentive or other plan or program provided by the Company (except for
any severance or termination policies, plans, programs or practices) and for
which the Executive may qualify, nor shall anything herein limit or reduce such
rights as the Executive may have under any other agreements with the Company
(except for any severance or termination agreement). Amounts which are vested
benefits or which the Executive is otherwise entitled to receive under any plan
or program of the Company shall be payable in accordance with such plan or
program, except as explicitly modified by this Agreement.

          9. No Guaranteed Employment. The Executive and the Company acknowledge
that, except as may otherwise be provided under any other written agreement
between the Executive and the Company, the employment of the Executive by the
Company is "at will" and may be terminated by either the Executive or the
Company at any time.

          10. Settlement of Claims. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Company may have against the Executive or others.

          11. Mutual Non-Disparagement. The Company, its affiliates and
subsidiaries agree and the Company shall use its best efforts to cause their
respective executive officers and directors to agree, that they will not make or
publish any statement critical of the Executive, or in any way adversely
affecting or otherwise maligning the Executive's reputation. The Executive
agrees that it will not make or publish any statement critical of the Company,
its affiliates and their respective executive officers and directors, or in any
way adversely affecting or otherwise maligning the business or reputation of any
member of the Company, its affiliates and subsidiaries and their respective
officers, directors and employees.

          12. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and the Company. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreement or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement.

          13. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Colorado without giving
effect to the conflict of laws principles thereof.

          14. Arbitration. Each of the Company and Executive agrees that any
claim, controversy or dispute that may arise directly or indirectly in
connection with Executive's employment or termination of employment, and /or any
associated or related disputes arising therefrom involving the Company and/or
any employee(s), Director(s), officer(s), or agent(s) of the Company, whether
arising in contract, statute, tort, fraud, misrepresentation, discrimination,
common law or any other legal theory, including, but not limited to, disputes

                                       7

<PAGE>

relating to the making, performance or interpretation of this Agreement; and
claims or other disputes arising under Title VII of the Civil Rights Act of
1964, as amended; the Civil Rights Act of 1991; the Age Discrimination in
Employment Act of 1967, as amended; 42 U.S.C. ss.1981, ss.1981a, ss.1983,
ss.1985, or ss.1988; the Family and Medical Leave Act of 1993; the Americans
with Disabilities Act of 1990, as amended; the Rehabilitation Act of 1973, as
amended; the Fair Labor Standards Act of 1938, as amended; the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"); the Colorado
Anti-Discrimination Act; or any other similar federal, state or local law or
regulation, whenever brought, shall be resolved by arbitration. If, however,
Executive would otherwise be legally required to exhaust administrative remedies
to obtain legal relief, Executive can and must exhaust such administrative
remedies prior to pursuing arbitration. The only legal claims between Executive
and the Company that are not included for arbitration within this Agreement are
claims for workers' compensation or unemployment compensation benefits. By
signing this Agreement, Executive voluntarily, knowingly and intelligently
waives any right Executive may otherwise have to seek remedies in court or other
forums, including the right to a jury trial. The Company also hereby
voluntarily, knowingly, and intelligently waives any right it might otherwise
have to seek remedies against Executive in court or other forums, including the
right to a jury trial. The Federal Arbitration Act, 9 U.S.C. ss.ss.1-16("FAA")
shall govern the arbitrability of all claims, provided that they are enforceable
under the FAA, as it may be amended from time to time. In the event the FAA does
not govern, the Colorado Uniform Arbitration Act shall apply. Additionally, the
substantive law of Colorado, to the extent it is consistent with the terms
stated in this Agreement for arbitration, shall apply to any common law claims.
This Agreement for arbitration supersedes any prior arbitration agreement
between Executive and the Company to the extent they are inconsistent.

          A single arbitrator engaged in the practice of law shall conduct the
arbitration under the applicable rules and procedures of the American
Arbitration Association ("AAA"), unless otherwise agreed to by the Parties. Any
dispute that relates directly or indirectly to Executive's employment with the
Company or to the termination of Executive's employment will be conducted under
the AAA National Rules for the Resolution of Employment Disputes, effective June
1, 1997. Other than as set forth herein, the arbitrator shall have no authority
to add to, detract from, change, amend, or modify existing law. The arbitrator
shall have the authority to order such discovery as is necessary for a fair
resolution of the dispute. The arbitrator may award punitive damages, as allowed
by Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights Act
of 1991; the Age Discrimination in Employment Act of 1967, as amended; and the
Americans with Disabilities Act of 1990, as amended, regardless of any
limitations imposed by federal, state, or local laws regarding amounts that may
be awarded in arbitration proceedings. All arbitration proceedings, including
without limitation, settlements under this Agreement, will be confidential. The
Company and the Executive shall each pay one half of the arbitrator's hourly
fees and expenses. The prevailing party in any arbitration shall be entitled to
receive reasonable attorneys' fees and related expenses (including the costs of
experts, evidence and counsel) as provided by law. The arbitrator's decision and
award shall be final and binding, as to all claims that were, or could have
been, raised in the arbitration, and judgment upon the award rendered by the
arbitrator may be entered to any court having jurisdiction thereof. If any party
hereto files a judicial or administrative action asserting claims subject to
this arbitration provision, and another party successfully stays such action
and/or compels arbitration of such claims, the party filing said action shall
pay the other party's costs and expenses incurred in seeking such stay and/or
compelling arbitration, including reasonable attorneys' fees not to exceed Two
Thousand Five Hundred Dollars ($2,500.00).

                                       8

<PAGE>

          15. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof, and, in
such event, such provision shall be changed and interpreted so as to best
accomplish the objectives of such invalid or unenforceable provision within the
limits of applicable law or applicable court decisions.

          16. Term Of Agreement. This Agreement shall commence on the Effective
Date and shall continue in effect until the earlier to occur of (a) the
termination of Executive's employment with the Company and the satisfaction of
both Parties' obligations pursuant to this Agreement, or (b) December 31, 2008.

          17. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto and supersedes all prior agreements, if any,
understandings and arrangements, oral or written, between the parties hereto
with respect to the subject matter hereof.

                                       9
<PAGE>

          IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and the Executive has executed this
Agreement to be effective as of the Effective Date.

                                     THE COMPANY:
                                     AMERIVEST PROPERTIES INC.

                                     By:  /s/ William T. Atkins
                                          --------------------------------------
                                          William T. Atkins
                                          Chairman and Chief Executive Officer

ATTEST:

/s/ Charles K. Knight
-----------------------------------
Charles K. Knight
Secretary, AmeriVest Properties Inc.

                                          EXECUTIVE:
                                          James F. Etter

                                          /s/ James F. Etter
                                          --------------------------------------
                                          James F. Etter, Individually

                                       10

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