COTELLIGENT GROUP INC
8-K, 1997-10-28
COMPUTER INTEGRATED SYSTEMS DESIGN
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               SECURITIES AND EXCHANGE COMMISSION
                        WASHINGTON, D.C.  20549
                               FORM 8-K
                            CURRENT REPORT

               Pursuant to Section 13 or 15(d) of the
                  Securities Exchange Act of 1934



                         Cotelligent Group, Inc. 
          ---------------------------------------------------
         (Exact name of registrant as specified in its charter)



                    October 28, 1997 (September 12, 1997)
          ----------------------------------------------------
             Date of Report (Date of earliest event reported)



         Delaware               0-25372                 94-3173918
  (State or other juris-      (Commission            (I.R.S. Employer
diction of incorporation)     File Number)           Identification No.)



101 California Street - Suite 2050 San Francisco, CA            94111
- -----------------------------------------------------       -------------
     (Address of principal executive offices)                  (Zip Code)



                             (415) 439-6400
           (Registrant's telephone number, including area code)




<PAGE>


Item 5.     Other Events.

            On September 12, 1997, Cotelligent Group, Inc. completed its 
            agreement with BankBoston, N.A. For a $40,000,000 revolving credit
            facility (the "Facility").  Indebtedness under the Facility will
            bear interest at BankBoston's alternate base rate of LIBOR plus
            an applicable margin, and will be secured by a first lien on all
            assets of the Company and its subsidiaries.  The Facility includes
            financial covenants with respect to maximum leverage, minimum 
            profitability and debt service coverage. 


Item 7.     Financial Statements, Pro Forma Financial Information and Exhibits.

             (c) Exhibits.

              Exhibit No.               Exhibit
 
               99.1                     Senior Secured Credit Agreement  




<PAGE>

                                 Signature

                  Pursuant to the requirements of the Securities Exchange Act of
1934,  the  registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.


                                                 COTELLIGENT GROUP, INC.
                                                 (Registrant)



Dated:  October 28, 1997                          By:/s/ Curtis J. Parker
                                                     --------------------
                                                     Curtis J. Parker
                                                     Chief Accounting Officer


NY02A/153445.1
                                                     

                                       6
<PAGE>




                             EXHIBIT INDEX


Exhibit No.          Description                                      Page


   99                Senior Secured Credit Agreement 
                         dated September 12, 1997.



<PAGE>


                                          SENIOR SECURED CREDIT AGREEMENT

         SENIOR  SECURED  CREDIT  AGREEMENT,  dated as of September 12, 1997 (as
amended from time to time, the  "Agreement"),  by and among  Cotelligent  Group,
Inc., a Delaware  corporation  (the  "Borrower"),  and each of the  Consolidated
Subsidiaries of the Borrower, the present list of which is set forth on Schedule
R-1  hereto  (each  a  "Co-Borrower";  sometimes  herein  the  Borrower  and the
Co-Borrowers  are  collectively  referred to as the  "Borrowers," but references
herein to "the Borrower" shall refer to Cotelligent Group,  Inc.), and the banks
and other  financial  institutions  that either now or in the future are parties
hereto,  including  without  limitation the Swingline  Lender, as defined herein
(collectively  the "Lenders" and each  individually a "Lender"),  and BankBoston
N.A., as agent and representative for the Lenders (in such capacity,  BankBoston
N.A. or any  successor in such  capacity is referred to herein as the  "Agent").
The  Lenders  and the Agent are  collectively  referred to herein as the "Lender
Parties" and each individually as a "Lender Party."


                                                   ARTICLE 1.

                                          DEFINITIONS AND RELATED MATTERS

         Section 1.1.  Definitions.

         The  following  terms with initial  capital  letters have the following
meanings:

         "Adjusted  LIBOR  Rate"  means,  with  respect  to any day  during  any
Interest Period, a rate per annum (rounded  upwards,  if necessary,  to the next
higher 1/100 of 1%) equal to (i) the applicable  London  Interbank  Offered Rate
for  such  Interest  Period,  divided  by (ii)  1.00  minus  the  LIBOR  Reserve
Requirement for such day (expressed as a decimal).

         "Accounts   Receivable"   means,  as  of  any  measurement   date,  all
"accounts," as such term is defined in Section 9106 of the California  UCC, then
owned by any Borrower,  including,  without limitation, all accounts receivable,
book debts and other  forms of  obligations  (other  than  forms of  obligations
evidenced by chattel paper,  documents or instruments) now owned by or belonging
or owing to any Borrower (including,  without limitation,  under any trade name,
style or division thereof) arising out of goods sold or services rendered by any
Borrower, whether billed or unbilled, and all monies due or to become due to any
Borrower  under all purchase  orders and  contracts for the sale of goods or the
performance of services or both by such Borrower.

         "Affiliate"  means, with respect to any Person,  any other Person that,
directly or  indirectly  through  one or more  intermediaries,  controls,  or is
controlled  by, or is under common  control with,  such first  Person.  The term
"control" means the possession, directly or indirectly, of the power, whether or
not exercised,  (i) to vote ten percent (10%) or more of the  securities  having
voting  power for the  election  of  directors  (or Persons  performing  similar
functions)  of such  Person  or (ii) to direct  or cause  the  direction  of the
management  or policies of a Person,  whether  through the  ownership  of voting
securities,  by contract or otherwise,  and the terms  "controlled"  and "common
control" have  correlative  meanings.  Unless otherwise  indicated,  "Affiliate"
refers to an Affiliate of any of the Borrowers.  Notwithstanding  the foregoing,
in no event  shall any Lender  Party or any  Affiliate  of any  Lender  Party be
deemed to be an Affiliate of any Borrower.

         "Agent" is defined in the Preamble and, where the context so requires,
includes BankBoston, N.A. in its individual capacity.

         "Agent's  Account" means the account of the Agent identified as such on
Schedule  1.1.B,  or such other account as the Agent may hereafter  designate by
notice to the Borrower and each Lender Party.

         "Agent's  Office"  means the office of the Agent  identified as such on
Schedule  1.1.B,  or such other office as the Agent may  hereafter  designate by
notice to the Borrower and each Lender Party.

         "Agreement" is defined in the Preamble and includes all Schedules and 
Exhibits.

         "Applicable   Law"  means  all   applicable   provisions   of  all  (i)
constitutions,  treaties,  statutes,  laws, rules, regulations and ordinances of
any  Governmental  Authority,  (ii)  Governmental  Approvals,  and (iii) orders,
decisions, judgments, awards and decrees of any Governmental Authority.

         "Applicable  Lending Office" means, with respect to any Lender,  (i) in
the case of any payment  with respect to LIBOR Rate Loans,  the  Lender's  LIBOR
Lending  Office,  and (ii) in the case of any payment  with respect to Base Rate
Loans or any other  payment  under the Loan  Documents,  the  Lender's  Domestic
Lending Office.

         "Applicable Margin" is defined on Schedule 1.1.E.

         "Assessment  Rate" means,  for any day, the average,  determined by the
Agent, of the net annual assessment rates (rounded upwards, if necessary, to the
next higher 1/100 of 1%) actually  incurred by the Agent to the Federal  Deposit
Insurance Corporation (or any successor) for such Corporation's  insuring Dollar
time  deposits of the Agent at its office in the United  States  during the most
recent period for which such rate has been determined prior to such day.

         "Asset  Disposition"  means any sale or other disposition of any assets
by any Borrower  (including  sales of any  receivables  but  excluding  sales of
inventory  and  dispositions  of obsolete or worn-out  equipment in the ordinary
course of business).

         "Assignment" and "Assignment and Acceptance" are defined in 
Section 9.6.2.

         "Bankruptcy  Code" means Title 11 of the United  States Code (11 U.S.C.
Section 101 et seq.), as amended from time to time.

         "Base Rate"  means the  greater of (i) the rate of  interest  announced
from time to time by BankBoston, N.A. at its head office as its "Base Rate," and
(ii) the Federal Funds Effective Rate plus 1/2 of 1% per annum (rounded upwards,
if necessary, to the next 1/8 of 1%).

         "Base Rate Loan" means a Loan, or portion thereof,  that bears interest
by reference to the Base Rate.

         "Borrower" means Cotelligent Group, Inc., a Delaware corporation, and 
any successor thereof.

         "Borrower Account" means the account of the Borrower identified as such
on Schedule 9.5., or such other account as the Borrower may hereafter  designate
by notice to the Agent.

         "Borrowing" means a contemporaneous borrowing of Loans of the same 
Type.

         "Business  Day" means any day that is not a  Saturday,  Sunday or other
day on which banks in Boston,  Massachusetts  or San  Francisco,  California are
authorized or obligated to close.

         "Capital Expenditures" means, for any period, the expenditures (whether
paid in cash or accrued and including  payments made with respect to Capitalized
Leases  during such period) of any  Borrower  during such period with respect to
property,  plant and  equipment  (other than  repairs)  that are  required to be
capitalized  on  the  consolidated   balance  sheet  of  the  Borrower  and  its
Consolidated Subsidiaries.

         "Capital  Stock"  means,  with  respect to any Person,  all (i) shares,
interests, participations or other equivalents (howsoever designated) of capital
stock and other equity interests of such Person and (ii) rights (other than debt
securities  convertible into capital stock or other equity interests),  warrants
or options to acquire any such capital stock or other equity interests.

         "Capitalized  Leases"  means  all  leases  of any  Borrower  of real or
personal  property  that are  required  to be  capitalized  on the  consolidated
balance  sheet  of  the  Borrower  and  its  Subsidiaries.  The  amount  of  any
Capitalized Lease shall be the capitalized amount thereof.

         "Cash" means cash and cash equivalents.

         "Change of Control" means the acquisition,  directly or indirectly,  by
any person (as defined in Section  13(d)(3) of the Exchange Act), of 50% or more
of the total  voting  power in the  aggregate  of all classes of common stock or
other equity  securities of the Borrower,  then  outstanding  or of the ability,
whether or not  exercised,  to appoint 50% or more of the Board of  Directors of
the Borrower,  whether through the ownership of voting securities,  by contract,
or otherwise.

         "Closing Date" means the date of this Agreement or such later date on 
which all conditions set forth in Section 3.1. have been satisfied or waived.

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

         "Collateral" means the collateral under the Collateral Documents, 
however defined.

         "Collateral  Documents"  means  the  Security  Agreement,   the  Pledge
Agreement,  financing  statements and all other documents  executed or delivered
from time to time in connection  therewith or otherwise to secure the Borrowers'
obligations under the Loan Documents, in each case as amended from time to time.

         "Compliance Certificate" is defined in Section 5.1.3.

         "Consolidated  Subsidiary"  means,  at any time, any  Subsidiary  whose
accounts would be  consolidated  with those of the Borrower in the  consolidated
financial statements of the Borrower at such time in accordance with GAAP.

         "Contingent Obligation" means, as to any Person, any obligation, direct
or indirect,  contingent  or  otherwise,  of such Person (i) with respect to any
Debt or other  obligation  of another  Person,  including any direct or indirect
guarantee  of such  Debt  (other  than any  endorsement  for  collection  in the
ordinary  course of  business) or any other  direct or indirect  obligation,  by
agreement or otherwise, to purchase or repurchase any such Debt or obligation or
any security  therefor,  or to provide funds for the payment or discharge of any
such  Debt  or  obligation  (whether  in the  form  of  loans,  advances,  stock
purchases,  capital  contributions  or  otherwise),  (ii) to  provide  funds  to
maintain the  financial  condition of any other  Person,  or (iii)  otherwise to
assure or hold  harmless  the  holders of Debt or other  obligations  of another
Person against loss in respect thereof. The amount of any Contingent  Obligation
under  clause  (i) or (ii)  shall be the lesser of (a) the amount of the Debt or
obligation guarantied or otherwise supported thereby, and (b) the maximum amount
guarantied or supported by the Contingent Obligation.

         "Contractual Obligation" means, as applied to any Person, any provision
of any security issued by that Person or of any agreement or other instrument to
which that  Person is a party or by which it or any of the  properties  owned or
leased by it is bound or otherwise subject.

         "Controlled  Group"  means  all  domestic  and  foreign  members  of  a
controlled  group of corporations  under Section 1563(a) of the Code (determined
without  regard  to  Section  1563(b)(2)(C)  of the  Code)  and  all  trades  or
businesses  (irrespective of whether incorporated) that are under common control
with  the  Borrower  or  the   Subsidiaries.   With  regard  to  all  Plans  and
Multiemployer Plans, "Controlled Group" includes all ERISA Affiliates.

         "Debt" means, with respect to any Person, without duplication:  (i) all
obligations  for  borrowed  money;  (ii) all  obligations  evidenced  by  bonds,
debentures, notes or other similar instruments; (iii) all obligations to pay the
deferred  purchase price of property or services,  except trade accounts payable
arising in the ordinary  course of business that are not overdue by more than 60
days;  (iv) all Capitalized  Leases;  (v) all obligations of others secured by a
Lien on any asset owned by such Person or Persons whether or not such obligation
or  liability  is  assumed;  (vi) all  obligations  of such  Person or  Persons,
contingent  or  otherwise,  in  respect  of any  letters  of credit or  bankers'
acceptances;  (vii) all Contingent Obligations; and (viii) all obligations under
facilities for the discount or sale of receivables.

         "Debt  Service  Coverage  Ratio"  means  (i) at the  end of the  Fiscal
Quarter in which the Closing Date  occurs,  the ratio of (x) (a) EBITDA for such
Fiscal  Quarter  multiplied by four minus (b) Capital  Expenditures  made during
such Fiscal  Quarter,  multiplied by four, to (y) (a) Interest  Expense for such
Fiscal  Quarter,  multiplied by four,  plus  scheduled  payments of principal in
respect of Debt of any Borrower  for such Fiscal  Quarter,  multiplied  by four;
(ii) at the end of the first  Fiscal  Quarter  following  the Fiscal  Quarter in
which  the  Closing  Date  occurs,  the  ratio  of (x)  (a)  EBITDA  for the two
consecutive  Fiscal  Quarters then ended,  multiplied by two,  minus (b) Capital
Expenditures  made  during  the two  consecutive  Fiscal  Quarters  then  ended,
multiplied by two, to (y) (a) Interest  Expense for the two  consecutive  Fiscal
Quarters then ended,  multiplied by two, plus scheduled payments of principal in
respect of Debt of any Borrower for the two  consecutive  Fiscal  Quarters  then
ended,  multiplied  by  two;  (iii)  at the  end of the  second  Fiscal  Quarter
following the Fiscal Quarter in which the Closing Date occurs,  the ratio of (x)
(a) EBITDA for the three consecutive  Fiscal Quarters then ended,  multiplied by
1.33, minus (b) Capital  Expenditures made during the three  consecutive  Fiscal
Quarters then ended,  multiplied  by 1.33,  to (y) (a) Interest  Expense for the
three consecutive Fiscal Quarters then ended, multiplied by 1.33, plus scheduled
payments  of  principal  in  respect  of Debt  of any  Borrower  for  the  three
consecutive Fiscal Quarters then ended,  multiplied by 1.33; and (iv) at the end
of any  Fiscal  Quarter  thereafter,  the ratio of (x) (a)  EBITDA  for the four
consecutive  Fiscal Quarters then ended minus (b) Capital  Expenditures for such
four-quarter  period, to (y) (a) Interest Expense for such four-quarter  period,
plus (b) scheduled  payments of principal in respect of Debt of any Borrower for
such four-quarter period.

         "Default"  means any condition or event that, with the giving of notice
or lapse of time or both,  would,  unless  cured or  waived,  become an Event of
Default.

         "Defined Benefit Plan" means any plan subject to Title IV of ERISA that
is not a Multiemployer Plan.

         "Dollars" and "$" means lawful money of the United States of America.

         "Domestic Lending Office" means the office,  branch or Affiliate of any
Lender identified on Schedule 1.1.B as its Domestic Lending Office or such other
office,  branch or  Affiliate  as the  Lender  may  hereafter  designate  as its
Domestic Lending Office for one or more Types of Loans by notice to the Borrower
and the Agent.

         "EBIT" means,  for the Borrowers for any period,  (i) Net Income,  plus
(ii) Interest  Expense deducted in the  determination of Net Income,  plus (iii)
the  amount  of  taxes  based on or  measured  by  income  and  deducted  in the
determination of Net Income,  plus (iv) the amount of any  extraordinary  losses
included  in the  determination  of Net  Income,  minus  (v) the  amount  of any
extraordinary  gains included in the  determination of Net Income,  in each case
for such period.

         "EBITDA"  means,  for the Borrowers for any period,  an amount equal to
EBIT,  plus the amount of  depreciation  and  amortization  expense  deducted in
determining Net Income, in each case for such period.

         "Environmental Damages" means all claims,  judgments,  damages, losses,
penalties,   liabilities  (including  strict  liability),  costs  and  expenses,
including  costs  of  investigation,   remediation,   defense,   settlement  and
reasonable  attorneys' fees and consultants' fees, that are incurred at any time
as a result of the existence of Hazardous  Material  upon,  about or beneath any
Real  Property  or  migrating  or  threatening  to  migrate  to or from any Real
Property,  or  arising  in  any  manner  whatsoever  out  of  any  violation  of
Environmental Requirements.

         "Environmental Lien" means a Lien in favor of any Governmental 
Authority for Environmental Damages.

         "Environmental  Requirements"  means all  Applicable  Laws  relating to
Hazardous  Materials  or the  protection  of human  health  or the  environment,
including all requirements  pertaining to reporting,  permitting,  investigation
and remediation of releases or threatened  releases of Hazardous  Materials into
the environment, or relating to the manufacture,  processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials.

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

         "ERISA  Affiliate"  means any Person  (including  for this  purpose any
trade  or  business)  that  is or  was a  member  of  the  controlled  group  of
corporations  or trades or businesses (as defined in Subsection (b), (c), (m) or
(o) of Section 414 of the Code) of which any  Borrower is or was a member at any
time within the last six years.

         "Event of Default" is defined in Section 7.1.

         "Exchange  Act" means the  Securities  Exchange Act of 1934, as amended
from time to time.

         "Excluded Taxes" is defined in Section 2.13.1.

         "Existing Debt" means the Debt described on Schedule 1.1.C.

         "Existing Liens" means the Liens described on Schedule 1.1.D.

         "Federal  Funds  Effective  Rate"  means,  for any day,  a  fluctuating
interest rate per annum equal to the weighted  average of the rates on overnight
Federal funds  transactions  with members of the Federal Reserve System arranged
by Federal  funds  brokers,  as published for such day (or, if such day is not a
Business Day, for the next preceding  Business Day), by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day on such transactions received by
Agent from three Federal funds  brokers of recognized  standing  selected by the
Agent.

         "Federal  Reserve  Board"  means the Board of  Governors of the Federal
Reserve System, or any successor thereto.

         "Fee Letter" means that certain  letter dated July 16, 1997 between the
Borrower and the Agent.

         "Fee Rate" is defined in Schedule 1.1.E.

         "Fees" means, collectively, the fees described or referenced in 
Section 2.6.

         "Fiscal Year" means the fiscal year of the Borrower, which shall be the
12  month-period  ending on December 31 in each year or such other period as the
Borrower may designate and the Agent may approve in writing. "Fiscal Quarter" or
"fiscal quarter" means any quarter of a Fiscal Year.

         "Funding Date" means any date on which a Loan is (or is requested to
 be) made.

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

         "Governmental  Approval"  means an  authorization,  consent,  approval,
permit or license issued by, or a registration or filing with, any  Governmental
Authority.

         "Governmental  Authority"  means any nation and any state or  political
subdivision thereof and any entity exercising executive, legislative,  judicial,
regulatory or  administrative  functions of or pertaining to government  and any
tribunal or arbitrator of competent jurisdiction.

         "Hazardous  Materials"  means any  substance  (i) the presence of which
requires  investigation or remediation under any Applicable Law; (ii) that is or
becomes  defined  as a  "hazardous  waste" or  "hazardous  substance"  under any
Applicable Law, including the Comprehensive Environmental Response, Compensation
and Liability Act (42 U.S.C. Section 9601 et seq.) or the Resource  Conservation
and  Recovery  Act (42  U.S.C.  Section  6901 et  seq.);  (iii)  that is  toxic,
explosive,  corrosive,  inflammable,   infectious,  radioactive,   carcinogenic,
mutagenic,   or  otherwise   hazardous  and  is  or  becomes  regulated  by  any
Governmental  Authority;  (iv) the presence of which on any Real Property causes
or  threatens  to  cause a  nuisance  upon  the  Real  Property  or to  adjacent
properties or poses or threatens to pose a hazard to any Real Property or to the
health or safety  of  Persons  on or about  any Real  Property;  or (v)  without
limitation,   that   contains   gasoline   or  other   petroleum   hydrocarbons,
polychlorinated biphenyls or asbestos.

         "Indemnified Liabilities" is defined in Section 9.2.1.

         "Indemnitee" is defined in Section 9.2.1.

         "Intellectual   Property  Right"  means  (i)  any  patent,   copyright,
trademark, service mark, trade name, trade secret or other intellectual property
right,  (ii) all  registrations  and  applications  to register any such patent,
copyright,  trademark,  service mark, trade name or other intellectual  property
right with any Governmental  Authority and all renewals and extensions  thereof,
and (iii) the goodwill of the business  associated  with or relating to any such
trademark, service mark, trade name or other intellectual property right.

         "Intercompany  Debt" means any Debt of any Borrower that is owed to any
other Borrower or any Affiliate.

         "Interest Expense" means, for any period,  total consolidated  interest
expense of the  Borrowers,  including  Fees and the  portion of any  Capitalized
Lease obligations  allocable to interest expense, but excluding  amortization or
write-off of debt discount and expense

         "Interest  Payment Date" means the last day of March,  June,  September
and  December  in each year (or,  if such day is not a  Business  Day,  the next
succeeding Business Day).

         "Interest Period" means, subject to the next sentence, (i) with respect
to each LIBOR Rate Loan,  the period  commencing  on the date  specified  in the
related Notice of Borrowing or Notice of Conversion/Continuation  (or telephonic
notice in lieu thereof) and ending one, two,  three,  four,  five,  six, nine or
twelve months thereafter, as the Borrower may elect pursuant to Section 2.1.

         Notwithstanding  the foregoing:  (a) if a LIBOR Rate Loan is continued,
the Interest Period applicable to the continued or converted Loan shall commence
on the day on which the Interest Period applicable to such LIBOR Rate Loan ends;
(b) any Interest Period applicable to a LIBOR Rate Loan (x) 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 succeeding  LIBOR Business Day falls
in another  calendar  month, in which case such Interest Period shall end on the
next preceding LIBOR Business Day, or (y) that begins on the last LIBOR Business
Day  of a  calendar  month  (or  on a day  for  which  there  is no  numerically
corresponding  day in the  calendar  month at the end of such  Interest  Period)
shall end on the last  LIBOR  Business  Day of the  calendar  month;  and (d) no
Interest Period shall end after the Stated Termination Date.

         "Investment"  means,  with  respect  to any  Person,  (i) any direct or
indirect purchase or other acquisition by that Person of stock or securities, or
any beneficial  interest in stock or other securities,  of any other Person, any
partnership  (whether general or limited) or limited  liability company interest
in any other Person, or all or any substantial part of the business or assets of
any  other  Person,  (ii) any  direct  or  indirect  loan,  advance  or  capital
contribution by that Person to any other Person,  including all indebtedness and
accounts  receivable  from that other Person that are not current  assets or did
not arise from sales to that other  Person in the  ordinary  course of business.
The amount of any Investment  shall be the original cost of such Investment plus
the cost of all  additions  thereto,  without any  adjustments  for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to such
Investment.

         "Knowledge"  means actual  knowledge  or knowledge  imputed to a Senior
Officer in the ordinary course of such Senior Officer's duties.

         "Lender"  is defined in the  Preamble.  For  purposes  of the  Sections
referred to in (and subject to) the last  sentence of Section  9.6.4.,  "Lender"
includes a holder of a Participation.

         "Lender Party" is defined in the Preamble. For purposes of the Sections
referred to in (and  subject to) the last  sentence of Section  9.6.4.,  "Lender
Party" includes a holder of a Participation.

         "Leverage  Ratio"  means  (i)  for  the  purposes  of  calculating  the
Applicable  Margin  during the first  Pricing  Period (as  described in Schedule
1.1.E),  the ratio of (x) the aggregate Total Liabilities of the Borrowers as of
June 30,  1997 to (y) the  aggregate  EBITDA  of the  Borrowers  for the  Fiscal
Quarter ended June 30, 1997,  multiplied by four;  (ii) at the end of the Fiscal
Quarter in which the Closing Date occurs,  the ratio of (x) the aggregate  Total
Liabilities  of the Borrowers to (y) the  aggregate  EBITDA of the Borrowers for
the Fiscal Quarter then ended, multiplied by four; (iii) at the end of the first
Fiscal  Quarter  following the Fiscal  Quarter in which the Closing Date occurs,
the ratio of (x) the  aggregate  Total  Liabilities  of the Borrowers to (y) the
aggregate  EBITDA of the Borrowers for the two consecutive  Fiscal Quarters then
ended, multiplied by two; (iv) at the end of the second Fiscal Quarter following
the  Fiscal  Quarter  in which the  Closing  Date  occurs,  the ratio of (x) the
aggregate Total  Liabilities of the Borrowers to (y) the aggregate EBITDA of the
Borrowers for the three  consecutive  Fiscal Quarters then ended,  multiplied by
1.33, and (v) at the end of any Fiscal Quarter thereafter,  the ratio of (x) the
aggregate Total  Liabilities of the Borrowers to (y) the aggregate EBITDA of the
Borrowers for the four consecutive Fiscal Quarters then ended.

         "LIBOR Business Day" means any Business Day on which  commercial  banks
are open for  international  business  (including  dealings in interbank  Dollar
deposits) in London, England.

         "LIBOR  Lending  Office"  means the office,  branch or Affiliate of any
Lender  identified on Schedule  1.1.B as its LIBOR Lending  Office or such other
office,  branch or Affiliate as the Lender may hereafter  designate as its LIBOR
Lending Office by notice to the Borrower and the Agent.

         "LIBOR Rate Loan" means a Loan, or portion thereof, that bears interest
at a rate  determined by reference to an Adjusted  LIBOR Rate (and as to which a
single Interest Period is applicable).

         "Lien" means any lien, mortgage,  pledge, security interest, charge, or
encumbrance of any kind (including any conditional sale or other title retention
agreement  or any lease in the  nature  thereof)  and any  agreement  to give or
refrain from giving any lien, mortgage,  pledge,  security interest,  charge, or
other encumbrance of any kind.

         "Loan"  means a Revolving  Loan or a Swingline  Loan made or to be made
pursuant to Article 2.

         "Loan Account" is defined in Section 2.5.3.

         "Loan Documents" means,  collectively,  this Agreement,  the Notes, the
Collateral  Documents  and any  other  agreement,  instrument  or other  writing
executed  or  delivered  by  any  Borrower  in  connection  herewith,   and  all
amendments, exhibits and schedules to any of the foregoing.

         "London  Interbank  Offered  Rate" means,  with respect to any Interest
Period,  a rate of  interest  per annum,  selected  by the Agent  acting in good
faith,  at which  deposits  in  dollars  are  offered to the Agent in the London
interbank  market at  approximately  11:00 A.M. (London time) two LIBOR Business
Days  before the first day of such  Interest  Period in an amount  approximately
equal to the  principal  amount of the LIBOR  Rate Loan to which  such  Interest
Period is to apply and for a period of time comparable to such Interest Period.

         "Mandatory Borrowing" is defined in Section |2.2.6.

         "Margin  Regulations"  means  Regulations  G, T, U and X of the Federal
Reserve Board, as amended from time to time.

         "Margin Stock" means "margin stock" as defined in the Margin 
Regulations.

         "Material,"  "Material  Adverse  Effect" or "Material  Adverse  Change"
means a  condition  or event  material  to, a  material  adverse  effect on or a
material  adverse  change  in,  as the  case  may  be,  any  one or  more of the
following: (i) the operations,  business, properties, or condition (financial or
otherwise) of the Borrowers taken as a whole; (ii) the Borrowers' ability, taken
as a whole, to perform their  obligations  under any Loan Document and avoid any
Event  of  Default;  or  (iii)  the  legality,   validity,   binding  effect  or
enforceability of any Loan Document. "Materially" has a correlative meaning.

         "Multiemployer Plan" means a "multiemployer plan" as defined in Section
3(37) and  Section  4001(a)(3)(A)  of ERISA to which the  Borrower or any of the
ERISA Affiliates is making or accruing an obligation to make contributions or to
which any such  Person has within any of the  preceding  five plan years made or
accrued an obligation to make contributions.

         "Multiple  Employer Plan" means a "single employer plan," as defined in
Section  4001(a)(15)  of ERISA,  that (i) is  maintained  for  employees  of any
Borrower or any ERISA Affiliate and at least one person other than such Borrower
and the ERISA  Affiliates or (ii) was so maintained and in respect of which such
Borrower or any ERISA  Affiliate could have liability under Section 4064 or 4069
of ERISA if such plan has been or were to be terminated.

         "Net Income" means,  for any period,  consolidated net income (or loss)
after taxes,  determined  in  accordance  with GAAP,  of the  Borrowers for such
period  taken  as a single  accounting  period,  provided  that  there  shall be
excluded  therefrom  (i) the  income  (or  loss)  of any  Person  (other  than a
Borrower) in which any Borrower has an equity interest,  except to the extent of
dividends or other  distributions  actually paid to such Borrower by such Person
during such period, (ii) the undistributed income of any Consolidated Subsidiary
to  the  extent  that  the   declaration   or  payment  of  dividends  or  other
distributions  by such  Consolidated  Subsidiary is not at the time permitted by
the terms of its charter or Contractual Obligations or Applicable Law binding on
such Consolidated Subsidiary, and (iii) the income (or loss) of any Consolidated
Subsidiary that is included in the calculation of Net Income but is attributable
to an owner of  Capital  Stock of such  Consolidated  Subsidiary  other than the
Borrower,  and provided  further,  Net Income shall be adjusted by the Pro Forma
Adjustments for any new Consolidated Subsidiary acquired by Borrower.

         "Note" means a Revolving Loan Note made by the Borrowers payable to the
order  of  any  Lender,  in the  original  principal  amount  of  such  Lender's
Commitment  which note is in  substantially  the form of Exhibit A-1, as amended
from  time  to  time,  or a  Swingline  Note,  as  defined  below  for  any  new
Consolidated subsidiary acquired by Borrower.

         "Notice of Borrowing" is defined in Section 2.1.3.

         "Notice of Conversion/Continuation" is defined in Section 2.4.3.2.

         "Notice of Responsible Officer" is defined in Section 2.1.3.3.

         "Obligations"  means all present and future obligations and liabilities
of each  Borrower of every type and  description  arising under or in connection
with the Loan Documents due or to become due to the Lender Parties or any Person
entitled to indemnification,  or any of their respective successors, transferees
or  assigns,  whether  for  principal,  interest,  letter  of  credit  or  other
reimbursement obligations, cash collateral cover, Fees, expenses, indemnities or
other amounts  (including  attorneys'  fees and expenses) and whether due or not
due, direct or indirect, joint and/or several, absolute or contingent, voluntary
or involuntary,  liquidated or  unliquidated,  determined or  undetermined,  and
whether now or hereafter existing, renewed or restructured.

         "Operating  Lease"  means,  as applied to any Person,  any lease of any
property  (whether  real,  personal,  or mixed)  under  which such Person is the
lessee and that is not capitalized on the balance sheet of such Person.

         "Participation" is defined in Section 9.6.4.

         "PBGC" means the Pension Benefit  Guaranty  Corporation,  as defined in
Title IV of ERISA, or any successor.

         "Permitted  Acquisition"  means the acquisition by the Borrower of all,
but not less than all,  ownership  interests in an entity,  in  connection  with
which either (a) all of the following conditions are met: (i) the Leverage Ratio
is less than  2.50:1.00  prior to giving  effect to such  acquisition;  (ii) the
Leverage Ratio will not exceed 2.75:1.00 after giving effect to such acquisition
as  adjusted  by the Pro  Forma  Adjustments;  (iii)  the  acquired  entity  has
generated  positive  earnings  before interest and taxes, as adjusted by the Pro
Forma Adjustments, for the twelve-month period immediately preceding the date of
such   acquisition;   (iv)  the  acquired  entity  is  in  a  line  of  business
substantially  similar in type to the  businesses  that  Borrowers  are  already
engaged in; (v) the  noncontingent  cash portion of the purchase  price for such
acquisition, regardless of when paid, does not exceed $5,000,000; (vi) the total
cash  portion of the purchase  price for such  acquisition,  regardless  of when
paid,  including  in such total  Borrower's  reasonable  estimate,  based on the
historical  performance of the acquired company, of the total amount of earnouts
to be paid in connection  with such  acquisition,  does not exceed  $10,000,000;
(vii) to the extent any such acquisition  involves a merger, the Borrower is the
surviving  entity;  (viii) after  giving  effect to Pro Forma  Adjustments  with
respect to such acquisition,  the Borrowers are in compliance with the covenants
set forth in Section 6.5. 6.1. hereof; (ix) at the time of such acquisition,  no
Default or Event of Default has occurred and is  continuing;  (x) the Borrower's
acquisition  of such  entity  is being  accomplished  with the  cooperation  and
consent of the  management  of, the board of directors (if any) of, the managing
member (if any) of, and the  holders of  ownership  interests  in, the  acquired
entity,  and (xi) any Debt  incurred  by any  Borrower in  connection  with such
acquisition  (other than the  Obligations  hereunder)  shall be  subordinated in
right of  payment to the  Obligations,  and the  contractual  terms of such Debt
shall  provide  that the  holders of such Debt  shall  have no payment  blockage
rights of any kind, or (b) the Required Lenders have given their approval.

         "Permitted  Liens" means, with respect to any asset, the Liens (if any)
permitted to exist on such asset under Section 6.1.

         "Person" means an individual, a corporation,  a partnership,  a limited
liability company,  a trust, an unincorporated  organization or any other entity
or organization,  including a government or any agency or political  subdivision
thereof.

         "Plan"  means any pension,  retirement,  disability,  defined  benefit,
defined  contribution,  profit sharing,  deferred  compensation,  employee stock
ownership,  employee stock purchase,  health, life insurance,  or other employee
benefit plan or arrangement,  other than a Multiemployer  Plan,  irrespective of
whether any of the  foregoing is funded,  in which any personnel of the Borrower
or ERISA  Affiliate  participates  or from which any such personnel may derive a
benefit.

         "Pledge Agreement" means the Pledge Agreement between the Borrowers and
the Agent in  substantially  the form of Exhibit  C-2,  as amended  from time to
time.

         "Post-Default  Rate" means,  at any time, a rate per annum equal to the
rate of interest  otherwise in effect at such time  pursuant to the terms hereof
plus 2%;  provided  that with  respect to any amount not paid when due  (whether
principal, interest, or otherwise), the Post-Default Rate means the Base Rate in
effect at such time plus the Applicable Margin plus 2%.

         "Pro Forma Adjustments"  means, in the context of an acquisition by the
Borrower of a new Consolidated Subsidiary,  adjustments to the actual historical
financial data of the acquired entity to reflect (i) compensation  differentials
to former owners and employees of such acquired entity,  (ii) the termination of
contributions  by the acquired  entity to  retirement  plans,  (iii)  removal of
non-recurring  transaction costs incurred by the Borrower in connection with the
acquisition  of such acquired  entity,  and (iv) income taxes as if the Borrower
and such acquired entity were combined and subject to the effective  federal and
state  statutory  rates  throughout  the fiscal period during which the acquired
entity was acquired by the  Borrower,  all as if the acquired  entity had been a
Consolidated  Subsidiary  for the  entire  fiscal  period  during  which  it was
acquired.

         "Prohibited  Transaction"  means a transaction that is prohibited under
Section  4975 of the Code or Section  406 or 407 of ERISA and not  exempt  under
Section 4975 of the Code or Section 408 of ERISA.

         "Quick Ratio" means, at any time of determination  thereof, (i) the sum
of (x) the  aggregate  of all  Borrowers'  Cash  plus (y) the  aggregate  of all
Borrowers'  Accounts Receivable (net of any reserves required pursuant to GAAP),
divided by (ii) the aggregate of all Borrowers' current liabilities.

         "Real  Property"  means each of those parcels (or portions  thereof) of
real property,  improvements and fixtures thereon and appurtenances  thereto now
or hereafter owned or leased by any Borrower.

         "Regulation  D" means  Regulation D of the Federal  Reserve  Board,  as
amended from time to time.

         "Regulatory  Change" means (i) the adoption or becoming effective after
the date hereof of any treaty,  law, rule or regulation,  (ii) any change in any
such treaty, law, rule or regulation  (including Regulation D), or any change in
the  administration  or  enforcement  thereof,  by any  Governmental  Authority,
central bank or other  monetary  authority  charged with the  interpretation  or
administration  thereof, in each case after the date hereof, or (iii) compliance
after the date hereof by any Lender Party (or its Applicable  Lending Office or,
in the case of capital adequacy requirements,  any holding company of any Lender
Party) with, any interpretation, directive, request, order or decree (whether or
not having the force of law) of any such Governmental Authority, central bank or
other monetary authority.

         "Reportable Event" means any of the events set forth in Section 4043(b)
of ERISA or the  regulations  thereunder,  except any such event (other than the
failure to meet minimum funding  standards of Section 412 of the Code or Section
302 of  ERISA)  as to which  the  provision  for 30 days'  notice to the PBGC is
waived under applicable regulations.

         "Required  Lenders"  means  Lenders  having  at  least  66-2/3%  of the
aggregate  amount of the  Commitments or, if the  Commitments  have  terminated,
Lenders holding at least 66-2/3% of the aggregate unpaid principal amount of the
Revolving Loans.

         "Reserve  Requirement"  means,  with respect to any LIBOR Rate Loan and
for any  day,  the  maximum  rate at which  reserves  (including  any  marginal,
supplemental,  special or emergency  reserve) are required to be  maintained  on
such day under Regulation D by member banks of the Federal Reserve System in New
York  City  with   deposits   exceeding   $5  billion   against   "Euro-Currency
Liabilities,"  as that term is used in  Regulation D (or in respect of any other
category  of  liabilities  that  includes  deposits  by  reference  to which the
interest rate on LIBOR Rate Loans is determined or any category of extensions of
credit or other assets that includes loans by a non-United  States office of any
bank to United States residents).

         "Responsible Officer" is defined in Section 2.1.3.3.

         "Restricted  Payment"  means (i) any  dividend  or other  distribution,
direct or  indirect,  on account of any  Capital  Stock of any  Borrower  now or
hereafter  outstanding,  except (a) a  dividend  or other  distribution  payable
solely in shares or  equivalents  of the same class of Capital Stock and (b) the
issuance of equity interests upon the exercise of outstanding warrants,  options
or other rights,  or (ii) any  redemption,  retirement,  sinking fund or similar
payment,  purchase or other  acquisition for value,  direct or indirect,  of any
Capital Stock of any Borrower now or hereafter outstanding.

         "Revolving  Commitment"  means, with respect to each Lender, the amount
set forth for such Lender as its "Revolving Commitment" on Schedule 1.1.A as the
amount  of  such  Lender's  commitment  to make  Revolving  Loans  and  purchase
participations  in, and  assignments of,  Swingline  Loans to the Borrowers,  as
reduced or terminated from time to time pursuant to the terms hereof.

         "Revolving  Commitment  Usage" means,  at any time, (i) with respect to
any Lender, the aggregate unpaid principal amount of all Revolving Loans made by
such Lender  (including,  with respect to the  Swingline  Lender,  the aggregate
unpaid principal amount of all Swingline Loans made by the Swingline Lender, and
(ii) with respect to all Lenders,  the aggregate  unpaid principal amount of all
Revolving Loans (including all Swingline  Loans),  in each case giving effect to
Borrowings then requested.

         "Revolving Loans" is defined in Section 2.1.1.

         "SEC" means the United States Securities and Exchange Commission, and
any successor.

         "Securities Act" means the Securities Act of 1933, as amended from time
to time.

         "Security  Agreement" means a Security  Agreement between the Borrowers
and the Agent in substantially  the form of Exhibit C-1, as amended from time to
time.

         "Senior Officer" means the President, the Chief Executive Officer, the
Chief Accounting Officer, or the Chief Financial Officer of the Borrower.

         "Single Employer Plan" means a Plan other than a Multiemployer Plan.

         "Solvent"  means,  with  respect  to any  Person,  that:  (i) the total
present fair salable value of such Person's business on a going concern basis is
in excess of the total amount of such Person's liabilities, including contingent
liabilities;  (ii) such  Person is able to pay its  liabilities  and  contingent
liabilities as they become due; and (iii) such Person does not have unreasonably
small capital to carry on such Person's business as theretofore  operated and as
proposed to be operated.

         "Stated Termination Date" is defined in Section 2.7.

         "Swingline Commitment" means Six Million Dollars ($6,000,000).

         "Swingline Lender" means BankBoston, N.A. in its individual capacity 
and not as Agent.

         "Swingline Loan" has the meaning assigned to such term in 
Section 2.2.1.

         "Swingline  Maturity  Date" means the date which is five  Business Days
prior to the Maturity Date.

         "Swingline Note" means the Swingline Note made by the Borrowers payable
to the order of the Swingline  Lender,  in the original  principal amount of Six
Million Dollars ($6,000,000), which note is in substantially the form of Exhibit
A-2, as amended from time to time.

         "Subsidiary"  means,  with  respect to any Person,  any other Person of
which more than 50% of the total voting power of the Capital  Stock  entitled to
vote in the  election of the board of  directors  (or other  Persons  performing
similar  functions)  are at the time directly or indirectly  owned by such first
Person.  Unless otherwise indicated,  "Subsidiary" refers to a Subsidiary of the
Borrower.

         "Taxes"  means any  present or future  income,  stamp and other  taxes,
charges,  fees,  levies,  duties,  imposts,  withholdings or other  assessments,
together  with any  interest  and  penalties,  additions  to tax and  additional
amounts imposed by any federal,  state,  local or foreign taxing  authority upon
any Person.

         "Termination Date" is defined in Section 2.7.1.

         "Termination Event" means: (i) a Reportable Event or an event described
in Section  4068(f) of ERISA;  (ii) the withdrawal of the Borrower or any of its
ERISA  Affiliates  from a Multiple  Employer Plan during a plan year in which it
was a  "substantial  employer" as defined in Section  4001(a)(2) of ERISA or the
cessation of operations at a facility in the circumstances  described in Section
4068(f) of ERISA;  (iii) the filing of a notice of intent to terminate a Defined
Benefit Plan  (including any such notice with respect to a Defined  Benefit Plan
amendment  referred  to in  Section  4041(e) of ERISA) or the  termination  of a
Defined Benefit Plan excluding,  for purposes of this clause (iii), any standard
termination  under Section 4041(b) of ERISA; (iv) the institution of proceedings
to terminate a Defined  Benefit Plan by the PBGC;  or (v) the  appointment  of a
trustee to administer any Defined  Benefit Plan under Section 4042 of ERISA;  or
(vi) any other event or condition that might reasonably constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Defined Benefit Plan.

         "Total  Liabilities"  means,  with  respect  to  any  Person,   without
duplication,  the sum of such Person's (i) Debt,  (ii) financial  obligations of
the kind  customarily  appearing as "liabilities" on a balance sheet prepared in
accordance with GAAP, and (iii) noncontingent exposure to financial liability of
any type,  kind or nature,  regardless of how incurred and regardless of whether
the  amount  of any such  exposure  would be  required  to be  disclosed  in any
financial reporting of such Person (provided,  however, that earnouts payable in
connection  with any  acquisition  shall not in any event be included in amounts
covered by this clause (iii)).  For purposes of this  definition,  the amount of
any  exposure  of the  kind  referred  to in  clause  (iii)  above  that  is not
liquidated shall be assumed to be the maximum amount of such exposure.

         "Wholly-Owned"  means,  with  respect to any  Subsidiary,  that all the
Capital Stock (except for directors'  qualifying  shares) of such  Subsidiary is
directly or indirectly owned by the Borrower.



<PAGE>



         Section 1.2.  Related Matters.



                  1.2.1.  Construction.

                  Unless  the  context  of  this  Agreement   clearly   requires
otherwise,  references to the plural include the singular, the singular includes
the plural, the part includes the whole,  "including" is not limiting,  and "or"
has  the  inclusive  meaning  represented  by the  phrase  "and/or."  The  words
"hereof,"  "herein,"  "hereby,"  "hereunder" and similar terms in this Agreement
refer to this Agreement as a whole  (including the Preamble,  the Recitals,  the
Schedules  and  the  Exhibits)  and  not to any  particular  provision  of  this
Agreement. Article, section, subsection, exhibit, schedule, recital and preamble
references in this Agreement are to this Agreement unless  otherwise  specified.
References  in  this  Agreement  to any  agreement,  other  document  or law "as
amended" or "as amended from time to time," or to  amendments of any document or
law, shall include any amendments, supplements,  replacements, renewals, waivers
or other modifications not prohibited by the Loan Documents.  References in this
Agreement  to any law (or any part  thereof)  include any rules and  regulations
promulgated   thereunder  (or  with  respect  to  such  part)  by  the  relevant
Governmental Authority, as amended from time to time.

                  1.2.2.  Determinations.

                  Any   determination   or  calculation   contemplated  by  this
Agreement  that is made by any Lender  Party shall be final and  conclusive  and
binding upon the Borrower, and, in the case of determinations by the Agent, also
the other Lender Parties,  in the absence of manifest error.  References in this
Agreement  to any  "determination"  by  any  Lender  Party  include  good  faith
estimates by such Lender Party (in the case of quantitative determinations), and
good  faith   beliefs  by  such  Lender  Party  (in  the  case  of   qualitative
determinations).  All references  herein to "discretion" of any Lender Party (or
terms of similar import) shall mean "absolute and sole discretion." All consents
and other  actions of any Lender Party  contemplated  by this  Agreement  may be
given,  taken,  withheld or not taken in such Lender Party's discretion (whether
or not so expressed), except as otherwise expressly provided herein.

                  1.2.3.  Accounting Terms and Determinations.

                  Unless otherwise  specified herein,  all accounting terms used
herein shall be interpreted,  all accounting  determinations  hereunder shall be
made, and all financial  statements  required to be delivered hereunder shall be
prepared in accordance with GAAP, applied on a basis consistent with the audited
financial statements referred to in Section 4.4.

                  |1.2.4.  Independence of Covenants.

                  All  covenants  under  this  Agreement  shall  each  be  given
independent  effect so that if a particular action or condition is not permitted
by any such covenant,  the fact that it would be permitted by another  covenant,
by an exception thereto, or be otherwise within the limitations  thereof,  shall
not avoid the  occurrence  of a Default or an Event of Default if such action is
taken or condition exists.


                                                    ARTICLE 2.

                                     AMOUNTS AND TERMS OF THE CREDIT FACILITY

         Section 2.1.  Revolving Loans.



                  |2.1.1.  Revolving Commitment.




                  Each Lender  severally  agrees,  upon the terms and subject to
         the conditions set forth in this Agreement,  at any time from and after
         the Closing Date until the Business Day next preceding the  Termination
         Date, to make  revolving  loans (each such  revolving  loan,  including
         those made in connection with Mandatory Borrowings, a "Revolving Loan")
         to the Borrower,  provided that (a) the Revolving  Commitment  Usage of
         any Lender shall not exceed,  at any time, the Revolving  Commitment of
         such Lender,  and (b) the Revolving  Commitment Usage of all Lenders at
         any time, in the  aggregate,  shall not exceed the aggregate  Revolving
         Commitments of all Lenders.


                  Revolving Loans may be voluntarily prepaid pursuant to Section
         2.8.3. and, subject to the          provisions of this Agreement, any 
         amounts so prepaid may be re-borrowed, up to the amount available
         under this Section 2.1. at the time of such re-borrowing.

                  2.1.2.  Type of Loans and Minimum Amounts.




                  Revolving Loans made under this Section 2.1. may be Base Rate
         Loans, or LIBOR Rate Loans (each a "Type" of Loan), subject, however, 
         to Section 2.4.2. and 2.11.


                  Each  Borrowing  of  Revolving  Loans  shall  be in a  minimum
         aggregate amount of $500,000 and integral multiples of $10,000,  in the
         case of a Borrowing of Base Rate Loans, or a minimum  aggregate  amount
         of $1,000,000,  and integral multiples of $1,000,000,  in the case of a
         Borrowing of LIBOR Rate Loans.

                  |2.1.3.  Notice of Borrowing.




                  When the Borrower  desires to borrow  Revolving Loans pursuant
         to Section  2.1.,  it shall  deliver to the Agent a Notice of Borrowing
         substantially  in the form of Exhibit E-1, duly  completed and executed
         by a Responsible Officer (a "Notice of Borrowing"), no later than 11:00
         a.m.  (California  time)  (a) at least  one  Business  Day  before  the
         proposed  Funding  Date, in the case of a Borrowing of Base Rate Loans,
         or (b) at least three LIBOR  Business Days before the proposed  Funding
         Date, in the case of a Borrowing of LIBOR Rate Loans.


                  In lieu of  delivering a Notice of  Borrowing,  the  Borrower,
         through a Responsible  Officer, may give the Agent telephonic notice of
         any  proposed  Borrowing  by the time a Notice  of  Borrowing  would be
         required to be delivered and containing all information  required for a
         Notice of  Borrowing;  provided,  however,  that such  notice  shall be
         confirmed  in writing by delivery of a Notice of Borrowing to the Agent
         on or before  the  proposed  Funding  Date (or,  in case of a Base Rate
         Borrowing, one Business Day after the Funding Date). The Lender Parties
         shall incur no liability to the Borrower or the other Lender Parties in
         acting upon any telephonic  notice that the Agent believes to have been
         given by a Responsible  Officer or for  otherwise  acting in good faith
         under this Section 2.1. and in making any Loan in accordance  with this
         Agreement pursuant to any telephonic notice.


                  The  Borrower  shall  notify  the  Agent  of the  names of its
         officers and  employees  authorized  to request and take other  actions
         with  respect to Loans on behalf of the Borrower  (each a  "Responsible
         Officer") by providing the Agent with a Notice of Responsible  Officers
         substantially  in the form of Exhibit E-7, duly  completed and executed
         by a Senior  Officer  (a "Notice of  Responsible  Officer").  The Agent
         shall be  entitled  to rely  conclusively  on a  Responsible  Officer's
         authority  to request and take other  actions  with respect to Loans on
         behalf  of the  Borrower  until  the  Agent  receives  a new  Notice of
         Responsible  Officer  that  no  longer  designates  such  Person  as  a
         Responsible  Officer.  The  Agent  shall  have no duty  to  verify  the
         authenticity  of the  signature  appearing on any Notice of  Borrowing,
         Notice of Responsible  Officer or any other notice given under the Loan
         Documents.


                  Any Notice of Borrowing (or telephone  notice in lieu thereof)
         delivered  pursuant to this Section  2.1.3.4.  shall be irrevocable and
         the  Borrower  shall  be  bound  to  make  a  borrowing  in  accordance
         therewith.


                  The Agent shall promptly notify each Lender of the contents of
         any Notice of Borrowing (or telephonic notice in lieu thereof) received
         by it and such  Lender's pro rata portion of the  Borrowing  requested.
         Not later than 11:30 a.m.  (California  time) on the date  specified in
         such  notice as the  Funding  Date (or, in the case of Base Rate Loans,
         10:30 a.m. (California time) on such date), each Lender, subject to the
         terms and  conditions  hereof,  shall make its pro rata  portion of the
         Borrowing  available,  in immediately  available funds, to the Agent at
         the Agent's Account.

                  2.1.4.  Funding.

                  Not later than 11:00 a.m. (California time) or such later time
as may be agreed to by the  Borrower  and the  Agent,  and  subject  to and upon
satisfaction of the applicable  conditions set forth in Article 3. as determined
by the  Agent,  the Agent  shall  arrange  for a wire  transfer  of  immediately
available funds in the amount of the requested  Loans to the account  designated
by the  Borrower  pursuant  to wire  instructions  set  forth in the  Notice  of
Borrowing.

         Section 2.2.  Swingline Loans.

                  2.2.1.  Swingline Commitment.

                  Subject  to the terms and  conditions  set forth  herein,  the
Swingline Lender severally agrees to lend to the Borrower,  and the Borrower may
borrow,  repay,  and reborrow from time to time between the Closing Date and the
Swingline  Maturity  Date upon notice by the  Borrower to the  Swingline  Lender
given in accordance  with Section 2.2.4,  such sums as are requested by Borrower
(each a "Swingline  Loan") up to a maximum aggregate amount  outstanding  (after
giving  effect to all amounts  requested) at any one time equal to the Swingline
Commitment,  provided  that the sum of the  outstanding  amount of the Swingline
Loans (after giving effect to all amounts requested),  plus the then-outstanding
aggregate  amount of all of the Revolving Loans shall not at any time exceed the
aggregate of all Lenders'  Revolving  Commitments.  Each request for a Swingline
Loan hereunder shall  constitute a  representation  and warranty by the Borrower
that the  conditions  set forth in Article 3 have been  satisfied on the date of
such request.

                  2.2.2.  The Swingline Note.

                  The Swingline  Loan shall be evidenced by the Swingline  Note,
dated the Closing Date and completed with appropriate insertions.  The Swingline
Note shall be payable to the order of the Swingline Lender in a principal amount
equal to the Swingline  Commitment.  Each Borrower  irrevocably  authorizes  the
Swingline  Lender  to make or  cause to be  made,  at or  about  the time of the
Funding Date of any  Swingline  Loan or at the time of receipt of any payment of
principal on the Swingline  Note, an appropriate  notation on the Swingline Note
reflecting the making of such Swingline Loan or (as the case may be) the receipt
of such payment.  The outstanding amount of the Swingline Loans set forth on the
Swingline  Note shall be prima facie  evidence of the principal  amount  thereof
owing and unpaid to the  Swingline  Lender,  but the  failure to record,  or any
error in so recording,  any such amount shall not limit or otherwise  affect the
obligations  of the  Borrowers  hereunder  or under the  Swingline  Note to make
payments of principal of or interest on the Swingline Note when due.

                  2.2.3.  Interest on Swingline Loans.

                  Except as otherwise provided in 2.4.1.2. , each Swingline Loan
shall bear interest for the period  commencing with the Funding Date thereof and
ending on the date of  repayment  thereof at a rate per annum  equal to the Base
Rate. The Borrower promises to pay interest on each Swingline Loan in arrears on
the earlier to occur of (a) the day on which such  Swingline  Loan is repaid and
(b) the next occurring  Interest Payment Date for Base Rate Loans.  Prior to the
date of any Mandatory Borrowing in respect of a Swingline Loan, interest on such
Swingline Loan shall be for the Swingline  Lender's  account,  and following any
Mandatory Borrowing in respect of any Swingline Loan, interest on such Swingline
Loan shall be for the account of all Lenders,  pro rata in  accordance  with the
amounts of such Lenders' Revolving Loan Commitments.

                  2.2.4.  Notice of Borrowing of Swingline Loans.

                  The  Borrower  shall give to the Agent  written  notice in the
form of Exhibit E-2 hereto (or telephonic  notice  confirmed in a writing in the
form of Exhibit  E-2  hereto) of each  Swingline  Loan  requested  hereunder  (a
"Swingline  Loan  Request") no later than 12:00 noon,  California  time,  on the
proposed  Funding Date of any Swingline Loan. Each such notice shall specify (a)
the  principal  amount of the  Swingline  Loan  requested,  and (b) the proposed
Funding Date of such  Swingline  Loan.  Each  Swingline  Loan  Request  shall be
irrevocable  and binding on the  Borrower  and shall  obligate  the  Borrower to
accept the Swingline Loan  requested  from the Swingline  Lender on the proposed
Funding  Date.  Each  Swingline  Loan  Request  shall be in a minimum  amount of
$10,000  or  an  integral   multiple   thereof.   Swingline  Lender  agrees  and
acknowledges  that the parties intend that the Swingline  loans be funded on the
same day as they are  requested and agrees to use its best efforts to honor each
Swingline  Loan  Request  that is timely  made  pursuant  to the  terms  hereof.
Notwithstanding  the  foregoing,  Borrower  agrees  and  acknowledges  that  the
Swingline  Lender shall incur no liability as a result of its  inability to fund
the amount  requested  in any  Swingline  Loan  Request  until the  Business Day
following the day on which such Swingline Loan Request is made.

                  2.2.5.  Limitations on Swingline Lender's Obligation to Make
Swingline Loans.

                  The Swingline Lender will not make any Swingline Loan after it
has received  written notice from the Required Lenders (other than the Swingline
Lender) that one or more of the  applicable  conditions  precedent  set forth in
Section 3.1 are not then  satisfied  (provided  that the delivery and receipt of
such written notice shall not limit,  affect or modify the Lenders'  obligations
in respect of a Mandatory  Borrowing in respect of any Swingline Loan made prior
to the receipt of such notice, as specified in Section 2.2.5.).

                  |2.2.6.  Mandatory Borrowings.

                  On any  Business  Day,  either the  Borrower or the  Swingline
Lender may, in its sole  discretion,  give notice to Agent  pursuant to that all
then  outstanding  Swingline Loans shall be funded with a borrowing of Revolving
Loans  (provided  that such  notice  shall be deemed to have been  automatically
given by the  Swingline  Lender upon the  occurrence  of a Default,  and further
provided  that such notice shall be deemed to have been  automatically  given on
the fourth Business Day after any day on which the principal amount of Swingline
Loans outstanding  equals or exceeds Five Hundred Thousand Dollars  ($500,000)),
in which case a borrowing of Revolving Loans  constituting Base Rate Loans (each
such borrowing,  a "Mandatory  Borrowing") shall be made on the Funding Date set
forth in the notice of such Mandatory  Borrowing  (which shall be a Business Day
and  shall  not be later  than the  first  Business  Day  after the date of such
notice, and in the case of a notice deemed to be given automatically  hereunder,
shall be the same day on which such notice is deemed given),  by all Lenders pro
rata in accordance  with each Lender's  Revolving  Commitment,  and the proceeds
thereof  shall  be  applied  directly  to repay  the  Swingline  Lender  for all
outstanding  Swingline  Loans.  Each Lender  hereby  irrevocably  agrees to make
Revolving  Loans pursuant to each  Mandatory  Borrowing in the amount and in the
manner specified in the preceding sentence, and on the date specified in writing
by the Swingline Lender, notwithstanding (i) whether any conditions specified in
Article 3 are then  satisfied;  (ii)  whether a Default or Event of Default  has
occurred and is continuing; (iii) the date of such Mandatory Borrowing; and (iv)
any reduction in the  Commitments  after any such Swingline  Loans were made. In
the event that any Mandatory Borrowing cannot for any reason be made on the date
otherwise  required above  (including,  without  limitation,  as a result of the
commencement of a case under the Bankruptcy  Code in respect of Borrower),  each
Lender (other than the Swingline  Lenders)  hereby agrees that it will forthwith
purchase  from  the  Swingline  Lenders  (without  recourse  or  warranty)  such
assignment of their  outstanding  Swingline Loans as shall be necessary to cause
the Lenders to share in such Swingline Loans ratably based upon their respective
Revolving  Commitments,  provided  that all interest  payable on such  Swingline
Loans  shall be for the  account  of the  Swingline  Lenders  until the date the
respective  assignment  is  purchased  and,  to the extent  attributable  to the
purchased assignment,  shall be payable to the Lender purchasing such assignment
from and  after the date of  purchase.  Each  Lender's  obligations  under  this
Section |2.2.6. shall be absolute and unconditional.

         Section 2.3.  Use of Proceeds.

         The  proceeds  of the  Loans  shall  be used by the  Borrower  only for
working capital,  acquisitions, and other general corporate purposes. No part of
the proceeds of the Loans shall be used directly or indirectly  for the purpose,
whether immediate,  incidental or ultimate, of purchasing or carrying any Margin
Stock or maintaining  or extending  credit to others for such purpose or for any
other purpose that otherwise violates the Margin Regulations.

         Section 2.4.  Interest; Interest Periods; Conversion/Continuation.



                  2.4.1.  Interest Rate and Payment.




                  Each Loan shall bear interest on the unpaid  principal  amount
         thereof,  from and including the date of the making of such Loan to and
         excluding  the due date or the date of any  repayment  thereof,  at the
         following  rates per annum:  (a) for so long as and to the extent  that
         such Loan is a Base Rate Loan, at the Base Rate (as in effect from time
         to  time);  (b) for so long as and to the  extent  that  such Loan is a
         LIBOR Rate Loan,  at the LIBOR Rate for each day during  each  Interest
         Period applicable thereto plus the Applicable Margin;


                  Notwithstanding  the  foregoing  provisions  of  this  Section
         2.4.1.,  any  principal,  interest or other amount  payable  under this
         Agreement and the other Loan  Documents that is not paid when due shall
         bear  interest  at a rate per  annum  equal to the  Post-Default  Rate,
         without notice or demand of any kind.


                  Accrued  interest  shall be payable in arrears (a) in the case
         of a Base Rate Loan, on each Interest  Payment Date; (b) in the case of
         a LIBOR Rate Loan,  on each  Interest  Payment Date that occurs  during
         such Interest Period applicable thereto;  provided that if the Interest
         Period  applicable  to a LIBOR Rate Loan is longer  than three  months,
         interest  also shall be  payable on the last day of the third  month of
         such Interest  Period;  (c) in the case of any interest  accrued at the
         Post-Default Rate, on demand, and (d) in the case of any Loan, when the
         Loan shall become due (whether at  maturity,  by reason of  prepayment,
         acceleration or otherwise).

                  |2.4.2.  Interest Periods and Minimum Amounts.

                  Notwithstanding  anything  herein  to the  contrary,  (a)  all
Interest Periods applicable to LIBOR Rate Loans shall comply with the definition
of  "Interest  Period,"  (b) there may be no more  than ten  different  Interest
Periods  for all LIBOR Rate Loans  outstanding  at the same time,  and (c) LIBOR
Rate Loans of each Type and with the same  Interest  Period  outstanding  at any
time shall be in an  aggregate  amount at least  equal to  $1,000,000  and in an
integral  multiple of  $1,000,000.  For  purposes of the  foregoing  clause (b),
Interest  Periods  applicable  to  Loans of  different  Types  shall  constitute
different Interest Periods even if they are coterminous.

                  |2.4.3.  Conversion or Continuation.




                  Subject to this Section 2.4.3.  and Sections 2.4.2. and 2.11.,
         the Borrower  shall have the option (a) at any time,  to convert all or
         any part of its outstanding Base Rate Loans to LIBOR Rate Loans, (b) on
         the last day of the Interest Period applicable  thereto, to (i) convert
         all or any part of its outstanding LIBOR Rate Loans to Base Rate Loans,
         (ii) to  continue  all or any part of its LIBOR  Rate Loans as Loans of
         the same Type,  or (iii) to convert all or any part of its  outstanding
         LIBOR Rate Loans to LIBOR Rate Loans of another Type; provided that, in
         the case of clause (a),  (b) (ii) or  (b)(iii),  there does not exist a
         Default or an Event of  Default at such time.  If a Default or an Event
         of Default  shall  exist upon the  expiration  of the  Interest  Period
         applicable  to any LIBOR Rate Loan,  such Loan  automatically  shall be
         converted into a Base Rate Loan.


                  If the  Borrower  elects to convert  or  continue a Loan under
         this  Section  2.4.3.,  it  shall  deliver  to the  Agent a  Notice  of
         Continuation/Conversion  substantially in the form of Exhibit E-3, duly
         completed  and  executed  by  a  Responsible   Officer  (a  "Notice  of
         Continuation/Conversion"),  (a) not later than  11:00 a.m.  (California
         time) at least three LIBOR Business Days before the proposed conversion
         or continuation  date, if the Borrower  proposes to convert into, or to
         continue,  a LIBOR Rate Loan,  and (b)  otherwise  not later than 11:00
         a.m.  (California time) on the Business Day next preceding the proposed
         conversion or continuation date.


                  In lieu of delivering a Notice of Continuation/Conversion, the
         Borrower,  through a Responsible Officer, may give the Agent telephonic
         notice of any proposed  continuation or conversion by the time a Notice
         of  Continuation/Conversion  would  be  required  to be  delivered  and
         containing all information required therefor;  provided,  however, that
         such notice  shall be  confirmed  in writing by delivery of a Notice of
         Continuation/Conversion   to  the  Agent  on  or  before  the  proposed
         continuation  or  conversion  date.  The Lender  Parties shall incur no
         liability to the  Borrower or the other  Lender  Parties in acting upon
         any  telephonic  notice that the Agent believes to have been given by a
         Responsible  Officer or for  otherwise  acting in good faith under this
         Section  2.4.3.  and in converting  or  continuing  any Loan (or a part
         thereof) pursuant to any telephonic notice.


                  Any Notice of Conversion/Continuation (or telephonic notice in
         lieu thereof) shall be  irrevocable  and the Borrower shall be bound to
         convert or continue  in  accordance  therewith.  If any request for the
         conversion or  continuation  of a Loan is not made in  accordance  with
         this  Section  2.4.3.,  or if no notice is so given  with  respect to a
         LIBOR Rate Loan as to which the Interest Period expires, then such Loan
         automatically shall be converted into a Base Rate Loan.

                  2.4.4.  Computations.

                  Interest  on each  LIBOR  Rate  Loan and all  Fees  and  other
amounts  payable  hereunder or the other Loan Documents shall be computed on the
basis of a 360-day  year,  and  interest on Base Rate Loans shall be computed on
the basis of a 365 or  366-day  year,  and the  actual  number  of days  elapsed
(including  the first and excluding  the last day of the period).  Any change in
the  interest  rate on any Loan or other amount  resulting  from a change in the
rate applicable  thereto (or any component thereof) pursuant to the terms hereof
shall  become  effective  as of the opening of business on the day on which such
change in the applicable rate (or component) shall become effective.

                  2.4.5.  Maximum Lawful Rate of Interest.

                  The rate of interest payable on any Loan or other amount shall
in no event exceed the maximum rate  permissible  under  Applicable  Law. If the
rate of interest payable on any Loan or other amount is ever reduced as a result
of this  Section  and at any time  thereafter  the  maximum  rate  permitted  by
Applicable Law shall exceed the rate of interest provided for in this Agreement,
then the rate provided for in this  Agreement  shall be increased to the maximum
rate provided by Applicable Law for such period as is required so that the total
amount of  interest  received  by the  Lenders  is that  which  would  have been
received  by the  Lenders but for the  operation  of the first  sentence of this
Section.

         Section 2.5.  Notes, Etc.



                  2.5.1.  Loans Evidenced by Notes.

                  The Revolving  Loans made by each Lender to any Borrower shall
be  evidenced  by one or  more  Revolving  Loan  Notes  executed  by each of the
Borrowers, provided that all of such Revolving Loan Notes shall comprise a joint
and several  obligation in an amount not  exceeding the aggregate  amount of the
Lenders' Revolving Commitments.

                  |2.5.2.  Notation of Amounts and Maturities, Etc.

                  Each Lender is hereby irrevocably  authorized to record on the
schedule  attached to its Revolving  Loan Note (or a  continuation  thereof) the
information  contemplated by such schedule.  The failure to record, or any error
in recording, any such information shall not, however, affect the obligations of
the Borrower  hereunder or under any Revolving  Loan Note to repay the principal
amount  of the Loans  evidenced  thereby,  together  with all  interest  accrued
thereon. All such notations shall constitute conclusive evidence of the accuracy
of the information so recorded, in the absence of manifest error.

                  |2.5.3.  Loan Account.

                  The Agent shall  maintain a loan account (the "Loan  Account")
on its books in which shall be recorded (a) all Loans made by the Lenders to the
Borrowers  pursuant  to this  Agreement,  (b) all other  appropriate  debits and
credits as and when due in accordance with this  Agreement,  including all Fees,
charges, expenses and interest, and (c) all payments made by any Borrower on the
Obligations.  All entries in the Loan Account shall be made in  accordance  with
the customary  accounting practices of the Agent as in effect from time to time.
The balance in the Loan Account shall be rebuttable  presumptive evidence of the
amounts due and owing the Lenders by the Borrowers.

         Section 2.6.  Fees.



                  |2.6.1.  Commitment Fee.

                  The Borrower shall pay to the Agent,  for the pro rata benefit
of the Lenders,  a  commitment  fee for each day from and after the Closing Date
until the Stated Termination Date, upon the excess, if any, of (a) the aggregate
Revolving Commitments of the Lenders over (b) the Revolving Commitment Usage, in
each case for such day.  Such Fee shall be payable  in arrears on each  Interest
Payment Date and the Termination Date. The commitment fee shall accrue at a rate
of (i) at any time when the Applicable  Margin is 1.75, 0.35% per annum; (ii) at
any time when the Applicable Margin is 1.50, 0.30% per annum;  (iii) at any time
when the Applicable  Margin is 1.25,  0.25% per annum, and (iv) at any time when
the Applicable Margin is 1.00, 0.20% per annum.

                  |2.6.2.  Other Fees.

                  On the  Closing  Date  and  from  time to time  thereafter  as
specified  in the Fee  Letter,  the  Borrower  shall  pay to the  Agent the fees
specified in the Fee Letter.

                  2.6.3.  Fees Non-Refundable.

                  All Fees shall be fully  earned  when  payable  hereunder  and
shall be non-refundable.

         Section 2.7.  Termination and Reduction of Revolving Commitments.



                  |2.7.1.

                  Each Lender's  Revolving  Commitment  shall terminate  without
further  action  on the  part of such  Lender  on the  earlier  to  occur of (a)
September  11, 2001 (or if that date is not a Business  Day, the next  preceding
LIBOR  Business  Day)  (the  "Stated  Termination  Date"),  and (b) the  date of
termination of the Revolving Commitment pursuant to Section 2.7.2. or 7.2. (such
earlier date being referred to herein as the "Termination  Date"). The Swingline
Commitment  shall expire  without  further  action on the part of the  Swingline
Lender on the Termination Date.

                  2.7.2.

                  The Borrower shall have the right, at any time or from time to
time after the Closing  Date,  to  terminate in whole or  permanently  reduce in
part, without premium or penalty, the Revolving  Commitments of the Lenders on a
pro rata basis to an amount not less than the Revolving  Commitment Usage of all
Lenders,  by giving the Agent not less than seven  Business  Days' prior written
notice of such termination or reduction and the amount of any partial reduction.
Any  such  termination  or  partial  reduction  shall be  effective  on the date
specified  in  the  Borrower's  notice  and  shall  be in a  minimum  amount  of
$10,000,000 and integral multiples of $5,000,000.  In addition, each termination
of the  Revolving  Commitments  of the Lenders,  or reduction of such  Revolving
Commitments  to an  aggregate  amount  less than the  amount  of the Swing  Line
Commitment  then in effect,  shall  automatically  terminate or reduce the Swing
Line Commitment to the amount of the Revolving Commitments then in effect.

         Section 2.8.  Repayments and Prepayments.



                  2.8.1.  Repayment.

                  The unpaid  principal  amount of all Revolving  Loans shall be
         paid in full on the Termination Date.

                  2.8.2.  Mandatory Prepayment.




                  If at any time the aggregate Revolving Commitment Usage of all
         Lenders exceeds the aggregate amount of the Revolving  Commitments then
         in  effect,  the  Borrower  shall,  on the  Business  Day on which  the
         Borrower learns or is notified of the excess,  notify the Agent that on
         the next Business Day the Borrower will make  mandatory  prepayments of
         the Revolving Loans as may be necessary so that,  after such prepayment
         and provision, such excess is eliminated.


                  All proceeds of Collateral  and other amounts  received by the
         Agent  pursuant to the  provisions of the Security  Agreement  shall be
         credited to Borrower's Loan Account and applied to the repayment of the
         Obligations   one  Business  Day  after  the  Agent's  receipt  thereof
         (conditional upon the Agent's receipt of immediately available funds at
         the end of such one-Business Day period).


                  The  Borrower  shall give the Agent not less than one Business
         Day's prior written notice of the date on which a Mandatory  Prepayment
         will be made. Each Mandatory  Prepayment shall be applied to the unpaid
         principal amount of the Loans;  provided that each Mandatory Prepayment
         shall be  applied  first to reduce  the Base Rate Loan  constituting  a
         portion  of the  respective  Loan  and  then to the  LIBOR  Rate  Loans
         constituting a portion thereof,  in the inverse order of termination of
         Interest Periods applicable thereto. Each Mandatory Prepayment shall be
         made together with accrued  interest on the amount  prepaid to the date
         of prepayment.

                  2.8.3.  Optional Prepayments




                  Subject to this  Section  2.8.3.,  the  Borrower  may,  at its
         option,  at any time or from time to time, prepay the Loans in whole or
         in part, without premium or penalty.


                  If the  Borrower  elects to prepay a Loan under  this  Section
         2.8.3.2., it shall deliver to the Agent a notice of optional prepayment
         (i) not later than 11:00 a.m.  California  time) at least  three  LIBOR
         Business Days before the proposed prepayment,  if the Borrower proposes
         to prepay a LIBOR Rate  Loan,  and (c)  otherwise  not later than 12:00
         noon (California time) on the proposed  prepayment date (which shall be
         a  Business   Day).  Any  notice  of  optional   prepayment   shall  be
         irrevocable,  and the payment amount  specified in such notice shall be
         due and payable on the date  specified  in such notice,  together  with
         interest accrued thereon to such date.

                  2.8.4.  Payments Set Aside.

                  To the extent the Agent or any Lender receives  payment of any
amount  under the Loan  Documents,  whether by way of  payment by the  Borrower,
set-off,  as proceeds of Collateral or otherwise,  which payment is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee,  receiver or any other party under any  bankruptcy  law,
other law or equitable  cause, in whole or in part,  then, to the extent of such
payment  received,  the  Obligations  or part  thereof  intended to be satisfied
thereby  shall be revived and continue in full force and effect,  together  with
all Collateral  security  therefor,  as if such payment had not been received by
the Agent or Lender.  If prior to any such  invalidation,  declaration,  setting
aside or  requirement,  this Agreement  shall have been canceled or surrendered,
this  Agreement  shall be  reinstated  in full force and effect,  and such prior
cancellation or surrender shall not diminish,  discharge or otherwise affect the
obligations of the Borrower in respect of the amount of the affected payment.

         Section 2.9.  Manner of Payment.



                  2.9.1.

                  Except as otherwise  expressly  provided,  the Borrower  shall
make each  payment  under the Loan  Documents  to the  Agent in  Dollars  and in
immediately  available funds,  without any deduction  whatsoever,  including any
deduction  for any  set-off,  recoupment,  counterclaim  or  Taxes  (other  than
Excluded  Taxes),  at the  Agent's  Office,  for the  account of the  Applicable
Lending Offices of the Lender Party entitled to such payment, by depositing such
payment in the Agent's  Account not later than 11:00 a.m.  (California  time) on
the due date thereof.  Any payments received after 11:00 a.m.  (California time)
on any Business  Day shall be deemed  received on the next  succeeding  Business
Day. Not later than 1:00 p.m. (California time) on the day such payment is made,
the  Agent  shall  deliver  to each  Lender,  for the  account  of the  Lender's
Applicable  Lending Office, in Dollars and in immediately  available funds, such
Lender's  share of the payment so made,  determined  pursuant  to Section  2.15.
Delivery shall be made in accordance with the written instructions  satisfactory
to the  Agent  from  time to time  given to the  Agent by each  Lender.  Without
limiting the rights of the Lender Parties under Section 9.10., each Lender Party
shall  have the  right,  at any time,  to charge  any  account  of the  Borrower
maintained  with the  Lender  Party  for the  amount of any  payment  due by the
Borrower  under the Loan  Documents  or to deduct the amount of any such payment
from any remittance due to the Borrower hereunder.

                  2.9.2.

                  Whenever  any payment to be made  hereunder  shall be due on a
day that is not a Business  Day (or, in the case of any payment  with respect to
any LIBOR Rate Loan, not a LIBOR  Business  Day),  such payment shall instead be
made on the next  succeeding  Business  Day (or, in the case of any such payment
with respect to any LIBOR Rate Loan,  the next  succeeding  LIBOR Business Day),
together with interest accrued during the period of such extension.

         Section 2.10.  Pro Rata Treatment.

         Except to the extent otherwise expressly provided herein,

                  2.10.1.

                  Revolving  Loans shall be requested  from the Lenders pro rata
according to their respective Revolving Commitments.

                  |2.10.2.

                  Mandatory  Borrowings  in respect of Swingline  Loans shall be
funded  by  the  Lenders  pro  rata  according  to  their  respective  Revolving
Commitments.

                  2.10.3.

                  Each  reduction of the  Revolving  Commitments  of the Lenders
shall be applied to the respective Revolving Commitments of the Lenders pro rata
according to their respective Revolving Commitments before such reduction.

                  2.10.4.

                  Each payment or prepayment by the Borrower of principal of the
Revolving  Loans shall be made for the account of the Lenders pro rata according
to the respective  unpaid principal  amount of the Revolving Loans,  owed to the
Lenders,  and each  payment by the Borrower of interest on the  Revolving  Loans
shall  be made  for  the  account  of the  Lenders  pro  rata  according  to the
respective  accrued  but unpaid  interest  on the  Revolving  Loans owed to such
Lenders. Each payment by the Borrower of Fees payable to the Lenders pursuant to
Section  2.6.1.  shall be made for the account of the Lenders pro rata according
to the respective amounts of their Revolving Commitments.

         |Section 2.11.  Mandatory Suspension and Conversion of LIBOR Rate 
Loans.

         Each Lender's  obligation to make, continue or convert Loans into LIBOR
Rate Loans  shall be  suspended,  all  outstanding  LIBOR  Rate  Loans  shall be
converted  into  Base  Rate  Loans on the last  day of the  respective  Interest
Periods  applicable  thereto  (or,  if earlier,  in the case of clause  |2.11.2.
below, on the last day that such Lender can lawfully  continue to maintain LIBOR
Rate  Loans) and all  pending  requests  for the making or  continuation  of, or
conversion into, LIBOR Rate Loans shall be disregarded, if:

                  |2.11.1.

                  on or prior to the  determination  of the interest  rate for a
LIBOR  Rate Loan for any  Interest  Period,  the Agent  determines  that for any
reason  appropriate  quotations  are not  available to the Agent in the relevant
interbank  market for purposes of  determining  the Adjusted  LIBOR Rate or that
such rate  would not  accurately  reflect  the cost to the  Lenders  of  making,
continuing,  or  converting  a Loan into,  a LIBOR  Rate Loan for such  Interest
Period; or

                  |2.11.2.

                  after the date hereof a Lender notifies the Agent (which shall
thereupon notify the Borrower and the other Lenders) of its  determination  that
any  Regulatory  Change makes it unlawful or  impossible  for such Lender or its
LIBOR  Lending  Office to make or maintain any LIBOR Rate Loan, to obtain in the
interbank  eurodollar  market  through its LIBOR  Lending  Office the funds with
which to make any LIBOR Rate Loan or to comply with its obligations hereunder in
respect thereof.

         Section 2.12.  Regulatory Changes.



                  |2.12.1.  Increased Costs.

                  If, on or after the date hereof,  any Regulatory  Change shall
impose, modify or deem applicable any reserve, special deposit, compulsory loan,
insurance or similar  requirement  (other than any such requirement with respect
to any LIBOR Rate Loan to the extent included in the LIBOR Reserve Requirement),
against,  or any fees or charges in respect of, assets held by, deposits with or
other  liabilities for the account of,  commitments of, advances or Loans by, or
other credit extended by, any Lender Party (or its Applicable Lending Office) or
shall impose on any Lender Party (or its  Applicable  Lending  Office) or on the
relevant interbank market any other condition  affecting any LIBOR Rate Loan, or
any obligation to make LIBOR Rate Loans,  and the effect of the foregoing is (i)
to increase the cost to such Lender Party (or its Applicable  Lending Office) of
making,  issuing,  renewing or maintaining  any LIBOR Rate Loan or its Revolving
Commitment  or Revolving  Commitments  in respect  thereof or (ii) to reduce the
amount of any sum received or receivable by such Lender Party (or its Applicable
Lending Office) hereunder or under any other Loan Document with respect thereto,
then,  subject to Section |2.15.1.,  the Borrower shall from time to time pay to
such  Lender  Party,  within 10 days after  request by such Lender  Party,  such
additional  amounts as may be specified by such Lender  Party as  sufficient  to
compensate such Lender Party for such increased cost or reduction.

                  2.12.2.  Capital Costs.

                  If a Regulatory Change regarding  capital adequacy  (including
the  adoption or becoming  effective of any treaty,  law,  rule,  regulation  or
guideline  adopted  pursuant  to or arising  out of the July 1988  report of the
Basle  Committee  on Banking  Regulations  and  Supervisory  Practices  entitled
"International Convergence of Capital Measurement and Capital Standards") has or
would  have the  effect of  reducing  the rate of return  on the  capital  of or
maintained by any Lender Party or any company controlling such Lender Party as a
consequence of such Lender Party's Loans,  Revolving  Commitments or obligations
hereunder  and other  commitments  of this type to a level below that which such
Lender  Party or company  could have  achieved  but for such  Regulatory  Change
(taking into account such Lender  Party's or company's  policies with respect to
capital adequacy),  then,  subject to Section |2.15.1.,  the Borrower shall from
time to time pay to such  Lender  Party,  within 10 days  after  request by such
Lender Party,  such additional  amounts as may be specified by such Lender Party
as sufficient to compensate  such Lender Party or company for such  reduction in
return,  to the  extent  such  Lender  Party  or such  company  determines  such
reduction to be attributable  to the existence,  issuance or maintenance of such
Loans or obligations for the account of the Borrower.

         Section 2.13.  Taxes.



                  2.13.1.

                  If the  Borrower  is required  by  Applicable  Law to make any
deduction or  withholding  in respect of any Taxes (other than  Excluded  Taxes)
from any amount  payable  under any Loan  Document  to or for the account of any
Lender Party, the Borrower shall pay to or for the account of such Lender Party,
on the date such amount is payable, such additional amounts as such Lender Party
reasonably determines may be necessary so that the net amounts received by it or
for  its  account,  in  the  aggregate,   after  all  applicable  deductions  or
withholdings,  shall  equal the amount  that such  Lender  Party would have been
entitled to receive if no deductions or withholdings were made. "Excluded Taxes"
means, with respect to any payment to any Lender Party, (a) any taxes imposed on
or measured by the overall net income  (including  a franchise  tax based on net
income) of such Lender Party or its Agent's Office or Applicable  Lending Office
by the  jurisdiction  in  which  it is  incorporated,  maintains  its  principal
executive office or in which such Agent's Office or Applicable Lending Office is
located,  and (b) "Excluded Taxes" arising under Section 2.13.3. If the Borrower
shall deduct or withhold any Taxes from any payments  under the Loan  Documents,
it shall provide to the relevant Lender Party (i) a statement  setting forth the
amount and type of Taxes so deducted or withheld,  the  applicable  rate and any
other information or documentation that such Lender Party may reasonably request
and  (ii) as  promptly  as  possible  after  payment  is  made  to the  relevant
Governmental  Authority,  a  certified  copy of any  original  official  receipt
received by the Borrower showing payment.

                  |2.13.2.

                  If any Lender  Party is required by law to make any payment on
account  of Taxes  (other  than  Excluded  Taxes) on or in  relation  to any sum
received or receivable by it under any Loan Document, or any liability for Taxes
(other than Excluded Taxes) in respect of any such payment is imposed, levied or
assessed  against such Lender Party,  then the Borrower  shall pay when due such
additional amounts as such Lender Party reasonably determines to be necessary so
that the amount  received by it, less any such Taxes  paid,  imposed,  levied or
assessed,  including  any Taxes  (other  than  Excluded  Taxes)  imposed on such
additional  amounts,  shall equal the amount  that such Lender  Party would have
been  entitled  to retain in the  absence of the  payment,  imposition,  levy or
assessment of such Taxes.

                  |2.13.3.

                  If any Lender Party is not  organized  and existing  under the
laws of the United  States of America or any  political  subdivision  thereof or
therein  (a  "Foreign  Lender  Party"),  to the extent  entitled  to do so under
Applicable Law, such Lender Party shall furnish to the Borrower,  on the Closing
Date (or on the date on which such Foreign  Lender Party first  becomes a Lender
Party  pursuant to Section 9.3.) a duly executed  certificate to the effect that
such Foreign  Lender Party is entitled to receive all amounts  payable under the
Loan  Documents  without  deduction  or  withholding  (or at a  reduced  rate of
deduction or  withholding)  on account of Taxes imposed by the United States (A)
pursuant  to the terms of an  applicable  tax  treaty in effect  with the United
States of America (in which case such  certificate  shall be  accompanied by two
executed  copies of IRS Form 1001),  or (B) under Code Section 1441(c) (in which
case such  certificate  shall be accompanied by two executed  copies of IRS Form
4224) (such forms being the  "Prescribed  Forms").  If requested by the Borrower
from  time  to time  after  the  Closing  Date  (upon  the  obsolescence  of any
previously  delivered form or otherwise),  a Foreign Lender Party shall,  to the
extent  entitled  thereto  under  Applicable  Law,  provide to the  Borrower new
Prescribed  Forms,  in each case duly  executed  and  completed  by such Foreign
Lender  Party.  If a Foreign  Lender  Party does not  furnish  Prescribed  Forms
establishing a complete  exemption from deduction and  withholding on account of
Taxes imposed by the United States of America,  any  deductions or  withholdings
required to be made by the  Borrower  under  Applicable  Law on account of Taxes
imposed by the United States of America (including deductions or withholdings on
account  of such  Taxes at the rate  shown in such  Prescribed  Forms),  and any
payments required to be made by, and any liability  imposed,  levied or assessed
against,  such Lender Party on account of such Taxes, shall constitute "Excluded
Taxes," provided that any such deductions, withholdings, payments or liabilities
shall not constitute  "Excluded  Taxes" to the extent they are attributable to a
Regulatory Change occurring after the date hereof (or, in the case of any Person
who becomes a Lender Party after the date hereof  pursuant to Section 9.3.,  the
date on which  such  Person  becomes a Lender  Party) if such  Lender  Party has
furnished to the Borrower all Prescribed  Forms required to be furnished by this
Section 2.13.3.

         Section 2.14.  Compensation for Funding Losses.

         The Borrower shall pay to any Lender,  upon demand by such Lender, such
amount or amounts as such Lender  reasonably  determines  is or are necessary to
compensate it for any loss, cost, expense or liabilities incurred (including any
loss,  cost,  expense or  liability  incurred  by reason of the  liquidation  or
redeployment  of deposits but excluding loss of future margin) by it as a result
of (a) any  payment,  prepayment  or  conversion  of any LIBOR Rate Loan for any
reason (including by reason of a Mandatory Prepayment,  an acceleration pursuant
to Section 7.2. or by operation of Section  2.11.) on a date other than the last
day of an Interest  Period  applicable to such LIBOR Rate Loan, or (b) any LIBOR
Rate Loan for any reason not being made (other  than a wrongful  failure to fund
by such  Lender),  converted  or  continued,  or any payment of  principal of or
interest  thereon not being made, on the date therefor  determined in accordance
with the applicable provisions of this Agreement.

         Section 2.15.  Certificates Regarding Yield Protection, Etc.



                  |2.15.1.

                  Any  request by any Lender for payment of  additional  amounts
pursuant to Sections 2.12., 2.13. and 2.14. shall be submitted through the Agent
and shall be accompanied by a certificate of such Lender Party setting forth the
basis and amount of such request,  including a  description  or  explanation  in
reasonable  detail of how such amount was  determined  and a statement that such
Lender  Party has  assessed,  or is in the  process of  assessing,  such  Lender
Party's other similarly situated  borrowers for similar amounts.  In determining
the  amount  of  such  payment,  such  Lender  Party  may  use  such  reasonable
attribution or averaging methods as it deems appropriate and practical.

                  |2.15.2.

                  Before any Lender Party  requests  compensation  under Section
2.12. or 2.13., such Lender Party shall designate a different Applicable Lending
Office if such  designation  (a) will avoid the need for such  request or reduce
the amount  payable under such Section and (b) will not cause the  imposition on
such Lender Party of any additional costs or legal, regulatory or administrative
burdens  deemed by such Lender  Party to be material or  otherwise  be deemed by
such Lender Party in its discretion to be materially disadvantageous to it.

         Section 2.16.  Applicable Lending Office; Discretion of Lenders as to 
Manner of Funding.

         Each Lender may make, carry or transfer LIBOR Rate Loans at, to, or for
the account of an Affiliate of the Lender,  provided  that such Lender shall not
be entitled to receive any greater  amount under  Section  2.12.  or 2.13.  as a
result of the  transfer of any such Loan than such  Lender  would be entitled to
immediately  prior  thereto  unless (a) such  transfer  occurred  at a time when
circumstances  giving rise to the claim for such greater amount did not exist or
(b) such  claim  would  have  arisen  even if such  transfer  had not  occurred.
Notwithstanding  any other provision of this Agreement,  each Lender Party shall
be  entitled  to fund and  maintain  its funding of all or any part of its LIBOR
Rate Loans in any manner it sees fit,  it being  understood,  however,  that for
purposes of this Agreement all determinations hereunder shall be made as if each
Lender Party had actually funded and maintained each LIBOR Rate Loan through the
purchase  of  deposits  in the  relevant  interbank  market  having  a  maturity
corresponding  to such  Loan's  Interest  Period  and  bearing  interest  at the
applicable rate.


                                                    ARTICLE 3.

                                                CONDITIONS TO LOANS

         Section 3.1.  Closing Conditions.

         The occurrence of the Closing Date shall be subject to  satisfaction of
the following conditions:

                  3.1.1.  Closing Date.

                  The Closing Date shall occur on or before September 15, 1997.

                  3.1.2.  Certain Documents.

                  The Agent shall have received the documents listed on Schedule
3.1.2.,  all of  which  shall  be  duly  executed  and  in  form  and  substance
satisfactory to the Agent.

                  3.1.3.  Fees and Expenses Paid.

                  The Borrower shall have paid (a) all Fees due on or before the
Closing Date and (b) all expenses for which the Borrower  shall have been billed
on or before the Closing Date.

                  3.1.4.  Satisfaction of Certain Conditions.

                  The conditions set forth in Sections 3.2.3., 3.2.4. and
3.2.5. shall be satisfied on and as of the Closing Date as if such date were a
Funding Date.

                  3.1.5.  Absence of Litigation Events.

                  There has not been issued any injunction, order or decree that
prohibits or limits any of the  transactions  contemplated by the Loan Documents
and there shall not be any action, suit, proceeding or investigation pending or,
to the Knowledge of the Borrower,  currently  threatened against the Borrower or
any  Lender  Party  that (i) draws  into  question  the  validity,  legality  or
enforceability   of  any  Loan  Document  or  to  consummate  the   transactions
contemplated  thereby  or  (ii)  might  result,  either  individually  or in the
aggregate, in any Material Adverse Change, except as set forth in Schedule 4.6.

                  3.1.6.  General.

                  All other  documents and legal matters in connection  with the
transactions  contemplated  by this  Agreement  shall  have  been  delivered  or
executed  or recorded in form and  substance  satisfactory  to the Agent and the
Agent shall have  received all such  counterpart  originals or certified  copies
thereof as Agent may request.  Without limiting the generality of the foregoing,
the  Agent  shall  have  received  evidence  that  UCC-1  financing   statements
reflecting  the Agent's  security  interest in the  collateral  described in the
Security  Agreement  have  been  duly  filed  in the  office  of the  California
Secretary of State and all other filing offices deemed  necessary or appropriate
by the  Agent  and  reflect  that the  Agent's  security  interest  holds  first
priority, subject only to exceptions consented to by all Lenders.

                  3.1.7.  No Material Adverse Change.

                  No Material Adverse Change shall have occurred since March 31,
1997.

         Section 3.2.  Conditions Precedent to Revolving Loans and Swingline 
Loans.

         The obligation of the Lenders or the Swingline  Lender, as the case may
be, to make any Loan on any  Funding  Date  shall be  subject  to the  following
conditions precedent:

                  3.2.1.  Occurrence of Closing Date.

                  The conditions precedent set forth in Section 3.1. shall have
been satisfied or waived in writing by the Agent.

                  3.2.2.  Notice of Borrowing.

                  The  Borrower  shall  have  delivered  to  the  Agent  or  the
Swingline Lender, as the case may be, after the time the conditions set forth in
Section 3.1.  shall have been  satisfied or waived and  otherwise in  accordance
with the  applicable  provisions  of this  Agreement,  a Notice of Borrowing (or
telephonic notice in lieu thereof).

                  3.2.3.  Representations and Warranties.

         All of the  representations and warranties of the Borrower contained in
the Loan Documents shall be true and correct in all material  respects on and as
of the Funding  Date as though made on and as of that date (except to the extent
that  such  representations  and  warranties  expressly  were  made only as of a
specific date).

                  3.2.4.  No Default.

         No Default or Event of Default shall exist or result from the making of
the Loan.

                  3.2.5.  No Material Adverse Change.

                  No Material  Adverse Change shall have occurred since the date
of the financial statements referred to in Section 4.4.1.

                  3.2.6.  Satisfaction of Conditions.

                  Each borrowing of a Loan shall constitute a representation and
warranty by the Borrower as of the Funding Date that the conditions contained in
Sections 3.2.3. through 3.2.5. have been satisfied.

                  3.2.7.  No Violation of Applicable Law.

                  No  Lender  shall be  prohibited  by any  Applicable  Law from
extending the credit requested in such Notice of Borrowing.


                                                    ARTICLE 4.

                                          REPRESENTATIONS AND WARRANTIES

         Each of the Borrowers  represents and warrants to the Lender Parties as
follows:

         Section 4.1.  Organization, Powers and Good Standing.

                  Each of the Borrowers is a corporation duly organized, validly
existing  and  in  good  standing  under  the  laws  of  its   jurisdiction   of
organization,  as shown as of the date  hereof  on  Schedule  4.1.,  and has all
requisite  corporate  power and authority and the legal right to own and operate
its properties, to carry on its business as heretofore conducted and as proposed
to be conducted,  to enter into the Loan Documents to which it is a party and to
carry out the transactions contemplated thereby. Each of the Borrowers possesses
all  Governmental  Approvals,  in  full  force  and  effect,  free  from  unduly
burdensome restrictions,  that are necessary for the ownership,  maintenance and
operation of its  properties  and conduct of its business as now  conducted  and
proposed to be conducted,  and is not in Material violation thereof. Each of the
Borrowers  is  duly  qualified  to do  business  and in  good  standing  in each
jurisdiction  where  any  failure  to be so  qualified,  individually  or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.

         Section 4.2.  Authorization, Binding Effect, No Conflict, Etc.




                  The  execution,  delivery  and  performance  by  each  of  the
Borrowers of each Loan  Document and each other  Transaction  Document have been
duly  authorized by all necessary  corporate or other action on the part of each
of the  Borrowers.  Each such Loan Document has been duly executed and delivered
by each of the Borrowers and is the joint and several  legal,  valid and binding
obligation of each such Borrower,  enforceable against it in accordance with its
terms,  except as  enforcement  may be limited by  equitable  principles  and by
bankruptcy, insolvency,  reorganization,  moratorium or similar laws relating to
creditors' rights generally.


                  The  execution,  delivery  and  performance  by  each  of  the
Borrowers  of each  Loan  Document  and  the  consummation  of the  transactions
contemplated  thereby,  do not and will not (a)  violate  any  provision  of the
charter  or other  organizational  documents  of any  Borrower,  (b)  except for
consents  that have been  obtained  and are in full force and  effect,  conflict
with,  result in a breach of, or  constitute  (or,  with the giving of notice or
lapse of time or both,  would  constitute)  a  default  under,  or  require  the
approval or consent of any Person pursuant to, any Contractual Obligation of any
such  Borrower,  or violate any  Applicable  Law  binding on any such  Borrower,
except  where  such  violation,   conflict,   breach,   or  default  would  not,
individually  or in the  aggregate,  reasonably  be  expected to have a Material
Adverse Effect and would not subject any Lender Party to any  liability,  or (c)
result in the creation or imposition of any Lien upon any asset of any Borrower,
except for Liens in favor of the Agent under the Collateral Documents.

                  4.2.3.  Governmental Approvals.

                  Except for  filings  and  recordings  in  connection  with the
perfection  of Liens  created by the  Collateral  Documents  listed on  Schedule
3.1.2.,  no Governmental  Approval is or will be required in connection with the
execution,  delivery  and  performance  by each  of the  Borrowers  of any  Loan
Document  to which it is party or the  transactions  contemplated  thereby or to
ensure the  legality,  validity  or  enforceability  thereof,  except  where the
failure to obtain such Governmental  Approval would not, individually and in the
aggregate,  reasonably be expected to have a Material  Adverse  Effect and would
not subject any Lender Party to any liability.

         Section 4.3.  Subsidiaries; Investments .



                  |4.3.1.  Subsidiaries.

                  Each Consolidated  Subsidiary of the Borrower,  the authorized
and issued Capital Stock of each such Consolidated Subsidiary and the record and
beneficial  owner of such Capital  Stock are  identified  in Schedule  4.3.,  as
amended from time to time.  All of the  outstanding  shares of Capital  Stock of
each of the  Subsidiaries  of the Borrower have been duly authorized and validly
issued and are fully paid and  nonassessable.  Except as  disclosed  on Schedule
4.3., as amended from time to time,  there are not  outstanding  any  securities
convertible  into or  exchangeable  for  shares of  Capital  Stock of any of the
Subsidiaries  of the  Borrower,  or any  options,  warrants  or other  rights to
purchase any such Capital Stock, or any commitments of any kind for the issuance
of  additional  shares  of  such  Capital  Stock  or  any  such  convertible  or
exchangeable securities or options,  warrants or rights to purchase such Capital
Stock.  Except for directors  qualifying  shares or similar  arrangements  or as
disclosed on Schedule 4.3., neither the Borrower nor any Consolidated Subsidiary
thereof is a party to any agreement with respect to the issuance, voting or sale
of issued or unissued shares of Capital Stock of any Consolidated  Subsidiary of
the Borrower.

                  |4.3.2.  Borrower Capital Stock.

                  The authorized and  outstanding  Capital Stock of the Borrower
is as set forth on Schedule  4.3. All  outstanding  shares of such Capital Stock
are duly authorized and validly issued and are fully paid and nonassessable, and
Borrower's ownership interest in its Subsidiaries is free and clear of all Liens
except for Liens in favor of the Agent.


         Section 4.4.  Financial Information.

                  |4.4.1.

                  The  consolidated  balance  sheets  of the  Borrower  and  its
consolidated  subsidiaries as of March 31, 1997 and the consolidated  statements
of  income,  stockholders'  equity  and  cash  flow  of  the  Borrower  and  its
consolidated  subsidiaries  for the Fiscal  Years then ended,  certified  by the
Borrower's  independent certified public accountants,  copies of which have been
delivered  to  the  Lender  Parties,  were  prepared  in  accordance  with  GAAP
consistently  applied and fairly present the consolidated  financial position of
the Borrower  and its  consolidated  subsidiaries,  as of the  respective  dates
thereof  and the results of  operations  and cash flow of the  Borrower  and its
consolidated  subsidiaries for the periods then ended.  Neither the Borrower nor
any  Consolidated   Subsidiary  on  such  dates  had  any  material   Contingent
Obligations,  liabilities  for Taxes or long-term  leases,  forward or long-term
commitments or unrealized  losses from any unfavorable  commitments that are not
reflected  in  the  foregoing  statements  or in the  notes  thereto  and  that,
individually or in the aggregate, are Material.

                  4.4.2.

                  The unaudited  consolidated  balance sheet of the Borrower and
its consolidated  subsidiaries as of June 30, 1997 and the related  consolidated
statements  of income,  stockholders'  equity and cash flow for the periods then
ended, certified by the Chief Financial Officer of the Borrower, copies of which
have been delivered to the Lender Parties, were prepared in accordance with GAAP
consistently applied (except to the extent noted therein) and fairly present the
consolidated   financial   position  of  the  Borrower   and  its   consolidated
subsidiaries as of such date and the results of operations and cash flow for the
periods covered thereby, subject to the absence of footnotes and normal year-end
audit adjustments.  Neither the Borrower nor any Consolidated Subsidiary on such
date had any material Contingent Obligations, liabilities for Taxes or long-term
leases,   forward  or  long-term  commitments  or  unrealized  losses  from  any
unfavorable commitments that are not reflected in the foregoing statements or in
the notes thereto and that, individually or in the aggregate, are Material.

                  |4.4.3.

                  The projected consolidated  statements of income and cash flow
of the Borrower and its  consolidated  subsidiaries for the period from April 1,
1997 to and  including  March 31, 2001 , and the projected  annual  consolidated
balance sheets of the Borrower and its  consolidated  subsidiaries as of the end
of each Fiscal Year through March 31, 2001,  copies of which have been furnished
to the Lender  Parties,  were prepared by or under the  supervision of the Chief
Executive Officer and the Chief Financial Officer of the Borrower,  are complete
and have been prepared on the basis of reasonable  assumptions and in good faith
utilizing historical financial  information that was prepared in accordance with
GAAP.

         Section 4.5.  No Material Adverse Changes; Solvency.

         Since  the date of the  Financial  Statements  referred  to in  Section
4.4.1.,  there has been no Material Adverse Change. Each of the Borrowers is and
will be Solvent after giving effect to any Loans then being requested.

         Section 4.6.  Litigation.

         Except as disclosed in Schedule  4.6.,  there are no actions,  suits or
proceedings pending or, to the Knowledge of the Borrower,  threatened against or
affecting the Borrower,  any of its Subsidiaries or any of its properties before
any Governmental  Authority (a) in which there is a reasonable possibility of an
adverse  determination  that  could  result  in a  Material  liability  or could
reasonably  be  expected  to have a Material  Adverse  Effect or (b) that in any
manner draws into question the validity,  legality or enforceability of any Loan
Document or any transaction contemplated thereby.

         Section 4.7.  Agreements; Applicable Law.

         None of the  Borrowers  is in violation  of any  Applicable  Law, or in
default  under its  charter  or bylaws  or any of its  Contractual  Obligations,
except  where  such  violation  or  default  could  not  individually  or in the
aggregate be reasonably  expected to have a Material Adverse Effect. None of the
Borrowers is a party to or bound by any unduly burdensome Contractual Obligation
that,  individually  or in the aggregate,  can be reasonably  expected to have a
Material Adverse Effect.

         Section 4.8.  Governmental Regulation.

         None of the  Borrowers is (a) an  "investment  company"  registered  or
required to be registered under the Investment  Company Act of 1940, as amended,
or a company  controlled by such a company,  or (b) subject to regulation  under
any Federal or state,  statute or regulation  limiting its ability to incur Debt
for money borrowed (other than the Margin Regulations).

         Section 4.9.  Margin Regulations.

         None  of  the  Borrowers  is  engaged  principally,  or as  one  of its
important  activities,  in the business of extending  credit for the purposes of
purchasing  or carrying  Margin Stock.  The aggregate  value of all Margin Stock
held by the Borrowers  constitutes  less than 25% of the value, as determined in
accordance  with  the  Margin  Regulations,  of  all  aggregate  assets  of  the
Borrowers.

         Section 4.10.  Employee Benefit Plans.




                  None of the Borrowers  sponsors,  maintains or contributes to,
or has an obligation  to  contribute  to, or, within the five years prior to the
Closing Date,  maintained,  contributed to or was required to contribute to, any
"employee pension benefit plan" within the meaning of Section 3(2) of ERISA that
is subject to Title IV of ERISA.

                  4.10.2.

                  There exists no Multiemployer  Plan. Each Borrower and each of
the  ERISA  Affiliates  is in  compliance  in all  Material  respects  with  all
Applicable Laws, including any applicable provisions of ERISA and the Code, with
respect to all Plans. There have been no Prohibited Transactions with respect to
any Plan that are reasonably  likely to result in any Material  liability of any
Borrower or any ERISA Affiliate. Each Borrower and the ERISA Affiliates have not
had  asserted  and do not  expect to have  asserted  against  them any  Material
penalty,  interest or excise tax under Sections 4971,  4972,  4975,  4976, 4977,
4979, 4980 or 4980B of the Code or Sections  502(c)(1) or 502(i) of ERISA.  Each
Plan covering  employees of any of the Borrowers or any of the ERISA  Affiliates
is able to pay benefits  thereunder  when due.  There is no claim pending or, to
the Knowledge of the Borrower,  threatened, against or involving any Plan by any
Governmental  Authority or other Plan,  other than ordinary  claims for benefits
pursuant to terms of any Plan and other claims that are not Material.

         Section 4.11.  Title to Property.

         Each of the  Borrowers  has  good  title  to or  valid  and  subsisting
leasehold interests in all of its property reflected in its books and records as
being owned or leased by it. No such property is subject to any Lien, other than
Permitted Liens.

         Section 4.12.  Intellectual Property, Etc.

         Each  of the  Borrowers  owns or  holds  valid  licenses  in and to all
Intellectual Property Rights that are material to the conduct of its business as
heretofore  operated and as proposed to be conducted.  None of the Borrowers has
infringed,  or been charged or, to the Knowledge of the Borrower,  threatened to
be charged with any infringement of, any unexpired  Intellectual  Property Right
of any Person, except where the effect thereof would not, individually or in the
aggregate, be reasonably expected to have a Material Adverse Effect. No Borrower
is bound by or a party to any options,  licenses or  agreements of any kind with
respect  to the  Intellectual  Property  Rights of any other  Person  except for
arrangements that, if terminated,  would not be reasonably likely to result in a
Material  Adverse  Effect.  None  of the  Borrowers  is  aware  that  any of its
employees is obligated under any  Contractual  Obligation  (including  licenses,
covenants or  commitments  of any nature),  or subject to any  judgment,  decree
(except as imposed by laws of general  application)  or order (except as imposed
by laws of  general  application)  of any  Governmental  Authority,  that  would
interfere  with the use of his or her best  efforts to promote the  interests of
such Borrower or that would  conflict with its business as proposed to be and as
currently  conducted.  To the  Knowledge of each of the  Borrowers,  there is no
material  violation by any Person of any right of the Borrowers  with respect to
any Intellectual Property Rights owned or used by it.

         Section 4.13.  Environmental Condition.

         Except as set forth on Schedule 4.13.:

                  4.13.1.

                  There  exists no order,  judgment or decree,  and there is not
pending or, to the  Knowledge of the  Borrower,  threatened,  any action,  suit,
proceeding or investigation  relating to any actual or alleged liability arising
out of the presence or suspected presence of Hazardous  Material,  any actual or
alleged  violation  of  Environmental  Requirements  or any  actual  or  alleged
liability for Environmental  Damages in connection with any Real Property or the
business  or  operations  of any of the  Borrowers  that has had, or as to which
there is a reasonable possibility of an adverse determination that would have, a
Material Adverse Effect nor, to the Knowledge of the Borrower,  does there exist
any basis for such action, suit, proceeding or investigation being instituted or
filed.

         Section 4.14.  Absence of Certain Restrictions.

         Except as set forth in Schedule 4.14., none of the Borrowers is subject
to any  Contractual  Obligation  that  restricts  or limits  the  ability of any
Consolidated Subsidiary to (a) make Restricted Payments to the Borrower, (b) pay
Debt owed the  Borrower or any  Consolidated  Subsidiary  thereof,  (c) make any
loans or advances to the Borrower  (except as provided in Section  5.11.) or (d)
except as provided in Contractual  Obligations  respecting  the specific  assets
subject to Permitted Liens, transfer any of its property to the Borrower.

         Section 4.15.  Labor Matters.

         There are no  material  strikes or other labor  disputes or  grievances
pending or, to the Knowledge of the Borrower,  threatened  against any Borrower.
Except as set  forth in  Schedule  4.15.,  there  are no  collective  bargaining
agreements to which any Borrower  thereof is a party.  Each of the Borrowers has
complied in all material respects with the requirements of the Worker Adjustment
and  Restraining  Notification  Act, 29 U.S.C.  Section 2101 et seq.  (the "WARN
Act").  No claim  under  the WARN Act is  pending  or, to the  Knowledge  of the
Borrower, threatened against the Borrower or any Consolidated Subsidiary thereof
nor is there any reasonable basis to anticipate any such claim, except where the
effect  thereof,  individually  or in the  aggregate,  would not  reasonably  be
expected to have a Material Adverse Effect.

         Section 4.16.  Disclosure.

         The  information  in each document,  certificate  or written  statement
(other than  information  referred to in Section  4.4.)  furnished to the Lender
Parties by or on behalf of any  Borrower  or any  Consolidated  Subsidiary  with
respect to the business,  assets, results of operation or financial condition of
any Borrower for use in connection  with the  transactions  contemplated by this
Agreement at the time of delivery thereof,  was true and correct in all Material
respects  and did not  omit,  when  considered  as a whole,  any  material  fact
necessary in order to make the statements made not  misleading,  in light of the
circumstances under which they were made. There is no fact known to any Borrower
(other  than  matters  of a  general  economic  nature)  that  has had or  could
reasonably be expected to have a Material  Adverse  Effect and that has not been
disclosed herein or in such other documents, certificates or statements.


                                                    ARTICLE 5.

                                      AFFIRMATIVE COVENANTS OF THE BORROWERS

         So long as any portion of the Revolving Commitments is in effect or any
Obligations remain unpaid or have not been performed in full:

         Section 5.1.  Financial Statements and Other Reports.

         The Borrower shall deliver to the Lender Parties:

                  5.1.1.

                  as soon as  practicable  and in any event within 90 days after
the end of each Fiscal Year, the consolidated  balance sheet of the Borrower and
the  consolidated  subsidiaries  as of the end of  such  year  and  the  related
consolidated  statements  of income,  stockholders'  equity and cash flow of the
Borrower and the consolidated  subsidiaries for such Fiscal Year,  setting forth
in each case in  comparative  form the  consolidated  figures  for the  previous
Fiscal Year, all in reasonable  detail and (i) in the case of such  consolidated
financial  statements,  accompanied  by an  unqualified  report thereon of Price
Waterhouse LLP or other independent  certified public  accountants of recognized
national  standing  selected by the Borrower and reasonably  satisfactory to the
Required  Lenders,  which  report shall state that such  consolidated  financial
statements  fairly present the consolidated  financial  position of the Borrower
and the consolidated  subsidiaries as of the date indicated and their results of
operations and cash flows for the periods  indicated are in conformity with GAAP
(except  as  otherwise   stated  therein)  and  that  the  examination  by  such
accountants in connection with such consolidated  financial  statements has been
made in accordance with generally  accepted  auditing  standards and (ii) in the
case  of  such  consolidating  financial  statements,  certified  by  the  chief
financial  officer  of the  Borrower  as being  fairly  stated  in all  material
respects  when  considered  in relation to the  audited  consolidated  financial
statements of the Borrower and the consolidated subsidiaries;

                  |5.1.2.

                  as soon as  practicable  and in any event within 45 days after
the end of each Fiscal Quarter a consolidated  balance sheet of the Borrower and
the  consolidated  subsidiaries  as of the end of such  quarter  and the related
consolidated  statements of income,  stockholders' equity and cash flow for such
quarter  and the  portion of the Fiscal  Year ended at the end of such  quarter,
setting forth in each case in comparative form the consolidated  figures for the
corresponding  periods of the prior Fiscal Year,  all in  reasonable  detail and
certified by the Borrower's  chief  financial  officer as fairly  presenting the
consolidated   financial   condition  of  the  Borrower  and  its   consolidated
subsidiaries  as of the dates  indicated,  and  their  consolidated  results  of
operations and cash flows for the periods  indicated,  in conformity  with GAAP,
subject to normal year-end adjustments and the absence of footnotes;


                  together with each delivery of financial  statements  pursuant
to Sections  5.1.1.  and 5.1.2.  above,  and not later than one (1) Business Day
after the consummation of any Permitted Acquisition,  a certificate of the chief
financial  officer of the Borrower  substantially  in the form of Exhibit F-6 (a
"Compliance  Certificate"),  duly  completed and setting forth the  calculations
required to establish compliance with Section 6.5. on the date of such financial
statements or such Permitted Acquisition, as the case may be;

                  5.1.4.

                  within  three  business  days after any Senior  Officer of the
Borrower  becomes  aware of the  occurrence  of any Default or Event of Default,
written or telephonic  notice of the nature of such Default or Event of Default,
and within  seven days  thereafter,  a  certificate  of a Senior  Officer of the
Borrower  setting forth the details  thereof and the action that the Borrower is
taking or proposes to take with respect thereto;

                  5.1.5.

                  promptly  upon  their  becoming   available,   copies  of  all
financial  statements,  reports,  notices  and  proxy  statements  sent  or made
available by the Borrower to its security holders,  all registration  statements
(other than the exhibits thereto) and annual,  quarterly or monthly reports,  if
any,  filed by the Borrower with the SEC and all press  releases by the Borrower
or any Consolidated  Subsidiary thereof concerning material  developments in the
business of the Borrower or any such Consolidated Subsidiary;

                  5.1.6.

                  within  three days  after the  Borrower  becomes  aware of the
occurrence of (a) any Reportable  Event in connection  with any Plan, or (b) any
Prohibited  Transaction  in  connection  with  any Plan  (or any  trust  created
thereunder),  notice providing reasonable details about such Reportable Event or
Prohibited Transaction;

                  5.1.7.

                  within three days after the Borrower obtains  Knowledge of the
threat or commencement of litigation or proceedings  affecting any Borrower,  or
of any  material  development  in any  pending  or future  litigation,  (a) that
involves  alleged  liability in excess of $1,000,000 (in the aggregate),  (b) in
which injunctive or similar relief is sought that, if obtained, could reasonably
be expected to have a Material Adverse Effect or (c) that questions the validity
or  enforceability  of any Loan Document,  notice providing  reasonable  details
about the threat or  commencement  of such  litigation  or about  such  material
development;

                  5.1.8.

                  within three days after receipt  thereof,  copies of all final
reports or letters submitted to the Borrower by its independent certified public
accountants  in connection  with each audit of the  financial  statements of the
Borrower or its consolidated  subsidiaries made by such  accountants,  including
any management report, which reports the Borrower agrees to obtain in connection
with each of its annual audits;

                  5.1.9.

                  within  60  days  after  the end of  each  Fiscal  Year of the
Borrower,  a forecast for the next  succeeding  Fiscal Year of the  consolidated
balance sheet and the  consolidated  results of operations  and cash flow of the
Borrower and its consolidated subsidiaries,  together with (a) an outline of the
major  assumptions  upon which the forecast is based,  and (b) a calculation  in
reasonable detail  evidencing  compliance with all covenants set forth herein on
the basis of, and after giving effect to, such forecast;

                  5.1.10.

                  within  three  days  after the  receipt  thereof by any Senior
Officer of the  Borrower,  a copy of any  notice,  summons,  citation or written
communication concerning any actual, alleged,  suspected or threatened violation
of  Environmental  Requirements,  or  liability  of the  Borrower  or any of its
Subsidiaries for Environmental Damages;

                  5.1.11.

                  within five days after the availability thereof, copies of all
amendments  to the  charter,  bylaws or other  organizational  documents  of the
Borrower or any of its Subsidiaries;

                  5.1.12.

                  not less  than  five  Business  Days  before  the  anticipated
consummation   of  a  proposed   acquisition  by  the  Borrower,   documentation
demonstrating to the Agent's  reasonable  satisfaction that the requirements set
forth in the definition of "Permitted  Acquisition"  are met with respect to the
proposed acquisition; and

                  5.1.13.

                  from time to time, such additional  information  regarding the
Borrower or its Subsidiaries or its business,  assets,  liabilities,  prospects,
results of operation or financial  condition as any Lender Party may  reasonably
request.

         Section 5.2.  Records and Inspection.

         Each  Borrower  shall,  and shall  cause each of its  Subsidiaries  to,
maintain adequate books, records and accounts as may be required or necessary to
permit the preparation of consolidated  financial  statements in accordance with
sound business  practices and GAAP. Each Borrower shall, and shall cause each of
its  Subsidiaries  to,  permit  such  Persons  as the  Agent may  designate,  at
reasonable times and as often as may be reasonably  requested,  under reasonable
circumstances,  to (a) visit and inspect any of its properties,  (b) inspect and
copy its books and records, and (c) discuss with its officers and employees, its
investment  bankers  and its  independent  accountants,  its  business,  assets,
liabilities,  prospects,  results of operation or financial condition,  provided
that so long as no Event of Default has occurred and is continuing,  Agent shall
conduct no more than three such visits and inspections per year and no more than
one such visit and inspection in any Fiscal Quarter.

         Section 5.3.  Audits of the Collateral.

         Each Borrower shall permit, and shall cause each of its Subsidiaries to
permit,  the Agent or its designee to perform  audits of the  Collateral  as the
Agent may reasonably  request,  provided that so long as no Event of Default has
occurred and is  continuing,  Agent shall perform no more than three such audits
in any year and no more than one such audit in any Fiscal Quarter.

         Section 5.4.  Corporate Existence, Etc.

         Each Borrower shall,  and shall cause each of its  Subsidiaries  to, at
all times preserve and keep in full force and effect its corporate existence and
all  Material  rights and  franchises,  provided,  however,  that the  corporate
existence of any  Consolidated  Subsidiary of any Borrower may be terminated (a)
as  contemplated  and  permitted by Section 6.6. or (b) if such  termination  is
determined by the Board of Directors of the relevant  Borrower to be in the best
interest of such Borrower and is not  disadvantageous in any Material respect to
the Lender Parties.

         Section 5.5.  Payment of Taxes.

         Each Borrower shall,  and shall cause each of its  Subsidiaries to, pay
and discharge  all Taxes imposed upon it or any of its  properties or in respect
of any of its franchises,  business, income or property before any penalty shall
be incurred  with respect to such Taxes,  provided,  however,  that,  unless and
until  foreclosure,  distraint,  levy,  sale or similar  proceedings  shall have
commenced, the Borrowers and the Subsidiaries need not pay or discharge any such
Tax so long as the validity or amount  thereof is being  contested in good faith
and by appropriate  proceedings and so long as any reserves or other appropriate
provisions as may be required by GAAP shall have been made therefor.

         Section 5.6.  Maintenance of Properties.

         Each  Borrower  shall,  and shall  cause each of its  Subsidiaries  to,
maintain or cause to be maintained  in good repair,  working order and condition
(ordinary  wear and tear  excepted),  all  properties and other assets useful or
necessary  to its  business,  and from time to time the  Borrower  shall make or
cause to be made all appropriate repairs, renewals and replacements thereto.

         Section 5.7.  Maintenance of Insurance.



                  |5.7.1.

                  Each Borrower shall,  and shall cause each of its Subsidiaries
to, maintain with financially sound and reputable  insurance companies insurance
in at least such amounts,  of such  character and against at least such risks as
is usually  maintained by companies of established repute engaged in the same or
a similar  business in the same general area. All liability  insurance  policies
shall name the Agent as a loss payee. Each insurance policy covering  Collateral
shall include endorsements or stipulations  providing that coverages will not be
canceled or  diminished  without at least 10 days' prior  written  notice to the
Agent and further providing, if available on commercially reasonable terms, that
coverage  in favor of the  Agent  will  not be  impaired  in any way by any act,
omission or default of the Borrower or any other Person.  In connection with all
policies of insurance covering  Collateral,  the Borrower will provide the Agent
with such  loss  payable  or other  endorsements  as the  Agent  may  reasonably
require.


                  In  addition  to  any   requirements   under  the   Collateral
Documents,  (a) all property loss or damage  insurance  policies with respect to
any assets of any Borrower or any Consolidated Subsidiary shall contain lender's
loss  payable  endorsements  in  favor  of  the  Agent  in  form  and  substance
satisfactory  to it,  which shall  provide  that all  insurance  proceeds (i) in
excess of $500,000 or (ii) payable after the insurer has received written notice
from the Agent that an Event of Default then exists (until a contrary  notice is
received),  shall be payable directly to the Agent,  (b) all insurance  policies
shall (i) provide that no cancellation,  reduction in amount or material adverse
change in  coverage  thereof  shall be  effective  until at least 30 days  after
receipt by the Agent of written notice thereof, (ii) insure the interests of the
Lender  Parties  regardless of any breach of or violation by the Borrower or any
other Person of any warranties,  declarations or conditions  contained  therein,
(iii) provide that the Lender  Parties shall have no obligation or liability for
premiums, commissions, assessments or calls in connection with such insurance or
in connection  with any  representation  or warranty made by the Borrower or any
Consolidated  Subsidiary thereof in connection with obtaining of such insurance,
(c) all business  interruption and extra expense  insurance shall name the Agent
as a loss payee,  and (d) all applicable  insurance  policies shall contain such
other provisions as are required under the relevant Collateral Documents.

                  |5.7.3.

                  Thirty  days prior to the  expiration  date of each  insurance
policy maintained hereunder,  the Borrower shall either (a) deliver to the Agent
either (i) if available,  a copy of the renewal of such policy or (ii) a copy of
the  binder for such  renewal  or (b) notify the Agent that such  policy has not
been  renewed.  If a copy of a binder is  delivered  pursuant  to clause  (a)(i)
hereof,  then as soon as it is  available,  but in any event not more than sixty
(60) days after the effective date of renewal of the policy,  the Borrower shall
deliver to the Agent a copy of such policy,  certified to be true and correct by
the insurer named therein. If at any time after the Closing Date the Borrower or
any  Consolidated  Subsidiary  thereof  obtains any new property  loss or damage
insurance policy providing  coverage in excess of $500,000,  the Borrower shall,
within 30 days  after  such new  policy is  obtained,  give  notice to the Agent
describing  the new  insurance  and provide to the Agent a copy of such  policy,
including  endorsements as required hereby,  certified to be true and correct by
the insurer named therein.

         Section 5.8.  Conduct of Business.

         Each  Borrower  shall,  and shall  cause each of its  Subsidiaries  to,
engage only in the businesses in which such Borrower or Consolidated  Subsidiary
is engaged on the date hereof,  except for other  businesses that are ancillary,
incidental  or necessary to its ongoing  business as presently  conducted.  Each
Borrower  shall,  and shall  cause  each of its  Subsidiaries  to,  conduct  its
business in compliance in all material  respects with all Applicable Law and all
its Contractual Obligations.

         Section 5.9.  Future Information.

         All  data,  certificates,  reports,  statements,  documents  and  other
information  required to be furnished to the Lender  Parties in connection  with
the Loan Documents shall, at the time the information is furnished,  not contain
any untrue  statement of a material  fact,  shall be complete and correct in all
material respects to the extent necessary to give the Lender Parties  sufficient
and accurate  knowledge  of the subject  matter  thereof,  and shall not omit to
state a  material  fact  necessary  in order to make  the  statements  contained
therein  not  misleading  in  light  of  the  circumstances   under  which  such
information is furnished.

         Section 5.10.  New Borrowers and Additional Collateral.



                  5.10.1.

                  Upon the creation or acquisition  after the date hereof of any
Consolidated  Subsidiary,  the Borrower shall cause such Consolidated Subsidiary
to execute  and  deliver a  Revolving  Loan Note in favor of each  Lender and to
become  jointly and severally  liable with the  already-existing  Borrowers with
respect to their Obligations  hereunder,  in form and substance  satisfactory to
the  Agent,  and the  Borrower  shall  grant,  or cause to be  granted,  a first
priority Lien on the Capital Stock of such  Consolidated  Subsidiary  and on the
assets  of such  Consolidated  Subsidiary,  pursuant  to  documents  in form and
substance  satisfactory  to the  Agent.  Upon  the  acquisition  or lease by any
Borrower or any Borrower's  Subsidiaries of any Material personal property asset
that is not then subject to a first  priority  Lien in favor of the Agent,  such
Borrower shall execute and deliver, or shall cause such Consolidated  Subsidiary
to execute and deliver, to the Agent a Collateral Document creating such a first
priority  Lien,  in each case in form and substance  satisfactory  to the Agent.
Such  Borrower and such  Consolidated  Subsidiary,  at their own expense,  shall
execute and deliver, or cause to be executed and delivered, and thereafter cause
to be registered, filed or recorded with the appropriate Governmental Authority,
any and all  documents  and  instruments  deemed by the Agent to be necessary or
desirable for the creation and  perfection of the foregoing  Liens and shall pay
all Taxes and fees related to such registration, filing or recording.

         Section 5.11.  Subordination of Intercompany Debt.

         The Borrowers shall cause all  Intercompany  Debt to be subordinated to
the prior payment in full in cash of the  Obligations on terms of  subordination
satisfactory  to the Required  Lenders;  provided,  however,  that as long as no
Event of Default then exists,  the Borrowers may pay such  Intercompany  Debt in
the ordinary course of business consistent with past practice.

         Section 5.12.  Environmental Compliance.

         Each Borrower shall comply, and shall cause its Subsidiaries to comply,
in all material respects with all Environmental Requirements and shall not cause
or permit to exist on any Real Property any Hazardous Materials.

         Section 5.13.  New Consolidated Subsidiaries To Become Borrowers.

         Borrower shall cause each entity that becomes a Consolidated Subsidiary
of the  Borrower  after the Closing  Date  immediately  to become a  Co-Borrower
hereunder and to execute and deliver this  Agreement,  the Revolving  Note,  the
Swingline Note, the Security Agreement, a UCC-1 financing statement, and each of
the other documents set forth on Schedule 5.13.


                                                    ARTICLE 6.

                                        NEGATIVE COVENANTS OF THE BORROWERS

         So long as any portion of the Revolving Commitments is in effect or any
Obligations remain unpaid or have not been performed in full:

         Section 6.1.  Liens.

         No Borrower shall, or shall permit any of its Subsidiaries to, directly
or  indirectly,  create,  incur,  assume  or permit to exist any Lien on or with
respect  to any asset of any  Borrower  or any  Consolidated  Subsidiary  of any
Borrower, whether now owned or hereafter acquired, except, without duplication:

                  6.1.1.

                  Liens securing the Obligations;

                  6.1.2.

                  Existing Liens on assets of the entities listed on Schedule 
R-1 hereto ;

                  6.1.3.

                  (a)  Liens  for   taxes,   assessments   or   charges  of  any
Governmental  Authority  for claims that are not Material and are not yet due or
being  contested in good faith by  appropriate  proceedings  and with respect to
which adequate reserves or other appropriate  provisions are being maintained in
accordance with of GAAP; (b) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen, bankers and other Liens imposed by law and
created in the ordinary course of business for amounts that are not Material and
are not yet due or being contested in good faith by appropriate  proceedings and
with respect to which  adequate  reserves or other  appropriate  provisions  are
being  maintained in accordance  with GAAP; (c) Liens incurred and deposits made
in the ordinary course of business for purchase-money  obligations, in an amount
not exceeding  $500,000 at any time, or Liens  incurred and deposits made in the
ordinary   course  of  business  in  connection   with  workers'   compensation,
unemployment  insurance and other types of social security benefits or to secure
the  performance  (including by way of surety bonds or appeal bonds) of tenders,
bids, leases, contracts, statutory obligations or similar obligations or arising
as a result of progress  payments under contracts,  in each case in the ordinary
course of business and not relating to the  repayment  of Debt;  (d)  easements,
rights-of-way, covenants, consents, reservations,  encroachments, variations and
other  restrictions,  charges or encumbrances  (whether or not recorded) that do
not  Materially  interfere  with the ordinary  conduct of  business,  Materially
detract  from the value of the asset to which they attach or  Materially  impair
the use thereof;  (e)  building  restrictions,  zoning laws and other  statutes,
laws,  rules,  regulations,  ordinances  and  restrictions;  and (f)  leases  or
subleases  granted in the ordinary  course of business to others not  Materially
interfering  with the business of, and  consistent  with past  practices of, the
Borrower,   provided   that  clauses  (a),  (b)  and  (c)  shall  not  apply  to
Environmental  Liens, Liens that, under Applicable Law, would have priority over
the Lien of the Collateral Documents or Liens imposed under ERISA;

                  6.1.4.

                  any attachment or judgment Lien not constituting an Event of 
Default;

                  6.1.5.

                  Liens on assets  securing  Debt  permitted  to be  incurred or
assumed on a secured basis pursuant to Section 6.1.5., including any interest or
title of a lessor under any Capitalized Lease,  provided that any such Lien does
not encumber any property  other than assets  acquired,  constructed or improved
with the proceeds of such Debt;

                  |6.1.6.

                  Liens existing on assets of any Person at the time such Person
becomes a  Consolidated  Subsidiary,  provided  (a) such Lien was not created in
contemplation  of such Person becoming a Consolidated  Subsidiary,  and (b) such
Lien does not encumber any assets other than the assets  subject to such Lien at
the time such Person becomes a Consolidated Subsidiary;

                  |6.1.7.

                  any Lien  constituting a renewal,  extension or replacement of
any Existing Lien or any Lien  permitted by Section 6.1.5.  or 6.1.6.,  provided
(a) the principal  amount of Debt or other  obligation  secured by such renewal,
extension or replacement  Lien does not exceed the principal  amount of the Debt
or other  obligation  renewed,  extended  or  replaced  unless  such  excess  is
otherwise permitted hereby at the time of the extension, renewal or replacement,
(b) the  average  weighted  maturity  of such  Debt or other  obligation  is not
shortened and (c) such Lien is limited to all or a part of the property  subject
to the Lien extended, renewed or replaced.

         Section 6.2.  Debt.

         No Borrower shall, or shall permit any of its Subsidiaries to, directly
or indirectly,  create, incur, assume,  guarantee, or otherwise become or remain
liable with respect to, any Debt, except:

                  6.2.1.

                  the Obligations;

                  6.2.2.

                  Existing Debt of entities that are listed on Schedule R-1 
hereto;

                  |6.2.3.

                  Intercompany  Debt of a Consolidated  Subsidiary to a Borrower
or to a Consolidated Subsidiary of a Borrower, to the extent otherwise permitted
hereunder and in compliance with Section 5.11.;

                  |6.2.4.

                  Contingent  Obligations  (i) in  connection  with a  Permitted
Acquisition or (ii) with respect to letters of credit in an aggregate amount for
all Borrowers and all of their Subsidiaries not exceeding $1,000,000 at any time
outstanding,  provided that such Debt (i) is incurred in the ordinary  course of
business, (a) is unsecured and (b) remains contingent;

                  |6.2.5.

                  Contingent  Obligations  of a  Borrower  or  any  Consolidated
Subsidiary with respect to Debt of other Borrowers or their Subsidiaries that is
otherwise permitted under this Section 6.2.;

                  |6.2.6.

                  Debt incurred to refinance Debt  described in Section  6.2.2.;
provided that (a) the unpaid principal  balance is not increased  (except to the
extent the  increase is then  otherwise  permitted  hereunder),  and (b) if such
refinanced Debt is repaid prior to its scheduled maturity, such refinancing Debt
shall comply with the provisions of Section 6.9.2.; and

                  6.2.7.

                  Debt incurred in connection with a Permitted Acquisition; and

                  6.2.8.

                  Debt   incurred  in  the  ordinary   course  of  business  for
purchase-money obligations, in an amount not exceeding $500,000 at any time.

         Section 6.3.  Restricted Payments.

         No  Borrower  shall,  nor shall any  Borrower  permit any  Consolidated
Subsidiary  to,  directly  or  indirectly,  declare,  pay or  make,  or agree to
declare, pay or make, any Restricted Payment.

         Section 6.4.  Investments.

         No  Borrower  shall,  nor shall any  Borrower  permit any  Consolidated
Subsidiary to, directly or indirectly, make or own any Investment, except:

                  6.4.1.

                  (a) marketable direct  obligations  issued or  unconditionally
guaranteed by the United States  Government or issued by any agency  thereof and
backed by the full faith and credit of the United States,  in each case maturing
within one year from the date of  acquisition  thereof,  (b)  marketable  direct
obligations  issued  by  any  state  of  the  United  States  or  any  political
subdivision  of any such state or any public  instrumentality  thereof  maturing
within one year from the date of acquisition  thereof and having, at the time of
acquisition,  the highest rating obtainable from either Standard & Poor's Rating
Group or Moody's  Investors  Service,  Inc., (c) commercial paper having, at the
time of acquisition, the highest rating obtainable from either Standard & Poor's
Rating  Group  or  Moody's  Investors   Service,   Inc.,  (d)  demand  deposits,
certificates of deposit,  other time deposits, and bankers' acceptances maturing
within  one  year  from  the  date of  acquisition  thereof  issued  by any bank
operating  under  the laws of the  United  States or any  state  thereof  or the
District  of  Columbia  that has  combined  capital and surplus of not less than
$500,000,000,  or (e) institutional  money market funds organized under the laws
of the United  States of  America or any state  thereof  that are  described  on
Schedule  1.1. or approved  in writing by the Agent or, if not so  described  or
approved,  substantially  all of  whose  assets  are  securities  of  the  types
described in the foregoing clauses (a), (b), (c), and (d);

                  6.4.2.

                  (a) trade credit  extended on usual and customary terms in the
ordinary  course  of  business,  and  (b)  advances  to  employees  for  moving,
relocation and travel expenses, drawing accounts and similar expenditures in the
ordinary course of business;

                  |6.4.3.

                  any Investment identified on Schedule 4.3., limited to the 
amount of such Investment on the date hereof;

                  |6.4.4.

                  Permitted Acquisitions; and

                  6.4.5.

                  Investments in Non-Cash Proceeds of permitted Asset 
Dispositions.

         Section 6.5.  Financial Covenants.

                  6.5.1.  Leverage Ratio.

                  The Leverage Ratio as of the last day of any Fiscal Quarter 
shall not exceed 3.00 to 1.00 at any time.

                  6.5.2.  Quick Ratio.

                  The Quick Ratio as of the last day of any Fiscal Quarter shall
not be less than 1:00 to 1:00.

                  6.5.3.  Debt Service Coverage Ratio.

                  As of the  last day of any  Fiscal  Quarter  the Debt  Service
Coverage  Ratio for the period  determined in accordance  with the definition of
"Debt  Service  Coverage  Ratio"  shall  not be less  than  2.50  to  1.00  when
calculated without regard to any earnouts required to be paid during such Fiscal
Quarter,  and (ii) shall not be less than 1.50 to 1:00 when calculated including
any such earnouts in the denominator of such ratio.

                  6.5.4.  Operating Income and Net Income.

                  As of the last day of each  Fiscal  Quarter,  the total of all
Borrowers'  income  from  operations,  determined  in  accordance  with GAAP and
calculated as it would be for the purposes of determining Net Income  hereunder,
and Borrowers' Net Income for the four  consecutive  Fiscal Quarters then ended,
shall each be greater than zero.

         Section 6.6.  Restriction on Fundamental Changes.

         No  Borrower  shall,  and no  Borrower  shall  permit any  Consolidated
Subsidiary  to,  directly or indirectly,  enter into any merger,  consolidation,
reorganization  or  recapitalization,  reclassify its Capital Stock,  liquidate,
wind up or dissolve or sell,  lease,  transfer or  otherwise  dispose of, in one
transaction or a series of transactions,  a significant  portion of its or their
business or assets,  whether now owned or hereafter acquired,  provided that (a)
as long as no Default or Event of Default  shall  exist after  giving  effect to
such merger,  consolidation or sale, any Consolidated Subsidiary of any Borrower
may be merged or  consolidated  with or into any  Borrower  or any  Wholly-Owned
Subsidiary of any Borrower or be  liquidated,  wound up or dissolved,  or all or
substantially all of its business or assets may be sold, leased,  transferred or
otherwise  disposed of, in one transaction or a series of  transactions,  to any
Borrower or any Wholly-Owned Subsidiary of any Borrower.

         Section 6.7.  Asset Dispositions; Sales of Receivables.

                  6.7.1.

                  No  Borrower   shall,   and  no  Borrower   shall  permit  any
Consolidated  Subsidiary to, directly or indirectly,  make or agree to make, any
Asset Disposition unless


                  the  Board  of  Directors  of  the  Borrower  has   reasonably
         determined  in good faith that the terms of such  transaction  are fair
         and reasonable to the Borrower or such Consolidated Subsidiary,  as the
         case may be, if the transaction  involves assets having a Material fair
         market value; and


                  the Asset Disposition is otherwise permissible under the 
         Collateral Documents and under Sections 6.6. and 6.8. and if the 
         transaction involves assets having a Material fair market value, the
         terms of such transaction shall have been approved in advance by the 
         Required Lenders.

                  6.7.2.

                  As promptly as practicable  but in no event later than 10 days
after any Asset  Disposition  (other  than an Asset  Disposition  required to be
approved by the Required  Lenders),  the Borrower  shall  deliver to the Agent a
certificate, duly executed by a Senior Officer of the Borrower, setting forth in
detail  a  description  of  such  Asset  Disposition,   copies  of  any  related
agreements,  the  date  or  scheduled  date  of  such  Asset  Disposition,   the
determination  of  the  Net  Cash  Proceeds  of  such  Asset  Disposition,   the
description  of any  Non-Cash  Proceeds  and the  Collateral  arrangements  with
respect  thereto and such other  documents  and  information  as is necessary to
demonstrate compliance with this Section 6.7.

                  6.7.3.

                  No  Borrower   shall,   nor  shall  any  Borrower  permit  any
Consolidated  Subsidiary  to,  directly  or  indirectly,  sell  with or  without
recourse,  discount  (except in the ordinary course of business  consistent with
past practice to compromise  disputes with customers) or otherwise sell for less
than the face value  thereof or for  consideration  other than cash,  any of its
Accounts Receivable and other receivables.

         Section 6.8.  Transactions with Affiliates.

         No  Borrower  shall,  and no  Borrower  shall  permit any  Consolidated
Subsidiary to, directly or indirectly, enter into any transaction (including the
transfer or lease of any  property or the  rendering  of any  service)  with any
Affiliate of any Borrower, unless (a) such transaction is in the ordinary course
of business of such Borrower, and (b) such transaction is on fair and reasonable
terms no less favorable to such Borrower or its Consolidated Subsidiary,  as the
case may be, than those terms that might be obtained at the time in a comparable
arm's length  transaction with a Person who is not an Affiliate of such Borrower
or, if such  transaction  is not one that by its nature  could be obtained  from
such other Person,  is on fair and  reasonable  terms and was negotiated in good
faith, (c) if such  transaction is Material,  such Borrower shall have delivered
to the Agent a certified  resolution of its Board of Directors  determining that
the standards  set forth in clause (b) above are satisfied  with respect to such
transaction and (d) if such transaction is Material, such Borrower shall deliver
to the Agent an opinion of a recognized  appraisal  or  valuation  firm that the
transaction  is fair to the Borrower  from a financial  point of view,  provided
that this Section 6.8. shall not restrict (i) dividends, distributions and other
payments  and  transfers  on account of the  Capital  Stock of a Borrower or any
Wholly-Owned  Subsidiary of a Borrower,  (ii) payments  pursuant to the terms of
any  Contractual  Obligations  in effect on the date  hereof  listed on Schedule
6.8.,  or (iii) any  transaction  in the ordinary  course of business  between a
Borrower and any Wholly-Owned Subsidiary of a Borrower.

         Section 6.9.  Prepayment of Debt.

         No  Borrower  shall,  nor shall any  Borrower  permit any  Consolidated
Subsidiary  to,  directly or  indirectly,  make any payment or  distribution  on
account of, or voluntarily purchase,  acquire, redeem or retire, any Debt, prior
to 30 days before its originally  stated maturity (or its stated maturity on the
date hereof, in the case of Debt outstanding on the date hereof), or in the case
of interest,  its stated due date, or directly or indirectly become obligated to
do any of the foregoing by amending the terms thereof or otherwise, except for:

                  6.9.1.

                  Prepayments of the Loans or of other amounts pursuant to the 
Loan Documents;

                  6.9.2.

                  Prepayments  made with the  proceeds of new Debt  incurred for
the purpose of refinancing the Debt being prepaid,  provided that (a) no portion
of such new Debt  matures or is required to be prepaid,  purchased  or otherwise
retired earlier than the  corresponding  portion of the Debt being prepaid,  (b)
such new Debt has the same priority vis-a-vis other Debt, and the same provision
for  recourse,  as the Debt being paid,  (c) no Default or Event of Default then
exists or would result from such prepayment or refinancing; and

                  6.9.3.

                  Prepayments by Subsidiaries of Debt owed to any Borrower.

         Section 6.10.  Employee Benefit Plans.

         Except to the extent  that a Borrower  gives  thirty  (30) days'  prior
written  notice to the Agent,  no Borrower will sponsor or contribute to any new
Plan,  make any change to any existing Plan, or incur any obligations in respect
of  any  Multiemployer  Plan  that  would  in  any  Material  way  increase  the
obligations of the Borrowers in any Material respect.

         Section 6.11.  Amendments of Charter Documents.

         No Borrower shall amend its charter,  bylaws or other charter documents
in any respect that affects the voting rights of Capital  Stock  included in the
Collateral or holders  thereof,  increases  payment  obligations  of a Borrower,
affects the validity or  enforceability  of any Loan Document or Lien thereunder
or that  otherwise  could  reasonably  be  expected  to have a Material  Adverse
Effect, without in each case obtaining the prior written consent of the Required
Lenders.

         Section 6.12.  Restrictive Agreements.

         No  Borrower  shall,  nor shall any  Borrower  permit any  Consolidated
Subsidiary  to,  enter  into  any  Contractual   Obligation  that,  directly  or
indirectly,  restricts or limits the ability of such Consolidated  Subsidiary to
(a) pay dividends or make  distributions on its Capital Stock, (b) pay Debt owed
to the Borrower or any Consolidated  Subsidiary,  (c) make any loans or advances
to the Borrower (except as provided in Section 5.11.), or (d) except as provided
in Contractual  Obligations  respecting the specific assets subject to Permitted
Liens, transfer any of its property to the Borrower.

         Section 6.13.  Negative Pledges, Etc.

         No Borrower  shall,  or shall permit any  Consolidated  Subsidiary  to,
enter into or otherwise become subject to, directly or indirectly, any agreement


                  prohibiting  or  restricting  a Borrower  or any  Consolidated
Subsidiary  of  a  Borrower  in  any  manner  (including  by  way  of  covenant,
representation or default), from (a) incurring, creating or assuming any Debt or
Lien upon any of its assets,  (b) selling or  otherwise  disposing of any of its
assets,  (c) making any Investments or Capital  Expenditures,  (d) suffering any
change of control,  or (e) amending any Loan  Document,  except that clauses (a)
and (b) shall not apply to any Debt otherwise permissible under Section 6.2; or


                  providing  that any default by a Borrower  that is not a party
to such  agreement  with  respect  to any  obligation  not  arising  under  such
agreement is a default under such agreement.


                                                    ARTICLE 7.

                                                 EVENTS OF DEFAULT

         Section 7.1.  Events of Default.

         The  occurrence  of any one or more of the  following  events,  acts or
occurrences shall constitute an event of default (each an "Event of Default"):

                  7.1.1.  Failure to Make Payments.

                  A Borrower  (a) shall fail to pay as and when due  (whether at
stated maturity,  upon acceleration,  upon required prepayment or otherwise) any
principal  of any Loan,  or (b) shall  fail to pay any  interest,  Fees or other
amounts payable under the Loan Documents  within three Business Days of the date
when due under the Loan Documents; or

                  7.1.2.  Default in Other Debt.

                  (a)  Any  Borrower  or  any  Consolidated  Subsidiary  of  any
Borrower  shall  default  in the  payment  (whether  at  stated  maturity,  upon
acceleration, upon required prepayment or otherwise), beyond any period of grace
provided  therefor,  of any  principal  of or  interest on any other Debt with a
principal  amount in excess of $400,000  or (b) any other  breach or default (or
other  event or  condition)  shall  occur  under  any  agreement,  indenture  or
instrument  relating  to any such other  Debt,  if the effect of such  breach or
default (or such other event or condition) is to cause,  or to permit the holder
or holders of the other Debt (or a Person on behalf of such  holder or  holders)
to cause (upon the giving of notice,  the lapse of time or both, or  otherwise),
such other Debt to become or be  declared  due and  payable,  or  required to be
prepaid, redeemed, purchased or defeased (or an offer of prepayment, redemption,
purchase or defeasance be made),  prior to its stated  maturity (other than by a
scheduled mandatory prepayment); or

                  7.1.3.  Breach of Certain Covenants.

                  The Borrower shall fail to perform, comply with or observe 
any agreement, covenant or obligation under Section 2.3., Section 5.1.4., 
Section 5.4. (insofar as it requires the preservation of the corporate existence
of the Borrower), or any Section of Article 6. not covered by 7.1.4 hereof; or

                  7.1.4.  Certain Defaults Under Article 6.

                  Any Borrower shall fail to perform, comply with or observe any
agreement,  covenant or obligation under any provision of Sections (inclusive of
subsections  thereof) and such failure shall not have been  remedied  within ten
(10) days after a Senior  Officer of Borrower  has  Knowledge  of such  failure;
provided, however, that no such ten (10) day cure period shall be available with
respect to any failure by any Borrower  that by its nature is incapable of being
remedied; or

                  7.1.5.  Other Defaults Under Loan Documents.

                  Any Borrower shall fail to perform, comply with or observe any
agreement,  covenant or  obligation  under any  provision  of any Loan  Document
(other than those  provisions  referred to in Sections  7.1.1.  7.1.3.) and such
failure  shall not have been remedied  within 20 days after a Senior  Officer of
the Borrower has Knowledge of such failure; or

                  7.1.6.  Breach of Warranty.

                  Any  representation  or  warranty  or  certification  made  or
furnished by the Borrower under any Loan Document shall prove to have been false
or incorrect in any material respect when made (or deemed made); or

                  7.1.7.  Involuntary Bankruptcy; Appointment of Receiver, Etc.

                  There  shall  be  commenced  against  any  Borrower,   or  any
Consolidated  Subsidiary,   an  involuntary  case  seeking  the  liquidation  or
reorganization  of such Borrower or Consolidated  Subsidiary  under Chapter 7 or
Chapter 11, respectively, of the Bankruptcy Code or any similar proceeding under
any other  Applicable  Law or an  involuntary  case or  proceeding  seeking  the
appointment of a receiver, liquidator, sequestrator, custodian, trustee or other
officer having similar powers of such Borrower or Consolidated  Subsidiary or to
take  possession of all or a  substantial  portion of its property or to operate
all or a substantial  portion of its business,  and any of the following  events
occur: (a) such Borrower or Consolidated  Subsidiary consents to the institution
of the  involuntary  case  or  proceeding;  (b)  such  petition  commencing  the
involuntary  case or  proceeding  is not timely  controverted;  (c) the petition
commencing the involuntary case or proceeding  remains  undismissed and unstayed
for a period of 60 days;  or (d) an order for relief  shall have been  issued or
entered therein; or

                  7.1.8.  Voluntary Bankruptcy; Appointment of Receiver, Etc.

                  Any Borrower or any Consolidated  Subsidiary shall institute a
voluntary case seeking liquidation or reorganization  under Chapter 7 or Chapter
11,  respectively,  of the Bankruptcy Code or any similar  proceeding  under any
other  Applicable  Law,  or  shall  consent  thereto;  or shall  consent  to the
conversion of an involuntary case to a voluntary case; or shall file a petition,
answer a complaint or  otherwise  institute  any  proceeding  seeking,  or shall
consent  to  or  acquiesce  in  the  appointment  of,  a  receiver,  liquidator,
sequestrator,  custodian,  trustee or other officer with similar powers of it or
to take possession of all or a substantial portion of its property or to operate
all or a substantial portion of its business; or shall make a general assignment
for the  benefit  of  creditors;  or shall  generally  not pay its debts as they
become due; or the Board of Directors of the Borrower or Consolidated Subsidiary
(or any committee thereof) adopts any resolution or otherwise  authorizes action
to approve any of the foregoing; or

                  7.1.9.  Change of Control.

                  A Change of Control shall occur at any time; or

                  7.1.10.  Termination of Loan Documents, Etc.

                  Any Loan Document,  or any material provision  thereof,  shall
cease to be in full force and effect for any reason, or any Lien in favor of the
Agent  thereunder  shall  fail to have the  priority  required  thereunder  with
respect to any Material item of collateral, except upon a release or termination
of such Loan  Document or Lien  pursuant to the terms  thereof;  or the Borrower
shall contest or purport to repudiate or disavow any of its obligations under or
the validity of  enforceability  of any Loan Document or any Material  provision
thereof; or

                  |7.1.11.  Material Adverse Change.

                  A Material Adverse Change shall have occurred since the 
Closing Date; or

                  7.1.12.  Judgments and Attachments.

                  (a) Any Borrower or any  Consolidated  Subsidiary shall suffer
any money judgments, fines, writs or warrants of attachment or similar processes
that, individually or in the aggregate,  involve an amount or value in excess of
$400,000 (excluding therefrom money judgments to the extent covered by insurance
as to which the carrier  has  accepted  liability)  and such  judgments,  writs,
warrants or other orders shall continue unsatisfied and unstayed for a period of
30 days  or,  in any  event,  within  10 days of the date of any  proposed  sale
thereunder;  or (b) a judgment  creditor shall obtain possession of any Material
portion of the assets of the Borrowers by any means,  including levy, distraint,
replevin or self-help.

         Section 7.2.  Remedies.

         Upon the occurrence of an Event of Default:

                  7.2.1.

                  If an Event of Default occurs under Section 7.1.7.  or 7.1.8.,
then the Revolving  Commitments shall  automatically and immediately  terminate,
and the obligation of the Lender Parties to make any Loan hereunder shall cease,
and the unpaid  principal  amount of the Loans and all other  Obligations  shall
automatically become immediately due and payable,  without presentment,  demand,
protest,  notice  or other  requirements  of any kind,  all of which are  hereby
expressly waived by the Borrower.

                  7.2.2.

                  If an Event of Default occurs, other than under Section 7.1.7.
or 7.1.8., the Agent may, or upon written request of the Required Lenders shall,
by written notice to the Borrower, declare the Revolving Commitments terminated,
whereupon the obligation of the Lender Parties to make any Loan hereunder  shall
cease,  and/or  declare the unpaid  principal  amount of the Loans and all other
Obligations to be, and the same shall thereupon become, due and payable, without
presentment, demand, protest, any additional notice or other requirements of any
kind, all of which are hereby expressly waived by the Borrower,  and may, as set
forth in Article 8 hereof,  pursue the  remedies  available  to it  pursuant  to
applicable law.


                                                    ARTICLE 8.

                                              THE AGENT AND THE BANKS

         Section 8.1.  Authorization and Action.

                  8.1.1.

                  Each Lender hereby  irrevocably  appoints and  authorizes  the
Agent  to act as  its  agent  hereunder  and  under  the  other  Loan  Documents
(including as its collateral agent under the Collateral  Documents),  to execute
and deliver or accept,  on its behalf,  the other Loan  Documents  and any other
documents,  instruments  and agreements  related  thereto or hereto to take such
action on its behalf  under the  provisions  hereof and  thereof and to exercise
such rights,  remedies,  powers and  privileges  hereunder and thereunder as are
delegated  to the Agent by the terms  hereof  and  thereof,  together  with such
rights, remedies, powers and privileges as are reasonably incidental thereto.

                  8.1.2.

                  Except for any  matters  expressly  subject to the  consent or
approval of the Agent under the Loan Documents, the Agent shall not, without the
prior approval of the Required  Lenders (or, as provided in Section 9.3., all of
the Lenders),  consent to any departure by any Borrower from the terms of, waive
any default or otherwise amend this Agreement or any other Loan  Documents.  The
Agent will, to the extent practicable under the circumstances,  consult with the
other  Lender  Parties  prior to taking  action on their  behalf  under the Loan
Documents and in acting as their Agent  thereunder.  The Agent will not take any
action  contrary to the written  direction  of Required  Lenders,  will take any
lawful action not contrary to the provisions of the Loan Documents prescribed in
written  instructions of the Required  Lenders (or, as provided in Section 9.3.,
all the Lenders) and, as to any matters not  expressly  provided for by the Loan
Documents (including enforcement or collection), may decline to take any action,
except upon the written instructions of the Required Lenders (or, as provided in
Section 9.3., all the Lenders).  If such  instructions are requested  reasonably
promptly,  the Agent shall be  absolutely  entitled  to refrain  from taking any
action  and shall not have any  liability  to the  Borrower  or any  Lender  for
refraining   from  taking  any  action  until  it  shall  have   received   such
instructions; provided, however, that the Agent shall in no event be required to
take or refrain from taking any action that would,  in the Agent's  opinion,  be
inconsistent with the Agent's practice in similar  situations when acting solely
for its own  account or be contrary to the  provisions  of any Loan  Document or
Applicable Law.

                  8.1.3.

                  The Agent shall not have any duties or responsibilities except
those expressly set forth in the Loan Documents. No duty to act, or refrain from
acting, and no other obligation whatsoever, shall be implied on the basis of any
right,  power or authority granted to the Agent or shall become effective in the
event of any temporary or partial  exercise of such rights,  power or authority.
The Agent  shall  not be  required  to  exercise  any  right,  power,  remedy or
privilege  granted to it in any Loan Document,  to ascertain or inquire  whether
any Default or Event of Default has  occurred and is  continuing,  or to inspect
the  property  (including  the books and records) of the Borrower or to take any
other  affirmative  action,  except  as  provided  in  Section  7.2.,  or unless
requested  or directed to do so in  accordance  with the  provisions  of Section
8.1.2.

                  8.1.4.

                  The duties of the Agent shall be mechanical and administrative
in nature.  The Agent  shall not have by reason of this  Agreement  a  fiduciary
relationship in respect of any other Lender Party.  Except for notices,  reports
and other  documents and information  expressly  required to be furnished to the
Lender  Parties  by the Agent  hereunder,  the Agent  shall not have any duty or
responsibility  to provide any Lender Party with any credit or other information
concerning the affairs, financial condition or business of the Borrower that may
come into the possession of the Agent or any of its Affiliates.

         Section 8.2.  Exculpation; Agent's Reliance; Etc.

         Neither the Agent nor any of its directors, officers, agents, attorneys
or  employees  shall be liable to the Borrower or any other Lender Party for any
action  taken or omitted to be taken by it or them under or in  connection  with
any Loan Document (a) with the consent or at the request of the Required Lenders
(or,  as  provided  in  Section  9.3.,  all the  Lenders),  or (b) in any  other
circumstances,  except  for  its  or  their  own  gross  negligence  or  willful
misconduct  as  determined  by  a  final   judgment  of  a  court  of  competent
jurisdiction.  The Agent makes no warranty or representation to any other Lender
Party and shall not be  responsible  to any other Lender Party for any recitals,
statements,  warranties or  representations  made in, or in connection with, any
Loan  Document  or for  the  execution,  effectiveness,  genuineness,  validity,
enforceability,  collectibility,  or  sufficiency  of any Loan  Document  or any
financial  information,  opinions  of counsel or other  documents  executed  and
delivered pursuant thereto, or for the financial condition of the Borrower.  The
Agent  shall  not be  responsible  to any  Lender  for the  satisfaction  of any
condition  specified  in Article  3.,  except  receipt of items  required  to be
delivered to the Agent, or for the value, effectiveness,  priority, genuineness,
validity,  of any Collateral or any Lien thereon.  The Agent may treat the payee
of any  Note  as the  holder  thereof  until  the  Agent  receives  the  related
Assignment  and  Acceptance  signed by such holder and the  assignee and in form
satisfactory to the Agent.  The Agent shall be entitled to rely upon any notice,
certificate or other writing believed by the Agent to be genuine and correct and
to have been signed or sent by the proper Person or Persons.  The Agent shall be
entitled to consult with legal counsel, independent public accountants and other
experts  selected  by the Agent and to act in  reliance  upon the advice of such
counsel and other experts concerning its actions and duties hereunder.

         Section 8.3.  Agent and Affiliates.

         The Agent and each other  Lender that is a party hereto as a Lender and
in some other capacity, shall in its capacity as a Lender, have the same rights,
powers and obligations  under this Agreement and the other Loan Documents as any
other Lender and may exercise or refrain from  exercising  the same as though it
were not the Agent or such other Lender  Party,  including  the right to give or
deny  consent  to any action  requiring  consent or  direction  of the  Required
Lenders or all the  Lenders.  The Agent,  each such other  Lender  Party and its
Affiliates  may accept  deposits  from,  lend  money to,  act as  trustee  under
indentures of, and generally  engage in any kind of business with, any Borrower,
any  Consolidated  Subsidiary  and any Affiliate of any Borrower,  all as if the
Agent or such other  Lender  Party were not the Agent or such other Lender Party
and without any duty to account therefor to the Lenders. The Agent or such other
Lender Party shall be entitled to receive from any Borrower its fees or portions
thereof in  connection  with this  transaction  without any liability to account
therefor to any other Lender, except as the Agent or such other Lender Party may
have expressly agreed.

         Section 8.4.  Lender Credit Decision.

         Each Lender Party  acknowledges that it has,  independently and without
reliance  upon the Agent or any other Party  Lender and based on such  documents
and information as it has deemed  appropriate,  made its own credit analysis and
decision to enter into this Agreement.  Each Lender Party also acknowledges that
it will,  independently  and without reliance upon the Agent or any other Lender
Party 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 the Loan Documents.

         Section 8.5.  Indemnification.

         The Agent shall in no event be  required  to take any action  under the
Loan  Documents or in relation  thereto  unless it shall first be indemnified to
its  satisfaction  by the other Lender Parties against any and all liability and
expense  that it may  incur by reason of taking  any such  action.  Each  Lender
agrees to indemnify and hold the Agent harmless (to the extent not promptly paid
or reimbursed by a Borrower),  ratably  according to their respective  Revolving
Commitments,  from and against any and all (a) costs, expenses and other amounts
incurred by the Agent otherwise  payable by a Borrower  pursuant to Section 9.1.
and (b) Indemnified Liabilities that may be imposed on, incurred by, or asserted
against the Agent,  except to the extent they are finally adjudged by a court of
competent  jurisdiction to have directly  resulted from the gross  negligence or
willful  misconduct  of the Agent.  Without  limitation of the  foregoing,  each
Lender agrees to reimburse the Agent  promptly upon demand for its ratable share
of any out-of-pocket  expenses (including counsel fees) incurred by the Agent in
connection   with  the   preparation,   execution,   delivery,   administration,
modification,  amendment or enforcement  (whether  through  negotiations,  legal
proceedings  or  otherwise)  of,  or  legal  advice  in  respect  of  rights  or
responsibilities  under, the Loan Documents, to the extent that the Agent is not
promptly reimbursed for such expenses by the Borrower.

         Section 8.6.  Successor Agent.

         The Agent may resign at any time as Agent under the Loan  Documents  by
giving  written notice thereof to the Lenders and the Borrower and the Agent may
be removed at any time with or without  cause by written  action of the Required
Lenders  (not  including  the  Agent)  delivered  to the  Agent.  Upon  any such
resignation or removal,  the Required  Lenders shall have the right to appoint a
successor  Agent.  If no  successor  Agent shall have been so  appointed  by the
Required Lenders, and shall have accepted such appointment, within 30 days after
the retiring Agent's notice of resignation or the removal of the Agent, then the
retiring or removed Agent may, on behalf of the other Lender Parties,  appoint a
successor  Agent,  which  shall be a  financial  institution  having a  combined
capital  and surplus of at least  $100,000,000,  or a branch or agency of such a
financial  institution,  organized or licensed to do business  under the laws of
the United States of America or any State  thereof.  Upon the  acceptance of any
appointment  as the Agent by a  successor  Agent,  such  successor  Agent  shall
thereupon succeed to and become vested with all the rights,  powers,  privileges
and duties of the retiring Agent,  and the retiring Agent shall be discharged of
its duties and obligations  under the Loan Documents.  Upon any retiring Agent's
resignation  or removal,  the  provisions  of this  Article 8. (as well as other
expense  reimbursement,  indemnification and exculpatory provisions in the other
Loan Documents) shall continue in effect for its benefit as to any actions taken
or omitted by it while it was Agent.

         Section 8.7.  Excess Payments.

         If any Lender  shall  obtain any  payment  or other  recovery  (whether
voluntary, involuntary, by application of setoff or otherwise) on account of any
Obligations in excess of its pro rata share of payments and other  recoveries on
account of such Obligations obtained by all Lenders,  such Lender shall purchase
from the other Lenders such  participations  in such Obligations held by them as
shall be necessary to cause such  purchasing  Lender to share the excess payment
or other  recovery  ratably with each of the other Lenders;  provided,  however,
that if all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing  Lender,  the purchase shall be rescinded and the
purchase  price  restored  to such  Lender to the extent of such  recovery,  but
without  interest.  Each  Borrower  agrees  that  any  Lender  so  purchasing  a
participation  from another  Lender  pursuant to this  Section 8.7.  may, to the
fullest extent permitted by Applicable Law and by Section 9.10., exercise all of
its rights of payment  (including  setoff) with respect to such participation as
fully as if such Lender were the direct  creditor of each Borrower in the amount
of such participation.

         Section 8.8.  Lender Parties.

         The  provisions  of this  Article 8. are solely for the  benefit of the
Agent and the other Lender Parties and no Borrower shall have any rights to rely
on or enforce any of the  provisions  hereof  (except that (i) the provisions of
Sections 8.6. and 8.9.5. are also for the benefit of each Borrower and (ii) each
Borrower is entitled to rely on any release  executed by the Agent as authorized
by  Section  8.9.).  In  performing  its  functions  and  duties  under the Loan
Documents,  the Agent  shall act  solely  as agent of the  Lenders  and does not
assume  and  shall  not be  deemed  to have  assumed  any  obligation  toward or
relationship of agency or trust with or for the Borrower.

         Section 8.9.  Collateral Matters.

                  |8.9.1.

                  Except  as  specifically  otherwise  provided  in  any  of the
Collateral  Documents,  the Agent is hereby  authorized  on behalf of all of the
Lenders,  without assumption of any duty or obligation in respect of and without
the  necessity of any notice to or further  consent from any other Lender Party,
to take any action with respect to any  Collateral or Collateral  Documents that
may be necessary to perfect and maintain  perfected  the Agent's  Liens upon the
Collateral.

                  8.9.2.

                  The Lenders  hereby  irrevocably  authorize the Agent,  in its
discretion,  to release any Lien held by the Agent upon any  Collateral (a) from
and after the day of  termination  of any  Collateral  Document  pursuant to the
terms  thereof;  (b)  constituting  property  being sold or  disposed  of if the
Borrower  certifies to the Agent that the sale or disposition is permitted under
the relevant  Collateral  Document (and the Agent may rely  conclusively  on any
such  certificate,  without further inquiry,  unless notified to the contrary by
the Required Lenders); or (c) approved, authorized or ratified in writing by all
Lender Parties in accordance with Section 9.3.; provided,  however, that (i) the
Agent shall not be required to execute any such  documents  on terms that create
any  obligation or entail any  consequence  other than the release of such Liens
without  recourse or  warranty,  and (ii) such  release  shall not in any manner
discharge, affect or impair the Obligations or any Liens upon (or obligations of
the Borrower in respect of) all assets  retained by the Borrower,  including the
proceeds of any Asset  Disposition,  all of which shall  continue to  constitute
part of the Collateral.  Upon request by the Agent at any time, the other Lender
Parties  will  confirm in writing the Agent's  authority  to release  particular
types or items of Collateral pursuant to this Section 8.9.2.

                  8.9.3.

                  The Agent  shall have no  obligation  whatsoever  to any other
Lender Party or other Person to assure that the Collateral exists or is owned by
a  Borrower  or  (except  as  otherwise  expressly  required  by the  Collateral
Documents)  is cared for,  protected or insured,  or that the Liens of the Agent
thereunder have been properly created,  perfected,  protected or enforced or are
entitled to any particular priority.

                  8.9.4.

                  Except as otherwise provided in the Loan Documents,  the Agent
may act in any manner it may deem  appropriate in respect of the Collateral,  in
its  discretion,  given the Agent's own interest in the  Collateral as a Lender,
and the Agent shall have no duty or liability whatsoever with respect thereto to
any other Lender Party.

                  8.9.5.

                  Each Lender Party  hereby  approves the form of the other Loan
Documents attached as exhibits to this Agreement and hereby authorizes the Agent
on its behalf to accept from the Borrower and execute and deliver as Agent,  the
other Loan  Documents  in  substantially  the form of such  exhibits,  with such
changes,  additions or deletions as the Agent, in its discretion, may approve as
necessary or  appropriate,  such  approval to be  conclusively  evidenced by the
Agent's acceptance or execution  thereof.  Each Lender Party also authorizes the
Agent to accept, or execute and deliver,  such additional  documents  (including
financing  statements,  opinions,  certificates  and other documents in form and
substance  satisfactory  to the Agent, in its discretion) in connection with the
closing pursuant to Section 3.1. or any subsequent closing for the pledge of any
other  Collateral or any additional  guaranties as the Agent, in its discretion,
may  approve,  such  approval  to  be  conclusively  evidenced  by  the  Agent's
acceptance or execution thereof.

         Section 8.10.  Payments; Availability of Funds; Certain Notices.

                  8.10.1.

                  If the Agent shall fail to deliver to any other  Lender  Party
its share of any payment  received  from the  Borrower  as and when  required by
Section  2.9.,  the Agent  shall pay to such  Lender  its share of such  payment
together with  interest on such amount at the Federal  Funds rate,  for each day
from the date such amount was  required to be paid to such Lender until the date
the Agent pays such amount to such  Lender,  calculated  as set forth in Section
2.4.4.

                  8.10.2.

                  Unless  (a) the Agent  shall  have been  notified  by a Lender
prior to the date upon  which a Loan is to be made or (b) the Agent  shall  have
been  notified  by the  Borrower  prior  to the date on which  the  Borrower  is
required to make any payment hereunder that such Lender or the Borrower,  as the
case may be (the  "Obligated  Party"),  does not intend to make available to the
Agent the Obligated Party's portion of such Loan or such payment,  the Agent may
assume that the Obligated Party will make such amount  available to the Agent on
such date and the Agent may, in reliance upon such  assumption (but shall not be
required  to),  make  available  to the  Borrower (in the case of a Loan) or the
Lenders (in the case of a payment by the Borrower) a  corresponding  amount.  If
such  corresponding  amount  is not in fact made  available  to the Agent by the
Obligated  Party,  the Agent shall be entitled to recover  such amount on demand
from the  Obligated  Party (or, in the case of a Loan, if the Lender that is the
Obligated  Party fails to pay such amount  forthwith upon such demand,  from the
Borrower).  Such amount shall be payable together with interest thereon from the
day on which such  corresponding  amount was made  available by the Agent to the
Lender or the Borrower,  as applicable,  to the date of payment by the Obligated
Party (or the Borrower,  as  applicable),  at a rate of interest equal to (i) in
the case of any payment by any other Lender Party,  the Federal Funds  Effective
Rate,  and (ii) in the case of any payment by the  Borrower,  the interest  rate
applicable to the Loan.

                  8.10.3.

                  The  Agent  shall  promptly  notify  the  Lenders  by telex or
telecopy of each Interest Period chosen by the Borrower, the LIBOR Rate for each
Interest  Period (and the  relevant  interest  rate),  the date of any  expected
payment and all other material notices transmitted by the Borrower.

         Section 8.11.  Obligations of Lender Parties Several; Enforcement by 
the Agent.

                  8.11.1.

                  Each Lender Party's obligations hereunder are several, and not
joint or joint and several.  The failure of any Lender Party to make any Loan or
otherwise to perform its obligations hereunder will not increase the obligations
of any other Lender Party. Notwithstanding the foregoing, any Lender may assume,
but shall  have no  obligation  to any  Person  to  assume,  any  non-performing
Lender's  obligation to make a Loan.  Nothing contained in this Agreement and no
action taken by the Agent or any other Lender Party  pursuant to this  Agreement
shall be deemed to  constitute  the  Agent  and any other  Lender  Party to be a
partnership, an association, a joint venture or any other kind of entity.

                  8.11.2.

                  Each Lender agrees that, except with the prior written consent
of the Agent or as provided  in Section  9.10.,  no Lender  Party shall have any
right  individually to realize upon the Collateral or otherwise enforce any Loan
Document or any provision thereof,  or make demand  thereunder,  it being agreed
that such rights and remedies may only be exercised by the Agent for the ratable
benefit of the Lenders upon the terms of this Agreement.


                                                    ARTICLE 9.

                                                   MISCELLANEOUS

         Section 9.1.  Expenses.

         The  Borrowers  shall pay within 10 days (or,  in the case of costs and
expenses  incurred  prior to the Closing  Date,  within one Business  Day) after
demand:

                  9.1.1.

                  any and all reasonable  attorneys' fees and  disbursements and
all  reasonable  out-of-pocket  costs  and  expenses  incurred  by the  Agent in
connection  with  (a) the  development,  drafting  and  negotiation  of the Loan
Documents  and the  syndication  and  closing of the  transactions  contemplated
thereby and (b) any  amendments to or the  administration  of the Loan Documents
(including  reasonable  costs  and  expenses  incurred  in  connection  with any
appraisal or environmental assessment); and

                  9.1.2.

                  any  and  all  costs   and   expenses   (including   fees  and
disbursements  of in-house  and other  attorneys,  appraisers  and  consultants)
incurred  by  the  Lender  Parties  in any  workout,  restructuring  or  similar
arrangements   or,  after  a  Default,   in  connection   with  the  protection,
preservation,  exercise or enforcement of any of the terms of the Loan Documents
or in connection with any foreclosure, collection or bankruptcy proceedings.

         Section 9.2.  Indemnity.

                  9.2.1.

                  Each Borrower shall  indemnify,  defend and hold harmless each
Lender  Party  and  the  officers,  directors,   employees,  agents,  attorneys,
affiliates,  successors  and assigns of each  Lender  Party  (collectively,  the
"Indemnitees")  from and against  (a) any and all  transfer  taxes,  documentary
taxes,  assessments or charges made by any  Governmental  Authority by reason of
the execution and delivery of the Loan Documents or the making of the Loans, and
(b) any and all liabilities,  losses,  damages,  penalties,  judgments,  claims,
costs  and  expenses  of any kind or  nature  whatsoever  (including  reasonable
attorneys'   fees,   including   allocated  costs  of  in-house   counsel,   and
disbursements  in  connection  with  any  actual  or  threatened  investigative,
administrative or judicial  proceeding,  whether or not such Indemnitee shall be
designated  a party  thereto)  that may be imposed  on,  incurred by or asserted
against such  Indemnitee,  in any manner  relating to or arising out of the Loan
Documents,  the Loans, the use or intended use of the proceeds of the Loans (the
"Indemnified Liabilities"); provided that (i) no Indemnitee shall have the right
to be  indemnified  or held harmless  hereunder for its own gross  negligence or
willful  misconduct,  as determined by a final  judgment of a court of competent
jurisdiction,  and (ii) no  Borrower  shall  have any  obligation  hereunder  in
respect  of (A) legal  proceedings  between  the Lender  Parties or between  any
Lender Party and any participant or (B) Indemnified  Liabilities  arising from a
breach of any Loan Document by the Indemnitee making a claim hereunder.

                  |9.2.2.

                  Each  Indemnitee  will  promptly  notify the  Borrower of each
event of which it has  knowledge  that may give rise to a claim under clause (b)
of Section 9.2.1.,  provided that the failure to so notify the Borrower shall in
no way impair the Borrowers' obligations under this Section 9.2.2 (except to the
extent  that such  failure  to so notify  arises  from the gross  negligence  or
willful  misconduct  of  such  Indemnitee  and  has  an  adverse  effect  on the
Borrowers,  taken as a whole). If any investigative,  judicial or administrative
proceeding  is brought  against  any  Indemnitee  indemnified  or intended to be
indemnified  pursuant to this Section 9.2.2, the Borrower,  to the extent and in
the manner  directed by the  Indemnitee,  will resist and defend such proceeding
with counsel  designated  by the Borrower  (which  counsel  shall be  reasonably
satisfactory  to the  Indemnitee).  Each Indemnitee will use its best efforts to
cooperate in the defense of any such action,  writ, or proceeding.  The Borrower
shall keep such  Indemnitee  advised of the status of such  defense  and consult
with such Indemnitee prior to taking any material position with respect thereto.
Such  Indemnitee  shall,  however,  be entitled to employ counsel  separate from
counsel for the  Borrower  and from any other party in such  proceeding  if such
Indemnitee  shall  reasonably  determine  that a conflict  of  interest or other
circumstance exists that makes  representation by counsel chosen by the Borrower
not advisable.  The reasonable fees and  disbursements  of such separate counsel
shall be paid by the Borrower. Such Indemnitee shall not agree to the settlement
of any such claim without the consent of the Borrower, unless the Borrower shall
have been given notice of the commencement of an action and shall have failed to
provide the defense thereof as herein provided or an Event of Default shall have
occurred.

                  9.2.3.

                  To the  extent  that the  undertaking  to  indemnify  and hold
harmless set forth in Section 9.2.1.  may be  unenforceable  as violative of any
Applicable  Law  or  public   policy,   the  Borrower  shall  make  the  maximum
contribution  to the  payment  and  satisfaction  of  each  of  the  Indemnified
Liabilities   that  is  permissible   under   Applicable  Law.  All  Indemnified
Liabilities shall be payable on demand.

         Section 9.3.  Waivers; Amendments in Writing.

                  9.3.1.

                  No amendment of any  provision of this  Agreement or any other
Loan Document  (including a waiver thereof or consent relating thereto) shall be
effective  unless the same  shall be in writing  and signed by the Agent and the
Required Lenders. Notwithstanding the foregoing,


                  no  amendment  that has the effect of (a) reducing the rate or
         amount,  or extending  the stated  maturity or due date,  of any amount
         payable by the Borrowers to any Lender Party under the Loan  Documents,
         (b)  increasing  the amount,  or extending  the stated  termination  or
         reduction  date,  of any  Lender's  Revolving  Commitment  hereunder or
         subjecting  any Lender  Party to any  additional  obligation  to extend
         credit,  (c) altering the rights and  obligations  of the  Borrowers to
         prepay the Loans, (d) permitting the creation of any Lien ranking prior
         to or on a parity with the Lien of any Collateral  Document,  releasing
         any  part  of the  Collateral  (except  as  permitted  under  the  Loan
         Documents)  or depriving  any Lender Party of the security  afforded by
         the Lien of any Collateral Document,  or (e) changing this Section 9.3.
         or the  definition of the term "Required  Lenders,"  shall be effective
         unless the same shall be signed by or on behalf of all of the Lenders;


                  no amendment  that has the effect of (a) increasing the duties
         or  obligations  of the Agent,  (b)  increasing the standard of care or
         performance  required  on the part of the  Agent,  or (c)  reducing  or
         eliminating  the  indemnities  or  immunities  to  which  the  Agent is
         entitled  (including any amendment of this Section 9.3.1.2.),  shall be
         effective unless the same shall be signed by or on behalf of the Agent;
         and


                  no amendment  that has the effect of (a) increasing the duties
         or obligations of the Swingline Lender,  (b) increasing the standard of
         care or performance  required on the part of the Swingline  Lender,  or
         (c) reducing or eliminating  the indemnities or immunities to which the
         Swingline  Lender is entitled  (including any amendment of this Section
         9.3.1.2.),  shall be effective unless the same shall be signed by or on
         behalf of the Swingline Lender; and


                  Notwithstanding anything to the contrary, Schedule 4.3. may be
         amended by written  notice by the Borrower to the Agent,  to the extent
         necessary to reflect transactions  occurring after the date hereof that
         are otherwise permissible hereunder.


                  Any waiver or consent shall be effective  only in the specific
         instance and for the specific  purpose for which given. No notice to or
         demand on the  Borrower in any case shall  entitle the  Borrower to any
         other or further  notice or demand in  similar or other  circumstances.
         Any amendment  effected in accordance  with this Section 9.3.  shall be
         binding upon each present and future Lender Party and the Borrower.

         Section 9.4.  Cumulative Remedies; Failure or Delay.

         The  rights  and  remedies   provided  for  under  this  Agreement  are
cumulative  and are  not  exclusive  of any  rights  and  remedies  that  may be
available to the Lender Parties under Applicable Law or otherwise. No failure or
delay on the part of any Lender  Party in the  exercise  of any power,  right or
remedy  under the Loan  Documents  shall  impair such power,  right or remedy or
operate as a waiver  thereof,  nor shall any single or partial  exercise  of any
such power, right or remedy preclude other or further exercise thereof or of any
other power, right or remedy.

         Section 9.5.  Notices, Etc.

         All notices and other  communications  under this Agreement shall be in
writing  and (except  for  financial  statements,  other  related  informational
documents and routine  communications,  which may be sent by  first-class  mail,
postage prepaid) shall be personally  delivered or sent by prepaid  courier,  by
overnight,  registered or certified mail (postage prepaid),  or by prepaid telex
or telecopy,  and shall be deemed given when received by the intended  recipient
thereof.  Unless otherwise specified in a notice sent or delivered in accordance
with this Section 9.5., all notices and other  communications  shall be given to
the parties hereto at their  respective  addresses (or to their respective telex
or telecopier  numbers)  indicated on Schedule  1.1.B (in the case of the Lender
Parties) or 9.5. (in the case of the Borrower).

         Section 9.6.  Successors and Assigns.

                  9.6.1.

                  This Agreement  shall be binding upon and inure to the benefit
of the parties hereto and their respective  successors and permitted assigns. No
Borrower may assign or transfer any interest hereunder without the prior written
consent of each Lender Party.

                  9.6.2.

                  Each  Lender  shall  have the right at any time to assign  (an
"Assignment")  all or any  portion of such  Lender's  Revolving  Commitment  and
outstanding Loans to one or more banks or other institutions; provided, however,
that (a) each Assignment shall be of a portion of the Revolving Commitment of at
least  equal to  $5,000,000,  (b) unless  otherwise  agreed by the  Agent,  each
Assignment shall be of a constant,  and not a varying,  percentage of all of the
assigning  Lender's  rights and  obligations  under this Agreement and the other
Loan  Documents;  (c)  unless a Default  or Event of  Default  then  exists,  no
Assignment  (other  than an  Assignment  to a Person that is then a Lender or an
Affiliate of a Lender)  shall be  effective  without the consent of the Borrower
and the Agent, which consents shall not be unreasonably withheld or delayed; (d)
the  parties  to the  Assignment  shall  execute  and  deliver  to the  Agent an
Assignment and Acceptance substantially in the form of Exhibit H (an "Assignment
and  Acceptance");  (c) the  assignee  shall pay to the Agent a  processing  and
recording fee of $2,500;  and no  Assignment  shall be effective for any purpose
unless and until the Agent  accepts  such  Assignment  and makes an  appropriate
entry  thereof in the  Register (as defined  below).  Upon  satisfaction  of the
conditions  in  clauses  (a)  through  (f) of  the  proviso  to the  immediately
preceding  sentence  with  respect to any proposed  Assignment,  the Agent shall
accept the Assignment, make appropriate entries thereof in the Register and send
notice thereof to the Borrower and all other Lender Parties.  From and after the
date on which the  conditions in the foregoing  clauses and the  Assignment  and
Acceptance have been satisfied,  the assignee shall be a "Lender" hereunder and,
to the extent that rights and  obligations  hereunder  have been assigned to it,
shall have the rights and obligations of the assigning Lender hereunder, and the
assigning Lender shall, to the extent that rights and obligations hereunder have
been assigned by it,  relinquish its rights and be released from its obligations
under this  Agreement  (and,  in the case of an  Assignment  covering all or the
remaining  portion of the assigning  Lender's rights and obligations  under this
Agreement, cease to be a party hereto).


                  The Agent shall  maintain at the Agent's Office a copy of each
Assignment and Acceptance  delivered to it and a register (the  "Register")  for
the  recordation  of the  names  of the  Lender  Parties  and  their  respective
Revolving  Commitments.  The  entries in the  Register  shall be  conclusive  as
against the Borrower and each Lender  Party,  in the absence of manifest  error,
notwithstanding  notice to the  contrary.  The Register  shall be available  for
inspection  by the  Borrower at any  reasonable  time and from time to time upon
reasonable prior notice.

                  9.6.4.

                  Each Lender  shall have the right at any time to grant or sell
participations  (each a "Participation")  in all or any portion of such Lender's
Revolving  Commitment  and  outstanding  Loans  to one or more  banks  or  other
institutions,  subject  to the terms and  conditions  set forth in this  Section
9.6.4. If any Lender sells or grants a Participation, (a) such Lender shall make
and receive all payments for the account of its  participant,  (b) such Lender's
obligations under this Agreement shall remain  unchanged,  (c) such Lender shall
continue to be the sole holder of its Notes and other Loan Documents  subject to
the  Participation  and shall  have the sole  right to  enforce  its  rights and
remedies under the Loan Documents, (d) the Borrower and the other Lender Parties
shall  continue to deal solely and directly with such Lender in connection  with
such  Lender's  rights and  obligations  under the Loan  Documents,  and (e) the
Participation agreement shall not restrict such Lender's ability to agree to any
amendment  of the terms of the Loan  Documents,  or to exercise or refrain  from
exercising any powers or rights that such Lender may have under or in respect of
the Loan Documents or any Collateral, except that the participant may be granted
the  right  to  consent  to any (a)  reduction  of the  rate or  amount,  or any
extension of the stated maturity or due date, of any principal, interest or Fees
payable by the  Borrower and subject to the  Participation,  (b) increase in the
amount or  extension  of the stated  termination  or any  reduction  date of the
affected Revolving  Commitment or (c) release of all or substantially all of the
Collateral,  except to the extent  otherwise  provided in the Loan Documents.  A
participant shall have the rights of the Lenders under Sections 2.11.,2.13.  and
9.10.,  subject to the  obligations  imposed  by such  Sections;  provided  that
amounts payable to any participant  shall not exceed the amounts that would have
been payable under such Sections to the Lender granting the  Participation,  had
such  Participation not been granted,  unless the Participation is made with the
prior written consent of the Borrower.

                  9.6.5.

                  Each  Lender may at any time  assign or pledge any  portion of
its  rights  under  the  Loan  Documents  to a  Federal  Reserve  Bank.  No such
assignment or pledge shall be subject to the  provisions of Sections  9.6.2.  or
9.6.4.

                  9.6.6.

                  Subject to the  provisions of Section 9.7.,  each Lender Party
shall have the right at any time to furnish one or more  potential  assignees or
participants with any information  concerning the Borrowers and the Subsidiaries
that has been supplied by any Borrower to any Lender Party.  The Borrower  shall
supply all  reasonably  requested  information  and execute and deliver all such
instruments  and take  all such  further  action  (including,  in the case of an
Assignment,  the execution and delivery of  replacement  Notes) as the Agent may
reasonably   request  in  connection   with  any  Assignment  or   Participation
arrangement.

         Section 9.7.  Confidentiality.

         Each Lender will  maintain  any  confidential  information  that it may
receive from any Borrower or Consolidated  Subsidiary pursuant to this Agreement
confidential  and shall not disclose such  information to third parties  without
the prior consent of the Borrower, except for disclosure:  (a) to legal counsel,
accountants  and  other  professional  advisors  to  the  Lender  Party;  (b) to
regulatory  officials having jurisdiction over the Lender Party; (c) required by
Applicable  Law or in  connection  with any legal  proceeding;  (d) to any other
Lender Party;(e) to another Person in connection with a potential  Assignment or
Participation,  provided  such Person shall have agreed in writing to be subject
to this Section 9.7.; (f) to prospective purchasers of Collateral after an Event
of Default;  and (g) of information that has been previously  disclosed publicly
without breach of this provision.

         Section |9.8.  Governing Law.

         THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE  WITH,
THE LAWS OF THE STATE OF  CALIFORNIA  (OTHER THAN CHOICE OF LAW RULES THAT WOULD
REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION).

         Section 9.9.  Choice of Forum.

                  9.9.1.

                  All actions or  proceedings  arising in  connection  with this
Agreement  shall be tried and  litigated in state or Federal  courts  located in
County of  Suffolk,  Commonwealth  of  Massachusetts,  unless  such  actions  or
proceedings are required to be brought in another court to obtain subject matter
jurisdiction  over the  matter in  controversy.  EACH  BORROWER  AND EACH OF THE
LENDER  PARTIES WAIVES ANY RIGHT IT MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON
CONVENIENS,  TO ASSERT THAT IT IS NOT SUBJECT TO THE JURISDICTION OF SUCH COURTS
OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH
THIS SECTION.

                  |9.9.2.

                  IN ANY ACTION AGAINST ANY BORROWER,  SERVICE OF PROCESS MAY BE
MADE  UPON  THE  BORROWER  BY  REGISTERED  OR  CERTIFIED  MAIL,  RETURN  RECEIPT
REQUESTED,  TO ITS ADDRESS  INDICATED IN SCHEDULE  9.5.,  WHICH SERVICE SHALL BE
DEEMED  SUFFICIENT FOR PERSONAL  JURISDICTION  AND SHALL BE DEEMED  EFFECTIVE 10
DAYS AFTER MAILING.

                  9.9.3.

                  Nothing  contained in this Section  shall  preclude the Lender
Parties  from  bringing any action or  proceeding  arising out of or relating to
this  Agreement  in the  courts of any place  where the  Borrower  or any of its
assets may be found or located.  TO THE EXTENT  PERMITTED BY THE APPLICABLE LAWS
OF ANY SUCH  JURISDICTION,  EACH  BORROWER  HEREBY  IRREVOCABLY  SUBMITS  TO THE
JURISDICTION  OF ANY SUCH  COURT AND  EXPRESSLY  WAIVES,  IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING,  THE JURISDICTION OF ANY OTHER COURT OR COURTS THAT NOW OR
HEREAFTER,  BY REASON OF SUCH PARTY'S PRESENT OR FUTURE DOMICILE,  OR OTHERWISE,
MAY BE AVAILABLE TO IT.

         Section 9.10.  Set Off.

         In addition to any rights now or  hereafter  granted  under  Applicable
Law,  during the existence of any Event of Default,  each Lender Party is hereby
irrevocably  authorized  by each  Borrower,  at any  time or from  time to time,
without  notice to any  Borrower or to any other  Person,  any such notice being
hereby expressly  waived, to set off and to appropriate and to apply any and all
deposits (general or special, including certificates of deposit, whether matured
or unmatured,  but not including trust accounts) and any other indebtedness,  in
each case whether  direct or indirect or  contingent  or matured or unmatured at
any time held or owing by such Lender  Party to or for the credit or the account
of the Borrower,  against and on account of the  obligations  of the Borrower to
such Lender  Party under the Loan  Documents  to which the  Borrower is a party,
irrespective  of whether or not such Lender Party shall have made any demand for
payment and although such obligations may be contingent and unmatured.

         Section 9.11.  Changes in Accounting Principles.

         If any changes in generally  accepted  accounting  principles after the
date of this  Agreement  result  from the  promulgation  of rules,  regulations,
pronouncements,  or  opinions  of, or the  imposition  of  requirements  by, the
Financial  Accounting  Standards  Board or the  American  Institute of Certified
Public Accountants (or successors  thereto or agencies with similar  functions),
or there shall occur any change in the Borrower's  fiscal or tax years and, as a
result  of any such  changes,  there  shall  result a change  in the  method  of
calculating  any  of  the  negative  covenants,  standards  or  other  terms  or
conditions found in this Agreement,  then the parties hereto agree to enter into
negotiations in order to amend such  provisions so as to equitably  reflect such
changes with the desired  result that the criteria for evaluating the Borrowers'
financial  condition shall be the same after such changes as if such changes had
not been made.

         Section |9.12.  Headings.

         The  Article  and  Section  headings  used  in this  Agreement  are for
convenience of reference only and shall not affect the construction hereof.

         Section |9.13.  Severability.

         If any provision of this Agreement shall be held to be invalid, illegal
or unenforceable under Applicable Law in any jurisdiction,  such provision shall
be  ineffective   only  to  the  extent  of  such   invalidity,   illegality  or
unenforceability,  which  shall not  affect any other  provisions  hereof or the
validity,   legality  or   enforceability   of  such   provision  in  any  other
jurisdiction.

         Section 9.14.  Survival of Agreements, Representations and Warranties.

         All  agreements,  representations  and  warranties  made  herein  shall
survive  the  execution  and  delivery  of this  Agreement,  the closing and the
extensions of credit  hereunder and shall continue until payment and performance
of any and all Obligations.  Any  investigation at any time made by or on behalf
of the Lender  Parties  shall not  diminish  the Lender  Parties'  right to rely
thereon.  Without  limitation,  the agreements and  obligations of the Borrowers
contained  in  Sections  2.11.,  2.12.,  2.13.,2.1.3.,  9.1.  and 9.1.,  and the
obligations  of the Lenders under Section 8.5. and 9.7 shall survive the payment
in full of all other Obligations.

         Section 9.15.  Execution in Counterparts.

         This Agreement may be executed in any number of  counterparts,  each of
which  counterparts,  when so executed and  delivered,  shall be deemed to be an
original and all of which counterparts, taken together, shall constitute but one
and the same Agreement. This Agreement shall become effective upon the execution
of a counterpart hereof by each of the parties hereto.  Faxed signatures to this
Agreement shall be binding for all purposes.

         Section 9.16.  Complete Agreement.

         This Agreement,  together with the other Loan Documents, is intended by
the parties as the final  expression  of their  agreement  regarding the subject
matter  hereof  and as a  complete  and  exclusive  statement  of the  terms and
conditions of such agreement.

         Section 9.17.  Limitation of Liability.

         No claim shall be made by any Borrower or any  Consolidated  Subsidiary
of any Borrower against any Lender Party or the Affiliates, directors, officers,
employees or agents of any Lender Party for any special, indirect, consequential
or punitive  damages in respect of any claim for breach of contract or under any
other  theory  of  liability  arising  out of or  related  to  the  transactions
contemplated  by this  Agreement,  or any act,  omission or event  occurring  in
connection  therewith;  and the Borrower waives,  releases and agrees not to sue
upon any claim for any such  damages,  whether or not accrued and whether or not
known or suspected to exist in its favor.

                                         [Space intentionally left blank.]



<PAGE>



         Section 9.18.  WAIVER OF TRIAL BY JURY.

         THE BORROWERS AND THE LENDER PARTIES WAIVE THE RIGHT TO A TRIAL BY JURY
IN ANY ACTION UNDER THIS AGREEMENT OR ANY ACTION ARISING OUT OF THE TRANSACTIONS
CONTEMPLATED HEREBY, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION OR ACTIONS.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first set forth above.


                                  Agent:

                                  BankBoston, N.A., a national banking 
                                   association,  as Agent and a Lender


                                  By:
                                  Name:
                                  Title:


                                  Lenders:
                                  U.S. Bank,
                                  a national banking association,



                                   By:
                                   Name:
                                   Title:
                                   Sumitomo Bank of California,
                                      a California banking corporation



                                    By:
                                    Name:
                                    Title:



                                     By:
                                     Name:
                                     Title:


                                     Borrowers:
                                     Cotelligent Group, Inc.,
                                        a Delaware corporation


                                     By:
                                     Name:
                                     Title:

                                     BFR Co., Inc., a New Jersey corporation


                                     By:
                                     Name:
                                     Title:


                                     Chamberlain Associates, Inc., a California
                                     corporation


                                     By:
                                     Name:
                                     Title:


                                     Data Arts & Sciences, Inc.,
                                         a Massachusetts corporation


                                     By:
                                     Name:
                                     Title:


                                     ESP Software Services, Inc., a Minnesota
                                         corporation


                                     By:
                                     Name:
                                     Title:


                                     Financial Data Systems, Inc., a Washington
                                         corporation


                                     By:
                                     Name:
                                     Title:


                                     INNOVA Solutions, Inc., a Texas corporation


                                     By:
                                     Name:
                                     Title:


                                     Cotelligent/JasTech Corporation, a Florida
                                         corporation


                                     By:
                                     Name:
                                     Title:


                                     Pittsburgh Business Consultants, Inc.,
                                          a Pennsylvania corporation


                                     By:
                                     Name:
                                     Title:


                                     TRC  Information Systems, Inc.,
                                        a California corporation


                                     By:
                                     Name:
                                     Title:


                                     United Data Processing, Inc., an Oregon 
                                        corporation


                                     By:
                                     Name:
                                     Title:


                                     EPIC Consulting Group, Ltd., a Missouri 
                                        corporation


                                     By:
                                     Name:
                                     Title:




<PAGE>


                                                 Credit Agreement
FA972470.024                                        Schedule R-1

                                                                   SCHEDULE R-1

                                       CONSOLIDATED SUBSIDIARIES OF BORROWER



<PAGE>



BFR Co., Inc.:
Mack Bridgewater I
721 Route 202-206
Bridgewater, NJ  08807
Phone: (908) 595-9333
Fax: (908) 595-9444
Confidential Fax: (908) 595-9555

Chamberlain Associates, Incorporated:
1875 South Grant, Suite 530
San Mateo, CA  94402
Phone: (650) 577-3700
Fax: (650) 574-2090

Data Arts & Sciences, Inc.:
8 Strathmore Road
Natick, MA  01760
Phone: (508) 651-8200
Fax: (508) 651-2936

ESP Software Services, Inc.:
701 Fourth Avenue South
Minneapolis, MN  55415
Phone: (612) 337-3000
Fax: (612) 337-9199

Financial Data Systems, Inc.:
P.O. Box 3008
Bellevue, WA  98009-3008

Street Address:
600 108th Avenue, N.E., Suite 1040
Bellevue, WA  98004
Phone: (425) 637-4155
Fax: (425) 637-1805
Confidential Fax: (425) 637-9340

INNOVA Solutions, Incorporated:
3030 LBJ Freeway
Dallas, TX  75234
Phone: (972) 620-9477
Fax: (972) 620-9419

Cotelligent/JasTech Corporation:
1375 East Ninth Street, Suite 2330
Cleveland, OH  44114
Phone: (800) 366-7600
Fax: (216) 566-0165

Pittsburgh Business Consultants, Inc.:
411 7th Avenue, Suite 1401A
Pittsburgh, PA  15219
Phone: (412) 391-0714
Fax: (412) 391-0478

TRC Information Services, Inc.:
2184 Bering Drive
San Jose, CA  95131
Phone: (408) 435-2800
Fax: (408) 435-1720

United Data Processing, Inc.:
1600 N.W. Compton Drive, Suite 140
Beaverton, OR  97006
Phone: (503) 690-6877
Fax: (503) 690-7518

EPIC Consulting Group, Ltd.:
10805 Sunset Office Drive, Suite 211
St. Louis, MO
Phone: (314) 965-0569
Fax: (314) 965-3047



<PAGE>


                                                 Credit Agreement
FA972470.024                                        Schedule 1.1A

                                                                 SCHEDULE 1.1.A

                                               COMMITMENTS

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


                       Lender                           Revolving Commitment
- ----------------------------------------------------- -------------------------


                  BankBoston, N.A.                          $20,000,000
- ----------------------------------------------------- -------------------------


                     U.S. Bank                               $10,000,00
- ----------------------------------------------------- -------------------------


            Sumitomo Bank of California                     $10,000,000
- ----------------------------------------------------- -------------------------


                       Total                                $40,000,000
- ----------------------------------------------------- -------------------------





<PAGE>



                                                 Credit Agreement
FA972470.024                                        Schedule 1.1B

                                                                 SCHEDULE 1.1.B

                                                LENDER INFORMATION

Agent's Office:

BankBoston, N.A.
435 Tasso Street, Suite 250
Palo Alto, California 94301
Fax: (415) 853-1425
Phone: (415) 853-0404
Attention: Teresa Heller

Agent's  Account  (for  funding  of Loans by the  Lenders  and  payments  by the
Borrower):

Method of Payment:         Fed Wire
Account No.:               54099647
Reference:                 Cotelligent
ABA No.:                   011000390
Attn:                      The Hightech Adm. 50

Lenders:
<TABLE>

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


<S>                                <C>                                 <C>
              Lender                     Domestic Lending Office              LIBOR Lending Office
- ----------------------------------- ---------------------------------- -----------------------------------


            `U.S. Bank              1420 5th Ave.                      1420 5th Ave.
                                    Seattle, Washington 98101          Seattle, Washington 98101
                                    Fax: (206) 344-7022                Fax: (206) 344-7022
                                    Phone: (206) 344-5449              Phone: (206) 344-5449
                                    Attn: Enola Borland                Attn: Enola Borland
- ----------------------------------- ---------------------------------- -----------------------------------
   Sumitomo Bank of California      611 West 6th Street                611 West 6th Street
                                    Suite 3900                         Suite 3900
                                    Los Angeles, CA 90017              Los Angeles, CA 90017
                                    Fax: (213) 622-1365                Fax: (213) 622-1365
                                    Phone: (213) 362-5727              Phone: (213) 362-5727
                                    Attn: Joyce Knox                   Attn: Joyce Knox
- ----------------------------------- ---------------------------------- -----------------------------------

</TABLE>




<PAGE>


                                                 Credit Agreement
FA972470.024                                        Schedule 1.1C

                                                                SCHEDULE 1.1.C

                                                   EXISTING DEBT

         Notes Payable

         BFR Co., Inc.

         Creditor:                          Gloria O'Donnell
         Commencement of Note:              February 1996
         Payment Terms:                     $100,000/Year for 4 years; 
                                            $75,000/Year for 1 year



<PAGE>


                                                 Credit Agreement
FA972470.024                                        Schedule 1.1D

                                                                 SCHEDULE 1.1.D

                                                  EXISTING LIENS

         Pittsburgh Business Consultants, Inc.

         Lien Holder:               Vanguard Financial Services Corp.
         Equipment:                 San Diego Office Copier
         Lease Type:                Operating



<PAGE>


                                                 Credit Agreement
FA972470.024                                        Schedule 1.1E

                                                                 SCHEDULE 1.1.E

                                           APPLICABLE MARGIN & FEE RATE

         The "Applicable Margin" in respect of LIBOR Rate Loans (and amounts not
paid when due) and the "Fee Rate" for any day are the respective rates per annum
set forth  below in the  applicable  row under the column  corresponding  to the
Pricing Level that applies on such day:
<TABLE>

<S>                                <C>               <C>              <C>               <C> 
- ---------------------------------- ----------------- ---------------- ----------------- -----------------

          Pricing Level                 Level I          Level II         Level III      Level IV Pricing
                                        Pricing           Pricing          Pricing
- ----------------------------------- ----------------- ---------------- ----------------- -----------------
- ----------------------------------- ----------------- ---------------- ----------------- -----------------

Applicable Margin (LIBOR Rate       1.75              1.50             1.25              1.00
Loans and amounts not paid when
due)
- ----------------------------------- ----------------- ---------------- ----------------- -----------------
- ----------------------------------- ----------------- ---------------- ----------------- -----------------

Fee Rate                            0.35              0.30             0.25              0.20
- ----------------------------------- ----------------- ---------------- ----------------- -----------------
</TABLE>

         For purposes of this Schedule,  the following  terms have the following
meanings:

         "Level I Pricing"  applies during any Pricing Period if (i) in the case
of Compliance  Certificates  prepared in conjunction  with financial  statements
delivered pursuant to Sections 5.1.1 and 5.1.2, at the end of the Fiscal Quarter
most recently ended prior to the first day of such Pricing  Period,  and (ii) in
the case of  Compliance  Certificates  prepared in  conjunction  with  Permitted
Acquisitions,  as of the day on which such  Compliance  Certificate is delivered
(as  reflected  in the  pro  forma  calculations  included  in  such  Compliance
Certificate), the Leverage Ratio was greater than 2.75 to 1.00.

         "Level II  Pricing"  applies  during  any  Pricing  Period if no higher
Pricing  Level  applies  and,  if,  (i) in the case of  Compliance  Certificates
prepared in conjunction with financial statements delivered pursuant to Sections
5.1.1 and 5.1.2,  at the end of the Fiscal  Quarter most recently ended prior to
the  first  day of such  Pricing  Period,  and  (ii) in the  case of  Compliance
Certificates prepared in conjunction with Permitted Acquisitions,  as of the day
on which such Compliance Certificate is delivered (as reflected in the pro forma
calculations  included in such  Compliance  Certificate)  the Leverage Ratio was
less than or equal to 2.75 to 1.00, but greater than 2.25 to 1.00.

         "Level III  Pricing"  applies  during any  Pricing  Period if no higher
Pricing  Level  applies  and  if,  (i) in the  case of  Compliance  Certificates
prepared in conjunction with financial statements delivered pursuant to Sections
5.1.1 and 5.1.2,  at the end of the Fiscal  Quarter most recently ended prior to
the  first  day of such  Pricing  Period,  and  (ii) in the  case of  Compliance
Certificates prepared in conjunction with Permitted Acquisitions,  as of the day
on which such Compliance Certificate is delivered (as reflected in the pro forma
calculations  included in such  Compliance  Certificate)  the Leverage Ratio was
less than or equal to 2.25 to 1.00, but greater than 1.75 to 1.00.

         "Level IV  Pricing"  applies  during  any  Pricing  Period if no higher
Pricing  Level  applies  and  if,  (i) in the  case of  Compliance  Certificates
prepared in conjunction with financial statements delivered pursuant to Sections
5.1.1 and 5.1.2,  at the end of the Fiscal  Quarter most recently ended prior to
the  first  day of such  Pricing  Period,  and  (ii) in the  case of  Compliance
Certificates prepared in conjunction with Permitted Acquisitions,  as of the day
on which such Compliance Certificate is delivered (as reflected in the pro forma
calculations  included in such  Compliance  Certificate)  the Leverage Ratio was
less than 1.75 to 1.00.

         "Pricing Period" means a period beginning on (and including) the day on
which a Compliance Certificate required pursuant to Section 5.1.2. is delivered,
and  ending  on (and  excluding)  the day on  which  the  next  such  Compliance
Certificate  is delivered,  except that the first Pricing  Period shall begin on
the  Closing  Date and shall end on the earlier to occur of (i) the day on which
the Compliance  Certificate in respect of the first Permitted  Acquisition to be
closed  after  the  Closing  Date is  delivered  and (ii)  the day on which  the
Compliance  Certificate  required  in  respect  of  the  Fiscal  Quarter  ending
September 30, 1997 is delivered.

         "Pricing  Level"  refers to such of Level I Pricing,  Level II Pricing,
Level III Pricing or Level IV Pricing as applies during any particular  day. The
numbering of Pricing  Levels is in descending  order (e.g.,  Level II Pricing is
referred to as a "lower" Pricing Level than Level I Pricing).



<PAGE>


                                                 Credit Agreement
FA972470.024                                       Schedule 3.1.2

                                                                SCHEDULE 3.1.2.

                                                 CLOSING DOCUMENTS

<TABLE>

<S>                                                                               <C>
TITLE                                                                             SIGNATORIES

        ------------------------------------------------------------------------- ----------------------------------------------
        Senior Secured Credit Agreement                                           BKB (as Agent, Swingline Lender, Lender), US
                                                                                  Bank, Sumitomo, CGI, BFR, CAI, DAS, ESP,
                                                                                  FDS, ISI, CJC, PBCI, TRC, UDP, ECG
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Swingline Note -- BankBoston, N.A.                                        CGI, BFR, CAI, DAS, ESP, FDS, ISI, CJC,
                                                                                  PBCI, TRC, UDP, ECG
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Revolving Loan Note -- BankBoston, N.A.                                   CGI, BFR, CAI, DAS, ESP, FDS, ISI, CJC,
                                                                                  PBCI, TRC, UDP, ECG
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Revolving Loan Note -- U.S.Bank                                           CGI, BFR, CAI, DAS, ESP, FDS, ISI, CJC,
                                                                                  PBCI, TRC, UDP, ECG
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Revolving Loan Note -- Sumitomo Bank of California                        CGI, BFR, CAI, DAS, ESP, FDS, ISI, CJC,
                                                                                  PBCI, TRC, UDP, ECG
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Security Agreement                                                        BKB, CGI, BFR, CAI, DAS, ESP, FDS, ISI, CJC,
                                                                                  PBCI, TRC, UDP, ECG
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Pledge Agreement                                                          BKB, CGI
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Initial Notice of Borrowing                                               CGI
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Officer's Closing Certificate                                             CGI
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Opinion of PM&S                                                           PM&S
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        UCC Financing Statement -- Cotelligent Group, Inc.                        BKB, CGI
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        UCC Financing Statement -- BFR Co., Inc.                                  BKB, BFR
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        UCC Financing Statement -- Chamberlain Associates, Inc.                   BKB, CAI
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        UCC Financing Statement -- Data Arts & Sciences, Inc.                     BKB, DAS
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        UCC Financing Statement -- ESP Software Services, Inc.                    BKB, ESP
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        UCC Financing Statement -- Financial Data Systems, Inc.                   BKB, FDS
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        UCC Financing Statement -- INNOVA Solutions, Inc.                         BKB, ISI
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        UCC Financing Statement -- Cotelligent/JasTech Corporation                BKB, CJC
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        UCC Financing Statement -- Pittsburgh Business Consultants, Inc.          BKB, PBCI
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        UCC Financing Statement -- TRC Information Services, Inc.                 BKB, TRC
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        UCC Financing Statement -- United Data Processing, Inc.                   BKB, UDP
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        UCC Financing Statement -- EPIC Consulting Group, Ltd.                    BKB, ECG
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Good Standing Certificate-- Cotelligent Group, Inc.                       Delaware Secretary of State
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Good Standing Certificate-- BFR Co., Inc.                                 New Jersey Secretary of State
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Good Standing Certificate-- Chamberlain Associates, Inc.                  California Secretary of State
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Good Standing Certificate-- Data Arts & Sciences, Inc.                    Massachusetts authority
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Good Standing Certificate-- ESP Software Services, Inc.                   Minnesota authority
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Good Standing Certificate-- Financial Data Systems, Inc.                  Washington authority
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Good Standing Certificate-- INNOVA Solutions, Inc.                        Texas authority
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Good Standing Certificate-- Cotelligent/JasTech Corporation               Florida authority
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Good Standing Certificate-- Pittsburgh Business Consultants, Inc.         Pennsylvania authority
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Good Standing Certificate-- TRC Information Services, Inc.                California Secretary of State
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Good Standing Certificate-- United Data Processing, Inc.                  Oregon Secretary of State
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Good Standing Certificate-- EPIC Consulting Group, Ltd.                   Missouri Secretary of State
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Corporate Resolution:  Borrowing (Cotelligent Group, Inc.)                CGI
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Corporate Resolution:  Borrowing (BFR, Inc.)                              BFR
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Corporate Resolution:   Borrowing (Chamberlain Associates, Inc.)          CAI
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Corporate Resolution:  Borrowing (Data Arts & Sciences, Inc.)             DAS
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Corporate Resolution:  Borrowing (ESP Software Services, Inc.)            ESP
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Corporate Resolution:  Borrowing (Financial Data Systems, Inc.)           FDS
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Corporate Resolution:  Borrowing (INNOVA Solutions, Inc.)                 ISI
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Corporate Resolution:  Borrowing (Cotelligent/JasTech Corporation)        CJC
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Corporate Resolution:  Borrowing (Pittsburgh Business Consultants, Inc.)  PBCI
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Corporate Resolution:  Borrowing (TRC Information Services, Inc.)         TRC
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Corporate Resolution:  Borrowing (United Data Processing, Inc.)           UDP
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Corporate Resolution:  Borrowing (EPIC Consulting Group, Ltd.)            ECG
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Secretary's Certificate (Cotelligent Group, Inc.)                         CGI
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Secretary's Certificate (BFR Inc.)                                        BFR
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Secretary's Certificate (Chamberlain Associates, Inc.)                    CAI
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Secretary's Certificate (Data Arts & Sciences, Inc.)                      DAS
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Secretary's Certificate (ESP Software Services, Inc..)                    ESP
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Secretary's Certificate (Financial Data Systems, Inc.)                    FDS
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Secretary's Certificate (INNOVA Solutions, Inc.)                          ISI
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Secretary's Certificate (Cotelligent/JasTech Corporation)                 CJC
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Secretary's Certificate (Pittsburgh Business Consultants, Inc.)           PBCI
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Secretary's Certificate (TRC Information Services, Inc.)                  TRC
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Secretary's Certificate (United Data Processing, Inc.)                    UDP
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Secretary's Certificate (EPIC Consulting Group, Ltd.)                     ECG
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Certified Articles of Incorporation (Cotelligent Group, Inc.)             CGI
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Certified Articles of Incorporation (BFR, Inc.).                          BFR
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Certified Articles of Incorporation (Chamberlain Associates, Inc.)        CAI
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Certified Articles of Incorporation (Data Arts & Sciences, Inc.)          DAS
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Certified Articles of Incorporation (ESP Software Services, Inc..)        ESP
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Certified Articles of Incorporation (Financial Data Systems, Inc.)        FDS
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Certified Articles of Incorporation (INNOVA Solutions, Inc.)              ISI
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Certified Articles of Incorporation (Cotelligent/JasTech Corporation)     CJC
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Certified Articles of Incorporation (Pittsburgh Business Consultants,     PBCI
        Inc.)
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Certified Articles of Incorporation (TRC Information Services Inc.)       TRC
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Certified Articles of Incorporation (United Data Processing, Inc.)        UDP
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Certified Articles of Incorporation (EPIC Consulting Group, Ltd.)         ECG
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Interim Unaudited Financial Statements (June 30, 1997)                    CGI
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Consolidated Balance Sheet for Borrower and Consolidated Subsidiaries     CGI
        (dated as of March 31, 1997)
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Quarterly Statements as of June 30, 1997                                  CGI
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Projected Consolidated Statements of Income and Cash Flow for Borrower    CGI
        and Consolidated Subsidiaries (for the period from January 1, 1997 to
        December 31, 1999)
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Projected Annual Consolidated Balance Sheets for each fiscal year         CGI
        through 1999 for Borrower and Consolidated Subsidiaries
        ------------------------------------------------------------------------- ----------------------------------------------
        ------------------------------------------------------------------------- ----------------------------------------------
        Evidence of Insurance                                                     CGI
        ------------------------------------------------------------------------- ----------------------------------------------

</TABLE>




<PAGE>


                                                 Credit Agreement
FA972470.024                                        Schedule 4.1
<TABLE>
<CAPTION>

                                                                                                      SCHEDULE 4.1.

                                           ORGANIZATION OF BORROWER AND
                                                   SUBSIDIARIES



<S>                                     <C>                                    <C>             
NAME OF COMPANY                         STATE OF INCORPORATION                 OWNERSHIP INTEREST

1.  Cotelligent Group, Inc.             Delaware                               Parent

2.  BFR Co., Inc.                       New Jersey                             100% by Cotelligent Group, Inc.

3.  Chamberlain Associates,             California                             100% by Cotelligent Group, Inc.
Incorporated

4.  Data Arts & Sciences, Inc.          Massachusetts                          100% by Cotelligent Group, Inc.

5.  Financial Data Systems, Inc.        Washington                             100% by Cotelligent Group, Inc.

6.  ESP Software Services, Inc.         Minnesota                              100% by Cotelligent Group, Inc.

7.  INNOVA Solutions Incorporated       Texas                                  100% by Cotelligent Group, Inc.

8.  Cotelligent/JasTech Corporation     Florida                                100% by Cotelligent Group, Inc.

9.  Pittsburgh Business Consultants,    Pennsylvania                           100% by Cotelligent Group, Inc.
Inc.

10.  United Data Processing, Inc.       Oregon                                 100% by Cotelligent Group, Inc.

11.  TRC Information Services, Inc.     California                             100% by Cotelligent Group, Inc.

12.  EPIC Consulting Group, Ltd.        Missouri                               100% by Cotelligent Group, Inc.



</TABLE>


<PAGE>


                                                 Credit Agreement
FA972470.024                                        Schedule 4.3
<TABLE>
<CAPTION>

                                                                                                      SCHEDULE 4.3.

                                        SUBSIDIARIES AND OTHER INVESTMENTS

SUBSIDIARIES


<S>                                     <C>                                    <C>   
NAME OF COMPANY                         STATE OF INCORPORATION                 OWNERSHIP INTEREST

1.  Cotelligent Group, Inc.             Delaware                               Parent

2.  BFR Co., Inc.                       New Jersey                             100% by Cotelligent Group, Inc.

3.  Chamberlain Associates,             California                             100% by Cotelligent Group, Inc.
Incorporated

4.  Data Arts & Sciences, Inc.          Massachusetts                          100% by Cotelligent Group, Inc.

5.  Financial Data Systems, Inc.        Washington                             100% by Cotelligent Group, Inc.

6.  ESP Software Services, Inc.         Minnesota                              100% by Cotelligent Group, Inc.

7.  INNOVA Solutions Incorporated       Texas                                  100% by Cotelligent Group, Inc.

8.  Cotelligent/JasTech Corporation     Florida                                100% by Cotelligent Group, Inc.

9.  Pittsburgh Business Consultants,    Pennsylvania                           100% by Cotelligent Group, Inc.
Inc.

10.  United Data Processing, Inc.       Oregon                                 100% by Cotelligent Group, Inc.

11.  TRC Information Services, Inc.     California                             100% by Cotelligent Group, Inc.

12.  EPIC Consulting Group, Ltd.        Missouri                               100% by Cotelligent Group, Inc.

</TABLE>


<PAGE>



OTHER INVESTMENTS


         None.



<PAGE>


                                                 Credit Agreement
FA972470.024                                        Schedule 4.6

                                                                   SCHEDULE 4.6.

                                                MATERIAL LITIGATION

         None.



<PAGE>


                                                 Credit Agreement
FA972470.024                                        Schedule 4.13

                                                                  SCHEDULE 4.13.

                                              ENVIRONMENTAL CONDITION

         None.



<PAGE>


                                                 Credit Agreement
FA972470.024                                        Schedule 4.14

                                                                  SCHEDULE 4.14.

                                               CERTAIN RESTRICTIONS

         None.



<PAGE>


                                                 Credit Agreement
FA972470.024                                        Schedule 4.15

                                                                  SCHEDULE 4.15.

                                                   LABOR MATTERS

         None.



<PAGE>


                                                 Credit Agreement
FA972470.024                                        Schedule 6.8

                                                                   SCHEDULE 6.8.

                                         EXISTING CONTRACTUAL OBLIGATIONS

Indenture of Lease dated October 26, 1995 between Data Arts and Sciences, Inc. 
and John Travers and Bjorn Nordemo, as Trustees of Strathmore Realty Trust for 
offices.

Demand Note in the amount of $150,000 from Daniel Jackson to Cotelligent  Group,
Inc.

Stock Purchase Agreement dated August 27, 1997 between Michael Shatzman and 
Cotelligent Group, Inc. for the purchase of EPIC Consulting Group, Ltd.

Business Lease dated December 31, 1990 between BFR Co., Inc. and BFR Properties,
a partnership  partially  owned by Jeffrey  Bernardis  for office  furniture and
equipment.

Business Lease dated December 31, 1989 between BFR Co., Inc. and BFR Properties,
a partnership  partially  owned by Jeffrey  Bernardis  for office  furniture and
equipment.

Lease Agreement dated April 1, 1995 between BFR Systems  [tradename for BFR Co.,
Inc.] and BFR Properties, a partnership partially owned by Jeffrey Bernardis for
offices.

Employment Agreement between Cotelligent Group, Inc. and Michael L. Evans dated
February 20, 1996.

Employment Agreement between Cotelligent Group, Inc. and Daniel E. Jackson dated
February 20, 1996.

Employment Agreement between Cotelligent Group, Inc. and James R. Lavelle dated
 February 20, 1996.

Employment Agreement by and among Cotelligent Group, Inc., BFR Co., Inc. and 
Jeffrey J. Bernardis dated February 20, 1996.

Employment Agreement by and among Cotelligent Group, Inc., BFR Co., Inc. and 
Charles F. Fowler dated February 20, 1996.

Employment Agreement by and among Cotelligent Group, Inc., BFR Co., Inc. and 
Bernard J. Ruddock dated February 20, 1996.

Employment Agreement by and among Cotelligent Group, Inc., Chamberlain 
Associates, Inc. and John E. Chamberlain dated February 20, 1996.

Employment Agreement by and among Cotelligent Group, Inc., Data Arts & Sciences,
Inc. and John C. Travers dated February 20, 1996.

Employment Agreement between INNOVA Solutions, Inc. and Susan E. Trice dated 
June 28, 1996.

Employment Agreement among Cotelligent Group, Inc., Jastech, Inc. and Judy 
Jaskiel dated September  30, 1996.

Employment Agreement between Pittsburgh Business Consultants, Inc. and Christy 
L. Cooper dated December 1, 1996.

Employment Agreement between Cotelligent/TRC Acquisition Corporation and Henry 
H. Pham dated February 10, 1997.

Employment Agreement between Innova Solutions, Inc. and Michael Shatzman dated
August 27, 1997.



<PAGE>


                                                 Credit Agreement
FA972470.024                                        Schedule 9.5

                                                                   SCHEDULE 9.5.

                                               BORROWER INFORMATION

Address for Notices:

BFR Co., Inc.:
Mack Bridgewater I
721 Route 202-206
Bridgewater, NJ  08807
Phone: (908) 595-9333
Fax: (908) 595-9444
Confidential Fax: (908) 595-9555

Chamberlain Associates, Incorporated:
1875 South Grant, Suite 530
San Mateo, CA  94402
Phone: (650) 577-3700
Fax: (650) 574-2090

Data Arts & Sciences, Inc.:
8 Strathmore Road
Natick, MA  01760
Phone: (508) 651-8200
Fax: (508) 651-2936

ESP Software Services, Inc.:
701 Fourth Avenue South
Minneapolis, MN  55415
Phone: (612) 337-3000
Fax: (612) 337-9199

Financial Data Systems, Inc.:
P.O. Box 3008
Bellevue, WA  98009-3008

Street Address:
600 108th Avenue, N.E., Suite 1040
Bellevue, WA  98004
Phone: (425) 637-4155
Fax: (425) 637-1805
Confidential Fax: (425) 637-9340

<PAGE>




INNOVA Solutions, Incorporated:
3030 LBJ Freeway
Dallas, TX  75234
Phone: (972) 620-9477
Fax: (972) 620-9419

Cotelligent/JasTech Corporation:
1375 East Ninth Street, Suite 2330
Cleveland, OH  44114
Phone: (800) 366-7600
Fax: (216) 566-0165

Pittsburgh Business Consultants, Inc.:
411 7th Avenue, Suite 1401A
Pittsburgh, PA  15219
Phone: (412) 391-0714
Fax: (412) 391-0478

TRC Information Services, Inc.:
2184 Bering Drive
San Jose, CA  95131
Phone: (408) 435-2800
Fax: (408) 435-1720

United Data Processing, Inc.:
1600 N.W. Compton Drive, Suite 140
Beaverton, OR  97006
Phone: (503) 690-6877
Fax: (503) 690-7518

EPIC Consulting Group, Ltd.:
10805 Sunset Office Drive, Suite 211
St. Louis, MO
Phone: (314) 965-0569
Fax: (314) 965-3047

Borrower Account (for the funding of Loans):  U.S. Bank, Account No. 0747239416



<PAGE>










                                          SENIOR SECURED CREDIT AGREEMENT

                                                       among
                                             COTELLIGENT GROUP , INC.,
                                              THE BANKS LISTED HEREIN
                                                        and


                                                 BANKBOSTON, N.A.
                                                     as Agent



                                                September 12, 1997

                                          $40,000,000 Revolving Facility




<PAGE>
<TABLE>



<CAPTION>
                                                         9

                                                 TABLE OF CONTENTS


<S>                                                                                                              <C>
SENIOR SECURED CREDIT AGREEMENT...................................................................................1


ARTICLE 1.        DEFINITIONS AND RELATED MATTERS.................................................................1

                  Section 1.1.  Definitions.  ....................................................................1

                  Section 1.2.  Related Matters.  ...............................................................16
                                ---------------
                                1.2.1.   Construction.  .........................................................16
                                1.2.2.   Determinations.  .......................................................16
                                1.2.3.   Accounting Terms and Determinations.  ..................................16
                                1.2.4.   Independence of Covenants.  ............................................16


ARTICLE 2.        AMOUNTS AND TERMS OF THE CREDIT FACILITY.......................................................17

                  Section 2.1.  Revolving Loans.  ...............................................................17
                                ---------------
                                2.1.1.   Revolving Commitment.  .................................................17
                                2.1.2.   Type of Loans and Minimum Amounts.  ....................................17
                                2.1.3.   Notice of Borrowing.  ..................................................17
                                2.1.4.   Funding.  ..............................................................18

                  Section 2.2.  Swingline Loans.  ...............................................................18
                                ---------------
                                2.2.1.   Swingline Commitment.  .................................................18
                                2.2.2.   The Swingline Note.  ...................................................19
                                2.2.3.   Interest on Swingline Loans.  ..........................................19
                                2.2.4.   Notice of Borrowing of Swingline Loans.  ...............................19
                                2.2.5.   Limitations on Swingline Lender's Obligation to Make Swingline Loans.  .20
                                2.2.6.   Mandatory Borrowings.  .................................................20

                  Section 2.3.  Use of Proceeds.  ...............................................................20

                  Section 2.4.  Interest; Interest Periods; Conversion/Continuation.  ...........................21
                                ---------------------------------------------------
                                2.4.1.   Interest Rate and Payment.  ............................................21
                                2.4.2.   Interest Periods and Minimum Amounts.  .................................21
                                2.4.3.   Conversion or Continuation.  ...........................................21
                                2.4.4.   Computations.  .........................................................22
                                2.4.5.   Maximum Lawful Rate of Interest.  ......................................22

                  Section 2.5.  Notes, Etc.  ....................................................................23
                                2.5.1.   Loans Evidenced by Notes.  .............................................23
                                2.5.2.   Notation of Amounts and Maturities, Etc.  ..............................23
                                2.5.3.   Loan Account.  .........................................................23

                  Section 2.6.  Fees.  ..........................................................................23
                                2.6.1.   Commitment Fee.  .......................................................23
                                2.6.2.   Other Fees.  ...........................................................23
                                2.6.3.   Fees Non-Refundable.  ..................................................24



<PAGE>



                  Section 2.7.  Termination and Reduction of Revolving Commitments.  ............................24
                                2.7.1.   ........................................................................24
                                2.7.2.   ........................................................................24

                  Section 2.8.  Repayments and Prepayments.  ....................................................24
                                --------------------------
                                2.8.1.   Repayment.  ............................................................24
                                2.8.2.   Mandatory Prepayment.  .................................................24
                                2.8.3.   Optional Prepayments  ..................................................25
                                2.8.4.   Payments Set Aside.  ...................................................25

                  Section 2.9.  Manner of Payment.  .............................................................25
                                2.9.1.   ........................................................................25
                                2.9.2.   ........................................................................26

                  Section 2.10. Pro Rata Treatment.  ............................................................26
                                2.10.1.  ........................................................................26
                                2.10.2.  ........................................................................26
                                2.10.3.  ........................................................................26
                                2.10.4.  ........................................................................26

                  Section 2.11. Mandatory Suspension and Conversion of LIBOR Rate Loans.  .......................26
                                2.11.1.  ........................................................................27
                                2.11.2.  ........................................................................27

                  Section 2.12. Regulatory Changes.  ............................................................27
                                2.12.1.  Increased Costs.  ......................................................27
                                2.12.2.  Capital Costs.  ........................................................27

                  Section 2.13. Taxes.  .........................................................................28
                                2.13.1.  ........................................................................28
                                2.13.2.  ........................................................................28
                                2.13.3.  ........................................................................28

                  Section 2.14. Compensation for Funding Losses.  ...............................................29

                  Section 2.15. Certificates Regarding Yield Protection, Etc.....................................29
                                2.15.1.  ........................................................................29
                                2.15.2.  ........................................................................29

                  Section 2.16. Applicable Lending Office; Discretion of Lenders as to Manner of Funding.  ......30
                                ------------------------------------------------------------------------


ARTICLE 3.        CONDITIONS TO LOANS............................................................................30

                  Section 3.1.  Closing Conditions.  ............................................................30
                                ------------------
                                3.1.1.   Closing Date.  .........................................................30
                                3.1.2.   Certain Documents.  ....................................................30
                                3.1.3.   Fees and Expenses Paid.  ...............................................30
                                3.1.4.   Satisfaction of Certain Conditions.  ...................................30
                                3.1.5.   Absence of Litigation Events.  .........................................30
                                3.1.6.   General.  ..............................................................30
                                3.1.7.   No Material Adverse Change.  ...........................................31



<PAGE>



                  Section 3.2.  Conditions Precedent to Revolving Loans and Swingline Loans.  ...................31
                                -----------------------------------------------------------
                                3.2.1.   Occurrence of Closing Date.  ...........................................31
                                3.2.2.   Notice of Borrowing.  ..................................................31
                                3.2.3.   Representations and Warranties.  .......................................31
                                3.2.4.   No Default.  ...........................................................31
                                3.2.5.   No Material Adverse Change.  ...........................................31
                                3.2.6.   Satisfaction of Conditions.  ...........................................31
                                3.2.7.   No Violation of Applicable Law.  .......................................31


ARTICLE 4.        REPRESENTATIONS AND WARRANTIES.................................................................32

                  Section 4.1.  Organization, Powers and Good Standing.  ........................................32

                  Section 4.2.  Authorization, Binding Effect, No Conflict, Etc.  ...............................32
                                4.2.1.   Authorization, Binding Effect, Etc......................................32
                                4.2.2.   No Conflict.............................................................32
                                4.2.3.   Governmental Approvals.  ...............................................32

                  Section 4.3.  Subsidiaries; Investments .  ....................................................33
                                4.3.1.   Subsidiaries.  .........................................................33
                                4.3.2.   Borrower Capital Stock.  ...............................................33

                  Section 4.4.  Financial Information............................................................33
                                4.4.1.   ........................................................................33
                                4.4.2.   ........................................................................33
                                4.4.3.   ........................................................................34

                  Section 4.5.  No Material Adverse Changes; Solvency.  .........................................34

                  Section 4.6.  Litigation.  ....................................................................34

                  Section 4.7.  Agreements; Applicable Law.  ....................................................34

                  Section 4.8.  Governmental Regulation.  .......................................................34

                  Section 4.9.  Margin Regulations.  ............................................................34

                  Section 4.10. Employee Benefit Plans.  ........................................................35
                                4.10.1.  ........................................................................35
                                4.10.2.  ........................................................................35

                  Section 4.11. Title to Property.  .............................................................35

                  Section 4.12. Intellectual Property, Etc.  ....................................................35

                  Section 4.13. Environmental Condition.  .......................................................36
                                4.13.1.  ........................................................................36

                  Section 4.14. Absence of Certain Restrictions.  ...............................................36

                  Section 4.15. Labor Matters.  .................................................................36

                  Section 4.16. Disclosure.  ....................................................................36


ARTICLE 5.        AFFIRMATIVE COVENANTS OF THE BORROWERS.........................................................37

                  Section 5.1.  Financial Statements and Other Reports.  ........................................37
                                --------------------------------------
                                5.1.1.   ........................................................................37
                                5.1.2.   ........................................................................37
                                5.1.3.   ........................................................................37
                                5.1.4.   ........................................................................38
                                5.1.5.   ........................................................................38
                                5.1.6.   ........................................................................38
                                5.1.7.   ........................................................................38
                                5.1.8.   ........................................................................38
                                5.1.9.   ........................................................................38
                                5.1.10.  ........................................................................38
                                5.1.11.  ........................................................................38
                                5.1.12.  ........................................................................39
                                5.1.13.  ........................................................................39

                  Section 5.2.  Records and Inspection.  ........................................................39

                  Section 5.3.  Audits of the Collateral.  ......................................................39

                  Section 5.4.  Corporate Existence, Etc.  ......................................................39

                  Section 5.5.  Payment of Taxes.  ..............................................................39

                  Section 5.6.  Maintenance of Properties.  .....................................................39

                  Section 5.7.  Maintenance of Insurance.  ......................................................40
                                5.7.1.   ........................................................................40
                                5.7.2.   ........................................................................40
                                5.7.3.   ........................................................................40

                  Section 5.8.  Conduct of Business.  ...........................................................41

                  Section 5.9.  Future Information.  ............................................................41

                  Section 5.10. New Borrowers and Additional Collateral.  .......................................41
                                5.10.1.  ........................................................................41

                  Section 5.11. Subordination of Intercompany Debt.  ............................................41

                  Section 5.12. Environmental Compliance.  ......................................................42

                  Section 5.13. New Consolidated Subsidiaries To Become Borrowers.  .............................42


ARTICLE 6.        NEGATIVE COVENANTS OF THE BORROWERS............................................................42

                  Section 6.1.  Liens.  .........................................................................42
                                -----
                                6.1.1.   ........................................................................42
                                6.1.2.   ........................................................................42
                                6.1.3.   ........................................................................42
                                6.1.4.   ........................................................................43
                                6.1.5.   ........................................................................43
                                6.1.6.   ........................................................................43
                                6.1.7.   ........................................................................43

                  Section 6.2.  Debt.  ..........................................................................43
                                ----
                                6.2.1.   ........................................................................43
                                6.2.2.   ........................................................................43
                                6.2.3.   ........................................................................43
                                6.2.4.   ........................................................................43
                                6.2.5.   ........................................................................43
                                6.2.6.   ........................................................................44
                                6.2.7.   ........................................................................44
                                6.2.8.   ........................................................................44

                  Section 6.3.  Restricted Payments.  ...........................................................44

                  Section 6.4.  Investments.  ...................................................................44
                                -----------
                                6.4.1.   ........................................................................44
                                6.4.2.   ........................................................................44
                                6.4.3.   ........................................................................44
                                6.4.4.   ........................................................................44
                                6.4.5.   ........................................................................44

                  Section 6.5.  Financial Covenants..............................................................45
                                -------------------
                                6.5.1.   Leverage Ratio.  .......................................................45
                                6.5.2.   Quick Ratio.  ..........................................................45
                                6.5.3.   Debt Service Coverage Ratio.  ..........................................45
                                6.5.4.   Operating Income and Net Income.  ......................................45

                  Section 6.6.  Restriction on Fundamental Changes.  ............................................45

                  Section 6.7.  Asset Dispositions; Sales of Receivables.  ......................................45
                                6.7.1.   ........................................................................45
                                6.7.2.   ........................................................................46
                                6.7.3.   ........................................................................46

                  Section 6.8.  Transactions with Affiliates.  ..................................................46

                  Section 6.9.  Prepayment of Debt.  ............................................................46
                                6.9.1.   ........................................................................46
                                6.9.2.   ........................................................................47
                                6.9.3.   ........................................................................47

                  Section 6.10. Employee Benefit Plans.  ........................................................47

                  Section 6.11. Amendments of Charter Documents.  ...............................................47

                  Section 6.12. Restrictive Agreements.  ........................................................47

                  Section 6.13. Negative Pledges, Etc.  .........................................................47
                                6.13.1.  ........................................................................47
                                6.13.2.  ........................................................................47




<PAGE>




ARTICLE 7.        EVENTS OF DEFAULT..............................................................................48

                  Section 7.1.  Events of Default.  .............................................................48
                                -----------------
                                7.1.1.   Failure to Make Payments.  .............................................48
                                7.1.2.   Default in Other Debt.  ................................................48
                                7.1.3.   Breach of Certain Covenants.  ..........................................48
                                7.1.4.   Certain Defaults Under Article 6.  .....................................48
                                7.1.5.   Other Defaults Under Loan Documents.  ..................................48
                                7.1.6.   Breach of Warranty.  ...................................................48
                                7.1.7.   Involuntary Bankruptcy; Appointment of Receiver, Etc.  .................49
                                7.1.8.   Voluntary Bankruptcy; Appointment of Receiver, Etc.  ...................49
                                7.1.9.   Change of Control.  ....................................................49
                                7.1.10.  Termination of Loan Documents, Etc.  ...................................49
                                7.1.11.  Material Adverse Change.  ..............................................49
                                7.1.12.  Judgments and Attachments.  ............................................49

                  Section 7.2.  Remedies.  ......................................................................50
                                7.2.1.   ........................................................................50
                                7.2.2.   ........................................................................50


ARTICLE 8.        THE AGENT AND THE BANKS........................................................................50

                  Section 8.1.  Authorization and Action.  ......................................................50
                                ------------------------
                                8.1.1.   ........................................................................50
                                8.1.2.   ........................................................................50
                                8.1.3.   ........................................................................51
                                8.1.4.   ........................................................................51

                  Section 8.2.  Exculpation; Agent's Reliance; Etc.  ............................................51

                  Section 8.3.  Agent and Affiliates.  ..........................................................52

                  Section 8.4.  Lender Credit Decision.  ........................................................52

                  Section 8.5.  Indemnification.  ...............................................................52

                  Section 8.6.  Successor Agent.  ...............................................................53

                  Section 8.7.  Excess Payments.  ...............................................................53

                  Section 8.8.  Lender Parties.  ................................................................53

                  Section 8.9.  Collateral Matters.  ............................................................54
                                ------------------
                                8.9.1.   ........................................................................54
                                8.9.2.   ........................................................................54
                                8.9.3.   ........................................................................54
                                8.9.4.   ........................................................................54
                                8.9.5.   ........................................................................54

                  Section 8.10. Payments; Availability of Funds; Certain Notices.................................55
                                8.10.1.  ........................................................................55
                                8.10.2.  ........................................................................55
                                8.10.3.  ........................................................................55



<PAGE>



                  Section 8.11. Obligations of Lender Parties Several; Enforcement by the Agent.  ...............55
                                8.11.1.  ........................................................................55
                                8.11.2.  ........................................................................56


ARTICLE 9.        MISCELLANEOUS..................................................................................56

                  Section 9.1.  Expenses.  ......................................................................56
                                9.1.1.   ........................................................................56
                                9.1.2.   ........................................................................56

                  Section 9.2.  Indemnity.  .....................................................................56
                                9.2.1.   ........................................................................56
                                9.2.2.   ........................................................................57
                                9.2.3.   ........................................................................57

                  Section 9.3.  Waivers; Amendments in Writing.  ................................................57
                                9.3.1.   ........................................................................57

                  Section 9.4.  Cumulative Remedies; Failure or Delay.  .........................................58

                  Section 9.5.  Notices, Etc.  ..................................................................58

                  Section 9.6.  Successors and Assigns.  ........................................................59
                                ----------------------
                                9.6.1.   ........................................................................59
                                9.6.2.   ........................................................................59
                                9.6.3.   ........................................................................59
                                9.6.4.   ........................................................................59
                                9.6.5.   ........................................................................60
                                9.6.6.   ........................................................................60

                  Section 9.7.  Confidentiality.  ...............................................................60

                  Section 9.8.  Governing Law.  .................................................................60

                  Section 9.9.  Choice of Forum.  ...............................................................61
                                9.9.1.   ........................................................................61
                                9.9.2.   ........................................................................61
                                9.9.3.   ........................................................................61

                  Section 9.10. Set Off.  .......................................................................61

                  Section 9.11. Changes in Accounting Principles.  ..............................................61

                  Section 9.12. Headings.  ......................................................................62

                  Section 9.13. Severability.  ..................................................................62

                  Section 9.14. Survival of Agreements, Representations and Warranties.  ........................62

                  Section 9.15. Execution in Counterparts.  .....................................................62

                  Section 9.16. Complete Agreement.  ............................................................62

                  Section 9.17. Limitation of Liability.  .......................................................62

                  Section 9.18. Waiver of Trial By Jury.  .......................................................64

</TABLE>


<PAGE>


<TABLE>


<CAPTION>

EXHIBITS

<S>                                   <C>                                                    
Exhibit A-1                           Form of Revolving Loan Note
Exhibit A-2                           Form of Swingline Note
Exhibit C-1                           Form of Security Agreement
Exhibit C-2                           Form of Pledge Agreement
Exhibit E-1                           Form of Notice of Borrowing
Exhibit E-2                           Form of Notice of Swingline Borrowing
Exhibit E-3                           Form of Notice of Conversion/Continuation
Exhibit E-7                           Form of Notice of Responsible Officers
Exhibit F-1                           Form of Secretary's Certificate
Exhibit F-3                           Form of Officers' Closing Certificate
Exhibit F-6                           Form of Compliance Certificate
Exhibit G-1                           Form of Borrower's Counsel Opinion
Exhibit H                             Form of Assignment and Acceptance

SCHEDULES

Schedule R-1                          Consolidated Subsidiaries of Borrower
Schedule 1.1A                         Revolving Commitments
Schedule 1.1B                         Lender Information
Schedule 1.1C                         Existing Debt
Schedule 1.1D                         Existing Liens
Schedule 1.1E                         Applicable Margin & Fee Rate
Schedule 3.1.2.                       Closing Documents
Schedule 4.1.                         Organization of Borrower and Subsidiaries
Schedule 4.3.                         Subsidiaries and Other Investments
Schedule 4.6.                         Material Litigation
Schedule 4.13.                        Environmental Condition
Schedule 4.14.                        Certain Restrictions
Schedule 4.15.                        Labor Matters
Schedule 6.8.                         Existing Contractual Obligations
Schedule 9.5.                         Borrower Information

</TABLE>


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