Document:

<PAGE>   1

                                                                     EXHIBIT 4.1

                                                                [EXECUTION COPY]

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                                CREDIT AGREEMENT

                         Dated as of September 29, 2000

                                      among

                             DUCOMMUN INCORPORATED,
                             a Delaware corporation,

                                  as Borrower,

                         the Lenders referred to herein,

                           FIRST UNION NATIONAL BANK,

                              as Syndication Agent

                                       and

                              BANK OF AMERICA, N.A.

                            as Administrative Agent.

                         BANC OF AMERICA SECURITIES LLC
                       Lead Arranger and Sole Book Manager

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                                  TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                            Page
                                                                                            ----
<S>                                                                                         <C>
ARTICLE 1.  DEFINITIONS AND ACCOUNTING TERMS .........................................       1
       1.1  Defined Terms ............................................................       1
       1.2  Use of Defined Terms .....................................................      20
       1.3  Accounting Terms .........................................................      20
       1.4  Exhibits and Schedules ...................................................      20
       1.5  "References to "Borrower and/or its Subsidiaries" ........................      21

ARTICLE 2.  LOANS AND LETTERS OF CREDIT ..............................................      22
       2.1  Loans-General ............................................................      22
       2.2  Base Rate Loans ..........................................................      23
       2.3  LIBOR Loans ..............................................................      23
       2.4  Letters of Credit ........................................................      24
       2.5  Swing Line ...............................................................      27
       2.6  Voluntary Reduction of Commitments .......................................      28
       2.7  Mandatory Reductions of the Aggregate Commitments ........................      28
       2.8  Administrative Agent's Right to Assume Funds Available for Advances ......      29
       2.9  Senior Indebtedness ......................................................      29

ARTICLE 3.  PAYMENTS AND FEES ........................................................      30
       3.1  Principal and Interest ...................................................      30
       3.2  Lead Arranger's Fees .....................................................      31
       3.3  Upfront Fees .............................................................      31
       3.4  Non-Use Fee ..............................................................      31
       3.5  Letter of Credit Fees ....................................................      31
       3.6  Administrative  Fees .....................................................      32
       3.7  Increased Commitment Costs ...............................................      32
       3.8  LIBOR Costs and Related Matters ..........................................      32
       3.9  Default Rate .............................................................      35
       3.10 Computation of Interest and Fees .........................................      36
       3.11 Non-Business Days ........................................................      36
       3.12 Manner and Treatment of Payments .........................................      36
       3.13 Funding Sources ..........................................................      37
       3.14 Failure to Charge Not Subsequent Waiver ..................................      37
       3.15 Administrative Agent's Right to Assume Payments Will be Made by Borrower .      38
       3.16 Fee Determination Detail .................................................      38
       3.17 Survivability ............................................................      38

ARTICLE 4.  REPRESENTATIONS AND WARRANTIES ...........................................      39
       4.1  Existence and Qualification; Power; Compliance With Laws .................      39
       4.2  Authority; Compliance With Other Agreements and Instruments and Government
            Regulations ..............................................................      39
       4.3  No Governmental Approvals Required .......................................      40
       4.4  Subsidiaries .............................................................      40
       4.5  Financial Statements .....................................................      41
</TABLE>

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<TABLE>
<S>                                                                                         <C>
       4.6  No Other Liabilities; No Material Adverse Effect .........................      41
       4.7  Title to and Location of Property ........................................      41
       4.8  Intangible Assets ........................................................      41
       4.9  Public Utility Holding Company Act .......................................      41
       4.10 Litigation ...............................................................      41
       4.11 Binding Obligations ......................................................      42
       4.12 No Default ...............................................................      42
       4.13 ERISA Plans ..............................................................      42
       4.14 Regulations T, U and X; Investment Company Act ...........................      42
       4.15 Disclosure ...............................................................      42
       4.16 Tax Liability ............................................................      43
       4.17 Employee Matters .........................................................      43
       4.18 Environmental Matters ....................................................      43
       4.19 Projections ..............................................................      44

ARTICLE 5.  AFFIRMATIVE COVENANTS (OTHER THAN INFORMATION AND
            REPORTING REQUIREMENTS) ..................................................      45
       5.1  Payment of Taxes and Other Potential Liens ...............................      45
       5.2  Preservation of Existence ................................................      45
       5.3  Maintenance of Properties ................................................      45
       5.4  Maintenance of Insurance .................................................      45
       5.5  Compliance With Laws .....................................................      45
       5.6  [RESERVED] ...............................................................      46
       5.7  Keeping of Records and Books of Account ..................................      46
       5.8  Compliance With Agreements, Duties and Obligations .......................      46
       5.9  Use of Proceeds ..........................................................      46
       5.10 Subsidiary Guaranty ......................................................      46
       5.11 [RESERVED] ...............................................................      46
       5.12 Inspection Rights ........................................................      46
       5.13 Interest Rate Protection Agreement .......................................      46

ARTICLE 6.  NEGATIVE COVENANTS .......................................................      48
       6.1  Disposition of Property ..................................................      48
       6.2  Mergers ..................................................................      48
       6.3  Distributions ............................................................      48
       6.4  Hostile Tender Offers ....................................................      48
       6.5  ERISA ....................................................................      48
       6.6  Change in Nature of Business .............................................      49
       6.7  Liens, Negative Pledges and Rights of Others .............................      49
       6.8  Indebtedness and Contingent Obligations ..................................      49
       6.9  Transactions with Affiliates .............................................      50
       6.10 Change in Fiscal Year ....................................................      50
       6.11 Payment or Prepayment of Subordinated Obligations ........................      50
       6.12 Leverage Ratio ...........................................................      50
       6.13 Minimum EBITDA ...........................................................      50
       6.14 Interest Coverage Ratio ..................................................      51
       6.15 Net Worth ................................................................      51
</TABLE>

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<TABLE>
<S>                                                                                         <C>
       6.16 Capital Expenditures .....................................................      51
       6.17 Acquisitions and Investments .............................................      51

ARTICLE 7.  INFORMATION AND REPORTING REQUIREMENTS ...................................      53
       7.1  Financial and Business Information .......................................      53
       7.2  Compliance Certificates ..................................................      55

ARTICLE 8.  CONDITIONS ...............................................................      56
       8.1  Closing Conditions .......................................................      56
       8.2  Any Increasing Loan, Etc. ................................................      57

ARTICLE 9.  EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT .....................      58
       9.1  Events of Default ........................................................      58
       9.2  Remedies Upon Event of Default ...........................................      60

ARTICLE 10. THE ADMINISTRATIVE AGENT .................................................      63
       10.1 Appointment and Authorization ............................................      63
       10.2 Administrative Agent and Affiliates ......................................      63
       10.3 Proportionate Interest in any Collateral .................................      63
       10.4 Creditors' Credit Decisions ..............................................      63
       10.5 Action by Administrative Agent ...........................................      64
       10.6 Liability of Administrative Agent ........................................      64
       10.7 Indemnification ..........................................................      65
       10.8 Successor Administrative Agent ...........................................      66
       10.9 No Obligations of Borrower ...............................................      66

ARTICLE 11. MISCELLANEOUS ............................................................      68
       11.1 Cumulative Remedies; No Waiver ...........................................      68
       11.2 Amendments; Consents .....................................................      68
       11.3 Costs, Expenses and Taxes ................................................      68
       11.4 Nature of Lenders' Obligations ...........................................      69
       11.5 Survival of Representations and Warranties ...............................      69
       11.6 Notices ..................................................................      70
       11.7 Execution of Credit Documents ............................................      70
       11.8 Binding Effect; Assignment ...............................................      70
       11.9 Right of Setoff ..........................................................      73
       11.10 Sharing of Setoffs ......................................................      73
       11.11 Indemnity by Borrower ...................................................      73
       11.12 Nonliability of the Lenders .............................................      74
       11.13 Nonliability of Responsible Official ....................................      75
       11.15 Confidentiality .........................................................      75
       11.16 Further Assurances ......................................................      76
       11.17 Governing Law ...........................................................      76
       11.18 Severability of Provisions ..............................................      76
       11.19 Headings ................................................................      76
       11.20 Time of the Essence .....................................................      76
       11.21 Foreign Lenders and Participants ........................................      76
</TABLE>

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<TABLE>
<S>                                                                                         <C>
       11.22 Integration .............................................................      77
       11.23 Hazardous Material Indemnity ............................................      77
       11.24 Waiver of Right to Trial by Jury ........................................      78
       11.25 Purported Oral Amendments ...............................................      78
       11.26 Removal of a Lender .....................................................      78
</TABLE>

Exhibits

A  -   Assignment Agreement
B  -   Compliance Certificate
C  -   Form of Note
D  -   Request for Loan
E  -   Request for Redesignation of Loan
F  -   Request for Letter of Credit

Schedules

4.4    Subsidiaries
4.7    Real Property Interests
4.10   Litigation
4.18   Environmental Matters
6.7    Liens and Rights of Others
6.8    Existing Indebtedness

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<PAGE>   6

                                CREDIT AGREEMENT

                           Dated as of _______ , 2000

                This CREDIT AGREEMENT ("Agreement") is entered into by and among
Ducommun Incorporated, a Delaware corporation, as Borrower, the lenders named on
the signature pages hereof and each lender which hereafter may become a party to
this Agreement pursuant to Section 11.8 (each a "Lender" and collectively,
"Lenders"), First Union National Bank, as Syndication Agent, and Bank of
America, N. A., as a Lender, as Issuing Lender, and as Administrative Agent.
While not a party hereto, Banc of America Securities LLC (the "Lead Arranger")
has acted as lead arranger and sole book manager of the credit facilities
provided herein. From time to time following the execution hereof, additional
Lenders may become parties hereto in the manner contemplated by Section 11.8.

                WHEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto covenant and agree as follows:

                                   ARTICLE 1.
                        DEFINITIONS AND ACCOUNTING TERMS

        1.1 Defined Terms. As used in this Agreement, the following terms shall
have the meanings set forth respectively after each:

                "Acquired EBITDA" means, for any fiscal period and for any
        Person or assets acquired by Borrower and its Subsidiaries following the
        Closing Date, the sum of (a) net income of that Person (or attributable
        to those assets) for that period, plus (b) any extraordinary loss
        reflected in such net income, minus (c) any extraordinary gain reflected
        in such net income, plus (d) interest expense of that Person (or
        attributable to those assets) for that period, plus (e) the aggregate
        amount of federal and state taxes on or measured by income of that
        Person (or related to such assets) for that period (whether or not
        payable during that period), plus (f) related depreciation, amortization
        and all other non-cash expenses for that period, plus (g) nonrecurring
        compensation paid to the owners of that Person or assets, in each case
        determined in accordance with GAAP, consistently applied

                "Acquisition" means any transaction, or any series of related
        transactions, by which Borrower and/or any of its Subsidiaries directly
        or indirectly (i) acquires any going business or all or substantially
        all of the assets of any firm, partnership, joint venture, limited
        liability company, corporation or division thereof, whether through
        purchase of assets, merger or otherwise, or (ii) acquires (in one
        transaction or as the most recent transaction in a series of
        transactions) control of at least a majority in ordinary voting power of
        the securities of a corporation which have ordinary voting power for the
        election of directors, or (iii) acquires control of greater than 50%
        ownership interest in any partnership, limited liability company or
        joint venture.

                "Acquisition Documents" means the acquisition agreement, merger
        agreement, purchase agreement or other material contracts and agreements
        governing each Permitted Acquisition.

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                "Adjusted EBITDA" means, for any period, EBITDA for that period
        after adjustment to (a) include, on a pro forma basis (but without
        duplication) the Acquired EBITDA associated with each Person or assets
        which are the subject of a Permitted Acquisition during the relevant
        period or after that period through the date of determination, but only
        to the extent that audited financial statements, or other financial
        statements reasonably acceptable to the Administrative Agent, are
        available for that Person or the relevant assets and for the relevant
        period, and (b) to exclude on a pro forma basis (but without
        duplication) that portion of EBITDA for such period which is
        attributable to any Disposition by Borrower or its Subsidiaries during
        the relevant period or after that period through the date of
        determination.

                "Administrative Agent" means Bank of America, when acting in its
        capacity as the Administrative Agent under any of the Credit Documents,
        or any successor Administrative Agent.

                "Administrative Agent's Office" means the Administrative Agent's
        address as set forth on the signature pages of this Agreement, or such
        other address as the Administrative Agent hereafter may designate by
        written notice to Borrower and the Lenders.

                "Advance" means any advance made or to be made by any Lender to
        Borrower as provided in Article 2, and includes each Base Rate Advance
        and each LIBOR Advance.

                "Affiliate" means, as to any Person, any other Person which
        directly or indirectly controls, or is under common control with, or is
        controlled by, such Person. As used in this definition, "control" (and
        its correlative meanings, "controlled by" and "under common control
        with") shall mean possession, directly or indirectly, of power to direct
        or cause the direction of management or policies (whether through
        ownership of securities or partnership or other ownership interests, by
        contract or otherwise), provided that, in any event, any Person that
        owns, directly or indirectly, 50% or more of the securities having
        ordinary voting power for the election of directors or other governing
        body of a corporation (other than securities having such power only by
        reason of the happening of a contingency), or 50% or more of the
        partnership or other ownership interests of any other Person (other than
        as a limited partner of such other Person), will be deemed to control
        such corporation or other Person.

                "Aggregate Commitments" means $100,000,000 or such lesser amount
        to which the Commitments of the Lenders hereunder may be reduced in
        accordance with Sections 2.6 or 2.7.

                "Aggregate Effective Amount" means, as of any date of
        determination and with respect to all Letters of Credit, the sum of (a)
        the aggregate effective face amounts of all outstanding Letters of
        Credit plus (b) the aggregate amounts paid by the Issuing Lender under
        Letters of Credit not then reimbursed to the Issuing Lender by Borrower
        pursuant to Section 2.4(d) and not then the subject of Advances made
        pursuant to Section 2.4(e).

                "Agreement" means this Credit Agreement, either as originally
        executed or as it may from time to time be further supplemented,
        modified, amended, restated or extended.

                "Assignment Agreement" means an Assignment Agreement
        substantially in the form of Exhibit A.

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                "Bank of America" means Bank of America, N.A., its successors
        and assigns.

                "Base Rate" means for any day a fluctuating rate per annum equal
        to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the
        rate of interest in effect for such day as publicly announced from time
        to time by Bank of America as its "prime rate." Such rate is a rate set
        by Bank of America based upon various factors including Bank of
        America's costs and desired return, general economic conditions and
        other factors, and is used as a reference point for pricing some loans,
        which may be priced at, above, or below such announced rate. Any change
        in such rate announced by Bank of America shall take effect at the
        opening of business on the day specified in the public announcement of
        such change.

                "Base Rate Loan" means a Loan that bears interest based on the
        Base Rate.

                "Base Rate Spread" means, during each Pricing Period, the rate
        set forth below opposite the Leverage Ratio in effect as of the last day
        of the Fiscal Quarter ending approximately two months prior to the first
        day of that Pricing Period (or, in the case of any Pricing Period
        commencing on the date of any Material Permitted Acquisition, the Pro
        Forma Leverage Ratio in effect on the date thereof):

<TABLE>
<CAPTION>
                      Leverage Ratio               Base Rate Spread
                      --------------               ----------------
                <S>                                <C>
                Less than or equal to 1.50:1.00      0.0 bps

                Greater than 1.50:1.00 but less      25.0 bps
                than or equal to 2.00:1.00

                Greater than 2.00:1.00 but less      50.0 bps
                than or equal to 2.50:1.00

                Greater than 2.50:1.00               75.0 bps
</TABLE>

                "Borrower" means Ducommun Incorporated, a Delaware corporation.

                "Business Day" means any Monday, Tuesday, Wednesday, Thursday or
        Friday on which the Administrative Agent is open for business at its
        address for notice designated as provided herein.

                "Capital Expenditure" means any expenditure (including any
        capitalized lease expenditure) that is considered a capital expenditure
        under GAAP, consistently applied, including, without limitation, any
        amount that is required to be treated as a capitalized asset pursuant to
        Financial Accounting Standards Board Statement No. 13.

                "Capital Lease Obligations" means all monetary obligations of a
        Person under any leasing or similar arrangement which, in accordance
        with GAAP, should be classified as a capital lease.

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                "Cash" means, when used in connection with any Person, all
        monetary and non-monetary items belonging to such Person that are
        treated as cash in accordance with GAAP, consistently applied.

                "Cash Equivalents" means, when used in connection with any
        Person, such Person's Investments in:

                (a) Government Securities due within one year after the date of
        the making of the Investment;

                (b) certificates of deposit issued by, Lender deposits in,
        bankers' acceptances of, and repurchase agreements covering Government
        Securities executed by, any Lender or other Lender doing business in and
        incorporated under the Laws of the United States of America or any state
        thereof and having on the date of such Investment combined capital,
        surplus and undivided profits of at least $500,000,000, in each case due
        within one year after the date of the Investment; and/or

                (c) readily marketable commercial paper of corporations doing
        business in and incorporated under the Laws of the United States of
        America or any state thereof given on the date of such Investment the
        highest credit rating by NCO/Moody's Commercial Paper Division of
        Moody's Investors Service, Inc. or Standard & Poor's Ratings Group, in
        each case due within six months after the date of the making of the
        Investment.

                "Certificate of a Responsible Official" means a certificate
        signed by a Responsible Official of the Person providing the
        certificate.

                "Closing Date" means the time and date upon which each of the
        conditions precedent specified in Section 8.1 are fulfilled.

                "Code" means the Internal Revenue Code of 1986, as amended.

                "Commitment" means, as to each Lender, the amount set forth in
        such Lender's Note, as such amount may be reduced from time to time
        pursuant to Sections 2.6 or 2.7.

                "Compliance Certificate" means a certificate in the form of
        Exhibit B, properly completed and signed by the Chief Financial Officer
        of Borrower.

                "Contingent Obligation" means, as to any Person, any (a) direct
        or indirect guarantee of Indebtedness of, or other obligation
        performable by, any other Person, including any endorsement (other than
        for collection or deposit in the ordinary course of business), co-making
        or sale with recourse of the obligations of any other Person or (b)
        assurance given to an obligee with respect to the performance of an
        obligation by, or the financial condition of, any other Person, whether
        direct, indirect or contingent, including any purchase or repurchase
        agreement covering such obligation or any collateral security therefor,
        any agreement to provide funds (by means of loans, capital contributions
        or otherwise) to such other Person, any agreement to support the
        solvency or level of any balance sheet item to such other Person, or any
        "keep-well", "take-or-pay", "through put" or other arrangement of
        whatever nature having the

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        effect of assuring or holding harmless any obligee against loss with
        respect to any obligation of such other Person. The amount of any
        Contingent Obligation shall be deemed to be an amount equal to the
        stated or determinable amount of the related primary obligation (unless
        the Contingent Obligation is limited by its terms to a lesser amount, in
        which case to the extent of such amount) or, if not stated or
        determinable, the maximum reasonably anticipated liability in respect
        thereof as determined by the Person in good faith.

                "Contractual Obligation" means, as to any Person, any provision
        of any outstanding security issued by that Person or of any material
        agreement, instrument or undertaking to which that Person is a party or
        by which it or any of its Property is bound.

                "Credit Documents" means, collectively, this Agreement, the
        Notes, the Guaranty, the Letters of Credit, each Swap Agreement entered
        into with any Lender hereunder with respect to Indebtedness in an amount
        which does not exceed the amount of the Obligations, and any other
        certificates, documents or agreements of any type or nature heretofore
        or hereafter executed or delivered by Borrower and/or any one or more of
        its Subsidiaries or Affiliates to the Administrative Agent and/or any
        Lender in any way relating to or in furtherance of this Agreement, in
        each case either as originally executed or as the same may from time to
        time be supplemented, modified, amended, restated or extended.

                "Creditors" means, collectively, the Administrative Agent, the
        Issuing Lender, the Swing Line Lender, the Lenders and the Lead
        Arranger.

                "Default" means any Event of Default and/or any event that, with
        the giving of notice or passage of time or both, would be an Event of
        Default.

                "Default Rate" means the interest rate prescribed in Section
        3.9.

                "Designated Deposit Account" means a deposit account to be
        maintained by Borrower at the Administrative Agent's Office, as from
        time to time designated by Borrower by written notification to
        Administrative Agent.

                "Designated Eurodollar Market" means, with respect to any LIBOR
        Loan, (a) the London Eurodollar Market, (b) if prime banks in the London
        Eurodollar Market are at the relevant time not accepting deposits of
        Dollars or if the Administrative Agent determines in good faith that the
        London Eurodollar Market does not represent at the relevant time the
        effective pricing to the Lenders for deposits of Dollars in the London
        Eurodollar Market, the Cayman Islands Eurodollar Market or (c) if prime
        banks in the Cayman Islands Eurodollar Market are at the relevant time
        not accepting deposits of Dollars or if the Administrative Agent
        determines in good faith that the Cayman Islands Eurodollar Market does
        not represent at the relevant time the effective pricing to the Lenders
        for deposits of Dollars in the Cayman Islands Eurodollar Market, such
        other Eurodollar Market as may from time to time be selected by the
        Administrative Agent with the approval of Borrower and the Required
        Lenders.

                "Disposition" means the sale, transfer or other disposition in
        any single transaction or series of related transactions of (i) any
        Subsidiary of Borrower, (ii) all or substantially all of the assets of
        any Subsidiary of Borrower, (iii) all or substantially all of the assets
        of a division or

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        comparable business segment of Borrower, or (iv) any other asset, or
        group of related assets, of Borrower or any of its Subsidiaries that has
        or have at the date of the Disposition a book value or fair market value
        of $1,000,000 or more, other than inventory sold, returned to vendors or
        otherwise disposed of in the ordinary course of business, and other than
        any such sale, transfer or other disposition for which the proceeds
        thereof are reinvested in Borrower or any Subsidiary or the replacement
        of assets of Borrower or any Subsidiary.

                "Distribution" means, with respect to shares of capital stock or
        any warrant or option to purchase an equity security or other equity
        security issued by a Person, (i) the retirement, redemption, purchase,
        or other acquisition for Cash or for Property by such Person of any such
        security, (ii) the declaration or (without duplication) payment by such
        Person of any dividend in Cash or in Property (excluding dividends
        payable solely in shares of capital stock of Borrower) on or with
        respect to any such security, (iii) any Investment by such Person in the
        holder of 5% or more of any such security if a purpose of such
        Investment is to avoid characterization of the transaction as a
        Distribution, and (iv) any other payment in Cash or Property by such
        Person constituting a distribution under applicable Laws with respect to
        such security.

                "Dollars" or "$" means United States dollars.

                "EBITDA" means, for any fiscal period, the sum of (a) Net Income
        for that period, plus (b) any extraordinary loss reflected in such Net
        Income, minus (c) any extraordinary gain reflected in such Net Income,
        plus (d) Interest Expense for that period, plus (e) the aggregate amount
        of federal and state taxes on or measured by income of Borrower and its
        Subsidiaries for that period (whether or not payable during that
        period), plus (f) depreciation, amortization and all other non-cash
        expenses for that period, in each case determined in accordance with
        GAAP, consistently applied.

                "Eligible Assignee" means, (a) another Lender, (b) with respect
        to any Lender, any Affiliate of that Lender, (c) any commercial bank
        having a combined capital and surplus of $500,000,000 or more, (d) any
        (i) savings bank, savings and loan association or similar financial
        institution or (ii) insurance company engaged in the business of writing
        insurance which, in either case (A) has a net worth of $500,000,000 or
        more, (B) is engaged in the business of lending money and extending
        credit under credit facilities substantially similar to those extended
        under this Agreement and (C) is operationally and procedurally able to
        meet the obligations of a Lender hereunder to the same degree as a
        commercial bank and (e) any other financial institution (including a
        mutual fund or other fund) having total assets of $250,000,000 or more
        which meets the requirements set forth in subclauses (B) and (C) of
        clause (d) above; provided that each Eligible Assignee must either (a)
        be organized under the Laws of the United States of America, any State
        thereof or the District of Columbia or (b) be organized under the Laws
        of the Cayman Islands or any country which is a member of the
        Organization for Economic Cooperation and Development, or a political
        subdivision of such a country, and (i) act hereunder through a branch,
        agency or funding office located in the United States of America and
        (ii) be exempt from withholding of tax on interest and deliver the
        documents related thereto pursuant to Section 11.20.

                "ERISA" means the Employee Retirement Income Security Act of
        1974, and any regulations issued pursuant thereto, as amended or
        replaced and as in effect from time to time.

                                      -6-
<PAGE>   12

                "ERISA Affiliate" means, with respect to any Person, any other
        Person (or any trade or business, whether or not incorporated) that is
        under common control with that Person within the meaning of Section 414
        of the Code.

                "Eurodollar Rate" means for any Interest Period with respect to
        any LIBOR Loan:

                        (a) the rate per annum equal to the rate determined by
                the Administrative Agent to be the offered rate that appears on
                the page of the Telerate screen (or any successor thereto) that
                displays an average British Bankers Association Interest
                Settlement Rate for deposits in Dollars (for delivery on the
                first day of such Interest Period) with a term equivalent to
                such Interest Period, determined as of approximately 11:00 a.m.
                (London time) two Business Days prior to the first day of such
                Interest Period, or

                        (b) if the rate referenced in the preceding subsection
                (a) does not appear on such page or service or such page or
                service shall cease to be available, the rate per annum equal to
                the rate determined by the Administrative Agent to be the
                offered rate on such other page or other service that displays
                an average British Bankers Association Interest Settlement Rate
                for deposits in Dollars (for delivery on the first day of such
                Interest Period) with a term equivalent to such Interest Period,
                determined as of approximately 11:00 a.m. (London time) two
                Business Days prior to the first day of such Interest Period, or

                        (c) if the rates referenced in the preceding subsections
                (a) and (b) are not available, the rate per annum determined by
                the Administrative Agent as the rate of interest (rounded upward
                to the next 1/100th of 1%) at which deposits in Dollars for
                delivery on the first day of such Interest Period in same day
                funds in the approximate amount of the LIBOR Loan being made,
                continued or converted by Bank of America and with a term
                equivalent to such Interest Period would be offered by Bank of
                America's London Branch to major banks in the offshore Dollar
                market at their request at approximately 11:00 a.m. (London
                time) two Business Days prior to the first day of such Interest
                Period.

                "Event of Default" shall have the meaning provided in Section
        9.1.

                "Existing Credit Agreement" means the Fifth Amended and Restated
        Loan Agreement dated as of June 23, 1997 between Borrower and Bank of
        America, as amended.

                "Federal Funds Rate" means, for any day, the rate per annum
        (rounded upwards to the nearest 1/100th of 1%) equal to the weighted
        average of the rates on overnight Federal funds transactions with
        members of the Federal Reserve System arranged by Federal funds brokers
        on such day, as published by the Federal Reserve Bank on the Business
        Day next succeeding such day; provided that (a) if such day is not a
        Business Day, the Federal Funds Rate for such day shall be such rate on
        such transactions on the next preceding Business Day as so published on
        the next succeeding Business Day, the Federal Funds Rate for such day
        shall be the average rate charged to Bank of America on such day on such
        transactions as determined by the Administrative Agent.

                                      -7-
<PAGE>   13

                "Fiscal Quarter" means the fiscal quarter of Borrower consisting
        of an approximately 13 week period ending on or about each March 31,
        June 30, September 30 and December 31.

                "Fiscal Year" means the fiscal year of Borrower consisting of a
        twelve-month period ending on each December 31.

                "GAAP" means accounting principles, as in effect on the Closing
        Date, as (a) set forth as generally accepted in the currently effective
        Opinions of the Accounting Principles Board of the American Institute of
        Certified Public Accountants, (b) set forth as generally accepted in the
        currently effective Statements of the Financial Accounting Standards
        Board or (c) that are approved by such other entity as may be approved
        by a significant segment of the accounting profession in the United
        States of America. The term "consistently applied," as used in
        connection therewith, means that the accounting principles applied are
        consistent in all material respects with those applied at prior dates or
        for prior periods.

                "Government Securities" means readily marketable direct
        obligations of the United States of America or obligations fully
        guarantied by the United States of America.

                "Governmental Agency" means (a) any international, foreign,
        federal, state, county or municipal government, or political subdivision
        thereof, (b) any governmental or quasi-governmental agency, authority,
        board, bureau, commission, department, instrumentality or public body,
        or (c) any court, administrative tribunal or public utility.

                "Guaranty" means the Continuing Guaranty dated as of the Closing
        Date executed and delivered by the Subsidiaries of Borrower to the
        Administrative Agent for the benefit of the Creditors, either as
        originally executed or as it may from time to time be supplemented,
        modified, amended, restated or extended.

                "Hazardous Materials" means substances regulated as hazardous
        substances pursuant to (a) the Comprehensive Environmental Response,
        Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et seq.,
        or as hazardous or toxic wastes or pollutants pursuant to the Hazardous
        Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the
        Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq.,
        or (b) any other Law regulating hazardous substances or hazardous or
        toxic wastes or pollutants or regulating the generation, use, storage,
        treatment, handling or transportation of any such substances, in each
        case as such Laws are amended from time to time.

                "Hazardous Materials Laws" means all federal, state or local
        laws, ordinances, rules or regulations governing the disposal, transfer,
        generation, storage or treatment of Hazardous Materials applicable to
        any real Property now or hereafter owned, leased or operated by Borrower
        or any of its Subsidiaries.

                "Indebtedness" means, as to any Person, (a) all indebtedness of
        such Person for borrowed money, (b) all Capital Lease Obligations of
        that Person, (c) any obligation of such Person that is evidenced by a
        promissory note or other instrument representing an extension of credit
        to such Person, whether or not for borrowed money, (d) any obligation of
        such Person for the deferred purchase price of Property or services
        (other than trade or other accounts payable

                                      -8-
<PAGE>   14

        in the ordinary course of business in accordance with customary industry
        terms), (e) any obligation of such Person that is secured by a Lien on
        assets of such Person, whether or not such obligation is non-recourse to
        the credit of such Person, but only to the extent of the fair market
        value of the assets so subject to the Lien, (f) obligations of such
        Person arising under acceptance facilities or under facilities for the
        discount of accounts receivable of such Person, (g) any direct or
        contingent obligations of such Person under Letters of Credit issued for
        the account of such Person and (h) the net amount of any obligations of
        such Person under a swap agreement or similar interest rate protection
        arrangement.

                "Intangible Assets" means assets that are considered intangible
        assets under GAAP, consistently applied, including, without limitation,
        goodwill, organization expense, patents, trademarks, trade names,
        copyrights and other intangible Property.

                "Interest Coverage Ratio" means, as of each date of
        determination, the ratio of (a) EBITDA for the four Fiscal Quarters
        ending on that date, to (b) Interest Expense for the same period.

                "Interest Differential" means, with respect to any prepayment of
        a LIBOR Loan on a day other than the last day of the applicable Interest
        Period and with respect to any failure to borrow a LIBOR Loan on the
        date or in the amount specified in any Request for Loan, (a) the per
        annum interest rate payable (or, with respect to a failure to borrow,
        the interest rate which would have been payable) pursuant to Section
        3.1(c) with respect to the LIBOR Loan minus (b) the LIBOR on, or as near
        as practicable to, the date of the prepayment or failure to borrow for a
        LIBOR Loan with an Interest Period commencing on such date and ending on
        the last day of the Interest Period of the LIBOR Loan so prepaid or
        which would have been borrowed on such date.

                "Interest Expense" means, for any fiscal period and for any
        Person, the consolidated interest expense of that Person and its
        Subsidiaries for that period (including all payments with respect to
        Capital Leases Obligations which, in accordance with GAAP should be
        treated as or is imputed to be interest) minus the consolidated interest
        income of that Person and its Subsidiaries for that period.

                "Interest Period" means, as to each LIBOR Loan, the period
        commencing on the date specified by Borrower pursuant to Section 2.1(b)
        and ending 7 days or one, two, three or six months thereafter, as
        specified by Borrower in the applicable Request for Loan; provided that:

                (a) The first day of any Interest Period shall be a LIBOR
                Business Day;

                (b) Any Interest Period that would otherwise end on a day that
                is not a LIBOR Business Day shall be extended to the next
                succeeding LIBOR Business Day unless such LIBOR Business Day
                falls in another calendar month, in which case such Interest
                Period shall end on the next preceding LIBOR Business Day;

                (c) Borrower may not specify an Interest Period that extends
                beyond any Reduction Date unless the sum of (i) the aggregate
                principal amount of the LIBOR Loans having a Interest Period
                ending after such Reduction Date plus (ii) the aggregate

                                      -9-
<PAGE>   15

                maximum amount available for drawing under Letters of Credit for
                which the expiry date is after such Reduction Date, does not
                exceed the Aggregate Commitments (after giving effect to any
                reduction thereto scheduled to be made on such Reduction Date
                pursuant to Section 2.7); and

                (d) No Interest Period shall extend beyond the Maturity Date.

                "Investment" means, when used in connection with any Person, any
        investment by or of that Person, whether by means of purchase or other
        acquisition of stock or other securities or by means of loan, advance,
        capital contribution, guaranty or other debt or equity participation or
        interest in any other Person, or otherwise, and includes, without
        limitation, any partnership and joint venture interests of such Person.

                "Issuing Lender" means Bank of America.

                "Laws" means, collectively, all international, foreign, federal,
        state and local statutes, treaties, rules, regulations, ordinances,
        codes and administrative or judicial precedents.

                "Lead Arranger" means Banc of America Securities LLC.

                "Letter of Credit" means commercial or standby letter of credit
        issued by Issuing Lender pursuant to Section 2.4, in the standard form
        of Issuing Lender for such letter of credit, either as originally issued
        or as the same may from time to time be supplemented, modified, amended,
        renewed or extended.

                "Leverage Ratio" means, as of each date of determination, the
        ratio of (a) Total Funded Debt as of such date, to (b) Adjusted EBITDA
        for the twelve month period ending on that date.

                "LIBOR" means, with respect to any LIBOR Loan, an interest rate
        per annum (rounded upward, if necessary, to the nearest 1/100 of one
        percent) determined pursuant to the following formula:

                LIBOR =         Eurodollar Rate
                           --------------------------
                           1.00 - Reserve  Percentage

                "LIBOR Advance" means an Advance made hereunder and specified to
        be a LIBOR Advance in accordance with Article 2.

                "LIBOR Business Day" means any Business Day on which dealings in
        Dollar deposits are conducted by and among banks in the Designated
        Eurodollar Market.

                "LIBOR Loan" means a Loan made hereunder and specified to be a
        LIBOR Loan in accordance with Article 2.

                "LIBOR Office" means, as to each Lender, its office or branch so
        designated by written notice the Administrative Agent as its LIBOR
        Office. If no LIBOR Office is designated by a Lender, its LIBOR Office
        shall be its office at its address for purposes of notices hereunder.

                                      -10-
<PAGE>   16

                "LIBOR Spread" means, during each Pricing Period, the rate set
        forth below opposite the Leverage Ratio in effect as of the last day of
        the Fiscal Quarter ending approximately two months prior to the first
        day of that Pricing Period (or, in the case of any Pricing Period
        commencing on the date of any Material Permitted Acquisition, the Pro
        Forma Leverage Ratio in effect on the date thereof):

<TABLE>
<CAPTION>
               Leverage Ratio              LIBOR Spread
               --------------              ------------
        <S>                                <C>
        Less than or equal to 1.50:1.00      125.0 bps

        Greater than 1.50:1.00 but less      150.0 bps
        than or equal to 2.00:1.00

        Greater than 2.00:1.00 but less      175.0 bps
        than or equal to 2.50:1.00

        Greater than 2.50:1.00               200.0 bps
</TABLE>

                "Lien" means any mortgage, deed of trust, pledge, hypothecation,
        security interest, encumbrance, lien or charge of any kind, whether
        voluntarily incurred or arising by operation of Law or otherwise,
        affecting any Property, including any agreement to give any of the
        foregoing, any conditional sale or other title retention agreement, any
        lease in the nature thereof, and/or the filing of or agreement to give
        any financing statement under the Uniform Commercial Code or comparable
        Law of any jurisdiction.

                "Loans" means the aggregate of the Advances made at any one time
        by the Lenders pursuant to Article 2.

                "Material Adverse Effect" means any set of circumstances or
        events which (a) has or may reasonably be expected to have any material
        adverse effect whatsoever upon the validity or enforceability of any
        Credit Document, (b) is or may reasonably be expected to be material and
        adverse to the condition (financial or otherwise), business operations
        or prospects of Borrower and its Subsidiaries, taken as a whole, or (c)
        materially impairs or may reasonably be expected to materially impair
        the ability of Borrower and its Subsidiaries, taken as a whole, to
        perform the Obligations.

                "Material Permitted Acquisition" means each Permitted
        Acquisition involving a consideration to be paid by Borrower and/or its
        Subsidiaries which is in excess of $5,000,000 (including any
        consideration paid through the issuance of equity securities in
        Borrower, earn-outs, assumed Indebtedness and other contractual
        arrangements which constitute consideration).

                "Maturity Date" means September 30, 2005.

                "Multiemployer Plan" means any employee benefit plan of the type
        described in Section 4001(a)(3) of ERISA to which Borrower or any of its
        ERISA Affiliates contribute or are obligated to contribute.

                                      -11-
<PAGE>   17

                "Negative Pledge" means a Contractual Obligation that contains a
        covenant binding on Borrower or any of its Subsidiaries that prohibits
        Liens on any of its or their Property, other than any such covenant
        contained in a Contractual Obligation granting a Lien permitted
        hereunder which affects only the Property that is the subject of such
        permitted Lien.

                "Net Cash Proceeds" means:

                (a) with respect to any Disposition consisting of the sale of
        assets of Borrower or any of its Subsidiaries (including by way of the
        sale of the equity securities of any such Subsidiaries), the aggregate
        cash proceeds (including cash proceeds received by way of deferred
        payment of principal pursuant to a note, installment payments or
        otherwise, but only as and when received) received by Borrower and its
        Subsidiaries pursuant to such Disposition, net of (i) the direct costs
        relating to such Disposition (including sales commission and any legal,
        accounting and investment banking fees), (ii) taxes paid or reasonably
        estimated by Borrower to be payable as a result thereof (after taking
        into account any available tax credits or deductions and any tax sharing
        arrangements) and (iii) any amounts required to be applied to the
        repayment of any Indebtedness secured by a Lien on the assets subject to
        such Disposition (other than the Obligations); and

                (b) with respect to any Disposition consisting of the issuance
        by Borrower or its Subsidiaries of Indebtedness, the aggregate cash
        proceeds received pursuant to such issuance net of the direct costs
        relating thereto (net of up-front fees and placement fees and any legal,
        accounting and investment banking fees).

                "Net Income" means, with respect to any fiscal period, the
        consolidated net income of Borrower and its Subsidiaries for that
        period, determined in accordance with GAAP, consistently applied.

                "Net Worth" means, as of each date of determination the
        consolidated net worth of Borrower and its Subsidiaries for that period,
        determined in accordance with GAAP, consistently applied.

                "Non-Use Fee Rate" means, during each Pricing Period, the rate
        set forth below opposite the Leverage Ratio in effect as of the last day
        of the Fiscal Quarter ending approximately two months prior to the first
        day of that Pricing Period (or, in the case of any Pricing Period
        commencing on the date of any Material Permitted Acquisition, the Pro
        Forma Leverage Ratio in effect on the date thereof):

                                      -12-
<PAGE>   18

<TABLE>
<CAPTION>
              Leverage Ratio                Non-Use Rate
              --------------                ------------
        <S>                                 <C>
        Less than or equal to 1.50:1.00      25.0 bps

        Greater than 1.50:1.00 but less      30.0 bps
        than or equal to 2.00:1.00

        Greater than 2.00:1.00 but less      35.0 bps
        than or equal to 2.50:1.00

        Greater than 2.50:1.00               40.0 bps
</TABLE>

                "Note" means any of the promissory notes made by Borrower to a
        Lender evidencing such Lender's Commitment, substantially in the form of
        Exhibit C, either as originally executed or as the same may from time to
        time be supplemented, modified, amended, renewed, extended or
        supplanted.

                "Obligations" means all present and/or future obligations of
        every kind or nature of Borrower or any Party at any time and/or from
        time to time owed to the Administrative Agent or any Lender under any
        one or more of the Credit Documents, whether due or to become due,
        matured or unmatured, liquidated or unliquidated, or contingent or
        noncontingent, including obligations of performance as well as
        obligations of payment, and including interest that accrues after the
        commencement of any Bankruptcy or insolvency proceeding by or against
        Borrower or any Subsidiary or Affiliate of Borrower.

                "Obligor" means, collectively, Borrower and each Guarantor.

                "Outstanding Obligations" means, as of each date of
        determination, and giving effect to the making of any such credit
        accommodations requested on that date, the sum of (i) the aggregate
        principal amount of the outstanding Loans, plus (ii) the Swing Line
        Outstandings, plus (iii) the Aggregate Effective Amount of all Letters
        of Credit.

                "Party" means any Person (including Borrower and/or any
        Subsidiaries or Affiliates of Borrower), other than the Administrative
        Agent and any Lender, which now or hereafter is a party to any of the
        Credit Documents.

                "Permitted Acquisition" means each Acquisition as to which each
        of the following conditions precedent have been met:

                        (a) the Person or assets acquired shall be in the same
                or a similar line of business as Borrower and its Subsidiaries;

                        (b) The Acquisition does not violate Section 6.4;

                                      -13-
<PAGE>   19

                        (c) Borrower shall have delivered to the Administrative
                Agent and the Lenders, not later than 30 days prior to the
                consummation of the Acquisition, written notice of such
                Acquisition;

                        (d) Giving effect to the making of the Acquisition, the
                Pro Forma Leverage Ratio shall not exceed the ratio permitted by
                Section 6.12 as of the next succeeding Fiscal Quarter minus
                0.25:1.00 (demonstrated in a certificate of Borrower delivered
                to the Administrative Agent in form and substance acceptable
                thereto);

                        (e) As to each Acquisition, the Borrower shall have
                delivered a Certificate to the effect that, giving effect
                thereto, no Default or Event of Default exists;

                        (f) As to each Acquisition, giving effect to the payment
                of the consideration therefor, the amount of the Loans available
                to Borrower hereunder shall be not less than the greater of (x)
                6% of the combined pro forma revenues of Borrower and the
                acquired Person or assets for the then most recent 12 month
                period, or (y) $10,000,000;

                        (g) For each Material Permitted Acquisition, not less
                than 15 days prior to the consummation of such Acquisition,
                Borrower shall have delivered to the Administrative Agent and
                the Lenders pro forma balance sheets and projections for the
                forthcoming fiscal year end and a pro forma Compliance
                Certificate demonstrating that, to the reasonable satisfaction
                of the Administrative Agent, giving effect to such Acquisition,
                Borrower shall remain in pro forma compliance with the covenants
                set forth in Section 6.12, 6.13, 6.14 and 6.15 as of the last
                day of each of the four immediately succeeding Fiscal Quarters;

                        (h) As to each Material Permitted Acquisition, Target
                EBITDA of the Person or assets to be acquired for the then most
                recent twelve month period shall be positive in amount
                (demonstrated in a certificate of Borrower delivered to the
                Administrative Agent in form and substance acceptable thereto);
                and

                        (i) As to each Acquisition for a consideration in excess
                of $30,000,000 (other than consideration in the form of equity
                securities of Borrower, earn-outs, assumed Indebtedness and
                other contractual arrangements which constitute consideration),
                the Required Lenders have approved such Acquisition in their
                reasonable business discretion as lenders in credit facilities
                of the type evidenced by this Agreement (which approval or
                nonapproval shall be given within fifteen (15) days after
                Borrower has submitted to the Administrative Agent the
                information set forth above).

                "Permitted Encumbrances" means:

                        (a) inchoate Liens incident to construction or
                maintenance of real property, or Liens incident to construction
                or maintenance of real property, now or hereafter filed of
                record for which adequate accounting reserves have been set
                aside and which are being contested in good faith by appropriate
                proceedings and have not

                                      -14-
<PAGE>   20

                proceeded to judgment (or, if a judgment has been rendered are
                the subject of an appropriate bond), provided that, by reason of
                nonpayment of the obligations secured by such Liens, no such
                real property is subject to a material risk of loss or
                forfeiture;

                        (b) Liens for taxes and assessments on Property which
                are not yet past due, or Liens for taxes and assessments on
                Property for which adequate reserves have been set aside and are
                being contested in good faith by appropriate proceedings and
                have not proceeded to judgment, (or, if a judgment has been
                rendered are the subject of an appropriate bond) provided that,
                by reason of nonpayment of the obligations secured by such
                Liens, no such Property is subject to a material risk of loss or
                forfeiture;

                        (c) minor defects and irregularities in title to any
                real property which in the aggregate do not materially impair
                the fair market value or use of the real property for the
                purposes for which it is or may reasonably be expected to be
                held;

                        (d) easements, exceptions, reservations, or other
                agreements granted or entered into after the date hereof for the
                purpose of pipelines, conduits, cables, wire communication
                lines, power lines and substations, streets, trails, walkways,
                drainage, irrigation, water, and sewerage purposes, dikes,
                canals, ditches, the removal of oil, gas, coal, or other
                minerals, and other like purposes affecting real property which
                in the aggregate do not materially burden or impair the fair
                market value or use of such real property for the purposes for
                which it is or may reasonably be expected to be held;

                        (e) rights reserved to or vested in any Governmental
                Agency by Law to control or regulate, or obligations or duties
                under Law to any Governmental Agency with respect to, the use of
                any real property;

                        (f) rights reserved to or vested in any Governmental
                Agency by Law to control or regulate, or obligations or duties
                under Law to any Governmental Agency with respect to, any right,
                power, franchise, grant, license, or permit;

                        (g) present or future zoning laws and ordinances or
                other laws and ordinances restricting the occupancy, use, or
                enjoyment of real property;

                        (h) statutory Liens, other than those described in
                clauses (a) or (b) above, arising in the ordinary course of
                business with respect to obligations which are not delinquent or
                are being contested in good faith by appropriate proceedings,
                provided that, if delinquent, adequate reserves have been set
                aside with respect thereto and, by reason of nonpayment, no
                Property is subject to a material risk of loss or forfeiture;

                        (i) Liens consisting of pledges or deposits made in
                connection with obligations under workers' compensation laws,
                unemployment insurance or similar legislation, including Liens
                of judgments thereunder which are not currently dischargeable;

                                      -15-
<PAGE>   21

                        (j) Liens consisting of pledges or deposits of Property
                to secure performance in connection with operating leases made
                in the ordinary course of business to which the Borrower is a
                party as lessee, provided the aggregate value of all such
                pledges and deposits in connection with any such lease does not
                at any time exceed 10% of the annual fixed rentals payable under
                such lease;

                        (k) Liens consisting of deposits of Property to secure
                statutory obligations of the Borrower in the ordinary course of
                its business;

                        (l) Liens consisting of deposits of Property to secure
                (or in lieu of) surety, appeal or customs bonds in proceedings
                to which the Borrower is a party in the ordinary course of its
                business not in excess of $5,000,000; and

                        (m) Liens created by or resulting from any litigation or
                legal proceeding involving the Borrower in the ordinary course
                of its business which is currently being contested in good faith
                by appropriate proceedings, provided that adequate reserves have
                been set aside with respect thereto or a bond posted as provided
                by Law, and such Liens are discharged or stayed within 60 days
                of creation or such Liens are being contested in good faith by
                appropriate proceedings and no Property is subject to a material
                risk of loss or forfeiture.

                "Permitted Rights of Others" means a Right of Others consisting
        of (a) an interest (other than a legal or equitable co-ownership
        interest, an option or right to acquire a legal or equitable
        co-ownership interest and any interest of a ground lessor under a ground
        lease) that does not materially impair the value or use of property for
        the purposes for which it is or may reasonably be expected to be held,
        (b) an option or right to acquire a Lien that would be a Permitted
        Encumbrance, and (c) the reversionary interest of a landlord under a
        lease of Property.

                "Person" means any entity, whether an individual, trustee,
        corporation, general partnership, limited partnership, joint stock
        company, limited liability company, trust, unincorporated organization,
        Lender, business association, firm, joint venture, Governmental Agency,
        or otherwise.

                "Plan" means any employee benefit plan subject to ERISA and
        maintained by Borrower and/or any Subsidiary of Borrower or to which
        Borrower and/or any Subsidiary of Borrower is required to contribute on
        behalf of its employees.

                "Pricing Period" means, (a) the period beginning on the Closing
        Date and ending on November 30, 2000, and (b) each subsequent period of
        three months that commences on the date that is two calendar months
        after the last day of each Fiscal Quarter, provided in each case that
        the current Pricing Period (and a new shortened Pricing Period) shall
        commence on the date upon which Borrower consummates any Material
        Permitted Acquisition.

                "Pro Forma Leverage Ratio" means, as to each Material Permitted
        Acquisition, the effective Leverage Ratio as of the date thereof, after
        adjustment of the Leverage Ratio as of the then most recent Fiscal
        Quarter for which a Compliance Certificate has been delivered to reflect

                                      -16-
<PAGE>   22

        (a) the additional Indebtedness incurred or assumed by Borrower and its
        Subsidiaries in connection with the Material Permitted Acquisition (net
        of any equity securities of Borrower issued substantially concurrently
        therewith), and (b) without duplication, Acquired EBITDA for the Person
        or assets so acquired for the most recent twelve month period for which
        operating results of such Person or assets are then available.

                "Pro Rata Share" of any amount (the "Determination Amount")
        means, with respect to any Lender, the product of (a) a fraction the
        numerator of which is the amount of such Lender's Commitment (or if such
        Commitment shall have expired or been terminated, the amount of such
        Lender's Advances) and the denominator of which is the Aggregate
        Commitments or Advances, as the case may be, multiplied by (b) the
        Determination Amount.

                "Property" means any interest in any kind of property or asset,
        whether real, personal or mixed, or tangible or intangible.

                "Quarterly Payment Date" means each March 31, June 30, September
        30 and December 31 to occur following the date of this Agreement.

                "Reduction Amount" means the amount set forth in the matrix
        below opposite that Reduction Date in the column headed "Reduction
        Amount" or such lesser amount to which that Reduction Amount may be
        reduced in accordance with the second sentence of Section 2.7:

<TABLE>
<CAPTION>
                Reduction Dates         Reduction Amount
                ---------------         ----------------
                <S>                     <C>
                  09/30/02               $  2,500,000
                  12/31/02               $  2,500,000
                  03/31/03               $  2,500,000
                  06/30/03               $  2,500,000
                  09/30/03               $  3,750,000
                  12/31/03               $  3,750,000
                  03/31/04               $  3,750,000
                  06/30/04               $  3,750,000
                  09/30/04               $  3,750,000
                  12/31/04               $  3,750,000
                  03/31/05               $  3,750,000
                  06/30/05               $  3,750,000
                  Maturity Date          $ 60,000,000
</TABLE>

                "Reduction Date" means September 30, 2002, and the last day of
        each succeeding December, March, June and September through the Maturity
        Date.

                "Regulation D" means Regulation D, as at any time amended, of
        the Board of Governors of the Federal Reserve System, or any other
        regulation in substance substituted therefor.

                                      -17-
<PAGE>   23

                "Request for Loan" means a written request for a Revolving Loan
        substantially in the form of Exhibit D, signed by a Responsible Official
        of Borrower and properly completed to provide all information required
        to be included therein.

                "Request for Letter of Credit" means a written request for the
        issuance of a Letter of Credit substantially in the form of Exhibit E,
        signed by a Responsible Official of Borrower and properly completed to
        provide all information required to be included therein.

                "Request for Redesignation" means a written request for a
        redesignation of loans substantially in the form of Exhibit E, signed by
        a Responsible Official of Borrower and properly completed to provide all
        information required to be included therein.

                "Required Lenders" means, as of each date of determination (a)
        if the Commitments are then in effect, Lenders having Pro Rata Shares
        constituting 66 2/3% of the Aggregate Commitments, and (b) if the
        Commitments have then been terminated and there are then any Obligations
        outstanding, Lenders holding 66 2/3% or more of the Outstanding
        Obligations.

                "Reserve Percentage" means, with respect to any LIBOR Loan, the
        maximum reserve percentage (expressed as a decimal, rounded upward, if
        necessary, to the nearest 1/100th of 1%) in effect on the date the LIBOR
        Base Rate for that LIBOR Loan is determined (whether or not applicable
        to any Lender) under regulations issued from time to time by the Federal
        Reserve Board for determining the maximum reserve requirement (including
        any emergency, supplemental or other marginal reserve requirement) with
        respect to eurocurrency funding (currently referred to as "eurocurrency
        liabilities") having a term comparable to the Interest Period for such
        LIBOR Loan. The determination by the Administrative Agent of any
        applicable Reserve Percentage shall be conclusive in the absence of
        manifest error.

                "Responsible Official" means (a) when used with reference to a
        Person other than an individual, any officer of such Person, general
        partner of such Person, officer of a corporate general partner of such
        Person, or corporate officer of a corporate general partner of a
        partnership that is a general partner of such Person, or any other
        responsible official thereof duly acting on behalf thereof, and (b) when
        used with reference to a Person who is an individual, such Person. Any
        document or certificate hereunder that is signed or executed by a
        Responsible Official of another Person shall be conclusively presumed to
        have been authorized by all necessary corporate, partnership and/or
        other action on the part of such other Person.

                "Right of Others" means, as to any Property in which a Person
        has an interest, any legal or equitable right, title or other interest
        (other than a Lien) held by any other Person in that Property, and any
        option or right held by any other Person to acquire any such right,
        title or other interest in that Property, including any option or right
        to acquire a Lien.

                "SPC" means, as to each Lender, one or more special purpose
        funding vehicles maintained or established by that Lender.

                "Special LIBOR Circumstance" means the application or adoption
        after the Closing Date of any Law or interpretation, or any change after
        the Closing Date therein or thereof, or any change after the Closing
        Date in the interpretation or administration thereof by any

                                      -18-
<PAGE>   24

        Governmental Agency, central bank or comparable authority charged with
        the interpretation or administration thereof, or compliance by any
        Lender or its LIBOR Office with any request or directive (whether or not
        having the force of Law) of any such Governmental Agency, central bank
        or comparable authority issued after the Closing Date, or the existence
        or occurrence after the Closing Date of circumstances affecting the
        Designated Eurodollar Market generally that are beyond the reasonable
        control of the Lenders.

                "Standby Letter of Credit" means any Letter of Credit, other
        than a Letter of Credit that is a commercial Letter of Credit, issued by
        Issuing Lender pursuant to Section 2.4, in the standard form for standby
        letters of credit of Issuing Lender, either as originally issued or as
        the same may from time to time be supplemented, modified, amended,
        renewed or extended. The determination by the Administrative Agent of
        which Letters of Credit constitute "Standby Letters of Credit" shall be
        determinative.

                "Subordinated Obligations" means Indebtedness of Borrower which
        is fully subordinated to the Obligations pursuant to written provisions
        approved in writing by the Required Lenders.

                "Subsidiary" means, as of any date of determination thereof and
        with respect to any Person, any corporation, partnership, limited
        liability company or joint venture, whether now existing or hereafter
        organized or acquired: (a) in the case of a corporation, of which a
        majority of the securities having ordinary voting power for the election
        of directors or other governing body (other than securities having such
        power only by reason of the happening of a contingency) are at the time
        owned by such Person and/or one or more Subsidiaries of such Person, or
        (b) in the case of a partnership or joint venture, of which such Person
        or a Subsidiary of such Person is a general partner or joint venturer or
        of which a majority of the partnership or other ownership interests are
        at the time owned by such Person and/or one or more of its Subsidiaries.

                "Swap Agreement" means a written agreement between Borrower and
        one or more financial institutions providing for "swap", "cap", "collar"
        or other interest rate protection with respect to any Indebtedness.

                "Swing Line" means the revolving line of credit established by
        the Swing Line Lender in favor of Borrower pursuant to Section 2.5.

                "Swing Line Documents" means the $5,000,000 promissory note
        dated as of the Closing Date (as at any time amended) and any other
        documents executed by Borrower in favor of the Swing Line Lender in
        connection with the Swing Line.

                "Swing Line Lender" means Bank of America.

                "Swing Line Loans" means loans made by the Swing Line Lender to
        Borrower pursuant to Section 2.5.

                "Swing Line Outstandings" means, as of any date of
        determination, the aggregate principal Indebtedness of Borrower on all
        Swing Line Loans then outstanding.

                                      -19-
<PAGE>   25

                "Target EBITDA" means, with respect to each Material Permitted
        Acquisition, the sum of (a) net income of the Person or assets which are
        the subject of such Permitted Acquisition for the most recent twelve
        month period prior to the consummation thereof, plus (b) any
        extraordinary loss reflected in such net income, minus (c) any
        extraordinary gain reflected in such net income, plus (d) Interest
        Expense of such Person or fairly attributable to such assets for that
        period, plus (e) the aggregate amount of federal and state taxes on or
        measured by the income of such Person or fairly attributable to such
        assets for that period (whether or not payable during that period), plus
        (f) all related depreciation, amortization and all other non-cash
        expenses for that period, plus (g) nonrecurring compensation paid to the
        owners of such Person or assets, in each case determined in accordance
        with GAAP, consistently applied.

                "to the best knowledge of" means, when modifying a
        representation, warranty or other statement of any Person, that the fact
        or situation described therein is known by the Person (or, in the case
        of a Person other than a natural Person, known by a Responsible Official
        of that Person) making the representation, warranty or other statement,
        or with the exercise of reasonable due diligence under the circumstances
        (in accordance with the standard of what a reasonable Person in similar
        circumstances would have done and consistent with Borrower's normal
        business practices) should have been known by the Person (or, in the
        case of a Person other than a natural Person, should have been known by
        a Responsible Official of that Person).

                "Total Funded Debt" means, as of each date of determination, the
        sum of Borrower's consolidated (a) Indebtedness, including Capital Lease
        Obligations, and (b) Contingent Obligations in respect of Indebtedness
        or Capital Lease Obligations of others.

                "type" means whether a Loan is a LIBOR Loan or a Base Rate Loan.

        1.2 Use of Defined Terms. Any defined term used in the plural shall
refer to all members of the relevant class, and any defined term used in the
singular shall refer to any one or more of the members of the relevant class.

        1.3 Accounting Terms. All accounting terms not specifically defined in
this Agreement shall be construed in conformity with, and all financial data
required to be submitted by this Agreement shall be prepared in conformity with,
GAAP applied on a consistent basis, as in effect on the date hereof, except as
otherwise specifically prescribed herein. In the event that GAAP change during
the term of this Agreement such that the financial covenants contained herein
would then be calculated in a different manner or with different components,
Borrower and the Lenders agree to amend this Agreement in such respects as are
necessary to conform those covenants as criteria for evaluating Borrower's
financial condition, or limiting the aggregate Loans hereunder, to substantially
the same criteria as were effective prior to such change in GAAP. Without
limiting the foregoing, and unless otherwise expressly stated to the contrary,
all financial covenants set forth in this Agreement and all calculations
required thereby shall be applied and calculated with respect to the performance
of Borrower and its Subsidiaries on a consolidated basis.

        1.4 Exhibits and Schedules. All exhibits and schedules to this
Agreement, either as originally existing or as the same may from time to time be
supplemented, modified or amended, are incorporated herein by this reference. A
matter disclosed on any Schedule shall be deemed disclosed on all Schedules.

                                      -20-
<PAGE>   26

        1.5 "References to "Borrower and/or its Subsidiaries". Any reference
herein to "Borrower and/or its Subsidiaries" or the like shall refer solely to
Borrower during such times, if any, as Borrower shall have no Subsidiaries.

                                      -21-
<PAGE>   27

                                   ARTICLE 2.
                           LOANS AND LETTERS OF CREDIT

        2.1 Loans-General.

                (a) Subject to the terms and conditions set forth in this
        Agreement, from time to time from the Closing Date through the Maturity
        Date each Lender shall, pro rata according to that Lender's Commitment,
        make revolving Advances to Borrower under its Commitment in such amounts
        as Borrower may request that do not result in the Outstanding
        Obligations being in excess of the then applicable Aggregate
        Commitments. The proceeds of the initial Advances made hereunder shall
        refinance the loans heretofore made by Bank of America under the
        Existing Credit Agreement. Subject to the limitations set forth herein,
        Borrower may borrow, repay and reborrow under the Commitments without
        premium or penalty.

                (b) Subject to the next sentence, each Loan shall be made
        pursuant to a Request for Loan which shall specify the requested (i)
        date of such Loan, (ii) type of Loan, (iii) amount of such Loan, and
        (iv) in the case of a LIBOR Loan, the Interest Period for such Loan.
        Unless the Administrative Agent has previously notified Borrower to the
        contrary (which notice may be given in the sole and absolute discretion
        of the Administrative Agent), Loans may be requested by telephone by a
        Responsible Official of Borrower, in which case Borrower shall confirm
        such request by promptly delivering a Request for Loan in person or by
        telecopier conforming to the preceding sentence to the Administrative
        Agent. Neither the Administrative Agent nor any Lender shall incur any
        liability whatsoever hereunder in acting upon any telephonic request for
        a Loan purportedly made by a Responsible Official of Borrower, which
        hereby agrees to indemnify the Administrative Agent and the Lenders from
        any loss, cost, expense or liability as a result of so acting.

                (c) Promptly following receipt of a Request for Loan, the
        Administrative Agent shall notify each Lender by telephone or telecopier
        (and if by telephone, promptly confirmed by telecopier) of the date and
        type of the Loan, the applicable Interest Period, and that Lender's Pro
        Rata Share of the Loan. Not later than 11:00 a.m. (California time) on
        the date specified for any Loan (which must be a Business Day), each
        Lender shall make its Pro Rata Share of the Loan in immediately
        available funds available to the Administrative Agent at the
        Administrative Agent's Office. Upon satisfaction or waiver of the
        applicable conditions set forth in Article 8, all Advances shall be
        credited on that date in immediately available funds to the Designated
        Deposit Account.

                (d) Unless the Required Lenders otherwise consent, each Loan
        shall be in an amount which is an integral multiple of $100,000 which is
        not less than $1,000,000.

                (e) The Advances made by each Lender shall be evidenced by that
        Lender's Note.

                (f) A Request for Loan shall be irrevocable upon the
        Administrative Agent's receipt thereof (or, in the case of a telephonic
        request for Loan referred to in the second sentence of Section 2.1(b),
        upon the Administrative Agent's receipt of that telephone call).

                                      -22-
<PAGE>   28

                (g) If no Request for Loan (or telephonic request for Loan
        referred to in the second sentence of Section 2.1(b), if applicable) or
        Request for Redesignation has been made within the requisite notice
        periods set forth in Section 2.2 or 2.3 in connection with a Loan which,
        if made and giving effect to the application of the proceeds thereof,
        would not increase the outstanding principal Indebtedness evidenced by
        the Notes, then Borrower shall be deemed to have requested, as of the
        date upon which the related then outstanding Loan is due pursuant to
        Section 3.1(e), a Base Rate Loan in an amount equal to the amount
        necessary to cause the outstanding principal Indebtedness evidenced by
        the Notes to remain the same and the Lenders shall make the Advances
        necessary to make such Loan notwithstanding Sections 2.1(b) and 2.2.

                (h) If a Loan is to be made on the same date that another Loan
        is due and payable, Borrower or the Lenders, as the case may be, shall
        at the request of the Administrative Agent make available to the
        Administrative Agent the net amount of funds giving effect to both such
        Loans and the effect for purposes of this Agreement shall be the same as
        if separate transfers of funds had been made with respect to each such
        Loan.

        2.2 Base Rate Loans. Each request by Borrower for a Base Rate Loan shall
be made pursuant to a Request for Loan (or telephonic or other request for loan
referred to in the second sentence of Section 2.1(b), if applicable) or Request
for Redesignation received by the Administrative Agent, at the Administrative
Agent's Office, not later than 9:00 a.m. California local time, on the date
(which must be a Business Day) of the requested Base Rate Loan. All Loans shall
constitute Base Rate Loans unless properly designated as LIBOR Loans pursuant to
Section 2.3.

        2.3 LIBOR Loans.

                (a) Each request by Borrower for a LIBOR Loan shall be made
        pursuant to a Request for Loan (or telephonic or other request for Loan
        referred to in the second sentence of Section 2.1(b), if applicable) or
        Request for Redesignation received by the Administrative Agent, at the
        Administrative Agent's Office, not later than 11:00 a.m. (California
        time) at least three LIBOR Business Days before the first day of the
        applicable Interest Period.

                (b) On the date which is two LIBOR Business Days before the
        first day of the applicable Interest Period, the Administrative Agent
        shall confirm its determination of the applicable LIBOR (which
        determination shall be conclusive in the absence of manifest error) and
        promptly shall give notice of the same to Borrower and the Lenders by
        telephone or telecopier (and if by telephone, promptly confirmed by
        telecopier).

                (c) Unless the Administrative Agent and the Required Lenders
        otherwise consent, no more than ten LIBOR Loans shall be outstanding at
        any one time.

                (d) No LIBOR Loan may be requested where a Default or Event of
        Default has occurred and remains continuing.

                (e) Nothing contained herein shall require any Lender to fund
        any LIBOR Advance in the Designated Eurodollar Market.

                                      -23-
<PAGE>   29

        2.4 Letters of Credit.

                (a) On the Closing Date, each letter of credit outstanding under
        the Existing Credit Agreement shall be deemed to have been issued
        hereunder, and each Lender shall thereupon acquire a participation
        interest therein in accordance with its Pro Rata Share and the terms of
        this Section. Subject to the terms and conditions hereof, at any time
        and from time to time from the Closing Date through the Business Day
        immediately prior to the Maturity Date, the Issuing Lender shall issue
        such Letters of Credit under the Commitments as Borrower may request by
        a Request for Letter of Credit; provided that (i) giving effect to the
        face amount of all such Letters of Credit, the Outstanding Obligations
        do not exceed the then applicable Aggregate Commitments, and (ii) the
        Aggregate Effective Amount under all outstanding Letters of Credit shall
        not exceed $5,000,000. Each Letter of Credit shall be in a form
        acceptable to the Issuing Lender. Unless all the Lenders otherwise
        consent in a writing delivered to the Administrative Agent, no Letter of
        Credit shall have a term which exceeds one year or extends beyond the
        Maturity Date.

                (b) Each Request for Letter of Credit shall be submitted to the
        Issuing Lender, with a copy to the Administrative Agent, at least two
        Business Days prior to the date upon which the related Letter of Credit
        is proposed to be issued. The Administrative Agent shall promptly notify
        the Issuing Lender whether such Request for Letter of Credit, and the
        issuance of a Letter of Credit pursuant thereto, conforms to the
        requirements of this Agreement. Upon issuance of a Letter of Credit, the
        Issuing Lender shall promptly notify the Administrative Agent, who shall
        promptly notify the Lenders, of the amount and terms thereof.

                (c) Upon the issuance of a Letter of Credit, each Lender shall
        be deemed to have purchased a pro rata participation in such Letter of
        Credit from the Issuing Lender in an amount equal to that Lender's Pro
        Rata Share. Without limiting the scope and nature of each Lender's
        participation in any Letter of Credit, to the extent that the Issuing
        Lender has not been reimbursed by Borrower for any payment required to
        be made by the Issuing Lender under any Letter of Credit, each Lender
        shall, pro rata according to its Pro Rata Share, pay the purchase price
        for such participation to the Issuing Lender through the Administrative
        Agent promptly upon demand therefor. The obligation of each Lender to so
        pay the participation purchase price to the Issuing Lender shall be
        absolute and unconditional and shall not be affected by the occurrence
        of an Event of Default or any other occurrence or event. Any such
        payment of the purchase price shall not relieve or otherwise impair the
        obligation of Borrower to reimburse the Issuing Lender for the amount of
        any payment made by the Issuing Lender under any Letter of Credit
        together with interest as hereinafter provided.

                (d) Borrower agrees to pay to the Issuing Lender through the
        Administrative Agent an amount equal to any payment made by the Issuing
        Lender with respect to each Letter of Credit upon demand by the Issuing
        Lender therefor, together with interest on such amount from the date of
        any payment made by the Issuing Lender at the Default Rate. The
        principal amount of any such payment shall be used to reimburse the
        Issuing Lender for the payment made by it under the Letter of Credit
        and, to the extent that the Lenders have not reimbursed the Issuing
        Lender pursuant to Section 2.4(c), the interest amount of any such
        payment shall be for the account of the Issuing Lender. Each Lender that
        has paid the participation purchase price to the Issuing Lender pursuant
        to Section 2.4(c) shall thereupon acquire a pro rata participation,

                                      -24-
<PAGE>   30

        to the extent of such payment, in the claim of the Issuing Lender
        against Borrower for reimbursement of principal and interest under this
        Section 2.4(d) and shall share, in accordance with that pro rata
        participation, in any principal payment made by Borrower with respect to
        such claim and in any interest payment made by Borrower (but only with
        respect to periods subsequent to the date such Lender paid the
        participation purchase price to the Issuing Lender) with respect to such
        claim.

                (e) Borrower may, pursuant to a Request for Loan, request that
        Advances be made pursuant to Section 2.1(a) to provide funds for the
        payment required by Section 2.4(d) and, for this purpose, the conditions
        precedent set forth in Article 8 shall not apply. The proceeds of such
        Advances shall be paid directly to the Issuing Lender to reimburse it
        for the payment made by it under the Letter of Credit.

                (f) If Borrower fails to make the payment required by Section
        2.4(d) on a timely basis then, in lieu of the payment of the
        participation purchase price to the Issuing Lender under Section 2.4(c),
        the Issuing Lender may (but is not required to), without notice to or
        the consent of Borrower, instruct the Administrative Agent to cause Base
        Rate Advances to be made by the Lenders under their respective
        Commitments in an aggregate amount equal to the amount paid by the
        Issuing Lender with respect to that Letter of Credit and, for this
        purpose, the conditions precedent to Advances set forth in Article 8
        shall not apply. The proceeds of such Advances shall be paid directly to
        the Issuing Lender to reimburse it for the payment made by it under the
        Letter of Credit.

                (g) The issuance of any supplement, modification, amendment,
        renewal, or extension to or of any Letter of Credit shall be treated in
        all respects the same as the issuance of a new Letter of Credit,
        provided that this clause (g) shall not require the payment of any
        letter of credit fees except to the extent that such supplementation,
        modification, amendment, renewal or extension results in an increase to
        the amount of the related Letter of Credit or any extension of its
        tenor.

                (h) The obligation of Borrower to pay to the Issuing Lender the
        amount of any payment made by the Issuing Lender under any Letter of
        Credit shall be absolute, unconditional, and irrevocable, subject only
        to performance by the Issuing Lender of its obligations to Borrower
        under Uniform Commercial Code Section 5109, as in effect in the State of
        California. Without limiting the foregoing, the obligations of Borrower
        to the Issuing Lender shall not be affected by any of the following
        circumstances:

                        (i) any lack of validity or enforceability of the Letter
                of Credit, this Agreement, or any other Agreement or instrument
                relating thereto;

                        (ii) any amendment or waiver of the terms of the Letter
                of Credit, or any consent to departure from the Letter of
                Credit, this Agreement, or any other Agreement or instrument
                relating thereto;

                        (iii) the existence of any claim, setoff, defense, or
                other rights which Borrower may have at any time against any
                Creditor, any beneficiary of the Letter of Credit (or any
                persons or entities for whom any such beneficiary

                                      -25-
<PAGE>   31

                may be acting) or any other Person, whether in connection with
                the Letter of Credit, this Agreement, or any other Agreement or
                instrument relating thereto, or any unrelated transactions;

                        (iv) any demand, statement, or any other document
                presented under the Letter of Credit proving to be forged,
                fraudulent, invalid, or insufficient in any respect or any
                statement therein being untrue or inaccurate in any respect
                whatsoever so long as any such document appeared to comply with
                the terms of the Letter of Credit;

                        (v) payment by the Issuing Lender in good faith under
                the Letter of Credit against presentation of a draft or any
                accompanying document which does not strictly comply with the
                terms of the Letter of Credit, except to the extent that the
                making of such payment has been determined by a court or
                arbitrator to result from the gross negligence or wilful
                misconduct of the Issuing Lender;

                        (vi) the existence, character, quality, quantity,
                condition, packing, value or delivery of any Property purported
                to be represented by documents presented in connection with any
                Letter of Credit or any difference between any such Property and
                the character, quality, quantity, condition, or value of such
                Property as described in such documents;

                        (vii) the time, place, manner, order or contents of
                shipments or deliveries of Property as described in documents
                presented in connection with any Letter of Credit or the
                existence, nature and extent of any insurance relative thereto;

                        (viii) the solvency or financial responsibility of any
                party issuing any documents in connection with a Letter of
                Credit;

                        (ix) any failure or delay in notice of shipments or
                arrival of any Property;

                        (x) any error in the transmission of any message
                relating to a Letter of Credit, or any delay or interruption in
                any such message, not caused by the Issuing Lender;

                        (xi) any error, neglect or default of any correspondent
                of the Issuing Lender in connection with a Letter of Credit (but
                without prejudice to any claim by Borrower against such
                correspondent);

                        (xii) any consequence arising from acts of God, war,
                insurrection, civil unrest, disturbances, labor disputes,
                emergency conditions or other causes beyond the control of the
                Issuing Lender;

                                      -26-
<PAGE>   32

                        (xiii) so long as the Issuing Lender in good faith
                determines that the contract or document appears to comply with
                the terms of the Letter of Credit, the form, accuracy,
                genuineness or legal effect of any contract or document referred
                to in any document submitted to the Issuing Lender in connection
                with a Letter of Credit; and

                        (xiv) where the Issuing Lender has acted in good faith
                and observed general banking usage, any other circumstances
                whatsoever.

                (i) The Issuing Lender shall be entitled to the protection
        accorded to the Administrative Agent pursuant to Article 10, mutatis
        mutandis.

        2.5 Swing Line. (a) Subject to the terms and conditions set forth
herein, from the Closing Date through the day prior to the Maturity Date the
Swing Line Lender may, from time to time in its discretion, make Swing Line
Loans to Borrower in such amounts as Borrower may request which do not result in
the Outstanding Obligations being in excess of the then effective Aggregate
Commitments, provided that (i) after giving effect to each Swing Line Loan, the
Swing Line Outstandings shall not exceed $5,000,000 and (ii) without the consent
of all of the Lenders, no Swing Line Loan may be made during the continuation of
an Event of Default. Borrower may borrow, repay and reborrow under this Section.
Unless notified to the contrary by the Swing Line Lender, Swing Line Loans may
be made in amounts which are integral multiples of $100,000 upon telephonic
request by a Responsible Official of Borrower made to the Administrative Agent
not later than 1:00 p.m., California local time, on the Business Day of the
requested borrowing (which telephonic request shall be promptly confirmed in
writing by telecopier), provided that if the requested Swing Line Loan is to be
credited to an account which is not with the Swing Line Lender, the request must
be submitted by 11:30 a.m., California local time. Promptly after receipt of
such a request for borrowing, the Administrative Agent shall provide telephonic
verification to the Swing Line Lender that, after giving effect to such request,
the Outstanding Obligations will not exceed the Aggregate Commitments. Each
Swing Line Loan shall bear interest at a fluctuating rate per annum equal to the
Base Rate plus the then applicable Base Rate Spread. Each change in the interest
rate under this Section 2.5(a) due to a change in the Base Rate shall take
effect simultaneously with the corresponding change in the Base Rate. Unless
notified to the contrary by the Swing Line Lender, each repayment of a Swing
Line Loan shall be in an amount which is an integral multiple of $100,000. If
Borrower instructs the Swing Line Lender to debit its demand deposit account at
the Swing Line Lender in the amount of any payment with respect to a Swing Line
Loan, or the Swing Line Lender otherwise receives repayment, after 3:00 p.m.,
California local time, on a Business Day, such payment shall be deemed received
on the next Business Day. The Swing Line Lender shall promptly notify the
Administrative Agent of the Swing Loan Outstandings each time there is a change
therein under the Swing Line.

                (b) Upon the making of a Swing Line Loan in accordance with
Section 2.5(a), each Lender shall be deemed to have purchased from the Swing
Line Lender a participation therein in an amount equal to that Lender's Pro Rata
Share times the amount of the Swing Line Loan. Upon demand made by the Swing
Line Lender through the Administrative Agent, each Lender shall, according to
its Pro Rata Share, promptly provide to the Swing Line Lender its purchase price
therefor in an amount equal to its participation therein. The obligation of each
Lender to so provide its purchase price to the Swing Line Lender shall be
absolute and unconditional (subject only to the making of a demand upon that
Lender by the Swing Line Lender) and shall not be affected by the occurrence of
a Default or Event

                                      -27-
<PAGE>   33

of Default; provided that no Lender shall be obligated to purchase its Pro Rata
Share of (i) Swing Line Loans to the extent that Swing Line Outstandings are in
excess of $5,000,000 or to the extent that the sum of the Indebtedness evidenced
by the Notes plus the Aggregate Effective Amount of all outstanding Letters of
Credit plus the Swing Line Outstandings exceeds the Aggregate Commitments (as in
effect on the date of the making of the related Swing Line Loan) and (ii) any
Swing Line Loan made (absent the consent of all of the Lenders) during the
continuation of an Event of Default. Each Lender that has provided to the Swing
Line Lender the purchase price due for its participation in Swing Line Loans
shall thereupon acquire a pro rata participation, to the extent of such payment,
in the claim of the Swing Line Lender against Borrower for principal and
interest and shall share, in accordance with that pro rata participation, in any
principal payment made by Borrower with respect to such claim and in any
interest payment made by Borrower (but only with respect to periods subsequent
to the date such Lender paid the Swing Line Lender its purchase price) with
respect to such claim.

                (c) Upon any demand for payment of the Swing Line Outstandings
by the Swing Line Lender (unless Borrower has made other arrangements acceptable
to the Swing Line Lender to reduce the Swing Line Outstandings to $0), Borrower
shall request a Loan pursuant to Section 2.1(a) sufficient to repay all Swing
Line Outstandings (and, for this purpose, Section 2.1(d) shall not apply). The
Administrative Agent shall automatically provide the respective Advances made by
each Lender to the Swing Line Lender (which the Swing Line Lender shall then
apply to the Swing Line Outstandings). In the event that Borrower fails to
request a Loan within the time specified by Section 2.2 on any such date, the
Administrative Agent may, but is not required to, without notice to or the
consent of Borrower, cause Advances to be made by the Lenders under their
respective Commitments in amounts which are sufficient to reduce the Swing Line
Outstandings as required above. The conditions precedent set forth in Article 8
shall not apply to Advances to be made by the Lenders pursuant to the two
preceding sentences but the Lenders shall not be obligated to make such Advances
to the extent that the conditions set forth in Section 2.5(a)(i) and (ii) were
not satisfied as to any Swing Line Loan which is part of such Swing Line
Outstandings. The proceeds of such Advances shall be paid directly to the Swing
Line Lender for application to the Swing Line Outstandings.

        2.6 Voluntary Reduction of Commitments. Borrower shall have the right,
at any time and from time to time, without penalty or charge, effective
following at least three Business Days' prior written notice by a Responsible
Official of Borrower to the Administrative Agent, voluntarily to reduce,
permanently and irrevocably, in aggregate principal amounts in an integral
multiple of $1,000,000 but not less than $5,000,000, or to terminate, all or a
portion of the then undisbursed portion of the Aggregate Commitments; provided
that the Aggregate Commitments may not be so reduced below an amount equal to
the then Outstanding Obligations. The voluntary reduction of the Aggregate
Commitments by Borrower under this Section shall have no effect upon the
requirement of mandatory reductions thereof in accordance with Section 2.7. The
Administrative Agent shall promptly notify the Lenders of any reduction or
termination of their Commitments under this Section.

        2.7 Mandatory Reductions of the Aggregate Commitments. The Aggregate
Commitments shall be automatically and permanently reduced (a) on each Reduction
Date by the related Reduction Amount, (b) to the extent that the aggregate
amount of all Dispositions made pursuant to Section 6.1 is in excess of
$5,000,000, on the date which is six months following the date of any
Disposition, by the Net Cash Proceeds received by Borrower and its Subsidiaries
as the consideration therefor (net of any associated transactional expenses)
minus the amount thereof then reinvested by Borrower through permitted Capital
Expenditures or Permitted Acquisitions following the date of such Disposition

                                      -28-
<PAGE>   34

(written notice of which shall be delivered to the Administrative Agent promptly
following such reinvestment), and (c) to the extent that such Net Cash Proceeds
of any issuances by Borrower or its Subsidiaries of Indebtedness (other than
Indebtedness permitted by Section 6.8 and Indebtedness to Borrower and its
Subsidiaries or the Lenders under and pursuant to this Agreement), concurrently
with the receipt of such Net Cash Proceeds in the amount of such Net Cash
Proceeds. Each reduction of the Aggregate Commitments pursuant to Sections (b)
and (c) shall be applied to the Reduction Amounts on then remaining Reduction
Dates ratably.

        2.8 Administrative Agent's Right to Assume Funds Available for Advances.
Unless the Administrative Agent shall have been notified by any Lender no later
than 10:00 a.m. (California time) on the Business Day of the proposed funding by
the Administrative Agent of any Loan that such Lender does not intend to make
available to the Administrative Agent such Lender's portion of the total amount
of such Loan, the Administrative Agent may assume that such Lender has made such
amount available to the Administrative Agent on the date of the Loan and the
Administrative Agent may, in reliance upon such assumption, make available to
Borrower the corresponding amount. If the Administrative Agent has made funds
available to Borrower based on such assumption and such corresponding amount is
not in fact made available to the Administrative Agent by such Lender, the
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Lender. If such Lender does not pay such corresponding amount
forthwith upon the Administrative Agent's demand therefor, the Administrative
Agent promptly shall notify Borrower who shall pay such corresponding amount to
the Administrative Agent. The Administrative Agent also shall be entitled to
recover from such Lender interest on such corresponding amount in respect of
each day from the date such corresponding amount was made available by the
Administrative Agent to Borrower to the date such corresponding amount is
recovered by the Administrative Agent, at a rate per annum equal to the daily
Federal Funds Rate. Nothing herein shall be deemed to relieve any Lender from
its obligation to fulfill its Commitment.

        2.9 Senior Indebtedness. The Obligations shall be and hereby are
designated by Borrower as "Senior Indebtedness" and "Designated Senior
Indebtedness" with respect to all Indebtedness and other obligations of Borrower
and its Subsidiaries (to the effect that the Obligations shall be afforded all
rights afforded to the most senior class of creditors thereunder) which are
subordinated in any manner or to any extent to any other Indebtedness and other
obligations of Borrower or its Subsidiaries.

                                      -29-
<PAGE>   35

                                   ARTICLE 3.
                                PAYMENTS AND FEES

        3.1 Principal and Interest.

                (a) Interest shall be payable on the outstanding daily unpaid
        principal amount of each Advance from the date thereof until payment in
        full is made and shall accrue and be payable at the rates set forth or
        provided for herein before and after default, before and after maturity,
        before and after judgment, and before and after the commencement of any
        proceeding under any Debtor Relief Law, with interest on overdue
        interest at the Default Rate to the fullest extent permitted by
        applicable Laws.

                (b) Interest accrued on each Base Rate Loan through the last
        Business Day of each calendar month shall be due and payable on the next
        Business Day. Except as otherwise provided in Section 3.9, the unpaid
        principal amount of each Base Rate Loan shall bear interest at a
        fluctuating rate per annum equal to the Base Rate plus the Base Rate
        Spread. Each change in the interest rate under this Section 3.1(b) due
        to a change in the Base Rate shall take effect simultaneously with the
        corresponding change in the Base Rate.

                (c) Interest accrued on each LIBOR Loan which is for a term of
        three months or less shall be due and payable on the last day of the
        related Interest Period. Interest accrued on each other LIBOR Loan shall
        be due and payable on the date which is three months after the date such
        LIBOR Loan was made and on the last day of the related Interest Period.
        Except as otherwise provided in Sections 3.1(d) and 3.9, the unpaid
        principal amount of any LIBOR Loan shall bear interest at a rate per
        annum equal to the LIBOR for that LIBOR Loan plus the LIBOR Spread.

                (d) During the existence of a Default or Event of Default, the
        Required Lenders may determine that any or all then outstanding LIBOR
        Loans shall be converted to Base Rate Loans. Such conversion shall be
        effective upon notice to Borrower from the Required Lenders (or from the
        Administrative Agent on behalf of the Required Lenders) and shall
        continue so long as such Default or Event of Default continues to exist.

                (e) If not sooner paid, the principal Indebtedness evidenced by
        the Notes shall be payable as follows:

                        (i) the principal amount of each LIBOR Loan shall be
                payable on the last day of the Interest Period for such Loan
                (provided that such principal amount may be paid using the
                proceeds of a Base Rate Loan made pursuant to Section 2.1(g));

                        (ii) the amount, if any, by which the Outstanding
                Obligations at any time exceed the Aggregate Commitments shall
                be payable immediately; and

                                      -30-
<PAGE>   36

                        (iii) the principal Indebtedness evidenced by the Notes
                and the Swing Line Documents shall in any event be payable on
                the Maturity Date.

                (f) The Notes may, at any time and from time to time,
        voluntarily be paid or prepaid in whole or in part without premium or
        penalty, except that with respect to any voluntary prepayment under this
        Section, (i) any partial prepayment of a LIBOR Loan shall be not less
        than $500,000, (ii) the Administrative Agent shall have received written
        notice of any prepayment by 10:00 a.m. on the Business Day of such
        prepayment (which must be a Business Day) in the case of a Base Rate
        Loan, and, in the case of a LIBOR Loan, three LIBOR Business Days before
        the date of prepayment, which notice shall identify the date and amount
        of the prepayment and the Loans being prepaid, (iii) each prepayment of
        principal shall be accompanied by payment of interest accrued to the
        date of payment on the amount of principal paid and (iv) any payment or
        prepayment of all or any part of any LIBOR Loan on a day other than the
        last day of the applicable Interest Period shall be subject to Section
        3.8(d).

        3.2 Lead Arranger's Fees. On the date hereof, Borrower shall pay to Lead
Arranger through the Administrative Agent certain fees in the amount heretofore
agreed upon by letter agreement between Borrower and the Lead Arranger. These
fees are for the services of the Lead Arranger in arranging the credit
facilities under this Agreement and are fully earned when paid and are
nonrefundable.

        3.3 Upfront Fees. On the date hereof, Borrower shall pay to the
Administrative Agent, for the account of each Lender, upfront fees in an amount
equal to (a) that Lender's allocated Commitment times (b) a fee percentage based
upon the amount of the offered commitment of that Lender to the credit facility
described herein, as set forth in a letter agreement of even date herewith among
Borrower, the Lead Arranger and Bank of America. Such upfront fees are for the
credit facilities committed by each Lender under this Agreement and are fully
earned when paid. The upfront fees paid to each Lender are solely for its own
account and are nonrefundable.

        3.4 Non-Use Fee. From the date hereof, Borrower shall pay to the
Administrative Agent, for the ratable accounts of the Lenders pro rata according
to their respective Pro Rata Shares, a commitment fee equal to the Non-Use Fee
Rate in effect from time to time times the average daily amount by which the
Aggregate Commitments exceed the sum of (a) the aggregate principal amount
outstanding under the Notes (but not the Swing Line Outstandings except to the
extent a Lender has provided the purchase price due for its participation in
Swing Line Loans to the Swing Line Lender in Cash) plus (b) the Aggregate
Effective Amount under all outstanding Standby Letters of Credit. The non-use
fee shall be payable quarterly in arrears on each Quarterly Payment Date, on the
Maturity Date and upon the date of any partial reduction or termination of the
Aggregate Commitments pursuant to Sections 2.6 or 2.7.

        3.5 Letter of Credit Fees. Concurrently with the issuance of each Letter
of Credit, Borrower shall pay a letter of credit issuance fee to the Issuing
Lender, for the sole account of the Issuing Lender, in an amount set forth in a
letter agreement between Borrower and the Issuing Lender. Each letter of credit
issuance fee is nonrefundable. On each Quarterly Payment Date and on the
Maturity Date, Borrower shall also pay to the Administrative Agent in arrears,
for the ratable account of the Lenders in accordance with their Pro Rata Share,
letter of credit fees in an amount equal to (a) the then applicable LIBOR Spread
times the average daily Aggregate Effective Amount of all Standby

                                      -31-
<PAGE>   37

Letters of Credit and (b) fifty percent (50%) of the then applicable LIBOR
Spread times the average daily Aggregate Effective Amount of all commercial
Letters of Credit, in each case for the period from the Closing Date or the most
recent Quarterly Payment Date. All letter of credit fees shall also be
non-refundable.

        3.6 Administrative Fees. On the date hereof and annually thereafter,
Borrower shall pay to the Administrative Agent an administrative fee in such
amounts as heretofore agreed upon by letter agreement between Borrower and Bank
of America and the Lead Arranger. The administrative fee is for the services to
be performed by the Administrative Agent in acting as Administrative Agent and
is fully earned on the date paid. The administrative fee paid to the
Administrative Agent is solely for its own account and is nonrefundable.

        3.7 Increased Commitment Costs. If any Lender shall determine in good
faith that the introduction after the date hereof of any applicable law, rule,
regulation or guideline regarding capital adequacy, or any change therein or any
change in the interpretation or administration thereof by any central bank or
other Governmental Agency charged with the interpretation or administration
thereof, or compliance by such Lender (or its Eurodollar Lending Office) or any
corporation controlling the Lender, with any request, guideline or directive
regarding capital adequacy (whether or not having the force of Law) of any such
central bank or other authority, affects or would affect the amount of capital
required or expected to be maintained by such Lender or any corporation
controlling such Lender and (taking into consideration such Lender's or such
corporation's policies with respect to capital adequacy and such Lender's
reasonably expected return on capital under this Agreement) determines in good
faith that the amount of such capital is increased, or the rate of return on
capital is reduced, as a consequence of its obligations under this Agreement,
then, within ten Business Days after demand of such Lender, Borrower shall pay
to such Lender, from time to time as specified in good faith by such Lender,
additional amounts sufficient to compensate such Lender in light of such
circumstances, to the extent reasonably allocable to such obligations under this
Agreement, provided that Borrower shall not be obligated to pay any such amount
which arose prior to the date which is ninety days preceding the date of such
demand or is attributable to periods prior to the date which is ninety days
preceding the date of such demand, and provided further that in the case where
Borrower becomes obligated to pay a material amount under this Section to any
Lender, that Lender will be subject to removal in accordance with Section 11.26,
provided that Borrower shall have paid such amount to that Lender and that
Borrower, within the thirty (30) day period following the date of such payment,
shall have notified that Lender in writing of Borrower's intent to so remove the
Lender. Each Lender's determination of such amounts shall be conclusive in the
absence of manifest error.

        3.8 LIBOR Costs and Related Matters.

                (a) If, after the date hereof, the existence or occurrence of
        any Special LIBOR Circumstance:

                        (i) shall subject any Lender or its LIBOR Office to any
                tax, duty or other charge or cost with respect to any LIBOR
                Advance, any of its Notes evidencing LIBOR Loans or its
                obligation to make LIBOR Advances, or shall change the basis of
                taxation of payments to any Lender attributable to the principal
                of or interest on any LIBOR Advance or any other amounts due
                under this Agreement in respect of any LIBOR Advance, any of its
                Notes evidencing LIBOR Loans or its obligation to make

                                      -32-
<PAGE>   38

                LIBOR Advances, excluding, in the case of each Lender, the
                Administrative Agent and each Eligible Assignee, and any
                Affiliate or LIBOR Office thereof, (i) taxes imposed on or
                measured in whole or in part by its overall net income, gross
                income or gross receipts or capital and franchise taxes imposed
                on it, by (A) any jurisdiction (or political subdivision
                thereof) in which it is organized or maintains its principal
                office or LIBOR Office or (B) any jurisdiction (or political
                subdivision thereof) in which it is "doing business" (unless it
                would not be doing business in such jurisdiction (or political
                subdivision thereof) absent the transactions contemplated
                hereby), (ii) any withholding taxes or other taxes based on
                gross income imposed by the United States of America (other than
                withholding taxes and taxes based on gross income resulting
                solely from or attributable to any change in any law, rule or
                regulation or any change in the interpretation or administration
                of any law, rule or regulation by any Governmental Agency) or
                (iii) any withholding taxes or other taxes based on gross income
                imposed by the United States of America for any period with
                respect to which it has failed to provide Borrower with the
                appropriate form or forms required by Section 11.20, to the
                extent such forms are then required by applicable Laws;

                        (b) shall impose, modify or deem applicable any reserve
                not applicable or deemed applicable on the date hereof
                (including, without limitation, any reserve imposed by the Board
                of Governors of the Federal Reserve System, but excluding the
                Reserve Percentage taken into account in calculating the LIBOR),
                special deposit, capital or similar requirements against assets
                of, deposits with or for the account of, or credit extended by,
                any Lender or its LIBOR Office; or

                        (iii) shall impose on any Lender or its LIBOR Office or
                the Designated LIBOR Market any other condition affecting any
                LIBOR Advance, any of its Notes evidencing LIBOR Loans, its
                obligation to make LIBOR Advances or this Agreement, or shall
                otherwise affect any of the same;

        and the result of any of the foregoing, as determined in good faith by
        such Lender, increases the cost to such Lender or its LIBOR Office of
        making or maintaining any LIBOR Advance or in respect of any LIBOR
        Advance, any of its Notes evidencing LIBOR Loans or its obligation to
        make LIBOR Advances or reduces the amount of any sum received or
        receivable by such Lender or its LIBOR Office with respect to any LIBOR
        Advance, any of its Notes evidencing LIBOR Loans or its obligation to
        make LIBOR Advances (assuming such Lender's LIBOR Office had funded 100%
        of its LIBOR Advance in the Designated LIBOR Market), then, within five
        (5) Business Days after demand by such Lender (with a copy to the
        Administrative Agent), Borrower shall pay to such Lender such additional
        amount or amounts as will compensate such Lender for such increased cost
        or reduction (determined as though such Lender's LIBOR Office had funded
        100% of its LIBOR Advance in the Designated LIBOR Market). Borrower
        hereby indemnifies each Lender against, and agrees to hold each Lender
        harmless from and reimburse such Lender within ten Business Days after
        demand for (without duplication) all costs, expenses, claims, penalties,
        liabilities, losses, reasonable legal fees and damages incurred or
        sustained by each Lender in connection with this Agreement, or any of
        the rights, obligations or transactions provided for or contemplated
        herein, as a direct result of the existence or occurrence of any Special
        LIBOR Circumstance. A statement of any Lender claiming compensation
        under this subsection and setting forth in reasonable detail the
        additional amount

                                      -33-
<PAGE>   39

        or amounts to be paid to it hereunder shall be conclusive in the absence
        of manifest error. Each Lender agrees to endeavor promptly to notify
        Borrower of any event of which it has actual knowledge, occurring after
        the Effective Date, which will entitle such Lender to compensation
        pursuant to this Section, and agrees to designate a different LIBOR
        Office if such designation will avoid the need for or reduce the amount
        of such compensation and will not, in the good faith judgment of such
        Lender, otherwise be materially disadvantageous to such Lender. If any
        Lender claims compensation under this Section, Borrower may at any time,
        upon at least four LIBOR Business Days' prior notice to the
        Administrative Agent and such Lender and upon payment in full of the
        amounts provided for in this Section through the date of such payment
        plus any prepayment fee required by Section 3.8(d), pay in full the
        affected LIBOR Advances of such Lender or request that such LIBOR
        Advances be converted to Base Rate Advances.

                (b) If, after the date hereof, the existence or occurrence of
        any Special LIBOR Circumstance shall, in the good faith opinion of any
        Lender, make it unlawful or impossible for such Lender or its LIBOR
        Office to make, maintain or fund its portion of any LIBOR Loan, or
        materially restrict the authority of such Lender to purchase or sell, or
        to take deposits of, Dollars in the Designated LIBOR Market, or to
        determine or charge interest rates based upon the LIBOR, and such Lender
        shall so notify the Administrative Agent, then such Lender's obligation
        to make LIBOR Advances shall be suspended for the duration of such
        illegality or impossibility and the Administrative Agent forthwith shall
        give notice thereof to the other Lenders and Borrower. Upon receipt of
        such notice, the outstanding principal amount of such Lender's LIBOR
        Advances, together with accrued interest thereon, automatically shall be
        converted to Base Rate Advances with Interest Periods corresponding to
        the LIBOR Loans of which such LIBOR Advances were a part on either (1)
        the last day of the Interest Period(s) applicable to such LIBOR Advances
        if such Lender may lawfully continue to maintain and fund such LIBOR
        Advances to such day(s) or (2) immediately if such Lender may not
        lawfully continue to fund and maintain such LIBOR Advances to such
        day(s), provided that in such event the conversion shall not be subject
        to payment of a prepayment fee under Section 3.8(d). Each Lender agrees
        to endeavor promptly to notify Borrower of any event of which it has
        actual knowledge, occurring after the Effective Date, which will cause
        that Lender to notify the Administrative Agent under this Section
        3.8(b), and agrees to designate a different LIBOR Office if such
        designation will avoid the need for such notice and will not, in the
        good faith judgment of such Lender, otherwise be materially
        disadvantageous to such Lender. In the event that any Lender is unable,
        for the reasons set forth above, to make, maintain or fund its portion
        of any LIBOR Loan, such Lender shall fund such amount as a Base Rate
        Advance for the same period of time, and such amount shall be treated in
        all respects as a Base Rate Advance. Any Lender whose obligation to make
        LIBOR Advances has been suspended under this Section 3.8(b) shall
        promptly notify the Administrative Agent and Borrower of the cessation
        of the Special LIBOR Circumstance which gave rise to such suspension. In
        the case where Borrower becomes obligated to pay a material amount under
        this Section to any Lender, that Lender will be subject to removal in
        accordance with Section 11.26, provided that Borrower shall have paid
        such amount to that Lender and that Borrower, within the thirty (30) day
        period following the date of such payment, shall have notified that
        Lender in writing of Borrower's intent to so remove the Lender.

                (c) If, with respect to any proposed LIBOR Loan:

                                      -34-
<PAGE>   40

                        (i) the Administrative Agent reasonably determines that,
                by reason of circumstances affecting the Designated LIBOR Market
                generally that are beyond the reasonable control of the Lenders,
                deposits in Dollars (in the applicable amounts) are not being
                offered to any Lender in the Designated LIBOR Market for the
                applicable Interest Period; or

                        (ii) the Required Lenders advise the Administrative
                Agent that the LIBOR as determined by the Administrative Agent
                (i) does not represent the effective pricing to such Lenders for
                deposits in Dollars in the Designated LIBOR Market in the
                relevant amount for the applicable Interest Period, or (ii) will
                not adequately and fairly reflect the cost to such Lenders of
                making the applicable LIBOR Advances;

        then the Administrative Agent forthwith shall give notice thereof to
        Borrower and the Lenders, whereupon until the Administrative Agent
        notifies Borrower that the circumstances giving rise to such suspension
        no longer exist, the obligation of the Lenders to make any future LIBOR
        Advances shall be suspended. If at the time of such notice there is then
        pending a Request for Loan that specifies a LIBOR Loan, such Request for
        Loan shall be deemed to specify a Base Rate Loan.

                (d) Upon payment or prepayment of any LIBOR Advance (other than
        as the result of a conversion required under Section 3.8(b)), on a day
        other than the last day in the applicable Interest Period (whether
        voluntarily, involuntarily, by reason of acceleration, or otherwise), or
        upon the failure of Borrower (for a reason other than the failure of a
        Lender to make an Advance) to borrow on the date or in the amount
        specified for a LIBOR Loan in any Request for Loan, Borrower shall pay
        to the appropriate Lender within ten Business Days after demand a
        prepayment fee or failure to borrow fee, as the case may be (determined
        as though 100% of the LIBOR Advance had been funded in the Designated
        LIBOR Market) equal to the sum of:

                        (i) the principal amount of the LIBOR Advance prepaid or
                not borrowed, as the case may be, times the number of days
                between the date of prepayment or failure to borrow, as
                applicable, and the last day in the applicable Interest Period,
                divided by 360, times the applicable Interest Differential
                (provided that the product of the foregoing formula must be a
                positive number); plus

                        (ii) all reasonable out-of-pocket expenses incurred by
                each Lender which are reasonably attributable to such payment,
                prepayment or failure to borrow.

        Each Lender's determination of the amount of any prepayment fee payable
        under this Section 3.8(d) shall be conclusive in the absence of manifest
        error.

        3.9 Default Rate. If any installment of principal or interest or any fee
or cost or other amount payable under any Credit Document to the Administrative
Agent or any Lender is not paid when due (after giving effect to any applicable
grace period), or at the option of the Required Lenders upon the occurrence and
during the continuance of any Event of Default, the outstanding Loans, and any
such delinquent fees, costs or other amounts, shall thereafter bear interest at
a rate which is 2% per annum in excess of the otherwise applicable rate, and the
outstanding Letters of Credit shall thereafter accrue fees at a rate which is 2%
per annum in excess of the otherwise applicable fees, in each case to the
fullest

                                      -35-
<PAGE>   41

extent permitted by applicable Laws. Accrued and unpaid interest on past due
amounts (including interest on past due interest) shall be compounded monthly,
on the last day of each calendar month, to the fullest extent permitted by
applicable Laws.

        3.10 Computation of Interest and Fees. Computation of interest on Base
Rate Loans shall be calculated on the basis of a year of 365 or 366 days, as the
case may be, and the actual number of days elapsed; computation of interest on
LIBOR Loans and all fees under this Agreement shall be calculated on the basis
of a year of 360 days and the actual number of days elapsed. Borrower
acknowledges that such latter calculation method will result in a higher yield
to the Lenders than a method based on a year of 365 or 366 days. Interest shall
accrue on each Loan for the day on which the Loan is made; interest shall not
accrue on a Loan, or any portion thereof, for the day on which the Loan or such
portion is paid. Any Loan that is repaid on the same day on which it is made
shall bear interest for one day. Notwithstanding anything in this Agreement to
the contrary, interest in excess of the maximum amount permitted by applicable
Laws shall not accrue or be payable hereunder or under the Notes, and any amount
paid as interest hereunder or under the Notes which would otherwise be in excess
of such maximum permitted amount shall instead be treated as a payment of
principal.

        3.11 Non-Business Days. If any payment to be made by Borrower or any
other Party under any Credit Document shall come due on a day other than a
Business Day, payment shall instead be considered due on the next succeeding
Business Day and the extension of time shall be reflected in computing interest
and fees.

        3.12 Manner and Treatment of Payments.

                (a) Subject to Section 3.12(e) below, each payment hereunder
        (except payments pursuant to Sections 2.5, 3.7, 3.8, 11.3, 11.11 and
        11.22) or on the Notes, on the Swing Line Documents or under any other
        Credit Document shall be made to the Administrative Agent, at the
        Administrative Agent's Office, for the account of each of the Lenders or
        the Administrative Agent, as the case may be, in immediately available
        funds not later than 11:00 a.m. on the day of payment (which must be a
        Business Day). All payments received after 11:00 a.m. on any Business
        Day, shall be deemed received on the next succeeding Business Day. The
        amount of all payments received by the Administrative Agent for the
        account of each Lender shall be immediately paid by the Administrative
        Agent to the applicable Lender in immediately available funds and, if
        such payment was received by the Administrative Agent by 11:00 a.m. on a
        Business Day and not so made available to the account of a Lender on
        that Business Day, the Administrative Agent shall reimburse that Lender
        for the cost to such Lender of funding the amount of such payment at the
        Federal Funds Rate. All payments shall be made in lawful money of the
        United States of America.

                (b) Each payment or prepayment on account of any Loan (other
        than Swing Line Advances) shall be applied pro rata according to the
        outstanding Advances made by each Lender comprising such Loan.

                (c) Each Lender shall use its best efforts to keep a record of
        Advances made by it and payments received by it with respect to each of
        its Notes and, subject to Section 10.6(g), such record shall, as against
        Borrower, be presumptive evidence of the amounts owing absent

                                      -36-
<PAGE>   42

        manifest error. Notwithstanding the foregoing sentence, no Lender shall
        be liable to any Obligor for any failure to keep such a record.

                (d) Each payment of any amount payable by Borrower or any other
        Obligor under this Agreement or any other Credit Document shall be made
        free and clear of, and without reduction by reason of, any taxes,
        assessments or other charges imposed by any Governmental Agency, central
        bank or comparable authority, excluding, in the case of each Lender, the
        Administrative Agent and each Eligible Assignee, and any Affiliate or
        LIBOR Office thereof, (i) taxes imposed on or measured in whole or in
        part by its overall net income, gross income or gross receipts or
        capital and franchise taxes imposed on it, (ii) any withholding taxes or
        other taxes based on gross income imposed by the United States of
        America (other than withholding taxes and taxes based on gross income
        resulting solely from or attributable to any change in any law, rule or
        regulation or any change in the interpretation or administration of any
        law, rule or regulation by any Governmental Agency) or (iii) any
        withholding taxes or other taxes based on gross income imposed by the
        United States of America for any period with respect to which it has
        failed to provide Borrower with the appropriate form or forms required
        by Section 11.21, to the extent such forms are then required by
        applicable Laws (all such non-excluded taxes, assessments or other
        charges being hereinafter referred to as "Taxes"). To the extent that
        Borrower is obligated by applicable Laws to make any deduction or
        withholding on account of Taxes from any amount payable to any Lender
        under this Agreement, Borrower shall (i) make such deduction or
        withholding and pay the same to the relevant Governmental Agency and
        (ii) pay such additional amount to that Lender as is necessary to result
        in that Lender's receiving a net after-Tax amount equal to the amount to
        which that Lender would have been entitled under this Agreement absent
        such deduction or withholding. If and when receipt of such payment
        results in an excess payment or credit to that Lender on account of such
        Taxes, that Lender shall promptly refund such excess to Borrower.

                (e) On each date when payments are due pursuant to Section
        3.12(a), Borrower agrees to maintain on deposit in the Designated
        Deposit Account an amount sufficient to pay any and all amounts so due
        in full on such date. Borrower hereby authorizes Administrative Agent
        (i) to deduct automatically from the Designated Deposit Account all such
        amounts when due under this Agreement or the other Credit Documents, and
        (ii) if and to the extent any payment of such amounts is not made when
        due, to deduct automatically any such amounts from any and all other
        accounts of Borrower or its Subsidiaries maintained with Bank of
        America. Administrative Agent agrees to provide timely written notice to
        Borrower of any automatic deduction made pursuant to this Section
        3.12(e) showing in reasonable detail the amounts of such deduction. Each
        Lender agrees to reimburse Borrower for amounts, if any, deducted from
        such accounts in excess of amounts due hereunder or under any other
        Credit Document to the extent such amounts shall have been actually
        received by such Lender.

        3.13 Funding Sources. Nothing in this Agreement shall be deemed to
obligate any Lender to obtain the funds for any Loan or Advance in any
particular place or manner or to constitute a representation by any Lender that
it has obtained or will obtain the funds for any Loan or Advance in any
particular place or manner.

        3.14 Failure to Charge Not Subsequent Waiver. Any decision by the
Administrative Agent or any Lender not to require payment of any interest
(including interest at the Default Rate), fee, cost or

                                      -37-
<PAGE>   43

other amount payable under any Credit Document, or to calculate any amount
payable by a particular method, on any occasion shall in no way limit or be
deemed a waiver of the Administrative Agent's or such Lender's right to require
full payment of any interest (including interest at the Default Rate), fee, cost
or other amount payable under any Credit Document, or to calculate an amount
payable by another method that is not inconsistent with this Agreement, on any
other or subsequent occasion.

        3.15 Administrative Agent's Right to Assume Payments Will be Made by
Borrower. Unless the Administrative Agent shall have been notified by Borrower
prior to the date on which any payment to be made by Borrower hereunder is due
that Borrower does not intend to remit such payment, the Administrative Agent
may, in its discretion, assume that Borrower has remitted such payment when so
due and the Administrative Agent may, in its discretion and in reliance upon
such assumption, make available to each Lender on such payment date an amount
equal to such Lender's share of such assumed payment. If Borrower has not in
fact remitted such payment to the Administrative Agent, each Lender shall
forthwith on demand repay to the Administrative Agent the amount of such assumed
payment made available to such Lender, together with interest thereon in respect
of each day from and including the date such amount was made available by the
Administrative Agent to such Lender to the date such amount is repaid to the
Administrative Agent at the Federal Funds Rate.

        3.16 Fee Determination Detail. The Administrative Agent and any Lender
shall provide reasonable detail to Borrower regarding the manner in which the
amount of any payment to the Creditors, or that Lender, under Article 3 has been
determined, concurrently with demand for such payment.

        3.17 Survivability. All of Borrower's obligations under Sections 3.7 and
3.8 shall survive for ninety days following the date on which the Commitments
are terminated, all Obligations hereunder are fully paid and all Letters of
Credit have expired.

                                      -38-
<PAGE>   44

                                   ARTICLE 4.
                         REPRESENTATIONS AND WARRANTIES

                In order to induce the Administrative Agent, the Issuing Lender,
and the Lenders to enter into this Agreement and the other Credit Documents, to
extend Loans and to issue and participate in Letters of Credit, Borrower
represents and warrants to the Administrative Agent, the Issuing Lender and each
Lender that:

        4.1 Existence and Qualification; Power; Compliance With Laws. Borrower
is a corporation duly formed, validly existing and in good standing under the
Laws of Delaware. The chief executive offices of Borrower are in Long Beach,
California. Borrower is duly qualified or registered to transact business and is
in good standing in California and each other jurisdiction in which the conduct
of its business or the ownership or leasing of its Properties makes such
qualification or registration necessary, except where the failure so to qualify
or register and to be in good standing would not have a material adverse effect
on the business, operations or condition (financial or otherwise) of Borrower
and its Subsidiaries, taken as a whole. Borrower has all requisite power and
authority to conduct its business, to own and lease its Properties and to
execute, deliver and perform all of its Obligations under the Credit Documents.
All outstanding shares of capital stock of Borrower are duly authorized, validly
issued, fully paid, non-assessable and issued in compliance with all applicable
state and federal securities and other Laws. Borrower is in compliance with all
Laws and other legal requirements applicable to its business, has obtained all
authorizations, consents, approvals, orders, licenses and permits from, and has
accomplished all filings, registrations and qualifications with, or obtained
exemptions from any of the foregoing from, any Governmental Agency that are
necessary for the transaction of its business, except where the failure so to
comply, file, register, qualify or obtain exemptions would not have a material
adverse effect on the business, operations or condition (financial or otherwise)
of Borrower and its Subsidiaries, taken as a whole.

        4.2 Authority; Compliance With Other Agreements and Instruments and
Government Regulations. The execution, delivery and performance by each of
Borrower and its Subsidiaries of the Credit Documents and the Acquisition
Documents to which it is a Party have been duly authorized by all necessary
action, and do not and will not:

                (a) Require any consent or approval not heretofore obtained of
        any partner, director, stockholder, security holder or creditor;

                (b) Violate or conflict with any provision of such Party's
        partnership agreement, certificate of limited partnership, charter,
        articles of incorporation or bylaws, or amendments thereto, as
        applicable;

                (c) Result in or require the creation or imposition of any Lien
        or Right of Others (other than as provided under the Credit Documents)
        upon or with respect to any Property now owned or leased or hereafter
        acquired by such Party;

                (d) Violate any provision of any Law (including, without
        limitation, Regulations T, U or X of the Board of Governors of the
        Federal Reserve System), order, writ, judgment, injunction, decree,
        determination or award presently in effect and having applicability to
        such Party; or

                                      -39-
<PAGE>   45

                (e) Result in a breach of or constitute a default under, or
        cause or permit the acceleration of any obligation owed under, any
        indenture or loan or credit agreement or any other material agreement,
        lease or instrument to which such Party is a party or by which such
        Party or any of its Property is bound or affected;

and neither Borrower nor any Subsidiary thereof is in default under any Law,
order, writ, judgment, injunction, decree, determination or award, or any
indenture, agreement, lease or instrument described in Section 4.2(e), in any
respect that is materially adverse to the interests of any Creditor or that
would have any material adverse effect on the business, operations or condition
(financial or otherwise) of Borrower and its Subsidiaries, taken as a whole.

        4.3 No Governmental Approvals Required. No authorization, consent,
approval, order, license or permit from, or filing, registration or
qualification with, or exemption from any of the foregoing from, any
Governmental Agency is or will be required to authorize or permit under
applicable Law the execution, delivery and performance by Borrower or any
Subsidiary thereof of the Credit Documents to which it is a Party.

        4.4 Subsidiaries.

                (a) Schedule 4.4 hereto correctly sets forth the names, forms of
        legal entity and jurisdictions of formation of all Subsidiaries of
        Borrower. Except as described in Schedule 4.4, Borrower does not own any
        capital stock, partnership interest, joint venture interest or other
        equity interest in any Person. Unless otherwise indicated in Schedule
        4.4, all of the outstanding shares of capital stock or partnership or
        joint venture interests of each Subsidiary of Borrower are owned of
        record and beneficially by Borrower, and all securities and interests so
        owned are duly authorized, validly issued, fully paid, non-assessable
        and issued in compliance with all applicable state and federal
        securities and other Laws, and are free and clear of all Liens and
        Rights of Others.

                (b) Each Subsidiary of Borrower is a legal entity of the form
        described for that Subsidiary in Schedule 4.4, duly formed, validly
        existing and in good standing under the Laws of its jurisdiction of
        formation, is duly qualified or registered to transact business and is
        in good standing in each other jurisdiction in which the conduct of its
        business or the ownership or leasing of its Properties makes such
        qualification or registration necessary, except where the failure so to
        qualify or register and to be in good standing would not have a material
        adverse effect on the business, operations or condition (financial or
        otherwise) of Borrower and its Subsidiaries, taken as a whole, and has
        all requisite legal power and authority to conduct its business and to
        own and lease its Properties and to execute, deliver and perform all of
        its Obligations under the Credit Documents.

                (c) Each Subsidiary of Borrower is in compliance with all Laws
        (subject to the matters referred to in Schedule 4.18) and other legal
        requirements applicable to its business, has obtained all
        authorizations, consents, approvals, orders, licenses and permits from,
        and has accomplished all filings, registrations and qualifications with,
        or obtained exemptions from any of the foregoing from, any Governmental
        Agency that are necessary for the transaction of its business, except
        where the failure so to comply, file, register, qualify or obtain
        exemptions

                                      -40-
<PAGE>   46

        would not have a material adverse effect on the business, operations or
        condition (financial or otherwise) of Borrower and its Subsidiaries,
        taken as a whole.

        4.5 Financial Statements. Borrower has furnished to each Creditor (a)
the audited consolidated balance sheet of Borrower and its Subsidiaries as at
December 31, 1999, and audited consolidated statements of profit and loss and of
changes in financial position of Borrower and its Subsidiaries for their fiscal
year then ended, and (b) the unaudited consolidated balance sheets of Borrower
and its Subsidiaries as at June 30, 2000, and unaudited consolidated statements
of profit and loss and of changes in financial position of Borrower and its
Subsidiaries for such quarter and for the portion of their fiscal year ended
with such quarter. Such financial statements fairly present in all material
respects the financial condition, results of operations and changes in financial
position of Borrower and its Subsidiaries as at such dates and for such periods,
in conformity with GAAP, consistently applied, provided that the balance sheets
and statements referred to in (b) above are subject to normal year-end audit
adjustments and do not contain footnotes.

        4.6 No Other Liabilities; No Material Adverse Effect. Borrower and its
Subsidiaries do not have any material liability or material contingent liability
not reflected or disclosed in the financial statements or notes thereto
described in Section 4.5. There has been no Material Adverse Effect since
December 31, 1999.

        4.7 Title to and Location of Property. Borrower and its Subsidiaries
have good and valid title to all the Property reflected in the financial
statements described in Section 4.5, other than Property subsequently sold in
the ordinary course of business, free and clear of all Liens and Rights of
Others other than Liens or Rights of Others permitted pursuant to Section 6.7.
Schedule 4.7 hereto sets forth the street address for all material interests in
real Property owned or held by Borrower or any of its Subsidiaries.

        4.8 Intangible Assets. Borrower and its Subsidiaries own, or possess the
unrestricted right to use, all trademarks, trade names, copyrights, patents,
patent rights, licenses and other Intangible Assets that are used in the conduct
of their businesses as now operated, and no such Intangible Asset, to the best
knowledge of Borrower, conflicts with the valid trademark, trade name,
copyright, patent, patent right or Intangible Asset of any other Person to the
extent that such conflict would have a material adverse effect on the business,
operations or condition (financial or otherwise) of Borrower and its
Subsidiaries, taken as a whole.

        4.9 Public Utility Holding Company Act. Neither Borrower nor any
Subsidiary thereof is a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.

        4.10 Litigation. Except for (i) any matter fully covered (subject to
usual deductibles and retentions) by insurance for which the insurance carrier
has assumed full responsibility, (ii) any matter, or series of related or
similar matters, involving a claim against Borrower or any of its Subsidiaries
of less than $500,000, and (iii) matters set forth in Schedule 4.10 and in the
financial statements (or the notes thereto) described in Section 4.5, there are
no actions, suits or proceedings pending or, to the best knowledge of Borrower,
threatened against or affecting Borrower or any of its Subsidiaries or any

                                      -41-
<PAGE>   47

Property of any of them in any court of Law or before any Governmental Agency
that would impair Borrower's or any Subsidiary's financial condition or ability
to repay the Loans.

        4.11 Binding Obligations. Each of the Credit Documents to which Borrower
or any Subsidiary thereof is a Party will, when executed and delivered by such
Party, constitute the legal, valid and binding obligation of such Party,
enforceable against such Party in accordance with its terms, except as
enforcement may be limited by Bankruptcy, insolvency, reorganization,
arrangement, moratorium or other similar Laws relating to or affecting
creditors' rights generally or equitable principles relating to the granting of
specific performance and other equitable remedies as a matter of judicial
discretion.

        4.12 No Default. No event has occurred and is continuing that is a
Default.

        4.13 ERISA Plans. With respect to each Plan maintained by Borrower or
any of its ERISA Affiliates:

                (a) such Plan complies in all material respects with ERISA and
        any other applicable Laws to the extent that noncompliance may
        reasonably be expected to have a Material Adverse Effect;

                (b) such Plan has not incurred any "accumulated funding
        deficiency" (as defined in Section 302 of ERISA);

                (c) no "reportable event" (as defined in Section 4043 of ERISA)
        has occurred; and

                (d) neither Borrower nor any of its ERISA Affiliates has engaged
        in any "prohibited transaction" (as defined in Section 4975 of the Code)
        that may reasonably be expected to have a Material Adverse Effect; and

                (e) Neither Borrower nor any of its Subsidiaries has incurred or
        expects to incur any withdrawal liability to any Multiemployer Plan that
        may reasonably be expected to have a Material Adverse Effect.

        4.14 Regulations T, U and X; Investment Company Act. Neither Borrower
nor any of its Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of "purchasing"
or "carrying" any "margin stock" or "margin security" within the meanings of
Regulations T, U or X, respectively, of the Board of Governors of the Federal
Reserve System. No part of the proceeds of any Loan hereunder will be used to
purchase or carry any such "margin security" or "margin stock" or to extend
credit to others for the purpose of purchasing or carrying any such "margin
security" or "margin stock" in violation of Regulations T, U or X of said Board
of Governors. Neither Borrower nor any of its Subsidiaries is or is required to
be registered under the Investment Company Act of 1940.

        4.15 Disclosure. No written statement made by Borrower or any Subsidiary
thereof to any Creditor in connection with this Agreement, or in connection with
any Loan, or in connection with the issuance of any Letter of Credit, contains
any untrue statement of a material fact or omits a material fact necessary to
make the statement made not misleading. To the best knowledge of Borrower, there
is

                                      -42-
<PAGE>   48

no fact which Borrower has not disclosed to any Creditor in writing which
materially and adversely affects nor, so far as Borrower can now foresee, is
reasonably likely to prove to affect materially and adversely the business,
operations, Properties, prospects, profits or condition (financial or otherwise)
of Borrower and its Subsidiaries, taken as a whole, or the ability of Borrower
and its Subsidiaries to perform their Obligations under the Credit Documents.

        4.16 Tax Liability. Borrower and its Subsidiaries have filed all income
tax returns which are required (including any extensions obtained pursuant to
applicable Law) to be filed, and have paid, or made provision for the payment
of, all taxes with respect to the periods, Property or transactions covered by
said returns, or pursuant to any assessment received by Borrower or any
Subsidiary thereof, except such taxes, if any, as are being contested in good
faith by appropriate proceedings and as to which adequate reserves have been
established and maintained.

        4.17 Employee Matters. There is no strike, work stoppage or labor
dispute with any union or group of employees pending or overtly threatened
involving Borrower or any of its Subsidiaries that could have a Material Adverse
Effect.

        4.18 Environmental Matters. Except as disclosed on Schedule 4.18 and in
the financial statements (or the notes thereto) described in Section 4.5, (i)
the real Property of Borrower and its Subsidiaries and the operations conducted
thereon do not violate any applicable Law, statute, ordinance, rule, regulation,
order or determination of any governmental authority or any restrictive covenant
or deed restriction (recorded or otherwise), including without limitation all
applicable zoning ordinances and building codes, flood disaster Laws and
Environmental Laws and regulations, in any respect which could have a Material
Adverse Effect; (ii) without limitation of clause (i) above, such real Property
and the operations conducted by Borrower, its subsidiaries or any current or
prior owner or operator of such real Property or operation, are not in violation
of or subject to any existing, pending or threatened action, suit,
investigation, inquiry or proceeding by any governmental authority or to any
remedial obligations under any Environmental Laws which, if determined adversely
to Borrower and its Subsidiaries, could have a Material Adverse Effect; (iii)
all notices, permits, licenses or similar authorizations, if any, required to be
obtained or filed in connection with the operation or use of the real Property
of Borrower, including without limitation past or present treatment, storage,
disposal or release of a hazardous substance or solid waste into the
environment, have been duly obtained or filed, except where the failure to
obtain or file same would not have a material adverse effect on the business,
operations or condition (financial or otherwise) of Borrower; (iv) all
significant amounts of hazardous waste generated at the real Property of
Borrower have in the past been and shall continue to be transported, treated and
disposed of only by carriers maintaining valid permits under RCRA and any other
Environmental Laws and only at treatment, storage and disposal facilities
maintaining valid permits under RCRA and any other Environmental Law, which
carriers and facilities have been and are, to the best of Borrower's knowledge,
operating in compliance with such permits or are exempt from obtaining such
permits; (v) Borrower has no actual or constructive knowledge of the disposal or
other release of any hazardous substance or solid waste, or the threatened
release of hazardous substances, on or to the real Property of Borrower except
in compliance with Environmental Laws, and that it has not been notified of same
by any Governmental Agency; (vi) Borrower has no material contingent liability
in connection with any release or threatened release of any hazardous substance
or solid waste into the environment; and (vii) the use which Borrower makes or
intends to make of Borrower's real Property will not result in the unlawful or
unauthorized disposal or other release of any hazardous substance or solid waste
on or to the real Property of Borrower. The terms "hazardous substance,"
"release" and

                                      -43-
<PAGE>   49

"threatened release" have the meanings specified in CERCLA, and the terms "solid
waste" and "disposal" (or "disposed") have the meanings specified in RCRA;
provided, however, in the event either CERCLA or RCRA is amended so as to
broaden the meaning of any term defined thereby, such broader meaning shall
apply subsequent to the effective date of such amendment, and provided further
that, to the extent the laws of any state in which any of the real Property of
Borrower is located establish a meaning for "hazardous substance," "release,"
"solid waste" or "disposal" which is broader than that specified in either
CERCLA or RCRA, such broader meaning shall apply with regard to the real
Property of Borrower located in such state.

        4.19 Projections. The projections and each of the pro forma financial
statements and certificates delivered to the Administrative Agent and the
Lenders in accordance with clauses (d), (g) and (h) of the definition of
"Permitted Acquisition" represent Borrower's best estimate, as of the date of
each such statement, of the future financial performance of Borrower and its
Subsidiaries for the periods set forth therein. Such pro forma financial
statements are based on facts, as of the date of each such statement, known to
Borrower and on assumptions that, as of the date of each such statement, are
reasonable and consistent with such facts. No material (in amount and
likelihood) fact or assumption is omitted as a basis for such pro forma
financial statements which, in Borrower's reasonable business judgment, should
be included, and such pro forma financial statements are reasonably based on
such facts and assumptions.

                                      -44-
<PAGE>   50

                                   ARTICLE 5.
                              AFFIRMATIVE COVENANTS
                           (OTHER THAN INFORMATION AND
                             REPORTING REQUIREMENTS)

                So long as any Loan remains unpaid, or any other Obligation
remains unpaid or unperformed, or any portion of the Commitments remain
outstanding, Borrower shall, and shall cause each of its Subsidiaries to, unless
the Required Lenders otherwise consent in writing:

        5.1 Payment of Taxes and Other Potential Liens. Pay and discharge
promptly all taxes, assessments and governmental charges or levies imposed upon
any of them, upon their respective Property or any part thereof, upon their
respective income or profits or any part thereof or upon any right or interest
of the Administrative Agent or any Lender under any Credit Document, except that
Borrower and its Subsidiaries shall not be required to pay or cause to be paid
(a) any income or gross receipts tax generally applicable to Lenders or (b) any
tax, assessment, charge or levy that is not yet past due, or is being contested
in good faith by appropriate proceedings, so long as the relevant entity has
established and maintains adequate reserves for the payment of the same and by
reason of such nonpayment and contest no material item or portion of Property of
Borrower and its Subsidiaries, taken as a whole, is in jeopardy of being seized,
levied upon or forfeited, or (c) miscellaneous taxes not willfully unpaid in an
aggregate amount not greater than $500,000 so long as by reason of such
nonpayment no material item or portion of Property of Borrower and its
Subsidiaries, taken as a whole, is in jeopardy of being seized, levied upon or
forfeited.

        5.2 Preservation of Existence. Other than where the failure of which
would not result in a Material Adverse Effect, preserve and maintain their
respective existences, licenses, rights, franchises and privileges in the
jurisdiction of their formation and all authorizations, consents, approvals,
orders, licenses, permits, or exemptions from, or registrations with, any
Governmental Agency that are necessary for the transaction of their respective
business, and qualify and remain qualified to transact business in each
jurisdiction in which such qualification is necessary in view of their
respective business or the ownership or leasing of their respective Properties.

        5.3 Maintenance of Properties. Maintain, preserve and protect all of
their respective Properties and equipment in good order and condition, subject
to wear and tear in the ordinary course of business, and not permit any waste of
their respective Properties, except that the failure to maintain, preserve and
protect a particular item of Property or equipment that is not of significant
value, either intrinsically or to the operations of Borrower and its
Subsidiaries, taken as a whole, shall not constitute a violation of this
covenant.

        5.4 Maintenance of Insurance. Maintain liability and casualty insurance
with responsible insurance companies in such amounts and against such risks as
is usually carried by responsible companies engaged in similar businesses and
owning similar Properties in the general areas in which Borrower and its
Subsidiaries operate, nor shall the coverage or terms or exclusions thereof be
materially modified, without at least thirty (30) days prior written notice to
the Administrative Agent.

        5.5 Compliance With Laws. Comply with the requirements of all applicable
Laws and orders of any Governmental Agency, noncompliance with which could
materially adversely affect the business, operations or condition (financial or
otherwise) of Borrower and its Subsidiaries, taken as a

                                      -45-
<PAGE>   51

whole, except that Borrower and its Subsidiaries need not comply with a
requirement then being contested by any of them in good faith by appropriate
proceedings so long as no interest of any Creditor would be materially impaired
thereby.

        5.6 [RESERVED].

        5.7 Keeping of Records and Books of Account. Keep adequate records and
books of account reflecting all financial transactions in conformity with GAAP,
consistently applied, and in material conformity with all applicable
requirements of any Governmental Agency having regulatory jurisdiction over
Borrower or any of its Subsidiaries.

        5.8 Compliance With Agreements, Duties and Obligations. Promptly and
fully comply with all their respective agreements, duties and obligations under
the Credit Documents, and under any other agreements, indentures, leases and/or
instruments to which any one or more of them is a party, whether such other
agreements, indentures, leases and/or instruments are with any Creditor or
another Person, except where failure to comply with any such agreement,
indenture, lease or instrument (other than any Credit Document) would not have a
Material Adverse Effect.

        5.9 Use of Proceeds. The proceeds of the Loans, the Letters of Credit
and the Swing Line Loans shall be used (a) on the Closing Date, to refinance the
obligations of Borrower and its Subsidiaries under the Existing Credit
Agreement, and (b) thereafter (i) to finance Capital Expenditures permitted
hereby, (ii) to provide for working capital and other general corporate purposes
of Borrower and its Subsidiaries, (iii) to fund Distributions permitted by
Section 6.3, and (iv) to finance Permitted Acquisitions.

        5.10 Subsidiary Guaranty. Cause each of its Subsidiaries, hereafter
formed or acquired, to execute and deliver a joinder of the Guaranty as soon as
practicable, but in any event within 5 days following such formation or
acquisition.

        5.11 [RESERVED].

        5.12 Inspection Rights. Upon reasonable notice, at any time during
regular business hours and as often as requested upon reasonable prior notice
(but not so as to unreasonably interfere with the business of the Borrower),
permit the Administrative Agent or any Lender, or any authorized employee, agent
or representative thereof, to examine, audit and make copies and abstracts from
the records and books of account of, and to visit and inspect the operations of
Borrower and its Subsidiaries, and to discuss the affairs, finances and accounts
of Borrower and its Subsidiaries with any of their officers, key employees, and
accountants, and, upon request, furnish promptly to the Administrative Agent or
any Lender true copies of all financial information made available to the senior
management of Borrower. All reasonable expenses incurred by the Creditors in
connection with this Section shall be promptly reimbursed by the Borrower.

        5.13 Interest Rate Protection Agreement. If at any time the Outstanding
Obligations are in excess of $60,000,000, and either (a) the Leverage Ratio as
of the last day of the then most recently ended Fiscal Quarter for which a
Compliance Certificate is required to have been delivered was in excess of
2.50:1.00, or (b) giving pro forma effect to any Indebtedness incurred since
such date to the Leverage Ratio as of such date, the Pro Forma Leverage Ratio as
of that date is in excess of 2.50:1.00,

                                      -46-
<PAGE>   52

then Borrower, within ninety (90) days thereafter, shall enter into a Swap
Agreement, in form and content and on terms and conditions satisfactory to the
Administrative Agent, which shall provide interest rate protection to Borrower
with respect to a portion of its Indebtedness in an amount equal to or greater
than at least fifty percent of the principal amount of the then outstanding
principal balance of the Loans.

                                      -47-
<PAGE>   53

                                   ARTICLE 6.
                               NEGATIVE COVENANTS

                So long as any Loan remains unpaid, or any other Obligation
remains unpaid or unperformed, or any portion of the Commitments remain
outstanding, Borrower shall not, and shall cause each of its Subsidiaries to
not, unless the Required Lenders otherwise consent in writing:

        6.1 Disposition of Property. Make any Disposition of their Property,
whether now owned or hereafter acquired, other than Dispositions of the types
described below made when no Default or Event of Default exists or would result
therefrom:

        (a)     obsolete or worn-out Property, tools or equipment no longer used
                or useful in its business or Real Property no longer used or
                useful in their business;

        (b)     any inventory or other Property sold or disposed of in the
                ordinary course of business; and

        (c)     other Dispositions of Property having an aggregate fair market
                value which is not in excess of $10,000,000.

        6.2 Mergers. Merge, consolidate or amalgamate with or into any Person,
except mergers, consolidations or amalgamations of a Subsidiary of Borrower into
Borrower (with Borrower as the surviving entity) or into any other Subsidiary of
Borrower and mergers conducted pursuant to Permitted Acquisitions where Borrower
or its pre-existing Subsidiary is the survivor thereof.

        6.3 Distributions. Make any Distribution, whether from capital, income
or otherwise, and whether in Cash or other Property, other than:

                (a) Distributions from any Subsidiary of Borrower to Borrower;

                (b) Provided that no Default or Event of Default exists or would
        result therefrom Borrower may repurchase shares of its common stock held
        by employees or former employees pursuant to employee stock ownership
        plans in existence on the Closing Date in an aggregate amount not to
        exceed $1,000,000 in any Fiscal Year; and

                (c) other Distributions made when no Default or Event of Default
        exists or would result therefrom in an aggregate amount not to exceed
        $10,000,000 during any period of twelve consecutive months or
        $25,000,000 during the term of this Agreement.

        6.4 Hostile Tender Offers. Make any offer to purchase or acquire, or
consummate a purchase or acquisition of, 5% or more of the capital stock of any
corporation or other business entity if the board of directors or management of
such corporation or business entity has notified Borrower that it opposes such
offer or purchase and such notice has not been withdrawn or superseded.

        6.5 ERISA. At any time, permit any Plan to: (i) engage in any non-exempt
"prohibited transaction" (as defined in Section 4975 of the Code); (ii) fail to
comply with ERISA or any other applicable Laws in all material respects; (iii)
incur any material "accumulated funding deficiency" (as

                                      -48-
<PAGE>   54

defined in Section 302 of ERISA); or (iv) terminate in any manner, which, with
respect to each event listed above, may reasonably be expected to result in any
Material Adverse Effect, or (b) withdraw, completely or partially, from any
Multiemployer Plan if to do so may reasonably be expected to result in a
Material Adverse Effect.

        6.6 Change in Nature of Business. Make any material change in the nature
of the business of Borrower and its Subsidiaries, as conducted and presently
proposed to be conducted.

        6.7 Liens, Negative Pledges and Rights of Others. Create, incur, assume
or suffer to exist any Lien, Negative Pledge prohibiting the granting of Liens
to the Creditors or any Right of Others of any nature upon or with respect to
any of their respective Properties, or engage in any sale and leaseback
transaction with respect to any of their respective Properties, whether now
owned or hereafter acquired, except:

                (a) Liens and Negative Pledges described on Schedule 6.7;

                (b) Permitted Encumbrances and Permitted Rights of Others;

                (c) Liens and Negative Pledges in favor of the Administrative
        Agent and the Lenders under the Credit Documents;

                (d) Liens securing Indebtedness and Liens securing real property
        financings, in each case to the extent permitted under Section 6.8(c)
        and Negative Pledges in favor of the holders of such Indebtedness with
        respect to such Property;

                (e) any Lien or Negative Pledge to the extent constituting a
        renewal, extension, refunding, refinancing or replacement of any Lien or
        Negative Pledge referred to in clauses (a); provided that the
        Indebtedness secured by any such Lien or Negative Pledge shall not be
        increased, or (c) of this Section, provided that such Lien or Negative
        Pledge relates solely to the Property which was subject to the Lien or
        Negative Pledge securing the obligation so renewed, extended, refunded,
        refinanced or replaced.

        6.8 Indebtedness and Contingent Obligations. Create, incur, assume or
suffer to exist any Indebtedness or Contingent Obligation except:

                (a) Indebtedness existing on the Closing Date and described on
        Schedule 6.8;

                (b) Indebtedness and Contingent Obligations under the Credit
        Documents;

                (c) purchase money Indebtedness (including Indebtedness incurred
        within one hundred eighty (180) days of such purchase for the purpose of
        financing such purchase), Capital Lease Obligations and real estate
        financing Indebtedness incurred when no Default or Event of Default has
        occurred and remains continuing, provided that the aggregate principal
        amount of such purchase money Indebtedness, real estate financing
        Indebtedness and Capital Lease Obligations outstanding at any time does
        not exceed $15,000,000;

                                      -49-
<PAGE>   55

                (d) Indebtedness consisting of one or more Swap Agreements
        entered into with respect to the Obligations;

                (e) Subordinated Obligations incurred when no Default or Event
        of Default exists;

                (f) unsecured Indebtedness to sellers in connection with
        Permitted Acquisitions in an aggregate principal amount not to exceed
        $5,000,000 at any time; and

                (g) amendments, renewals, extensions and refinancings of any of
        the Indebtedness and Capital Lease Obligations described in the
        foregoing clauses of this Section, to the extent that the then current
        principal amount thereof is not increased.

        6.9 Transactions with Affiliates. Enter into any transaction of any kind
with any Affiliate of Borrower other than (a) transactions between or among any
of Borrower and its Subsidiaries, (b) employment arrangements with officers and
directors of the Borrower in the ordinary course of business and (c)
transactions on overall terms at least as favorable to Borrower or its
Subsidiaries as would be the case in an arm's-length transaction between
unrelated parties of equal bargaining power.

        6.10 Change in Fiscal Year. Change its Fiscal Year.

        6.11 Payment or Prepayment of Subordinated Obligations. Pay or prepay
any principal (including sinking fund payments), interest or any other amount
with respect to any Subordinated Obligation, or purchase or redeem any
Subordinated Obligation, except Borrower may pay interest in accordance with the
terms of any Subordinated Obligation so long as there has not occurred and is
then continuing any Default or Event of Default.

        6.12 Leverage Ratio. Permit the Leverage Ratio as of the last day of any
Fiscal Quarter of Borrower and its Subsidiaries ending during any period
specified below to exceed the designated ratios for the periods specified below:

<TABLE>
<CAPTION>
                     Period                          Maximum Ratio
                     ------                          -------------
        <S>                                          <C>
        Closing Date through and including             3.00:1.00
        third Fiscal Quarter in 2002

        Fourth Fiscal Quarter in 2002 through          2.75:1.00
        and including the third Fiscal Quarter in
        2004

        Thereafter                                     2.50:1.00
</TABLE>

        6.13 Minimum EBITDA. Permit Adjusted EBITDA, for the period of four
fiscal quarters ending on the last day of any Fiscal Quarter to be less than the
sum of $25,000,000 plus (a) 75% of the cumulative Acquired EBITDA since the
Closing Date, and minus (b) 100% of the cumulative EBITDA attributable to any
Person or assets sold, transferred or otherwise disposed of by Borrower or its

                                      -50-
<PAGE>   56

Subsidiaries following the Closing Date for the most recent twelve month period
prior to such sale, transfer or other disposition.

        6.14 Interest Coverage Ratio. Permit the Interest Coverage Ratio as of
the last day of any Fiscal Quarter of Borrower and its Subsidiaries to be less
than 3.00:1.00.

        6.15 Net Worth. Permit Net Worth as of any date to be less than the sum
of (a) $80,000,000, plus (b) 75% of Net Income for each Fiscal Quarter which has
ended following the Closing Date (without deduction for any net loss occurring
in any such Fiscal Quarter), plus (c) 75% of the aggregate amount of the Net
Cash Proceeds of each issuance of equity securities by Borrower or any of its
Subsidiaries following the Closing Date, minus (d) the aggregate amount of the
Distributions made by Borrower pursuant to Section 6.3(c).

        6.16 Capital Expenditures. Make or commit to make any Capital
Expenditure other than:

                (a) Capital Expenditures made during each Fiscal Year described
        below in an aggregate amount not to exceed the amount set forth opposite
        that Fiscal Year

<TABLE>
<CAPTION>
        Fiscal Year Ending     Maximum Amount
        ------------------     --------------
        <S>                    <C>
        December 31, 2000      $17,000,000
        December 31, 2001      $11,400,000
        December 31, 2002      $ 9,400,000
        December 31, 2003      $ 9,000,000
        December 31, 2004      $ 9,500,000
        December 31, 2005      $10,000,000;
</TABLE>

        provided that any such amount not expended during any Fiscal Year may
        instead be carried over and expended in the immediately succeeding
        Fiscal Year (but not in any subsequent Fiscal Year);

                (b) additional Capital Expenditures made during Borrower's
        Fiscal Year ending December 31, 2000 and each subsequent year in an
        amount which does not exceed, during any such Fiscal Year, 1.5 times the
        depreciation during that Fiscal Year (determined in accordance with
        GAAP) associated with assets acquired pursuant to Permitted
        Acquisitions, provided that any such amount not expended during any
        Fiscal Year may instead be carried over and expended in the immediately
        succeeding Fiscal Year (but not in any subsequent Fiscal Year); and

                (c) to the extent treated as Capital Expenditures in accordance
        with GAAP, the amount of the consideration paid in connection with
        Permitted Acquisitions.

        6.17 Acquisitions and Investments. Borrower shall not, and shall not
suffer or permit any of its Subsidiaries to, make any Acquisition or Investment
other than:

                (a) Permitted Acquisitions;

                                      -51-
<PAGE>   57

                (b) Investments in Cash and Cash Equivalents;

                (c) other Investments in an aggregate amount not to exceed
        $5,000,000; and

                (d) Investments made in the ordinary course of business pursuant
        to (i) Ducommun Incorporated Executive Compensation Deferral Plan dated
        May 5, 1993 and (ii) Ducommun Incorporated Compensation Deferral Plan
        No. 2 dated October 15, 1994.

                                      -52-
<PAGE>   58

                                   ARTICLE 7.
                     INFORMATION AND REPORTING REQUIREMENTS

        7.1 Financial and Business Information. So long as any Loan remains
unpaid, or any other Obligation remains unpaid or unperformed, or any portion of
the Commitment remain outstanding, Borrower shall, unless the Required Lenders
otherwise consent in writing, deliver to the Administrative Agent for provision
to each Lender, at Borrower's sole expense:

                (a) As soon as practicable, and in any event within 45 days
        after the end of each Fiscal Quarter of Borrower (including the last
        fiscal quarter of each fiscal year, provided that with respect to such
        last quarter the financial statements required hereby may be in
        preliminary form, prior to year-end audit adjustments), (i) consolidated
        and consolidating balance sheets of Borrower and its Subsidiaries as at
        the end of such quarter, setting forth in comparative form the
        corresponding figures as at the end of the corresponding quarter of
        their preceding fiscal year and (ii) consolidated and consolidating
        statements of profit and loss and of changes in financial position of
        Borrower and its Subsidiaries for such quarter and for the portion of
        their fiscal year ended with such quarter, setting forth in comparative
        form the corresponding figures for the corresponding periods of their
        preceding fiscal year, all in reasonable detail. The preceding financial
        statements shall be certified by a Responsible Official of Borrower as
        fairly presenting the financial condition, results of operations and
        changes in financial position of Borrower and its Subsidiaries in
        accordance with GAAP, consistently applied, as at such date and for such
        periods, subject only to normal year-end audit adjustments and the
        absence of footnotes.

                (b) As soon as practicable, and in any event within 90 days
        after the close of each Fiscal Year of Borrower, (i) the consolidated
        balance sheet of Borrower and its Subsidiaries as at the end of such
        fiscal year, setting forth in comparative form the corresponding figures
        as at the end of their preceding fiscal year, and (ii) the consolidated
        statement of profit and loss and of changes in financial position of
        Borrower and its Subsidiaries for such fiscal year, setting forth in
        comparative form the corresponding figures for their previous fiscal
        year, all in reasonable detail. Such balance sheets and statements shall
        be prepared in accordance with GAAP, consistently applied, and such
        consolidated balance sheet and consolidated statements shall be
        accompanied by a report and opinion of independent public accountants of
        nationally recognized standing selected by Borrower and reasonably
        satisfactory to Lender, which report and opinion shall be prepared in
        accordance with generally accepted auditing principles as at such date,
        and shall be subject only to such qualifications and exceptions as are
        acceptable to the Required Lender.

                (c) Within 45 days after the end of each Fiscal Quarter of
        Borrower (or more frequently, if requested by the Administrative Agent),
        a consolidated and consolidating project backlog (with work in progress
        information on major projects, if requested by the Administrative Agent)
        of Borrower and its Subsidiaries.

                (d) Promptly after request by the Administrative Agent, copies
        of any detailed audit reports or recommendations submitted to Borrower
        or any of its Subsidiaries by independent accountants in connection with
        the accounts or books of Borrower or any of its Subsidiaries, or any
        audit of any of them.

                                      -53-
<PAGE>   59

                (e) Promptly after request by any Lender, copies of any report
        or other document filed by Borrower or any of its Subsidiaries with any
        Governmental Agency.

                (f) Within ten days of the filing or sending thereof, copies of
        each annual report, proxy or financial statement or other report or
        communication sent to the shareholders of Borrower, and copies of all
        annual, regular, periodic and special reports and registration
        statements which Borrower may file or be required to file with the
        Securities and Exchange Commission or any similar or corresponding
        Governmental Agency or with any securities exchange.

                (g) As soon as practicable, and in any event within two Business
        Days after a corporate officer of Borrower becomes aware of the
        existence of any condition or event which constitutes a Default, a
        written notice specifying the nature and period of existence thereof and
        what action Borrower or its Subsidiaries are taking or propose to take
        with respect thereto.

                (h) Promptly upon a corporate officer of Borrower becoming aware
        that (i) a dispute exists between Borrower or any of its Subsidiaries
        and any Governmental Authority or law enforcement authority which, if
        determined adversely to Borrower or its Subsidiary, would have a
        material adverse effect on Borrower or its Subsidiary, together with
        written notice describing the pertinent facts relating thereto and what
        action Borrower or its Subsidiary is taking or proposes to take with
        respect thereto, (ii) any Person commenced a legal proceeding with
        respect to a claim against Borrower or any of its Subsidiaries in excess
        of $500,000 that is not fully covered by insurance, (iii) any creditor
        or lessor under a written credit agreement or material lease has
        asserted a default thereunder on the part of Borrower or any of its
        Subsidiaries or (iv) any Person commenced a legal proceeding with
        respect to a claim against Borrower or any of its Subsidiaries under a
        contract that is not a credit agreement or material lease in excess of
        $500,000 or which otherwise may reasonably be expected to result in a
        material adverse effect on Borrower and its Subsidiaries, taken as a
        whole, together with a written notice describing the pertinent facts
        relating thereto and what action Borrower or its Subsidiaries are taking
        or propose to take with respect thereto.

                (i) Updated projections for Borrower and its Subsidiaries
        (prepared on a consolidated and consolidating basis), as follows: (1)
        within 60 days prior to the end of each Fiscal Year, the strategic/long
        range plan on an annual basis for the Fiscal Years from present through
        December 31, 2005, and (2) within 30 days after the end of each Fiscal
        Year, the annual operating plan for the current Fiscal Year; such
        projections required by (1) and (2) above each to be in form and detail
        satisfactory to the Administrative Agent, and each to be submitted
        together with the certification of Borrower's chief financial officer
        stating that the projections are based on facts known to Borrower and on
        assumptions that are reasonable and consistent with such facts, that no
        material (in amount and likelihood) fact or assumption has been omitted
        as a basis for such projections which, in Borrower's reasonable business
        judgment, should be included, and that such projections are reasonably
        based on such facts and assumptions.

                (j) Promptly upon request, such other information, financial or
        otherwise, as the Administrative Agent or the Required Lenders may
        reasonably request.

                                      -54-
<PAGE>   60

        7.2 Compliance Certificates. So long as any Loan remains unpaid, or any
other Obligation remains unpaid or unperformed, or any portion of the
Commitments remain outstanding, Borrower shall, unless the Required Lenders
otherwise consent in writing, deliver to the Administrative Agent, at Borrower's
sole expense, not later than 60 days after the end of each fiscal quarter of
Borrower, a Compliance Certificate (a) setting forth computations showing, in
detail satisfactory to the Administrative Agent, whether Borrower and its
Subsidiaries were in compliance with their obligations pursuant to Sections 6.12
through 6.17; and (b) stating that a review of the activities of Borrower and
its Subsidiaries during such fiscal period has been made under supervision of
the certifying Responsible Official with a view to determining whether during
such fiscal period Borrower and its Subsidiaries performed and observed all
their respective Obligations under the Credit Documents, and either (i) stating
that, to the best knowledge of the certifying Responsible Official, during such
fiscal period, Borrower and its Subsidiaries performed and observed each
covenant and condition of the Credit Documents applicable to them, or (ii) if
Borrower and its Subsidiaries have not performed and observed such covenants and
conditions, specifying all such Defaults and their nature and status.

                                      -55-
<PAGE>   61

                                   ARTICLE 8.
                                   CONDITIONS

        8.1 Closing Conditions. The obligation of each Lender to make the
initial Advance to be made by it on the Closing Date, and the obligation of Bank
of America to make available the initial Swing Line Advances and Letters of
Credit, are each subject to the following conditions precedent, each of which
shall be satisfied prior to the making of the initial Advances (unless all of
the Lenders, in their sole and absolute discretion, shall agree otherwise):

                (a) The Administrative Agent shall have received all of the
        following, each of which shall be originals unless otherwise specified,
        each properly executed by a Responsible Official of each party thereto,
        each dated as of the Closing Date and each in form and substance
        satisfactory to the Administrative Agent and its legal counsel (unless
        otherwise specified or, in the case of the date of any of the following,
        unless the Administrative Agent otherwise agrees or directs):

                        (1) executed counterparts of this Agreement, sufficient
                in number for distribution to the Administrative Agent, each
                Lender, Borrower and their respective counsel;

                        (2) the Notes executed by Borrower payable to the order
                of each Lender;

                        (3) with respect to Borrower and any and each Subsidiary
                of Borrower, such documentation as the Administrative Agent may
                require to establish the due organization, valid existence and
                good standing of Borrower and each such Subsidiary, its
                qualification to engage in business in each jurisdiction in
                which it is engaged in business or required to be so qualified,
                its authority to execute, deliver and perform any Credit
                Documents to which it is a Party, and the identity, authority
                and capacity of each Responsible Official thereof authorized to
                act on its behalf, including, without limitation, certified
                copies of articles of incorporation and amendments thereto,
                bylaws and amendments thereto, certificates of good standing
                and/or qualification to engage in business, tax clearance
                certificates, certificates of corporate resolutions, incumbency
                certificates, Certificates of Responsible Officials, and the
                like;

                        (4) the Guaranty executed by all Subsidiaries of
                Borrower;

                        (5) the written legal opinion of James Heiser, General
                Counsel for the Borrower, and Gibson, Dunn & Crutcher LLP,
                special counsel for Borrower and each of the Guarantors;

                        (6) the fee letter described in Article 3;

                                      -56-
<PAGE>   62

                        (7) a Certificate of a Responsible Official of Borrower
                certifying that the conditions specified in Sections 8.1(b),
                8.1(c) and 8.1(d) have been satisfied and setting forth the
                Leverage Ratio as of the last Fiscal Quarter ending prior to the
                Closing Date; and

                        (8) such other certificates, documents, consents or
                opinions as the Administrative Agent or any Lender reasonably
                may require.

                (b) The representations and warranties of Borrower contained in
        Article 4 shall be true and correct.

                (c) Borrower and its Subsidiaries and any other Parties shall be
        in compliance with all the terms and provisions of the Credit Documents,
        and no Default shall have occurred and be continuing.

                (d) No Material Adverse Effect shall have occurred since
        December 31, 1999.

                (e) The Administrative Agent and the Lead Arranger shall have
        received payments of the fees described in Sections 3.2 through 3.6 to
        be paid on the Closing Date, together with reimbursement for their
        expenses invoiced prior to the Closing Date.

        8.2 Any Increasing Loan, Etc. In addition to any applicable conditions
precedent set forth elsewhere in this Article 8, the obligation of each Lender
to make any Advance which would increase the principal amount outstanding under
the Notes, the obligation of the Issuing Lender to issue any Letter of Credit,
and the obligation of the Swing Line Lender to make any Swing Line Loan, are
subject to the following conditions precedent:

                (a) the representations and warranties contained in Article 4,
        other than Sections 4.4(a), 4.5, 4.6 (first sentence), 4.10 and 4.19,
        shall be true and correct on and as of the date of the Loan or issuance,
        as the case may be, as though made on and as of that date; there shall
        be no actions, suits or proceedings pending against or affecting
        Borrower or any of its Subsidiaries or any Property of any of them in
        any court of Law or before any Governmental Agency which might
        reasonably be expected adversely to have a Material Adverse Effect; no
        Material Adverse Effect shall have occurred and be continuing since the
        Closing Date; no Default shall have occurred and be continuing; the
        Administrative Agent shall have timely received a properly completed
        Request for Loan or Request for Letter of Credit, as the case may be, in
        compliance with all applicable provisions of Article 2; and
        Administrative Agent shall have received, dated as of the date of the
        Loan or issuance, as the case may be, a Certificate of a Responsible
        Official of Borrower to the effect that all of the above conditions have
        been satisfied, with any changes or exceptions thereto being described
        in a schedule attached to such certificate and with such changes or
        exceptions being subject to the approval of Administrative Agent; and

                (b) Administrative Agent shall have received, in form and
        substance satisfactory to Administrative Agent such other certificates,
        documents, consents or opinions as Administrative Agent reasonably may
        require.

                                      -57-
<PAGE>   63

                                   ARTICLE 9.
              EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT

        9.1 Events of Default. The existence or occurrence of any one or more of
the following events, whatever the reason therefor, shall constitute an Event of
Default:

                (a) Borrower (i) fails to pay any principal on any of the Notes,
        or any portion thereof, on the date when due, (ii) fails to make any
        payment with respect to any Letter of Credit when due, or (iii) fails to
        make any payment of principal with respect to any Swing Line Advance
        when due; or

                (b) Borrower fails to pay any interest on any of the Notes, or
        any fees under Article 3 or any portion thereof, within two Business
        Days after the date when due; or fails to pay any other fee or amount
        payable to the Lenders under any Credit Document, or any portion
        thereof, within five Business Days after demand therefor; or

                (c) Borrower fails to comply with any of the covenants contained
        in Article 6;

                (d) Borrower or any other Obligor fails to perform or observe
        any other covenant or agreement (not specified in clauses (a), (b) or
        (c) above) contained in any Credit Document on its part to be performed
        or observed within twenty-five Business Days after the giving of notice
        by the Administrative Agent or the Required Lenders of such Default; or

                (e) Any representation or warranty of Borrower or any other
        Obligor made in any Credit Document proves to have been incorrect when
        made or reaffirmed, or in any certificate or other writing delivered by
        Borrower pursuant to any Credit Document, proves to have been incorrect
        when made or reaffirmed; or

                (f) Any failure to comply with Section 7.1(g) that is materially
        adverse to the interest of any Creditor; or

                (g) Borrower or any of its Subsidiaries (i) fails to pay the
        principal, or any principal installment, of any present or future
        indebtedness for borrowed money or in connection with the purchase or
        lease of Property, or any guaranty of present or future indebtedness for
        borrowed money or issued in connection with the purchase or lease of
        Property, on its part to be paid, when due (or within any stated grace
        period), whether at the stated maturity, upon acceleration, by reason of
        required prepayment or otherwise (other than any such obligation under
        an unsecured promissory note or related documentation, executed by
        Borrower or any of its Subsidiaries in favor of the seller in any
        Permitted Acquisition, that is being contested in good faith), which
        equals or exceeds in the aggregate, $1,000,000 or (ii) fails to perform
        or observe any other term, covenant or agreement on its part to be
        performed or observed in connection with any present or future
        indebtedness for borrowed money or in connection with the purchase or
        lease of Property, or of any guaranty of present or future indebtedness
        for borrowed money or issued in connection with the purchase or lease of
        Property (other than any such obligation under an unsecured promissory
        note or related documentation, executed by Borrower or any of its
        Subsidiaries in favor of the seller in any Permitted

                                      -58-
<PAGE>   64

        Acquisition, that is being contested in good faith), which equals or
        exceeds in the aggregate, $1,000,000 if as a result of such failure any
        holder or holders thereof (or an agent or trustee on its or their
        behalf) has the right to declare such indebtedness due before the date
        on which it otherwise would become due, or has commenced judicial or
        nonjudicial action to collect such indebtedness or to foreclose or
        otherwise realize upon security held therefor; or

                (h) Any Credit Document, at any time after its execution and
        delivery and for any reason other than the agreement of the Lenders or
        satisfaction in full of all the Obligations, ceases to be in full force
        and effect or is declared by a court of competent jurisdiction to be
        null and void, invalid or unenforceable in any respect which, in the
        reasonable opinion of the Lenders, is materially adverse to the
        interests of the Lenders; or any Party thereto denies that it has any or
        further liability or obligation under any Credit Document, or purports
        to revoke, terminate or rescind same; or

                (i) A final judgment against Borrower or any of its Subsidiaries
        is entered for the payment of money in excess of $500,000 (which is not
        covered by insurance) and such judgment remains unsatisfied, unvacated,
        or unstayed pending appeal within thirty days after the date of entry of
        judgment, or in any event later than five days prior to the date of any
        proposed sale thereunder; or

                (j) Borrower or any of its Subsidiaries is the subject of an
        order for relief in a Bankruptcy case, or is unable or admits in writing
        its inability to pay its debts as they mature, or makes an assignment
        for the benefit of creditors; or applies for or consents to the
        appointment of any receiver, trustee, custodian, conservator,
        liquidator, rehabilitator or similar officer for it or for all or any
        part of its Property; or any receiver, trustee, custodian, conservator,
        liquidator, rehabilitator or similar officer is appointed without the
        application or consent of that Person and the appointment continues
        undischarged or unstayed for forty-five days; or institutes or consents
        to any Bankruptcy, insolvency, reorganization, arrangement, readjustment
        of debt, dissolution, custodianship, conservatorship, liquidation,
        rehabilitation or similar case or proceedings relating to it or to all
        or any part of its Property under the Laws of any jurisdiction; or any
        similar case or proceeding is instituted without the consent of that
        Person and continues undismissed or unstayed for forty-five days; or

                (k) Any judgment, writ, warrant of attachment or execution or
        similar process is issued or levied against all or any material Property
        or portion thereof of any such Person and is not released, vacated or
        fully bonded within forty-five days after its issue or levy; or

                (l) Borrower or any Subsidiary thereof is dissolved or
        liquidated or all or substantially all of the assets of Borrower or any
        Subsidiary of Borrower are sold or otherwise transferred in violation of
        the provisions of this Agreement without the written consent of the
        Required Lenders; or

                (m) An event or set of events occurs which has or could
        reasonably be expected to have a material adverse effect on (i) the
        validity or enforceability of this Agreement, any other agreement or
        document executed in connection with this Agreement, or the ability of
        the Administrative Agent and the Lenders to enforce their legal remedies
        thereunder; or (ii) the condition (financial or otherwise), business
        operations or prospects of Borrower and its

                                      -59-
<PAGE>   65

        Subsidiaries, taken as a whole, which could in turn reasonably be
        expected to impair the ability of Borrower and its Subsidiaries, taken
        as a whole, to perform their obligations under this Agreement and all
        such other documents and agreements; or

                (n) The occurrence of any one or more of the following events
        with respect to Borrower or any Subsidiary, provided such event or
        events could reasonably be expected, in the judgment of the
        Administrative Agent, to subject the Borrower to any tax, penalty or
        liability (or any combination of the foregoing) which, in the aggregate,
        could have a material adverse effect on the financial condition of
        Borrower with respect to a Plan:

                        (1) A reportable event shall occur with respect to a
                Plan which is, in the reasonable judgment of Lender likely to
                result in the termination of such Plan for purposes of Title IV
                of ERISA.

                        (2) Any Plan termination (or commencement of proceedings
                to terminate a Plan) or Borrower's full or partial withdrawal
                from a Plan.

        9.2 Remedies Upon Event of Default. Without limiting any other rights or
remedies of the Administrative Agent or the Lenders provided for elsewhere in
this Agreement, or the other Credit Documents, or by applicable Law, or in
equity, or otherwise:

                (a) Upon the occurrence, and during the continuance, of any
        Event of Default other than an Event of Default described in Section
        9.1(j):

                        (i) the Commitments to make Advances, the obligation of
                the Issuing Lender to issue Letters of Credit, the obligation of
                the Swing Line Lender to make Swing Line Advances and all other
                obligations of the Creditors to the Obligors and all rights of
                Borrower and the other Obligors under the Credit Documents shall
                be suspended without notice to or demand upon Borrower, which
                are expressly waived by Borrower, except that all of the Lenders
                or the Required Lenders (as the case may be, in accordance with
                Section 11.2) may waive an Event of Default or, without waiving,
                determine, upon terms and conditions satisfactory to the Lenders
                or Required Lenders, as the case may be, to reinstate the
                Commitments and make further Advances, and cause the Issuing
                Lender to issue further Letters of Credit, which waiver or
                determination shall apply equally to, and shall be binding upon,
                all the Lenders;

                        (ii) the Issuing Lender may, with the approval of the
                Administrative Agent on behalf of the Required Lenders, demand
                immediate payment by Borrower of an amount equal to the
                aggregate amount of all outstanding Letters of Credit to be held
                by the Issuing Lender as cash collateral hereunder; and

                        (iii) the Required Lenders may request the
                Administrative Agent to, and the Administrative Agent thereupon
                shall, terminate the Commitments and may declare all or any part
                of the unpaid principal of the Notes, all interest accrued and
                unpaid thereon and all other amounts payable under the Credit
                Documents to be forthwith due and payable, whereupon the same
                shall become and be forthwith due and payable, without

                                      -60-
<PAGE>   66

                protest, presentment, notice of dishonor, demand or further
                notice of any kind, all of which are expressly waived by
                Borrower.

                (b) Upon the occurrence of any Event of Default described in
        Section 9.1(j):

                        (i) the Commitments to make Advances, the obligation of
                the Issuing Lender to issue Letters of Credit, the obligation of
                the Swing Line Lender to make Swing Line Advances and all other
                obligations of the Creditors to the Obligors and all rights of
                Borrower and any other Obligors under the Credit Documents shall
                terminate without notice to or demand upon Borrower, which are
                expressly waived by Borrower, except that all the Lenders may
                waive the Event of Default or, without waiving, determine, upon
                terms and conditions satisfactory to all the Lenders, to
                reinstate the Commitments and make further Advances and to cause
                the Issuing Lender to issue further Letters of Credit, which
                determination shall apply equally to, and shall be binding upon,
                all the Lenders;

                        (ii) an amount equal to the aggregate amount of all
                outstanding Letters of Credit shall be immediately due and
                payable to the Issuing Lender without notice to or demand upon
                Borrower, which are expressly waived by Borrower, to be held by
                the Issuing Lender in an interest-bearing account as collateral
                hereunder; and

                        (iii) the unpaid principal of all Notes, all interest
                accrued and unpaid thereon and all other amounts payable under
                the Credit Documents shall be forthwith due and payable, without
                protest, presentment, notice of dishonor, demand or further
                notice of any kind, all of which are expressly waived by
                Borrower.

                (c) Upon the occurrence and during the continuance of any Event
        of Default, the Lenders and the Administrative Agent, or any of them,
        without notice to (except as expressly provided for in any Credit
        Document) or demand upon Borrower, which are expressly waived by
        Borrower (except as to notices expressly provided for in any Credit
        Document), may proceed (but only with the consent of the Required
        Lenders) to protect, exercise and enforce their rights and remedies
        under the Credit Documents against Borrower and any other Obligor and
        such other rights and remedies as are provided by Law or equity.

                (d) The order and manner in which the Lenders' and the
        Administrative Agent's rights and remedies are to be exercised shall be
        determined by the Required Lenders in their sole discretion, and all
        payments received by the Administrative Agent and the Lenders, or any of
        them, shall be applied first to the costs and expenses (including
        reasonable attorneys' fees and disbursements and the reasonably
        allocated costs of attorneys employed by the Administrative Agent or by
        any Lender) of the Administrative Agent and of the Lenders, and
        thereafter paid pro rata to the Lenders in the same proportions that the
        aggregate Obligations owed to each Lender under the Credit Documents
        bear to the aggregate Obligations owed under the Credit Documents to all
        the Lenders, without priority or preference among the Lenders.
        Regardless of how each Lender may treat payments for the purpose of its
        own accounting, for the purpose of computing Borrower's Obligations
        hereunder and under the Notes, payments shall be applied first, to the
        costs and expenses of the Administrative Agent and the Lenders, as set
        forth above, second, to the payment of accrued and unpaid interest due
        under any Credit Documents to and

                                      -61-
<PAGE>   67

        including the date of such application (ratably, and without
        duplication, according to the accrued and unpaid interest due under each
        of the Credit Documents), and third, to the payment of all other amounts
        (including principal and fees) then owing to the Administrative Agent or
        the Lenders under the Credit Documents. No application of payments will
        cure any Event of Default, or prevent acceleration, or continued
        acceleration, of amounts payable under the Credit Documents, or prevent
        the exercise, or continued exercise, of rights or remedies of the
        Lenders hereunder or thereunder or at Law or in equity.

                                      -62-
<PAGE>   68

                                   ARTICLE 10.
                            THE ADMINISTRATIVE AGENT

        10.1 Appointment and Authorization. Each Creditor hereby irrevocably
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers under the Credit Documents as are
delegated to the Administrative Agent by the terms thereof or are reasonably
incidental, as determined by the Administrative Agent, thereto. This appointment
and authorization is intended solely for the purpose of facilitating the
servicing of the Loans and the other Obligations and does not constitute
appointment of the Administrative Agent as trustee for any Lender or as
representative of any Lender for any other purpose and, except as specifically
set forth in the Credit Documents to the contrary, the Administrative Agent
shall take such action and exercise such powers only in an administrative and
ministerial capacity.

        10.2 Administrative Agent and Affiliates. Bank of America (and each
successor Administrative Agent) has the same rights and powers under the Credit
Documents as any other Lender and may exercise the same as though it was not the
Administrative Agent, and the term "Lender" or "Lenders" includes Bank of
America in its individual capacity. Bank of America (and each successor
Administrative Agent) and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of banking, trust or other business with
Borrower, any Subsidiary thereof, or any Affiliate of Borrower or any Subsidiary
thereof, as if it was not the Administrative Agent and without any duty to
account therefor to the Lenders. Bank of America (and each successor
Administrative Agent) need not account to any other Lender for any monies
received by it for reimbursement of its costs and expenses as Administrative
Agent hereunder, or for any monies received by it in its capacity as a Lender
hereunder. The Administrative Agent shall not be deemed to hold a fiduciary
relationship with any Lender (other than with respect to funds it receives on
behalf of any Lender) and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Agreement or
otherwise exist against the Administrative Agent.

        10.3 Proportionate Interest in any Collateral. The Administrative Agent,
on behalf of all the Lenders, shall hold in accordance with the Credit Documents
all items of any collateral or interests therein received or held by the
Administrative Agent. Subject to the Administrative Agent's and the Lenders'
rights to reimbursement for their costs and expenses hereunder (including
attorneys' fees and disbursements and other professional services and the
allocated costs of attorneys employed by the Administrative Agent or a Lender),
each Lender shall have an interest in the Lenders' interest in any collateral or
interests therein in the same proportions that the aggregate Obligations owed
such Lender under the Credit Documents bear to the aggregate Obligations owed
under the Credit Documents to all the Lenders, without priority or preference
among the Lenders.

        10.4 Creditors' Credit Decisions. Each Creditor agrees that it has,
independently and without reliance upon the Administrative Agent, any other
Creditor or the directors, officers, agents, employees or attorneys of any other
Creditor, and instead in reliance upon information supplied to it by or on
behalf of Borrower and upon such other information as it has deemed appropriate,
made its own independent credit analysis and decision to enter into this
Agreement. Each Creditor also agrees that it shall, independently and without
reliance upon any other Creditor or the directors, officers, agents, employees
or attorneys of any other Creditor, continue to make its own independent credit
analyses and decisions in acting or not acting under the Credit Documents.

                                      -63-
<PAGE>   69

        10.5 Action by Administrative Agent.

                (a) Absent actual knowledge of the Administrative Agent of the
        existence of a Default or Event of Default, the Administrative Agent may
        assume that no Default or Event of Default has occurred and is
        continuing, unless the Administrative Agent has received notice from
        Borrower stating the nature of the Default or has received notice from a
        Lender stating the nature of the Default and that such Lender considers
        the Default to have occurred and to be continuing.

                (b) The Administrative Agent has only those obligations under
        the Credit Documents as are expressly set forth therein.

                (c) Except for any obligation expressly set forth in the Credit
        Documents and as long as the Administrative Agent may assume that no
        Event of Default has occurred and is continuing, the Administrative
        Agent may, but shall not be required to, exercise its discretion to act
        or not act, provided that (i) the Administrative Agent shall be required
        to act or not act upon the instructions of the Required Lenders (or of
        all the Lenders, to the extent required by Section 11.2) and those
        instructions shall be binding upon the Administrative Agent and all of
        the other Creditors, and (ii) the Administrative Agent shall not be
        required to act or not act if to do so would be contrary to any Credit
        Document or to applicable Law or would result, in the reasonable
        judgment of the Administrative Agent, in substantial risk of liability
        to the Administrative Agent.

                (d) If the Administrative Agent has received a notice specified
        in clause (a), the Administrative Agent shall immediately give notice
        thereof to the Lenders, which notice shall specify a requested action
        with respect thereto (such notice, a "Default Action Request"), and
        shall act or not act upon the instructions of the Required Lenders (or
        of all the Lenders, to the extent required by Section 11.2), provided
        that (i) the Administrative Agent shall not be required to act or not
        act if to do so would be contrary to any Credit Document or to
        applicable Law or would result, in the reasonable judgment of the
        Administrative Agent, in substantial risk of liability to the
        Administrative Agent, and (ii) if the Required Lenders (or all the
        Lenders, if required under Section 11.2) fail, for five Business Days
        after the receipt of the Default Action Request from the Administrative
        Agent, to instruct the Administrative Agent, then the Administrative
        Agent shall (A) treat such failure to respond as an affirmative response
        to the Default Action Request and (B) act in accordance therewith.

                (e) The Administrative Agent shall have no liability to any
        Creditor for acting, or not acting, as instructed by the Required
        Lenders (or all the Lenders, if required under Section 11.2),
        notwithstanding any other provision hereof.

        10.6 Liability of Administrative Agent. Neither the Administrative Agent
nor any of its directors, officers, agents, employees or attorneys shall be
liable for any action taken or not taken by them under or in connection with the
Credit Documents, except for their own gross negligence or willful misconduct.
Without limitation on the foregoing, the Administrative Agent and its directors,
officers, agents, employees and attorneys:

                                      -64-
<PAGE>   70

                (a) May treat the payee of any Note as the holder thereof until
        the Administrative Agent receives notice of the assignment or transfer
        thereof, in form satisfactory to the Administrative Agent, signed by the
        payee, and may treat each Lender as the owner of that Lender's interest
        in the Obligations for all purposes of this Agreement until the
        Administrative Agent receives notice of the assignment or transfer
        thereof, in form satisfactory to the Administrative Agent, signed by
        that Lender.

                (b) May consult with legal counsel (including in-house legal
        counsel), accountants (including in-house accountants) and other
        professionals or experts selected by it, or with legal counsel,
        accountants or other professionals or experts for Borrower and/or its
        Subsidiaries or the Lenders, and shall not be liable for any action
        taken or not taken by it in accordance with this Article 10 and in good
        faith in accordance with any advice of such legal counsel, accountants
        or other professionals or experts.

                (c) Shall not be responsible to any Lender for any statement,
        warranty or representation made in any of the Credit Documents or in any
        notice, certificate, report, request or other statement (written or
        oral) given or made in connection with any of the Credit Documents.

                (d) Except to the extent expressly set forth in the Credit
        Documents, shall have no duty to ask or inquire as to the performance or
        observance by Borrower or its Subsidiaries of any of the terms,
        conditions or covenants of any of the Credit Documents or to inspect any
        collateral or the Property, books or records of Borrower or its
        Subsidiaries.

                (e) Will not be responsible to any Lender for the due execution,
        legality, validity, enforceability, genuineness, effectiveness,
        sufficiency or value of any Credit Document, any other instrument or
        writing furnished pursuant thereto or in connection therewith, or any
        collateral.

                (f) Will not incur any liability by acting or not acting in
        reliance upon any Credit Document, notice, consent, certificate,
        statement, request or other instrument or writing believed by it to be
        genuine and signed or sent by the proper party or parties.

                (g) Will not incur any liability for any arithmetical error in
        computing any amount paid or payable by Borrower or any Subsidiary or
        Affiliate thereof or paid or payable to or received or receivable from
        any Lender under any Credit Document, including, without limitation,
        principal, interest, commitment fees, Advances and other amounts;
        provided that, promptly upon discovery of such an error in computation,
        the Creditors (and, to the extent applicable Borrower and/or its
        Subsidiaries or Affiliates) shall make such adjustments as are necessary
        to correct such error and to restore the parties to the position that
        they would have occupied had the error not occurred.

        10.7 Indemnification. Each Lender shall, ratably in accordance with its
Pro Rata Share, indemnify and hold the Administrative Agent, the Lead Arranger
and their respective directors, officers, agents, employees and attorneys
harmless against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever (including, without limitation, attorneys' fees and
disbursements and allocated costs of attorneys

                                      -65-
<PAGE>   71

employed by the Administrative Agent or the Lead Arranger) that may be imposed
on, incurred by or asserted against it or them in any way relating to or arising
out of the Credit Documents (other than losses incurred by reason of the failure
of Borrower to pay the indebtedness represented by the Notes) or any action
taken or not taken by it as Administrative Agent and the Lead Arranger
thereunder, except such as result from their own gross negligence or willful
misconduct. Without limitation on the foregoing, each Lender shall reimburse the
Administrative Agent and the Lead Arranger upon demand for that Lender's Pro
Rata Share of any out-of-pocket cost or expense incurred by the Administrative
Agent or the Lead Arranger in connection with the negotiation, preparation,
execution, delivery, amendment, waiver, restructuring, reorganization (including
a bankruptcy reorganization), enforcement or attempted enforcement of the Credit
Documents, to the extent that Borrower or any other Party is required by Section
11.3 to pay that cost or expense but fails to do so upon demand. Nothing in this
Section shall entitle the Administrative Agent or the Lead Arranger to recover
any amount from the Lenders if and to the extent that such amount has
theretofore been recovered from Borrower or any of its Subsidiaries, and the
Administrative Agent shall promptly refund to the Lenders any amount for which
it is indemnified for which it later receives duplicative reimbursement.

        10.8 Successor Administrative Agent. The Administrative Agent may, and
at the request of the Required Lenders shall, resign as Administrative Agent
upon thirty days notice to the Lenders and Borrower. If the Administrative Agent
shall resign as Administrative Agent under this Agreement, the Required Lenders
shall appoint from among the Lenders a successor administrative agent for the
Lenders, which successor administrative agent shall be approved by Borrower (and
such approval shall not be unreasonably withheld or, during the continuation of
an Event of Default, required). If no successor administrative agent is
appointed prior to the effective date of the resignation of the Administrative
Agent, the Administrative Agent may appoint, after consulting with the Lenders
and Borrower, a successor administrative agent from among the Lenders. Upon the
acceptance of its appointment as successor administrative agent hereunder, such
successor administrative agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent and the term "Administrative Agent"
shall mean such successor administrative agent and the retiring Administrative
Agent's appointment, powers and duties as Administrative Agent shall be
terminated (except for any liabilities incurred prior to such termination).
After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article 10, and Sections 11.3,
11.11 and 11.22, shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Administrative Agent under this Agreement. If no
successor administrative agent has accepted appointment as Administrative Agent
by the date which is thirty days following a retiring Administrative Agent's
notice of resignation, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of the Administrative Agent hereunder until such time, if any, as the
Required Lenders appoint a successor administrative agent as provided for above.

        10.9 No Obligations of Borrower. Nothing contained in this Article 10
shall be deemed to impose upon Borrower any obligation in respect of the due and
punctual performance by the Administrative Agent of its obligations to the
Lenders under any provision of this Agreement, and Borrower shall have no
liability to any Creditor in respect of any failure by any Creditor to perform
any of its obligations to any other Creditor under this Agreement. Without
limiting the generality of the foregoing, where any provision of this Agreement
relating to the payment of any amounts due and owing under the Credit Documents
provides that such payments shall be made by Borrower to the Administrative
Agent for the account of any Creditor, Borrower's obligations to the Lenders in
respect

                                      -66-
<PAGE>   72

of such payments shall be deemed to be satisfied upon the making of such
payments to the Administrative Agent in the manner provided by this Agreement.

                                      -67-
<PAGE>   73

                                   ARTICLE 11.
                                  MISCELLANEOUS

        11.1 Cumulative Remedies; No Waiver. The rights, powers, privileges and
remedies of the Creditors provided herein, in the Notes and in the other Credit
Documents are cumulative and not exclusive of any right, power, privilege or
remedy provided by Law or equity. No failure or delay on the part of any
Creditor in exercising any right, power, privilege or remedy may be, or may be
deemed to be, a waiver thereof; nor may any single or partial exercise of any
right, power, privilege or remedy preclude any other or further exercise of the
same or any other right, power, privilege or remedy. The terms and conditions of
Article 8 are inserted for the sole benefit of the Creditors; the same may be
waived in whole or in part, with or without terms or conditions, in respect of
any Loan or Letter of Credit without prejudicing the Creditors' rights to assert
them in whole or in part in respect of any other Loan.

        11.2 Amendments; Consents. No amendment, modification, supplement,
extension, termination or waiver of any provision of this Agreement or any other
Credit Document, no approval or consent thereunder, and no consent to any
departure by Borrower or any other Obligor therefrom, may in any event be
effective unless in writing signed or approved in writing by the Required
Lenders or by the Administrative Agent with the consent of the Required Lenders
(and, in the case of any amendment, modification or supplement to (i) Article
10, signed by the Administrative Agent, and (ii) any Credit Document, signed by
the Obligors party thereto), and then only in the specific instance and for the
specific purpose given. No amendment, modification, supplement, termination,
waiver or consent shall (a) increase the Aggregate Commitment without the
consent of the Required Lenders; provided that no such increase shall increase
the Commitment or decrease the Pro Rata Share of any Lender absent the consent
of that Lender, (b) extend, postpone or delay the date for payment of any
principal of or interest on any Loan or any fees payable hereunder or under any
other Credit Document without the consent of the Required Lenders and each
Lender directly affected thereby, or (c) reduce the principal amount of any
Loan, the rate of interest payable with respect thereto or any fees or other
amounts payable hereunder or under any other Credit Document (or change the
method of calculating any of the foregoing) without the consent of the Required
Lenders and each Lender directly affected thereby. Without the consent of all of
the Lenders, no amendment, modification, supplement, termination, waiver or
consent shall (a) permit the term of any Letter of Credit to exceed one year or
extend beyond the Maturity Date or permit the Aggregate Effective Amount of all
outstanding Letters of Credit to exceed $5,000,000 (unless such Letters of
Credit are supported by cash collateral in a manner acceptable to the
Administrative Agent), (b) amend the provisions of the definition of "Required
Lenders" or this Section 11.2, (c) consent to the assignment or transfer by
Borrower of its rights or obligations hereunder or release any Guarantor from
the Guaranty (except to the extent that such Guarantor is the subject of a
Disposition permitted hereby), or (d) amend any provision of this Agreement that
expressly requires the consent or approval of all the Lenders. Any amendment,
modification, supplement, termination, waiver or consent pursuant to this
Section 11.2 shall apply equally to, and shall be binding upon, all of the
Creditors.

        11.3 Costs, Expenses and Taxes. Borrower shall pay within five Business
Days after demand, accompanied by an invoice therefor:

                                      -68-
<PAGE>   74

                (a) the reasonable out-of-pocket costs and expenses of the
        Administrative Agent in connection with the negotiation, preparation,
        syndication, administration, execution and delivery of the Credit
        Documents;

                (b) the reasonable out-of-pocket costs and expenses of the
        Administrative Agent in connection with any amendment to the Credit
        Documents or any waiver of the terms thereof; and

                (c) the reasonable costs and expenses of the Administrative
        Agent and, after a Default, the Lenders in connection with the
        refinancing, restructuring, reorganization (including a bankruptcy
        reorganization) and enforcement or attempted enforcement of the Credit
        Documents, and any matter related thereto.

The foregoing costs and expenses shall include the actual environmental review
fees, filing fees, recording fees, title insurance premiums and fees, appraisal
fees, search fees, and other out-of-pocket expenses and the reasonable fees and
out-of-pocket expenses of any legal counsel (including, without duplication,
reasonably allocated costs of legal counsel employed by the Administrative Agent
or, with respect to Section 11.3(c) any Lender), independent public accountants
and other outside experts retained by the Administrative Agent or any Lender,
whether or not such costs and expenses are incurred or suffered by the
Administrative Agent or any Lender in connection with or during the course of
any bankruptcy or insolvency proceedings of any Obligor. Such costs and expenses
shall also include, in the case of any amendment or waiver of any Credit
Document requested by Borrower, the administrative costs of the Administrative
Agent reasonably attributable thereto. Borrower shall pay any and all
documentary, recording, stamp and other taxes, and all costs, expenses, fees and
charges payable or determined to be payable in connection with the filing or
recording of this Agreement, any other Credit Document or any other instrument
or writing to be delivered hereunder or thereunder, or in connection with any
transaction pursuant hereto or thereto. Any amount payable to the Administrative
Agent or any Lender under this Section 11.3 shall bear interest from the fifth
Business Day following the date of demand for payment at the Default Rate.

        11.4 Nature of Lenders' Obligations. The obligations of the Lenders
hereunder are several and not joint or joint and several. Nothing contained in
this Agreement or any other Credit Document and no action taken by any Creditor
pursuant hereto or thereto may, or may be deemed to, make any of the Creditors a
partnership, an association, a joint venture or other entity, either among
themselves or with Borrower or any Affiliate of Borrower. Each Lender's
obligation to make any Advance pursuant hereto is several and not joint or joint
and several, and in the case of the initial Advance only, is conditioned upon
the performance by all other Lenders of their obligations to make initial
Advances. A default by any Lender will not increase the Commitment of any other
Lender. Any Lender not in default may, if it desires, assume in such proportion
as the nondefaulting Lenders agree the obligations of any Lender in default, but
is not obligated to do so.

        11.5 Survival of Representations and Warranties. All representations and
warranties contained herein or in any other Credit Document, or in any
certificate or other writing delivered by or on behalf of any one or more of the
Obligors, will survive the making of the Loans hereunder and the execution and
delivery of the Notes, and have been or will be relied upon by each Creditor,
notwithstanding any investigation made by the Creditors or on their behalf.

                                      -69-
<PAGE>   75

        11.6 Notices. Except as otherwise expressly provided in the Credit
Documents, all notices, requests, demands, directions and other communications
provided for hereunder or under any other Credit Document must be in writing and
must be mailed, telecopied, dispatched by commercial courier or delivered to the
appropriate party at the address set forth on the signature pages of this
Agreement or other applicable Credit Document or, as to any party to any Credit
Document, at any other address as may be designated by it in a written notice
sent to all other parties to such Credit Document in accordance with this
Section. Except as otherwise expressly provided in any Credit Document, if any
notice, request, demand, direction or other communication required or permitted
by any Credit Document is given by mail it will be effective on the earlier of
receipt or the fifth calendar day after deposit in the United States mail with
first class or airmail postage prepaid; if given by telecopier, when receipt is
confirmed; if dispatched by commercial courier, on the scheduled delivery date;
or if given by personal delivery, when delivered.

        11.7 Execution of Credit Documents. Unless the Administrative Agent
otherwise specifies with respect to any Credit Document, (a) this Agreement and
any other Credit Document may be executed in any number of counterparts and any
party hereto or thereto may execute any counterpart, each of which when executed
and delivered will be deemed to be an original and all of which counterparts of
this Agreement or any other Credit Document, as the case may be, when taken
together will be deemed to be but one and the same instrument and (b) execution
of any such counterpart may be evidenced by a telecopier transmission of the
signature of such party. The execution of this Agreement or any other Credit
Document by any party hereto or thereto will not become effective until
counterparts hereof or thereof, as the case may be, have been executed by all
the parties hereto or thereto.

        11.8 Binding Effect; Assignment.

                (a) This Agreement and the other Credit Documents to which
        Borrower is a party will be binding upon and inure to the benefit of
        Borrower and the Creditors, and their respective successors and assigns,
        except that Borrower may not assign its rights hereunder or thereunder
        or any interest herein or therein without the prior written consent of
        all the Lenders. Each Lender represents that it is not acquiring its
        Note with a view to the distribution thereof within the meaning of the
        Securities Act of 1933, as amended (subject to any requirement that
        disposition of such Note must be within the control of such Lender). Any
        Lender may at any time pledge its Note or any other instrument
        evidencing its rights as a Lender under this Agreement to a Federal
        Reserve Bank, but no such pledge shall release that Lender from its
        obligations hereunder or grant to such Federal Reserve Bank the rights
        of a Lender hereunder absent foreclosure of such pledge.

                (b) From time to time following the Closing Date, each Lender
        may assign to one or more Eligible Assignees all or any portion of its
        Pro Rata Share; provided that (i) such Eligible Assignee, if not then a
        Lender or an Affiliate of the assigning Lender, shall be approved by the
        Administrative Agent and Borrower (neither of which approvals shall be
        unreasonably withheld or delayed), provided that the consent of Borrower
        to assignments shall not be required when any Default or Event of
        Default has occurred and remains continuing, (ii) such assignment shall
        be evidenced by an Assignment Agreement, a copy of which shall be
        furnished to the Administrative Agent as provided below, (iii) except in
        the case of an assignment to an Affiliate of the assigning Lender, to
        another Lender or of the entire remaining Commitment of the assigning
        Lender, the assignment shall not assign a Commitment equivalent to less
        than

                                      -70-
<PAGE>   76

        $10,000,000, and (iv) the effective date of any such assignment shall be
        as specified in the Assignment Agreement, but not earlier than the date
        which is five Business Days after the date the Administrative Agent has
        received the Assignment Agreement. Upon the effective date of such
        Assignment Agreement, the Eligible Assignee named therein shall be a
        Lender for all purposes of this Agreement, with the Pro Rata Share
        therein set forth and, to the extent of such Pro Rata Share, the
        assigning Lender shall be released from its further obligations under
        the Credit Documents. Borrower agrees that it shall execute and deliver
        (against delivery by the assigning Lender to Borrower of its Note) to
        such assignee Lender, a Note evidencing that assignee Lender's Pro Rata
        Share, and to the assigning Lender, a Note evidencing the remaining
        balance Pro Rata Share retained by the assigning Lender.

                (c) By executing and delivering an Assignment Agreement, the
        Eligible Assignee thereunder acknowledges and agrees that: (i) other
        than the representation and warranty that it is the legal and beneficial
        owner of the Pro Rata Share being assigned thereby free and clear of any
        adverse claim, the assigning Lender has made 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 or sufficiency of this Agreement or any other Credit
        Document; (ii) the assigning Lender has made no representation or
        warranty and assumes no responsibility with respect to the financial
        condition of Borrower or the performance by Borrower of the Obligations;
        (iii) it has received a copy of this Agreement, together with copies of
        the most recent financial statements delivered pursuant to Section 7.1
        and such other documents and information as it has deemed appropriate to
        make its own credit analysis and decision to enter into such Assignment
        Agreement; (iv) it will, independently and without reliance upon the
        Administrative Agent or any 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; (v) it appoints and authorizes the Administrative Agent to
        take such action and to exercise such powers under this Agreement and
        the other Credit Documents as are delegated to the Administrative Agent
        by this Agreement; and (vi) it will perform in accordance with their
        terms all of the obligations which by the terms of this Agreement are
        required to be performed by it as a Lender.

                (d) The Administrative Agent shall maintain at the
        Administrative Agent's Office a copy of each Assignment Agreement
        delivered to it. After receipt of a completed Assignment Agreement
        executed by any Lender and an Eligible Assignee, and receipt of an
        assignment fee of $3,500 from such Eligible Assignee (which fee shall
        not be required when such Eligible Assignee is an Affiliate of the
        assigning Lender), the Administrative Agent shall, promptly following
        the effective date thereof, provide to Borrower and the Lenders a
        revised list of the Pro Rata Shares of the Lenders giving effect
        thereto.

                (e) Each Lender may from time to time grant participations to
        one or more banks or other financial institutions (including another
        Lender) in a portion of its Pro Rata Share; provided, however, that (i)
        such Lender's obligations under this Agreement shall remain unchanged,
        (ii) such Lender shall remain solely responsible to the other parties
        hereto for the performance of such obligations, (iii) the participating
        banks or other financial institutions shall not be a Lender hereunder
        for any purpose except, if the participation Agreement so provides, for
        the purposes of Sections 3.7, 3.8, 11.11 and 11.22 but only to the
        extent that the cost of such

                                      -71-
<PAGE>   77

        benefits to Borrower does not exceed the cost which Borrower would have
        incurred in respect of such Lender absent the participation, (iv)
        Borrower, the Administrative Agent and the other Lenders shall continue
        to deal solely and directly with such Lender in connection with such
        Lender's rights and obligations under this Agreement, (v) the
        participation interest shall be expressed as a percentage of the
        granting Lender's Commitment as it then exists and shall not restrict an
        increase in the Aggregate Commitments, or in the granting Lender's
        Commitment, so long as the amount of the participation interest is not
        affected thereby and (vi) the consent of the holder of such
        participation interest shall not be required for amendments or waivers
        of provisions of the Credit Documents other than those which (A) extend
        the Maturity Date or any other date upon which any payment of money is
        due to the Lenders, (B) reduce the rate of interest payable with respect
        to the participation, any fee or any other monetary amount payable to
        the participant, or (C) reduce the amount of any installment of
        principal due under the Notes in a manner which affects the participant.

                (g) Notwithstanding anything to the contrary contained herein,
        any Lender (a "Granting Lender") may grant to one or more SPC's
        established or maintained by that Granting Lender the option to provide
        all or any part of any Loan or Advance that such Granting Lender would
        otherwise be obligated to make, provided that (i) nothing herein shall
        constitute a commitment to make any Loan by any SPC, (ii) if a SPC
        elects not to exercise such option or otherwise fails to provide all or
        any part of such Loan, the Granting Lender shall be obligated to make
        such Loan pursuant to the terms hereof, (iii) the rights of any such SPC
        shall be derivative of the rights of the Granting Lender, and each SPC
        shall be subject to all of the restrictions upon the Granting Lender
        herein contained, and (iv) the use of any SPC shall not increase any
        costs of Borrower hereunder. Each SPC shall be conclusively presumed to
        have made arrangements with its Granting Lender for the exercise of
        voting and other rights hereunder in a manner which is acceptable to the
        SPC, and the Administrative Agent, the other Creditors, Borrower and
        each other Party shall be entitled to rely upon and deal solely with the
        Granting Lender with respect to Loans and Advances made by or through
        its SPC. The making of a Loan by a SPC hereunder shall utilize the
        Commitment of the Granting Lender to the same extent, and as if, such
        Loan were made by the Granting Lender. Each party hereto hereby agrees
        that no SPC shall be liable for any indemnity or similar payment
        obligation under this Agreement (all liability for which shall remain
        with the related Granting Lender). In furtherance of the foregoing, each
        party hereto hereby agrees (which agreement shall survive the
        termination of this Agreement) that, prior to the date that is one year
        and one day after the payment in full of all outstanding senior
        indebtedness of any SPC, it will not institute against, or join any
        other person in instituting against, such SPC any bankruptcy,
        reorganization, arrangement, insolvency or liquidation proceedings or
        similar proceedings under the laws of the United States or any State
        thereof, provided that the Granting Lender for each SPC hereby agrees to
        indemnify, save, and hold harmless each other party hereto for any loss,
        cost, damage and expense arising out of their inability to institute any
        such proceeding against its SPC. In addition, notwithstanding anything
        to the contrary contained in this Section 11.8, any SPC may (i) with
        notice to, but without the prior written consent of, the Borrower or the
        Administrative Agent and without paying any processing fee therefor,
        assign all or a portion of its interests in any Loans to its Granting
        Lender or to any financial institutions providing liquidity and/or

                                      -72-
<PAGE>   78

       credit facilities to or for the account of such SPC to fund the Loans
       made by such SPC or to support the securities (if any) issued by such SPC
       to fund such Loans (but nothing contained herein shall be construed in
       derogation of the obligation of the Granting Lender to make Loans
       hereunder), provided that neither the consent of the SPC or of any such
       assignee shall be required for amendments or waivers of provisions of the
       Credit Documents except for those amendments or waivers for which the
       consent of participants is required under Section 11.8(e)(vi), and (ii)
       disclose on a confidential basis (in the same manner described in Section
       11.14) any non-public information relating to its Loans to any rating
       agency, commercial paper dealer or provider of a surety, guarantee or
       credit or liquidity enhancement to such SPC.

        11.9 Right of Setoff. If an Event of Default has occurred and is
continuing, each Creditor may (but only with the consent of the Required
Lenders) exercise its rights under Article 9 of the Uniform Commercial Code and
other applicable Laws and, to the extent permitted by applicable Laws, apply any
funds in any deposit account maintained with it by Borrower or any Property of
Borrower in its possession against the Obligations.

        11.10 Sharing of Setoffs. Each Lender severally agrees that if it,
through the exercise of any right of setoff, banker's lien or counterclaim
against Borrower, or otherwise, receives payment of the Obligations held by it
that is ratably more than any other Lender, through any means, receives in
payment of the Obligations held by that Lender, then, subject to applicable Laws
(a) the Lender exercising the right of setoff, banker's lien or counterclaim or
otherwise receiving such payment shall purchase, and shall be deemed to have
simultaneously purchased, from the other Lender a participation in the
Obligations held by the other Lender and shall pay to the other Lender a
purchase price in an amount so that the share of the Obligations held by each
Lender after the exercise of the right of setoff, banker's lien or counterclaim
or receipt of payment shall be in the same proportion that existed prior to the
exercise of the right of setoff, banker's lien or counterclaim or receipt of
payment; and (b) such other adjustments and purchases of participations shall be
made from time to time as shall be equitable to ensure that all of the Lenders
share any payment obtained in respect of the Obligations ratably in accordance
with each Lender's share of the Obligations immediately prior to, and without
taking into account, the payment; provided that, if all or any portion of a
disproportionate payment obtained as a result of the exercise of the right of
setoff, banker's lien, counterclaim or otherwise is thereafter recovered from
the purchasing Lender by Borrower or any Person claiming through or succeeding
to the rights of Borrower, the purchase of a participation shall be rescinded
and the purchase price thereof shall be restored to the extent of the recovery,
but without interest. Each Lender that purchases a participation in the
Obligations pursuant to this Section 11.10 shall from and after the purchase
have the right to give all notices, requests, demands, directions and other
communications under this Agreement with respect to the portion of the
Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased. Borrower expressly consents to
the foregoing arrangements and agrees that any Lender holding a participation in
an Obligation so purchased may exercise any and all rights of setoff, banker's
lien or counterclaim with respect to the participation as fully as if the Lender
were the original owner of the Obligation purchased.

        11.11 Indemnity by Borrower. Borrower agrees to indemnify, save and hold
harmless the Creditors and their directors, officers, agents, attorneys and
employees (collectively the "Indemnitees") from and against: (a) any and all
claims, demands, actions or causes of action, if the claim, demand, action or
cause of action arises out of or relates to any act or omission (or alleged act
or omission) of Borrower, any other Obligor, their respective Affiliates or any
of their respective partners, officers,

                                      -73-
<PAGE>   79

directors or stockholders relating to the Commitments, the use or contemplated
use of proceeds of any Loan, Letter of Credit or Swing Line Advance, or the
relationship between any such Person and the Creditors under this Agreement; (b)
any administrative or investigative proceeding by any Governmental Agency
arising out of or related to a claim, demand, action or cause of action
described in clause (a) above; and (c) any and all liabilities, losses, costs or
expenses (including reasonable attorneys' fees and, without duplication, the
reasonably allocated costs of attorneys employed by any Indemnitee and
disbursements of such attorneys and other professional services) that any
Indemnitee suffers or incurs as a result of the assertion of any foregoing
claim, demand, action or cause of action; provided that no Indemnitee shall be
entitled to indemnification for (i) any loss caused by its own gross negligence
or willful misconduct, (ii) any claims or causes of action between two or more
of the Creditors or (iii) as to any claim asserted by that Indemnitee against
Borrower to the extent that Borrower prevails on that claim in a final and
non-appealable determination by a court of competent jurisdiction or an
arbitrator appointed in accordance herewith. If any claim, demand, action or
cause of action is asserted against any Indemnitee, such Indemnitee shall
promptly notify Borrower, but the failure to so promptly notify Borrower shall
not affect Borrower's obligations under this Section unless such failure
materially prejudices Borrower's right to participate in the contest of such
claim, demand, action or cause of action, as hereinafter provided. Each
Indemnitee may (i) contest the validity, applicability and amount of such claim,
demand, action or cause of action with counsel of its own choosing and (ii)
reasonably (as determined by a Lender providing credit facilities substantially
similar to those described in this Agreement) settle or compromise any claim or
proceeding for which Borrower may be liable for payment of indemnities
hereunder. Any Indemnitee that proposes to so settle or compromise any claim or
proceeding for which Borrower may be liable for payment of indemnity hereunder
shall give Borrower written notice of the terms of such proposed settlement or
compromise reasonably in advance of settling or compromising such claim or
proceeding. Any obligation or liability of Borrower to any Indemnitee under this
Section 11.11 shall survive the expiration or termination of this Agreement, the
repayment of all Loans, the expiration or termination of all Letters of Credit
and the payment and performance of all other Obligations owed to the Lenders.

        11.12 Nonliability of the Lenders. Borrower acknowledges and agrees
that:

                (a) Any inspections of any Property of Borrower made by or
        through the Creditors are for purposes of administration of the Loans
        and Letters of Credit only and Borrower is not entitled to rely upon the
        same (whether or not such inspections are at the expense of Borrower);

                (b) By accepting or approving anything required to be observed,
        performed, fulfilled or given to the Creditors pursuant to the Credit
        Documents, no Creditor shall be deemed to have warranted or represented
        the sufficiency, legality, effectiveness or legal effect of the same, or
        of any term, provision or condition thereof, and such acceptance or
        approval thereof shall not constitute a warranty or representation to
        anyone with respect thereto by any Creditor;

                (c) The relationship between each Obligor and Creditors is, and
        shall at all times remain, solely that of borrower and lenders; no
        Creditor shall under any circumstance be construed to be a partner or
        joint venturer with Borrower or its Affiliates; no creditor shall under
        any circumstance be deemed to be in a relationship of confidence or
        trust or a fiduciary or other special relationship with Borrower or its
        Affiliates, or to owe any fiduciary duty or other special duty to
        Borrower or its Affiliates; no Creditor undertakes or assumes any

                                      -74-
<PAGE>   80

        responsibility or duty to Borrower or its Affiliates to select, review,
        inspect, supervise, pass judgment upon or inform Borrower or its
        Affiliates of any matter in connection with their Property or the
        operations of Borrower or its Affiliates; Borrower and its Affiliates
        shall rely entirely upon their own judgment with respect to such
        matters; and any review, inspection, supervision, exercise of judgment
        or supply of information undertaken or assumed by the Creditors in
        connection with such matters is solely for the protection of the
        Creditors and neither Borrower nor any other Person is entitled to rely
        thereon; and

                (d) The Creditors shall not be responsible or liable to any
        Person for any loss, damage, liability or claim of any kind relating to
        injury or death to Persons or damage to Property caused by the actions,
        inaction or negligence of Borrower or its Affiliates and Borrower hereby
        indemnifies and holds each Creditor harmless from any such loss, damage,
        liability or claim.

        11.13 Nonliability of Responsible Official. In the absence of actual
fraud, no Certificate of a Responsible Official delivered hereunder shall create
personal liability on the part of such Responsible Official for performance or
payment hereunder of any of the Credit Documents.

        11.14 No Third Parties Benefitted. This Agreement is made for the
purpose of defining and setting forth certain obligations, rights and duties of
Borrower and the Creditors in connection with the Loans, Letters of Credit and
Swing Line Advances and is made for the sole benefit of Borrower, the Creditors
and the Creditors' successors and assigns. Except as provided in Sections 11.8,
11.11 and 11.14, no other Person shall have any rights of any nature hereunder
or by reason hereof.

        11.15 Confidentiality. Subject to clause (b) of this Section, each
Lender agrees to hold any confidential information that it may receive from
Borrower pursuant to this Agreement in confidence, except for disclosure: (i) to
other Lenders; (ii) to legal counsel and accountants for Borrower or any Lender;
(iii) to other professional advisors to Borrower or any Lender, provided that
the recipient has accepted such information subject to a confidentiality
Agreement substantially similar to this Section 11.14; (iv) to regulatory
officials having jurisdiction over that Lender; (v) as required by Law or legal
process or in connection with any legal proceeding to which that Lender and
Borrower are adverse parties; and (vi) to another financial institution in
connection with a disposition or proposed disposition to that financial
institution of all or part of that Lender's interests hereunder or a
participation interest in its Note, provided that the recipient has accepted
such information subject to a written confidentiality Agreement. For purposes of
the foregoing, "confidential information" shall mean any information respecting
Borrower reasonably considered by Borrower to be confidential, other than (i)
information previously filed with any Governmental Agency and available to the
public, (ii) information previously published in any public medium from a source
other than, directly or indirectly, that Lender, and (iii) information
previously disclosed by Borrower to any Person not associated with themselves
without a confidentiality Agreement or obligation substantially similar to this
Section 11.14. Nothing in this Section shall be construed to create or give rise
to any fiduciary duty or other special duty on the part of any Creditor to
Borrower.

                (b) Borrower acknowledges that from time to time financial
advisory, investment banking and other services may be offered or provided to
Borrower, or one or more of its Affiliates (in connection with this Agreement or
otherwise) by any Creditor or by one or more Subsidiaries or Affiliates of that
Creditor and Borrower hereby authorizes each Lender to share any information

                                      -75-
<PAGE>   81

delivered to that Lender by Borrower and its Subsidiaries pursuant to the Credit
Documents, or in connection with the decision of such Lender to enter into this
Agreement, to any Subsidiary or Affiliate of that Lender, it being understood
that any such Subsidiary or Affiliate of any Lender receiving such information
shall be bound by any obligation of confidentiality as if it were a Lender
hereunder. This authorization shall survive the repayment of the Obligations and
the termination of the Commitments.

        11.16 Further Assurances. Borrower covenants that Borrower and each
other Obligor shall, at their expense and without expense to the Creditors, do,
execute and deliver such further acts and documents as any Creditor from time to
time reasonably requires for the assuring and confirming unto the Creditors of
the rights hereby created or intended now or hereafter so to be, or for carrying
out the intention or facilitating the performance of the terms of any Credit
Document.

        11.17 Governing Law. Except to the extent otherwise provided therein,
each Credit Document shall be governed by, and construed and enforced in
accordance with, the local Laws of California, without reference to the choice
of law or conflicts of laws provisions thereof.

        11.18 Severability of Provisions. Any provision in any Credit Document
that is held to be inoperative, unenforceable or invalid as to any party or in
any jurisdiction shall, as to that party or jurisdiction, be inoperative,
unenforceable or invalid without affecting the remaining provisions or the
operation, enforceability or validity of that provision as to any other party or
in any other jurisdiction, and to this end the provisions of all Credit
Documents are declared to be severable.

        11.19 Headings. Article and Section headings in this Agreement and the
other Credit Documents are included for convenience of reference only and are
not part of this Agreement or the other Credit Documents for any other purpose.

        11.20 Time of the Essence. Time is of the essence of the Credit
Documents.

        11.21 Foreign Lenders and Participants. Each Lender, and each holder of
a participation interest herein, that is incorporated or otherwise organized
under the Laws of a jurisdiction other than the United States of America or any
State thereof or the District of Columbia shall deliver to Borrower (with a copy
to the Administrative Agent) on the Effective Date (or after accepting an
assignment or receiving a participation interest herein pursuant to Section
11.8, if applicable) two duly completed copies, signed by a Responsible
Official, of either Form 1001 (relating to such Person and entitling it to a
complete exemption from withholding on all payments to be made to such Person by
Borrower pursuant to this Agreement) or Form W-8 ECI (relating to all payments
to be made to such Person by Borrower pursuant to this Agreement) of the United
States Internal Revenue Service or such other evidence (including, if reasonably
necessary, Form W-9) satisfactory to Borrower and the Administrative Agent that
no withholding under the federal income tax laws is required with respect to
such Person. Thereafter and from time to time, each such Person shall (a)
promptly submit to Borrower (with a copy to the Administrative Agent) such
additional duly completed and signed copies of one of such forms (or such
successor forms as shall be adopted from time to time by the relevant United
States taxing authorities) as may then be available under then current United
States laws and regulations to avoid, or such evidence as is satisfactory to
Borrower and the Administrative Agent of any available exemption from, United
States withholding taxes in respect of all payments to be made to such Person by
Borrower pursuant to this Agreement and (b) take such steps as shall not be
materially disadvantageous to it, in the reasonable judgment of such Lender, and
as may be reasonably necessary (including

                                      -76-
<PAGE>   82

the re-designation of its LIBOR Office, if any) to avoid any requirement of
applicable Laws that Borrower make any deduction or withholding for taxes from
amounts payable to such Person.

        11.22 Integration. This Agreement, together with the other Credit
Documents and the letter agreements referred to in Sections 3.2, 3.3, 3.5 and
3.6, comprises the complete and integrated agreement of the parties on the
subject matter hereof and supersedes all prior agreements, written or oral, on
the subject matter hereof. In the event of any conflict between the provisions
of this Agreement and those of any other Credit Document, the provisions of this
Agreement shall control and govern; provided that the inclusion of supplemental
rights or remedies in favor of the Creditors in any other Credit Document shall
not be deemed a conflict with this Agreement. Each Credit Document was drafted
with the joint participation of the respective parties thereto and shall be
construed neither against nor in favor of any party, but rather in accordance
with the fair meaning thereof.

        11.23 Hazardous Material Indemnity. Borrower hereby agrees to indemnify,
hold harmless and defend (by counsel reasonably satisfactory to the
Administrative Agent) the Creditors and their respective directors, officers,
employees, agents, successors and assigns from and against any and all claims,
losses, damages, liabilities, fines, penalties, charges, administrative and
judicial proceedings and orders, judgments, remedial action requirements,
enforcement actions of any kind, and all reasonable costs and expenses incurred
in connection therewith (including but not limited to reasonable attorneys' fees
and the reasonably allocated costs of attorneys employed by any of the
Creditors, and expenses to the extent that the defense of any such action has
not been assumed by Borrower), arising directly or indirectly out of:

                (a) the presence on, in, under or attributable to any Real
        Property of any Hazardous Materials, or any releases or discharges of
        any Hazardous Materials on, under or from any Real Property; and

                (b) any activity carried on or undertaken on any Real Property
        by Borrower, any of its Subsidiaries, or any of their respective
        predecessors in title, whether prior to or during the term of this
        Agreement (but not after the Obligations are paid in full and the
        Commitments terminated), and whether by Borrower, its Subsidiaries or
        any predecessor in title or any employees, agents, contractors or
        subcontractors of Borrower, its Subsidiaries or any predecessor in
        title, or any third persons at any time prior to the payment in full of
        the Obligations and the termination of the Commitments occupying or
        present on any Real Property, in connection with the handling,
        treatment, removal, storage, decontamination, clean-up, transport or
        disposal of any Hazardous Materials at any time located or present on,
        in, under or affecting any Real Property.

The foregoing indemnity shall further apply to any residual contamination
remaining on, in, under or affecting any Real Property, or affecting any natural
resources, and to any contamination of any Real Property or related natural
resources arising from the generation, use, handling, storage, transport or
disposal of any such Hazardous Materials, and irrespective of whether any of
such activities were or will be undertaken in accordance with applicable
Hazardous Materials Laws, but the foregoing indemnity shall not apply to
Hazardous Materials on any Real Property, the presence of which is caused by the
relevant Creditor. Borrower hereby acknowledges and agrees that, notwithstanding
any other provision of this Agreement or any of the other Credit Documents to
the contrary, the obligations of Borrower under this Section shall be unlimited
obligations of Borrower and shall not be secured by any

                                      -77-
<PAGE>   83

mortgage or deed of trust on any Real Property. Any obligation or liability of
Borrower to any Indemnitee under this Section shall survive the expiration or
termination of this Agreement and the repayment of all of the Obligations until
(but not beyond) the date upon which the applicable statute of limitations for
the related cause of action shall have expired.

        11.24 Waiver of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY CREDIT DOCUMENT OR IN ANY WAY CONNECTED
WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF
THEM WITH RESPECT TO ANY CREDIT DOCUMENT, OR THE TRANSACTIONS RELATED THERETO,
IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

        11.25 Purported Oral Amendments. BORROWER EXPRESSLY ACKNOWLEDGES THAT
THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS MAY ONLY BE AMENDED OR MODIFIED,
OR THE PROVISIONS HEREOF OR THEREOF WAIVED OR SUPPLEMENTED, BY AN INSTRUMENT IN
WRITING THAT COMPLIES WITH SECTION 11.2. BORROWER AGREES THAT IT WILL NOT RELY
ON ANY COURSE OF DEALING, COURSE OF PERFORMANCE, OR ORAL OR WRITTEN STATEMENTS
BY ANY CREDITOR OR ITS REPRESENTATIVES THAT DOES NOT COMPLY WITH SECTION 11.2 TO
EFFECT AN AMENDMENT, MODIFICATION, WAIVER OR SUPPLEMENT TO THIS AGREEMENT OR THE
OTHER CREDIT DOCUMENTS.

        11.26 Removal of a Lender. Borrower shall have the right to remove a
Lender as a party to this Agreement in accordance with this Section under the
circumstances set forth in Sections 3.7 and 3.8(b). If Borrower is entitled to
remove a Lender pursuant to this Section, upon notice from Borrower, the Lender
being removed shall execute and deliver an Assignment Agreement (but shall not
be obligated to pay any assignment fee) covering that Lender's Commitment in
favor of one or more Eligible Assignees designated by Borrower (and acceptable
to the Administrative Agent) subject to payment of a purchase price by such
Eligible Assignee equal to all principal and accrued interest, fees and other
amounts payable to such Lender under this Agreement through the date of
assignment.

                     [THIS SPACE INTENTIONALLY LEFT BLANK -

                           SIGNATURE PAGES TO FOLLOW]

                                      -78-
<PAGE>   84

        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.

                              DUCOMMUN INCORPORATED, a Delaware
                              corporation

                              By: /s/  James S. Heiser
                                 ---------------------------------
                                 Name: James S. Heiser
                                 Title:  Vice President

                              Address: 111 West Ocean Boulevard
                                       Suite 900
                                       Long Beach, California  90802
                                       Telecopier:   (562) 624-0789
                                       Telephone:    (562) 624-0800

                              BANK OF AMERICA  N.A., as
                              Administrative Agent

                              By: /s/  Ronald R. Parsons
                                 ---------------------------------
                                 Name: Ronald R. Parsons
                                 Title:  Vice President

                              Address: WA1-501-37-20
                                       800 Fifth Avenue, 37th Floor
                                       Seattle, Washington  98104
                                       Attn:  Ron Parsons, Vice President
                              Telecopier: (206) 358-0971
                              Telephone:  (206) 358-7578

                              BANK OF AMERICA  N.A., as Issuing Lender, Swing
                              Line Lender and a Lender

                              By: /s/  Dean R. Glassberg
                                 ---------------------------------
                                 Name: Dean R. Glassberg
                                 Title:  Vice President

                              Address: CA6-137-02-02
                                       675 Anton Boulevard, 2nd Floor
                                       Costa Mesa, California  92626
                                       Attn:   Dean R. Glassberg
                                               Vice President
                              Telecopier: (714) 850-6586
                              Telephone:  (714) 950-6547

                                        S-1              [DUCOMMUN INCORPORATED]
                                                CREDIT AGREEMENT SIGNATURE PAGE]
<PAGE>   85

                              FIRST UNION NATIONAL BANK, as Syndication Agent
                              and a Lender

                              By: /s/  Chris R. Hetterly
                                 ---------------------------------
                                 Name: Chris R. Hetterly
                                 Title:  Director

                              Address: 201 South College Street
                                       CP-6 (NC0760)
                                       Charlotte, North Carolina  28288
                                       Attn:  Barbara VanMeerten
                              Telecopier: (704) 715-1117
                              Telephone:  (704) 374-7115

                              WASHINGTON MUTUAL BANK, dba WM BUSINESS
                              BANK

                              By: /s/  S.C. Schumacher
                                 ---------------------------------
                                 Name: S.C. Schumacher
                                 Title:  Vice President and Manager

                              Address: 1000 Wilshire Boulevard, Suite 100
                                       Los Angeles, California  90017
                                       Attn:   Chad Schumacher
                                               Vice President and Manager
                              Telecopier: (213) 996-7780
                              Telephone:  (213) 996-7788

                              SANWA BANK CALIFORNIA

                              By: /s/  Allan Howard
                                 ---------------------------------
                                 Name: Allan Howard
                                 Title:  Vice President

                              Address: 200 Oceangate
                                       Long Beach, California  90802
                                       Attn:   Allan Howard, Vice President
                              Telecopier: (562) 435-4634
                              Telephone:  (562) 983-5600

                                       S-2               [DUCOMMUN INCORPORATED]
                                                CREDIT AGREEMENT SIGNATURE PAGE]COMMON STOCK PURCHASE AGREEMENT

         THIS COMMON STOCK PURCHASE  AGREEMENT (this  "Agreement") is made as of
October  13,  2000,  between  FINET.COM,   INC.,  a  Delaware  corporation  (the
"Company"), and the person executing this Agreement on the signature page hereof
(the "Signature Page") as Purchaser (the "Purchaser"):

                                R E C I T A L S :
                                - - - - - - - -

     WHEREAS,  the Company has  authorized the issuance and sale pursuant to the
terms and conditions  hereof of up to 18,500,000 shares of its Common Stock (the
"Common Stock"); and

     WHEREAS,  the Purchaser desires to purchase and the Company desires to sell
the Common Stock on the terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of these premises and the mutual covenants
and agreements  herein contained and other valuable  consideration,  the receipt
and  adequacy  of which the parties  hereto  acknowledge,  the parties  agree as
follows:

     1.  Purchase  and Sale of the  Shares.
         ---------------------------------

     The  Company  agrees  to sell to the  Purchaser,  and upon the basis of the
representations  and warranties,  and subject to the terms and  conditions,  set
forth in this Agreement,  the Purchaser agrees to purchase from the Company that
number of shares of Common  Stock set forth on the  Signature  Page  hereof (the
"Shares")  in  consideration  for a  purchase  price (the  "Purchase  Price") of
US$0.40 per share.

     2.  Closing  Date;  Delivery.
         ------------------------

     The  closing of the  purchase  and sale of the Shares  shall be held at the
offices of the Company,  2527 Camino Ramon, Suite 200, San Ramon,  California on
October  13, 2000 or at such other time and place as the parties may agree upon.
At the closing,  subject to the terms of this  Agreement,  the  Purchaser  shall
deliver the purchase  price in  immediately  available  funds by transfer to the
account of the Company.  Within  fourteen (14) days  following the Closing,  the
Company  will  deliver  to  the  Purchaser,  pursuant  to  Purchaser's  delivery
instructions,  certificates  representing  the  Shares  to be  purchased  by the
Purchaser from the Company.

     3.  Representations  and Warranties of the Company.
         ----------------------------------------------

     The Company  represents  and warrants to, and agrees  with,  the  Purchaser
that:

          (a) Organization and Standing,  Articles and Bylaws.  The Company is a
corporation  duly organized and validly  existing  under,  and by virtue of, the
laws of the State of  Delaware  and is in good  standing  under such  laws.  The
Company has the requisite  corporate power to own and operate its properties and
assets,  and to carry on its business as presently  conducted and as proposed to
be conducted.  The Company is qualified,  licensed or  domesticated as a foreign
corporation  in all  jurisdictions  where the nature of its activities or of its
properties owned or leased makes such qualification,  licensing or domestication
necessary at this time.

          (b) Corporate  Power. The Company has now, or will have at the Closing
Date, all requisite legal and corporate  power to enter into this Agreement,  to
sell the Shares  hereunder,  and to carry out and perform its obligations  under
the terms of this Agreement.

          (c)  Authorization.

               (i)  All  corporate  action  on  the  part  of the  Company,  its
officers, directors, and stockholders necessary for the sale and issuance of the
Shares  pursuant  hereto  and  the  performance  of  the  Company's  obligations
hereunder has been taken or will be taken prior to the Closing.  This  Agreement
is a legal, valid and binding obligation of the Company, enforceable against the
Company  in  accordance  with  its  terms,  except  as  limited  by  bankruptcy,
insolvency,  reorganization,  moratorium or similar laws of general  application
affecting enforcement of creditors' rights, and except as limited by application
of legal principles  affecting the availability of equitable remedies.

               (ii) The Shares, when issued in compliance with the provisions of
this Agreement, will be validly issued, fully paid and nonassessable and will be
free of any liens or encumbrances;  provided,  however,  that such shares may be
subject to restrictions  on transfer under state and/or federal  securities laws
as set forth herein and as may be required by future changes in such laws.

               (iii)  No  shareholder  of the  Company  has any  right  of first
refusal or any preemptive  rights in connection  with the issuance of the Shares
or of Common Stock by the  Company.

          (d) Financial  Statements.  The Company's  audited balance sheet as of
April 30, 1999,  audited statement of operations for the fiscal year ended April
30, 1999, unaudited balance sheet and statement of operations for the six months
ended June 30, 2000  (hereinafter  collectively  referred  to as the  "Financial
Statements")  have  been  supplied  by the  Company  to the  Purchaser  and such
Financial Statements are true and correct, have been prepared in accordance with
generally  accepted  accounting  principles   consistently  applied  (except  as
disclosed  therein and except that the  unaudited  Financial  Statements  do not
contain the footnotes required by generally accepted accounting principles), and
fairly  present the financial  condition of the Company as of the date indicated
and the  results of the  operations  of the  Company  for the period  ended,  as
indicated.

          (e)  Public  Reporting.  The  Company  is  subject  to  the  reporting
requirements  of Section 13 or Section 15(d) of the  Securities  Exchange Act of
1934 (the "1934 Act");  the  Company's (a) Annual Report on Form 10-K and 10-K/A
for the fiscal year ended April 30, 1999, (b) Annual Proxy Statement on Form 14A
for the fiscal year ended April 30, 1999, (c) Current  Reports on Form 8-K dated
June 24, 1999, July 12, 1999, August 27, 1999,  November 24, 1999,  December 30,
1999, January 19, 2000, March 21, 2000 and May 3, 2000, (d) Quarterly Reports on
Forms 10-Q and 10-Q/A for the quarterly periods ended July 31, 1999, October 31,
1999, March 31, 2000 and June 30, 2000 (collectively,  the "Public  Disclosure")
filed by the Company  with the U.S.  Securities  and  Exchange  Commission  (the
"SEC")  include  all  reports  and  other  information  required  to be filed or
furnished by the Company under the 1934 Act and the Company has provided  copies
of all such  Public  Disclosure  to the  Purchaser.

          (f) Validity of Material  Contracts and Commitments.  All the material
contracts,  commitments,  agreements,  and instruments to which the Company is a
party are legal,  valid,  binding,  and in full force and effect in all material
respects and enforceable by the Company in accordance with their terms except as
limited by bankruptcy, insolvency,  reorganization,  moratorium, or similar laws
of general application affecting enforcement of creditors' rights, and except as
limited  by  application  of legal  principles  affecting  the  availability  of
equitable  remedies.  Except as  disclosed to  Purchaser,  the Company is not in
material  default  under  any of  such  contracts.

          (g) Compliance with Other Instruments,  None Burdensome,  etc. Neither
the Company nor any  subsidiary  is in violation  of any term of its  respective
Articles of  Incorporation or Bylaws,  or, except as disclosed to Purchaser,  in
any  material  respect  of  any  mortgage,   indenture,   contract,   agreement,
instrument,  or, to the best  knowledge of the Company,  any  judgment,  decree,
order, statute,  rule, or regulation applicable to it. The execution,  delivery,
and performance by the Company of this  Agreement,  and the issuance and sale of
the  Shares  pursuant  hereto,  will not result in any such  violation  or be in
conflict  with or  constitute  a  default  under  any such  term,  or cause  the
acceleration of maturity of any loan or material obligation to which the Company
or the  subsidiaries  are a party  or by  which  any of them  are  bound or with
respect  to which  any of them is an  obligor  or  guarantor,  or  result in the
creation or imposition of any material lien, claim, charge, restriction,  equity
or  encumbrance  of any kind  whatsoever  upon, or, to the best knowledge of the
Company  after due  inquiry,  give to any other  person  any  interest  or right
(including any right of termination or  cancellation)  in or with respect to any
of the material properties, assets, business or agreements of the Company or the
subsidiaries.  To the best  knowledge of the Company after due inquiry,  no such
term or condition  materially  adversely affects or in the future (so far as can
reasonably  be  foreseen  by the  Company  at the  date of this  Agreement)  may
materially  adversely  affect  the  business,  property,  prospects,  condition,
affairs, or operations of the Company and the subsidiary.

          (h)  Litigation,  etc.  Other  than  as  described  in  the  Financial
Statements  or the  Public  Disclosure,  there are no  actions,  proceedings  or
investigations  pending (or to the best of the  Company's  knowledge,  any basis
therefor  or threat  thereof),  which,  either in any case or in the  aggregate,
might  result in any  adverse  change in the  business,  prospects,  conditions,
affairs, or operations of the Company, or in any of its properties or assets, or
in any  impairment  of the  right  or  ability  of the  Company  to carry on its
business as proposed to be conducted,  or in any material  liability on the part
of the Company,  or which  question the validity of this Agreement or any action
taken or to be taken in connection  herewith.

          (i) Governmental Consent etc. No consent,  approval,  or authorization
of, or  designation,  declaration,  or filing  with,  any  governmental  unit is
required on the part of the Company in connection  with the valid  execution and
delivery of this Agreement, or the offer, sale or issuance of the Shares, or the
consummation of any other transaction  contemplated hereby (except qualification
or exemption under the California  Corporate  Securities Law, which exemption or
qualification will be available or obtained and will be effective on the Closing
Date).

          (j) Offering. The offer, sale and issuance of the Shares in conformity
with  the  terms  of this  Agreement  (the  "Offering")  will  not  violate  the
Securities  Act of  1933,  as  amended  ("Securities  Act").

          (k)  Title  to and  Condition  of  Properties.  The  Company  and  its
subsidiaries have good and marketable title to all their respective tangible and
intangible  property  and  assets,  including  those  reflected  in  the  Public
Disclosure and the Financial  Statements (except such property or assets as have
since June 30, 2000,  been sold or otherwise  disposed of in the ordinary course
of  business).  Such  property and assets are subject to no mortgage or security
interests,  conditional sales contract,  charge, lien or encumbrance (except for
the lien of current  taxes not yet due and  payable  and such  imperfections  of
title, easements and encumbrances,  if any, as are not substantial in character,
amount or extent and do not  materially  detract from the value of, or interfere
with the present use of the properties  subject thereto or affected thereby,  or
otherwise  materially  impair the  business  operations  of the  Company and any
subsidiary). Subsequent to June 30, 2000, neither the Company nor any subsidiary
has sold or disposed of any of its property and assets or obligated itself to do
so except in the ordinary  course of business.  Except for such minor defects as
are not  substantial  in character  and which do not have a  materially  adverse
effect upon the validity thereof, all material real and personal property leases
to which the Company or the subsidiaries are a party are in good standing, valid
and  effective,  and  there is not under any such  lease any  existing  material
default or event which with notice or lapse of time or both would  constitute  a
material  default and in respect of which the Company or the  subsidiaries  have
not taken  reasonable  steps to  prevent  such a  default  from  occurring.

          (l) Disclosure.  This Agreement, the Public Disclosure,  the Financial
Statements,  and  all  certificates  delivered  to  Purchaser  pursuant  to this
Agreement, when read together, do not contain any untrue statement of a material
fact and do not omit to state a  material  fact  necessary  in order to make the
statements contained therein or herein not misleading,  it being understood that
the  information  provided  to the  Purchaser  regarding  the  Company  contains
estimates and projections which constitute  forward looking statements and which
have been made in good faith by the Company and no warranty of such  projections
is  expressed  or  implied  hereby.  There  is,  to the  best  of the  Company's
knowledge,  no fact which materially adversely affects the business,  prospects,
condition,  affairs or  operations  of the Company or any of its  properties  or
assets which has not been set forth in this  Agreement,  the Public  Disclosure,
the Financial Statements or the other information provided to Purchaser.

          (m) The  Shares:

               (i) are free and clear of any security interests,  liens, claims,
or other encumbrances;

               (ii) have been duly and  validly  authorized  and issued and are,
and on the Closing Date will be, fully paid and  non-assessable;

               (iii) will not have been,  individually and collectively,  issued
or sold in violation of any  pre-emptive  or other similar rights of the holders
of any securities of the Company;  and

               (iv) will not subject the holders  thereof to personal  liability
by reason of being such  holders.

          (n) Furnishing of Financial  Statements and  Information.  The Company
will  deliver to the  Purchaser:

               (i) as soon as practicable, but in any event within 90 days after
the end of each fiscal year, a consolidated balance sheet of the Company and its
Subsidiaries,  as of the end of such  fiscal  year,  together  with the  related
consolidated  statements of operations,  shareholders'  equity and cash flow for
such fiscal year,  setting  forth in  comparative  form figures for the previous
fiscal  year,  all in  reasonable  detail and duly  certified  by the  Company's
independent public  accountants,  which accountants shall have given the Company
an opinion, unqualified as to the scope of the audit, regarding such statements.

               (ii)  with  reasonable  promptness,  such  other  financial  data
relating to the business, affairs and financial condition of the Company and any
Subsidiaries  as is  available  to the  Company  and as from  time  to time  the
Purchasers may reasonably request.

          (o) Inspection.  The Company will permit each Purchaser and any of its
partners,  officers or employees, or any outside  representatives  designated by
such  Purchaser,  to visit and  inspect at such  Purchaser's  expense any of the
properties of the Company or its Subsidiaries, including their books and records
(and to make  photocopies  thereof or make extracts  therefrom),  and to discuss
their  affairs,   finances,  and  accounts  with  their  officers,  lawyers  and
accountants,  except with  respect to trade  secrets  and  similar  confidential
information,  all to such  reasonable  extent and at such  reasonable  times and
intervals as such Purchaser may reasonably request. Except as otherwise required
by laws or regulations applicable to a Purchaser, the Purchasers shall maintain,
and shall require their  representatives to maintain,  all information  obtained
pursuant  to  Sections  3(m)  and  3(n)  hereof  on  a  confidential  basis.

     4.   Representations  and  Warranties  of  the  Purchaser.
          ----------------------------------------------------

     The Purchaser represents and warrants to, and agrees with, the Company:

          (a) No  consent,  approval,  authorization,  or  order  of any  court,
governmental  agency  or  body,  or  arbitrator  having  jurisdiction  over  the
Purchaser  is required  for  execution  of this  Agreement,  including,  without
limitation,  the purchase of the Shares or the  performance  of the  Purchaser's
obligations  hereunder.

          (b) The  Purchaser  understands  that no federal  or state  agency has
passed on or made any recommendation or endorsement of the Shares.

          (c) The  Company  has  given the  Purchaser  the  opportunity  to have
answered  all of the  Purchaser's  questions  concerning  the  Company  and  its
business and has made  available to the Purchaser all  information  requested by
the  Purchaser  which is  reasonably  necessary  to verify the accuracy of other
information  furnished by the Company.  The Purchaser has received and evaluated
all  information  about the Company and its business  which the Purchaser  deems
necessary to formulate  an  investment  decision and does not desire any further
information.

          (d) The  Purchaser  understands  that the Shares are being offered and
sold to it in  reliance  on  specific  exemptions  or  non-application  from the
registration  requirements  of federal  and state  securities  laws and that the
Company  is  relying  upon  the  truth  and  accuracy  of  the  representations,
warranties, agreements, acknowledgments, and understandings of the Purchaser set
forth herein in order to  determine  the  applicability  of such  exemptions  or
non-applications and the suitability of the Purchaser to acquire the Shares.

          (e) The  Purchaser  is aware that the Shares have not been  registered
under the  Securities  Act of 1933 by reason of their  issuance in a transaction
exempt  from  the  registration  and  prospectus  delivery  requirements  of the
Securities  Act pursuant to Section 4(2) and  Regulation D thereof and that they
must be held by the Purchaser  indefinitely,  and the Purchaser  must  therefore
bear the  economic  risk of such  investment  indefinitely  unless a  subsequent
disposition  thereof is registered  under the  Securities  Act or is exempt from
registration.  The Purchaser is aware of the provisions of Rule 144  promulgated
under the Securities Act which permits  limited resale of shares  purchased in a
private placement subject to the satisfaction of certain  conditions,  including
among  other  things  the  existence  of a public  market  for the  Shares,  the
availability of certain current public information about the Company, the resale
occurring  not less than two years after a party has  purchased and paid for the
security  to be sold,  the sale being  through a  "broker's  transaction"  or in
transactions  directly with a "market  maker" (as provided by Rule 144(f)),  and
the number of shares  being sold  during any  three-month  period not  exceeding
specified  limitations.  The  Purchaser  is also  aware  that  while many of the
restrictions  of Rule 144 do not apply to the  resale of shares by a person  who
owned those shares for at least one year prior to their resale and who is not an
"affiliate"  (within the meaning of Rule  144(a)) of the issuer and has not been
an affiliate of the issuer for at least three months prior to the date of resale
of the restricted securities, the Company does not warrant or represent that the
Purchaser  is not an  affiliate  as of the  date of this  Agreement  or that the
Purchaser will not be an affiliate at any relevant times in the future.

          (f) Each instrument representing the Shares is to be endorsed with the
following  legends:

               (i) THE SECURITIES  EVIDENCED BY THIS  CERTIFICATE  HAVE NOT BEEN
REGISTERED  UNDER THE SECURITIES  ACT OF 1933, AS AMENDED,  AND MAY NOT BE SOLD,
TRANSFERRED,  ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT  UNDER  SUCH  ACT  COVERING  SUCH  SECURITIES,  THE  SALE  IS  MADE IN
ACCORDANCE  WITH RULE 144 UNDER THE ACT, OR THE  COMPANY  RECEIVES AN OPINION OF
COUNSEL  FOR THE  HOLDER  OF THESE  SECURITIES  REASONABLY  SATISFACTORY  TO THE
COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.

               (ii) Any other  legend  required  by  California  or other  state
securities laws.

     The  Company  need not  register  a  transfer  of  legended  Shares and may
instruct  its transfer  agent not to register the transfer of the Shares  unless
one of the conditions  specified in the foregoing legends is satisfied.

          (g) Any legend  endorsed on an  instrument  pursuant  to Section  4(f)
hereof and the stop transfer  instructions  with respect to such Shares shall be
removed,  and the Company shall issue an  instrument  without such legend to the
holder of such Shares if such Shares are registered under the Securities Act and
a prospectus  meeting the  requirements  of Section 10 of the  Securities Act is
available or if such holder  provides the Company with an opinion of counsel for
such holder of the Shares, reasonably satisfactory to the Company, to the effect
that a public sale,  transfer or  assignment  of such Shares may be made without
registration.

          (h)  The  Purchaser  is  either  (i)  acquiring  the  Shares  for  the
Purchaser's  own  account;  or (ii) for the  account  of  another  for which the
Purchaser  acts as a fiduciary,  in which case the Purchaser  will so advise the
Company.  If acting as a fiduciary,  the  Purchaser  makes the  representations,
warranties, and covenants as set forth herein on its own behalf and as agent for
and on behalf of such other party.  The  Purchaser  is acquiring  the Shares for
investment  and  without  any  present  intention  to engage  in a  distribution
thereof.

          (i) The Purchaser  has the  knowledge and  experience in financial and
business matters to evaluate the merits and risks of the proposed investment.

          (j) The Purchaser is an "Accredited  Investor" as that term is defined
under Rule 501 adopted pursuant to the Securities Act.

     5. Conditions Precedent to the Purchaser's Obligations.
        ---------------------------------------------------

     The  obligations of the Purchaser  hereunder are subject to the performance
by the  Company of its  obligations  hereunder  and to the  satisfaction  of the
following conditions precedent on or before the Closing Date:

          (a) The  representations  and  warranties  made by the Company in this
Agreement shall,  unless waived by the Purchaser,  be true and correct as of the
date hereof and at the Closing  Date,  with the same force and effect as if they
had been made on and as of the Closing Date.

          (b) After the date hereof until the Closing Date, there shall not have
occurred:

               (i)  any  change,  or any  development  involving  a  prospective
change, in either (A) the condition, financial or otherwise, or in the earnings,
business or operations, or in or affecting the properties of the Company, or (B)
the financial or market  conditions or  circumstances  in the United States,  in
either case which,  in the  Purchaser's  judgment,  is material  and adverse and
makes it  impractical  or  inadvisable  to proceed with the  offering,  sale, or
delivery of the Shares;

               (ii) an imposition of a new legal or regulatory  restriction  not
in effect on the date hereof,  or any change in the  interpretation  of existing
legal or regulatory  restrictions,  that  materially  and adversely  affects the
offering, sale, or delivery of the Shares; or

               (iii)  a  suspension  or  material   limitation  of  trading  (A)
generally  on or by  the  New  York  Stock  Exchange  or  NASDAQ  or  (B) of any
securities of the Company on any exchange or in any over-the-counter market.

          (c) The Purchasers  shall have received from Allen Matkins Leck Gamble
& Mallory LLP, San Francisco,  California,  counsel for the Company, a favorable
opinion dated as of the Closing Date.

     6. Conditions  Precedent to the Company's  Obligations.
        ---------------------------------------------------

     The  obligations  of the  Company  hereunder  are  subject  to the  Company
receiving  any necessary  shareholder  approval for the sale and issuance of the
Shares, the performance by the Purchaser of its obligations  hereunder,  and the
satisfaction  of the condition that the  representations  and warranties made by
the Purchaser in this Agreement shall, unless waived by the Company, be true and
correct at the Closing Date,  with the same force and effect as if they had been
made on and as of, the Closing Date.

     7. Registration Rights.
        -------------------

          (a) Demand Registration  Rights. Upon the written request of Purchaser
to the  Company,  but not  earlier  than the five (5)  months  from the  Closing
("Demand Date"),  the Company shall use its best efforts to file with the SEC as
promptly as  practicable a  registration  statement on Form S-3 or any successor
thereto (the "Registration Statement"),  signed, pursuant to Section 6(a) of the
Securities  Act, by the  officers  of the  Company,  with  respect to all of the
Shares. In connection with this Section 7, the Company shall:

               (i) use its best efforts to cause the  Registration  Statement to
be declared  effective  within ninety (90) days of the Demand Date and to remain
effective  through  and  including  the  earlier of (i) the time when all of the
Shares have been sold  pursuant to the  Registration  Statement or (ii) the time
when all of the Purchasers of the Shares can sell all of the Shares  pursuant to
Rule 144(k) (or any similar  provision  then in force,  but not Rule 144A) under
the Securities Act without registration under the Securities Act;

               (ii)  prepare  and  file  with  the  SEC  such   amendments   and
supplements to such Registration Statement,  signed, pursuant to Section 6(a) of
the  Securities  Act, by the  officers and  directors  of the  Company,  and the
prospectus  used in connection  therewith as may be necessary to comply with the
provisions  of the  Securities  Act with respect to the  disposition  of all the
Shares covered by the Registration Statement;

               (iii)  furnish to the  Purchasers  of the Shares  such  number of
copies  of the  Registration  Statement  and  the  prospectus  included  therein
(including  each  preliminary  prospectus  and  any  amendments  or  supplements
thereto) in conformity  with the  requirements  of the  Securities  Act and such
other documents and information as they may reasonably request;

               (iv) use its reasonable efforts to register or qualify the Shares
covered by the Registration  Statement under such securities or blue sky laws of
such  jurisdictions  within the United States and Puerto Rico as required by law
for the  distribution  of the  Shares  covered  by the  Registration  Statement;
provided,  however,  that  the  Company  shall  not be  required  in  connection
therewith  or as a  condition  thereto to qualify to do business in or to file a
general consent to service of process in any  jurisdiction  wherein it would not
but for the  requirements  of this  paragraph  (d) be  obligated  to do so;  and
provided, further, that the Company shall not be required to qualify such Shares
in any jurisdiction in which the securities  regulatory  authority requires that
any  holder  submit  any  number of its  Shares  to the  terms,  provisions  and
restrictions of any escrow,  lockup or similar  agreement(s) for consent to sell
Shares in such jurisdiction unless such holder agrees to do so;

               (v) enter into  customary  agreements and take such other actions
as are reasonably required in order to expedite or facilitate the disposition of
the Shares to be so included in the Registration Statement; and

               (vi) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the SEC.

     Notwithstanding  any other provisions  hereof, the Company will ensure that
(i) any  Registration  Statement  and any amendment  thereto and any  prospectus
forming  part  thereof  and any  supplement  thereto  complies  in all  material
respects with the Securities Act and the rules and regulations thereunder,  (ii)
any Registration  Statement and any amendment  thereto does not, when it becomes
effective,  contain an untrue  statement  of a material  fact or omit to state a
material fact  required to be stated herein or necessary to make the  statements
therein not misleading and (iii) any prospectus forming part of any Registration
Statement,  and any  supplement  to such  prospectus  does not include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements  therein,  in the light of the circumstances  under which
they were made, not misleading.

          (b) Registration of Underwritten  Offering.  If the offering of Common
Stock to be registered by the Company pursuant to the Registration  Statement is
underwritten,  each selling  shareholder shall sell the Shares to or through the
underwriter(s)  of the Common  Stock  being  registered  for the  account of the
Company or others upon the same terms  applicable  to the Company or others.  If
the managing underwriter(s)  reasonably determine that all or any portion of the
Shares  held  by  the  selling   shareholder  should  not  be  included  in  the
Registration  Statement,  then notwithstanding  anything to the contrary in this
Section, the determination of such underwriter(s) shall be conclusive; provided,
however,  that if such  underwriter(s)  determine  that  some but not all of the
Shares  of the  selling  shareholder  shall  be  included  in  the  Registration
Statement, the number of Shares owned by each selling shareholder to be included
in the Registration Statement will be proportionately reduced in accordance with
the respective written requests given as provided above.

          (c)  Indemnification.  In the event that Shares purchased  pursuant to
this  Agreement are included in a Registration  Statement  under this Section 7,
the Company will indemnify and hold harmless each selling  shareholder  and each
other person, if any, who controls such selling  shareholder  within the meaning
of Section 15 of the  Securities  Act,  against any losses,  claims,  damages or
liabilities,  joint or several, to which such selling shareholder or controlling
person may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of are based  upon any  untrue  statement  or alleged  untrue  statement  of any
material fact contained,  in the  Registration  Statement  pursuant to which the
Shares were registered  under the Securities Act, any preliminary  prospectus or
final prospectus  contained therein,  or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a  material  fact  required  to be  stated  therein  or  necessary  to make  the
statements therein not misleading, or arise out of or are based upon the failure
by the Company to file any amendment or supplement  thereto that was required to
be filed under the Securities  Act, and will reimburse such selling  shareholder
and each such controlling person for any legal or any other expenses  reasonably
incurred by them in connection  with  investigating  or defending any such loss,
claim, damage,  liability or action.  Notwithstanding the foregoing, the Company
will not be liable in any such case to a selling  shareholder to the extent that
any such loss,  claim,  damage,  or liability  arises out of or is based upon an
untrue statement or omission made in such  Registration  Statement,  preliminary
prospectus,  final prospectus or amendment or supplement in reliance upon and in
conformity  with  written  information  furnished  to  the  Company  through  an
instrument   duly  executed  by  or  on  behalf  of  that  selling   shareholder
specifically  for  use  in  the  preparation  of  such  Registration  Statement,
preliminary prospectus,  final prospectus,  or amendment or supplement. It shall
be a condition  precedent  to the  obligation  of the Company to take any action
pursuant to this Section  that the Company  shall have  received an  undertaking
satisfactory to it from each selling  shareholder to indemnify and hold harmless
the  Company  (in the same  manner  and to the same  extent as set forth in this
Section),  each  director  of the  Company,  each  officer  who shall  sign such
Registration  Statement,  and any persons  who  control  the Company  within the
meaning of the  Securities  Act,  with respect to any statement or omission from
such Registration  Statement,  preliminary  prospectus,  or any final prospectus
contained therein,  or any amendment or supplement thereto, if such statement or
omission was made in reliance  upon and in conformity  with written  information
furnished to the Company through an instrument duly executed by the indemnifying
party  specifically for use in the preparation of such  Registration  Statement,
preliminary prospectus,  final prospectus, or amendment or supplement.  Promptly
following  receipt by an indemnified  party of notice of the commencement of any
action  involving  a  claim  referred  to  above  in  this  Section  7(c),  such
indemnified  party will, if a claim in respect  thereof is to be made against an
indemnifying  party,  give written notice to the latter of the  commencement  of
such action,  provided,  however,  that any failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability  hereunder to
the extent it is not materially  prejudiced as a result thereof and in any event
shall not  relieve it from any  liability  which it may have  otherwise  than on
account of this indemnity  agreement.  An indemnifying  party may participate at
its own  expense in the  defense of any such  action;  provided,  however,  that
counsel to the  indemnifying  party  shall not  (except  with the consent of the
indemnified  party) also be counsel to the indemnified  party. In no event shall
the  indemnifying  parties  be  liable  for fees and  expenses  of more than one
counsel (in addition to any local  counsel)  separate from their own counsel for
all  indemnified  parties  in  connection  with any one action or  separate  but
similar or  related  actions in the same  jurisdiction  arising  out of the same
general allegations or circumstances.  No indemnifying party shall,  without the
prior  written  consent of the  indemnified  parties,  settle or  compromise  or
consent to the entry of any  judgment  with  respect to any  litigation,  or any
investigation  or proceeding by any  governmental  agency or body,  commenced or
threatened,  or any claim  whatsoever  in  respect of which  indemnification  or
contribution  could be sought under this Section 7 or Section 8 hereof  (whether
or not the indemnified parties are actual or potential parties thereto),  unless
such settlement,  compromise or consent (i) includes an unconditional release of
each  indemnified  party  from all  liability  arising  out of such  litigation,
investigation,  proceeding  or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.

          (d) Binding  Provisions.  The  provisions  of this  Section 7 shall be
binding  on the  successors  of the  Company.  No  Shareholder  may  assign  the
provisions  of this  Section  7 or all or any  part of its or  their  rights  or
obligations hereunder,  except that in the event of a merger or consolidation in
which the  Company or the  Purchaser  is not the  survivor,  the  Company or the
Purchaser,  as the case may be, shall assign and transfer,  and successor  shall
assume, the provisions of this Section 7.

          (e) Conflicts.  To the extent that the Company's  compliance  with the
obligations set forth in Sections 8(a) through 8(d) above would conflict with or
otherwise  cause a breach of or default  under any of its  existing  obligations
pursuant to any  agreements  to which it  currently  is a party,  the  Company's
failure to comply  with those  obligations  shall not be deemed a breach of this
Agreement.

          (f) Transfer of Registration  Rights.  The rights to cause the Company
to register the Shares  granted to the  Purchaser by the Company under Section 7
may be  assigned  by the  Purchaser  to a  transferee  or assignee of any of the
Purchaser's  Shares,  provided that the Company is given  written  notice by the
Purchaser  at the time of or  within a  reasonable  time  after  said  transfer,
stating the name and address of said transferee or assignee and indemnifying the
Shares with respect to which such registration rights are being assigned.

          (g) Additional Shares. Provided Rule 144 is not available to Purchaser
for resale of the Shares and in the event that the  Company  shall fail to cause
the Registration  Statement with respect to the Shares to be declared  effective
by the SEC within  ninety  (90) days of the Demand  Date as  provided in Section
7(a),  the Company shall pay to the Purchaser for each month or portion  thereof
until such  Registration  Statement  becomes  effective  an amount  equal to one
percent  (1%) of the  greater  of (i) the  purchase  price  paid for the  Shares
pursuant  to this  Agreement,  or (ii) the value of the Shares  measured  by the
average  closing bid price of a share of the Company's  Common Stock on the five
trading days  immediately  preceding the date that is ninety (90) days following
the Demand Date. Such payments shall be paid by the delivery to the Purchaser of
shares of Common Stock valued in the same manner as in (ii) above. Provided that
the Company  shall  continue to use its  reasonable  best  efforts to cause such
Registration  Statement  to become  effective  as promptly as  practicable,  the
delivery of such Common Stock shall be in full  satisfaction of any liability on
the part of the Company for failing to register  the Shares as provided  herein;
provided further  however,  that such delivery shall not excuse the Company from
the obligation to register all of such Shares which  obligation  shall continue.
Any shares of Common Stock issued pursuant to this Section 7(g) shall be subject
to the same registration rights provided in this Section 7.

     8. Contribution
        ------------

          (a) If the indemnification provided for in Section 7 hereof is for any
reason  unavailable to or insufficient to hold harmless an indemnified  party in
respect of any losses,  liabilities,  claims,  damages or  expenses  referred to
therein,  then each indemnifying  party shall contribute to the aggregate amount
of such  losses,  liabilities,  claims,  damages and  expenses  incurred by such
indemnified  party,  as incurred,  (i) in such  proportion as is  appropriate to
reflect the relative  benefits  received by the selling  shareholder  on the one
hand and the  Company  on the other  hand from the offer and sale of the  Shares
pursuant to this Agreement or (ii) if the  allocation  provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the  relative  benefits  referred  to in clause  (i) above but also the
relative fault of the selling  shareholder on the one hand and of the Company on
the other hand in connection  with the statements or omissions which resulted in
such losses,  liabilities,  claims,  damages or  expenses,  as well as any other
relevant equitable considerations.

          (b) The relative  fault of the Company on the one hand and the selling
shareholder  on the other hand shall be  determined by reference to, among other
things,  whether any such untrue or alleged untrue  statement of a material fact
or omission or alleged  omission to state a material fact relates to information
supplied by the Company or by the selling  shareholder and the parties' relative
intent,  knowledge,  access to information and opportunity to correct or prevent
such statement or omission.

          (c) The Company and the selling shareholder agree that it would not be
just and equitable if a contribution  pursuant to this Section 8 were determined
by pro rata allocation or by any other method of allocation  which does not take
account of the equitable  considerations referred to above. The aggregate amount
of losses, liabilities,  claims, damages and expenses incurred by an indemnified
party and  referred  to above in this  Section 8 shall be deemed to include  any
legal  or  other  expenses  reasonably  incurred  by such  indemnified  party in
investigating,   preparing  or  defending   against  any   litigation,   or  any
investigation  or proceeding by any  governmental  agency or body,  commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.

          (d) No  person  guilty of  fraudulent  misrepresentation  (within  the
meaning  of  Section  11(f)  of  the  Securities   Act)  shall  be  entitled  to
contribution   from  any  person   who  was  not   guilty  of  such   fraudulent
misrepresentation.

          (e) For purposes of this Section 8, each person,  if any, who controls
the selling  shareholder  within the meaning of Section 15 of the Securities Act
or Section 20 of the 1934 Act shall have the same rights to contribution as such
selling  shareholder,  and each  director of the  Company,  each  officer of the
Company, and each person, if any, who controls the Company within the meaning of
Section  15 of the  Securities  Act or Section 20 of the 1934 Act shall have the
same rights to contribution as the Company.

     9. Fees and Expenses.
        -----------------

     The Purchaser and the Company each agrees to pay its own expenses  incident
to the performance of its obligations hereunder,  except that the Company agrees
to pay the fees, expenses and disbursements of the Purchaser's counsel.

     10.  Survival  of the  Representations,  Warranties,  etc.
          ----------------------------------------------------

     The respective agreements,  representations,  warranties,  indemnities, and
other  statements made by or on behalf of the Company and Purchaser  pursuant to
this  Agreement  shall  remain  in full  force  and  effect,  regardless  of any
investigation  made by or on behalf of the other party to this  Agreement or any
officer,  director,  or employee,  or person controlling or under common control
with, such party, and will survive delivery of any payment of the Shares.

     11. Notices.
         ------

     All  communications  hereunder  shall  be in  writing  and,  if sent to the
Purchasers, shall be sufficient in all respects if delivered, sent by registered
mail, or by telecopy and confirmed to the Purchasers at the address set forth on
the  Signature  Page or, if sent to the  Company,  shall be  delivered,  sent by
registered mail, or by telecopy and confirmed to the Company at:

                           Finet.Com, Inc.
                           2527 Camino Ramon, Suite 200
                           San Ramon, California 94583
                           Tel: (925) 242-6550
                           Fax: (925) 242-5990

     12. Miscellaneous.
         -------------

          (a) This Agreement may be executed in one or more  counterparts and it
is not necessary that signatures of all parties appear on the same  counterpart,
but such counterparts together shall constitute but one and the same agreement.

          (b) This  Agreement  shall inure to the benefit of and be binding upon
the parties hereto,  their respective  successors and, with respect to Section 8
hereof, the officers, directors, and controlling persons thereof and each person
under  common  control  therewith,  and no other  person shall have any right or
obligation hereunder.

          (c) This  Agreement  shall be governed by, and construed in accordance
with, the laws of the State of California.

          (d) The headings of the sections of this  document  have been inserted
for  convenience  of reference only and shall not be deemed to be a part of this
Agreement.

<PAGE>

     IN WITNESS HEREOF, the parties hereto have duly executed and delivered this
Agreement, all as of the day and year first above written.

                                    COMPANY:

                                    FINET.COM, INC.,
                                    a Delaware corporation

                                    By:
                                       --------------------------------
                                       Rick Cossano
                                       President and Chief Executive Officer

                                     PURCHASER:

Shares: ___________

                                     -------------------------------------
                                     Print Name

Total Purchase Price: ____________

                                     ------------------------------------
                                     Signature

                                     -------------------------------------
                                     Address

                                     --------------------------------------
                                     Telephone Number

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