CHARLOTTE RUSSE, INC. SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT DATED as of December 23, 1998

▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.

SECOND AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT

DATED as of December 23, 1998

among

▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC., as Borrower,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ HOLDING, INC., as Guarantor
BANKBOSTON, N.A., as Agent,

and

THE BANKS
listed on SCHEDULE 1 hereto

TABLE OF CONTENTS

1. DEFINITIONS AND RULES OF INTERPRETATION.. . . . . . . . . . . . . . . . . 1
1.1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. RULES OF INTERPRETATION. . . . . . . . . . . . . . . . . . . . .17
2. THE REVOLVING CREDIT FACILITY.. . . . . . . . . . . . . . . . . . . . . .18
2.1. COMMITMENT TO LEND.. . . . . . . . . . . . . . . . . . . . . . .18
2.2. COMMITMENT FEE.. . . . . . . . . . . . . . . . . . . . . . . . .18
2.3. REDUCTION OF TOTAL COMMITMENT. . . . . . . . . . . . . . . . . .19
2.3.1. MANDATORY REDUCTION OF TOTAL COMMITMENT. . . . . . . .19
2.3.2. OPTION OF REDUCTION OF TOTAL COMMITMENT. . . . . . . .19
2.4. THE NOTES. . . . . . . . . . . . . . . . . . . . . . . . . . . .20
2.5. INTEREST ON LOANS. . . . . . . . . . . . . . . . . . . . . . . .20
2.6. REQUESTS FOR LOANS.. . . . . . . . . . . . . . . . . . . . . . .20
2.6.1. GENERAL. . . . . . . . . . . . . . . . . . . . . . . .20
2.6.2. LOANS TO REPAY UNPAID REIMBURSEMENT OBLIGATIONS. . . .21
2.7. CONVERSION OPTIONS.. . . . . . . . . . . . . . . . . . . . . . .21
2.7.1. CONVERSION TO DIFFERENT TYPE OF LOAN.. . . . . . . . .21
2.7.2. CONTINUATION OF TYPE OF LOAN.. . . . . . . . . . . . .22
2.7.3. EURODOLLAR RATE LOANS. . . . . . . . . . . . . . . . .22
2.8. FUNDS FOR LOANS. . . . . . . . . . . . . . . . . . . . . . . . .22
2.8.1. FUNDING PROCEDURES.. . . . . . . . . . . . . . . . . .22
2.8.2. ADVANCES BY AGENT. . . . . . . . . . . . . . . . . . .22
3. REPAYMENT OF THE LOANS. . . . . . . . . . . . . . . . . . . . . . . . . .23
3.1. MATURITY.. . . . . . . . . . . . . . . . . . . . . . . . . . . .23
3.2. MANDATORY REPAYMENTS OF LOANS. . . . . . . . . . . . . . . . . .23
3.3. OPTIONAL REPAYMENTS OF LOANS.. . . . . . . . . . . . . . . . . .24
4. LETTERS OF CREDIT.. . . . . . . . . . . . . . . . . . . . . . . . . . . .24
4.1. LETTER OF CREDIT COMMITMENTS.. . . . . . . . . . . . . . . . . .24
4.1.1. COMMITMENT TO ISSUE LETTERS OF CREDIT. . . . . . . . .24
4.1.2. LETTER OF CREDIT APPLICATIONS. . . . . . . . . . . . .24
4.1.3. TERMS OF LETTERS OF CREDIT.. . . . . . . . . . . . . .25
4.1.4. REIMBURSEMENT OBLIGATIONS OF BANKS.. . . . . . . . . .25
4.1.5. PARTICIPATIONS OF BANKS. . . . . . . . . . . . . . . .25
4.2. REIMBURSEMENT OBLIGATION OF THE BORROWER.. . . . . . . . . . . .25
4.3. LETTER OF CREDIT PAYMENTS. . . . . . . . . . . . . . . . . . . .26
4.4. OBLIGATIONS ABSOLUTE.. . . . . . . . . . . . . . . . . . . . . .27
4.5. RELIANCE BY ISSUER.. . . . . . . . . . . . . . . . . . . . . . .27
4.6. LETTER OF CREDIT FEE.. . . . . . . . . . . . . . . . . . . . . .27
5. CERTAIN GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . .28
5.1. FEES.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
5.1.1. AGENT'S FEE. . . . . . . . . . . . . . . . . . . . . .28
5.1.2. CLOSING FEE. . . . . . . . . . . . . . . . . . . . . .28

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5.2. FUNDS FOR PAYMENTS.. . . . . . . . . . . . . . . . . . . . . . .28
5.2.1. PAYMENTS TO AGENT. . . . . . . . . . . . . . . . . . .28
5.2.2. NO OFFSET, ETC.. . . . . . . . . . . . . . . . . . . .29
5.3. COMPUTATIONS.. . . . . . . . . . . . . . . . . . . . . . . . . .29
5.4. INABILITY TO DETERMINE EURODOLLAR RATE.. . . . . . . . . . . . .29
5.5. ILLEGALITY.. . . . . . . . . . . . . . . . . . . . . . . . . . .30
5.6. CHANGE IN CIRCUMSTANCES. . . . . . . . . . . . . . . . . . . . .30
5.7. CAPITAL ADEQUACY.. . . . . . . . . . . . . . . . . . . . . . . .31
5.8. CERTIFICATE. . . . . . . . . . . . . . . . . . . . . . . . . . .31
5.9. INDEMNITY. . . . . . . . . . . . . . . . . . . . . . . . . . . .31
5.10. INTEREST AFTER EVENT OF DEFAULT.. . . . . . . . . . . . . . . .32
6. COLLATERAL SECURITY AND GUARANTIES. . . . . . . . . . . . . . . . . . . .32
7. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . . . .32
7.1. INCORPORATION; GOOD STANDING; AUTHORIZATION. . . . . . . . . . .32
7.2. ENFORCEABILITY.. . . . . . . . . . . . . . . . . . . . . . . . .33
7.3. TITLE TO PROPERTIES; FRANCHISES, INTELLECTUAL PROPERTY;
CONSENT; NO CONFLICT; INSURANCE.. . . . . . . . . . . . . . . . . . . .33
7.4. FISCAL YEAR; FINANCIAL STATEMENTS AND FORECAST.. . . . . . . . .33
7.5. NO MATERIAL CHANGES, ETC.. . . . . . . . . . . . . . . . . . . .33
7.6. LITIGATION.. . . . . . . . . . . . . . . . . . . . . . . . . . .33
7.7. CONSENTS; NO CONFLICT. . . . . . . . . . . . . . . . . . . . . .34
7.8. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC.. . . . . . . . . .34
7.9. PERFECTION OF SECURITY INTEREST; ABSENCE OF FINANCING
STATEMENTS, ETC.. . . . . . . . . . . . . . . . . . . . . . . . . . . .34
7.10. SUBSIDIARIES, ETC.. . . . . . . . . . . . . . . . . . . . . . .34
7.11. BANK ACCOUNTS.. . . . . . . . . . . . . . . . . . . . . . . . .34
7.12. SENIOR INDEBTEDNESS.. . . . . . . . . . . . . . . . . . . . . .34
7.13. STATUS OF GUARANTOR.. . . . . . . . . . . . . . . . . . . . . .35
7.14. NO DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . .35
7.15. CAPITAL STRUCTURE.. . . . . . . . . . . . . . . . . . . . . . .35
7.16. USE OF PROCEEDS.. . . . . . . . . . . . . . . . . . . . . . . .35
7.16.1. GENERAL.. . . . . . . . . . . . . . . . . . . . . . .35
7.16.2. REGULATIONS U AND X.. . . . . . . . . . . . . . . . .35
8. AFFIRMATIVE COVENANTS OF THE BORROWER AND THE GUARANTOR.. . . . . . . . .35
8.1. PUNCTUAL PAYMENT.. . . . . . . . . . . . . . . . . . . . . . . .35
8.2. FINANCIAL STATEMENTS; COMPLIANCE CERTIFICATE; BUDGET.. . . . . .36
8.3. BOOKS AND RECORDS; FISCAL YEAR; INSPECTIONS; COMMERCIAL
FINANCE EXAMINATIONS. . . . . . . . . . . . . . . . . . . . . . . . . .36
8.4. MAINTENANCE OF EXISTENCE, RIGHTS, FRANCHISES, ETC.;
MAINTENANCE OF PROPERTIES, ETC .. . . . . . . . . . . . . . . . . . . .36
8.5. INSURANCE; CHIEF EXECUTIVE OFFICE; COMPLIANCE WITH LAW;
PAYMENT OF TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . .37
8.6. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . .37

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8.7. USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . .38
8.8. AGENCY ACCOUNT AGREEMENTS. . . . . . . . . . . . . . . . . . . .38
8.9. FURTHER ASSURANCES.. . . . . . . . . . . . . . . . . . . . . . .38
8.10. POST-CLOSING MATTERS.. . . . . . . . . . . . . . . . . . . . . .39
8.11. AGREEMENTS REGARDING LOAN TO ▇▇. ▇▇▇▇▇▇▇▇. . . . . . . . . . . .39
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER AND THE GUARANTOR. . . . . . .39
9.1. RESTRICTIONS ON INDEBTEDNESS.. . . . . . . . . . . . . . . . . .39
9.2. RESTRICTIONS ON LIENS. . . . . . . . . . . . . . . . . . . . . .41
9.3. RESTRICTIONS ON SUBSIDIARIES AND INVESTMENTS.. . . . . . . . . .42
9.4. DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . .43
9.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS. . . . . . . . .43
9.5.1. MERGERS AND ACQUISITIONS.. . . . . . . . . . . . . . .43
9.5.2. DISPOSITION OF ASSETS. . . . . . . . . . . . . . . . .44
9.6. SALE AND LEASEBACK.. . . . . . . . . . . . . . . . . . . . . . .44
9.7. GUARANTIES.. . . . . . . . . . . . . . . . . . . . . . . . . . .45
9.8. SUBORDINATED DEBT. . . . . . . . . . . . . . . . . . . . . . . .45
9.9. BUSINESS ACTIVITIES. . . . . . . . . . . . . . . . . . . . . . .45
9.10. FISCAL YEAR.. . . . . . . . . . . . . . . . . . . . . . . . . .45
9.11. TRANSACTIONS WITH AFFILIATES. . . . . . . . . . . . . . . . . .45
9.12. BANK ACCOUNTS.. . . . . . . . . . . . . . . . . . . . . . . . .46
9.13. RESTRUCTURING AGREEMENTS. . . . . . . . . . . . . . . . . . . .46
10. FINANCIAL COVENANTS OF THE BORROWER. . . . . . . . . . . . . . . . . . .46
10.1. CAPITAL EXPENDITURES. . . . . . . . . . . . . . . . . . . . . .46
10.2. FUNDED DEBT TO EBITDA.. . . . . . . . . . . . . . . . . . . . .46
10.3. FIXED CHARGE RATIO. . . . . . . . . . . . . . . . . . . . . . .47
10.4. INTEREST COVERAGE RATIO.. . . . . . . . . . . . . . . . . . . .47
10.5. INVENTORY TURN RATIO. . . . . . . . . . . . . . . . . . . . . .47
11. CLOSING CONDITIONS.. . . . . . . . . . . . . . . . . . . . . . . . . . .48
11.1. LOAN DOCUMENTS. . . . . . . . . . . . . . . . . . . . . . . . .48
11.2. CERTIFIED COPIES OF CHARTER DOCUMENTS.. . . . . . . . . . . . .48
11.3. CORPORATE ACTION. . . . . . . . . . . . . . . . . . . . . . . .48
11.4. INCUMBENCY CERTIFICATE. . . . . . . . . . . . . . . . . . . . .48
11.5. VALIDITY OF LIENS.. . . . . . . . . . . . . . . . . . . . . . .49
11.6. PERFECTION CERTIFICATES.. . . . . . . . . . . . . . . . . . . .49
11.7. CERTIFICATES OF INSURANCE.. . . . . . . . . . . . . . . . . . .49
11.8. AGENCY ACCOUNT AGREEMENTS.. . . . . . . . . . . . . . . . . . .49
11.9. SOLVENCY CERTIFICATE. . . . . . . . . . . . . . . . . . . . . .49
11.10. OPINIONS OF COUNSEL. . . . . . . . . . . . . . . . . . . . . .49
11.11. PAYMENT OF FEES. . . . . . . . . . . . . . . . . . . . . . . .50
11.12. POST-CLOSING MATTERS . . . . . . . . . . . . . . . . . . . . .50
12. CONDITIONS TO ALL BORROWINGS.. . . . . . . . . . . . . . . . . . . . . .50
12.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT.. . . . . . . . . . .50
12.2. NO LEGAL IMPEDIMENT.. . . . . . . . . . . . . . . . . . . . . .50

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13. EVENTS OF DEFAULT; ACCELERATION; ETC.. . . . . . . . . . . . . . . . . .50
13.1. EVENTS OF DEFAULT AND ACCELERATION. . . . . . . . . . . . . . .50
13.2. TERMINATION OF COMMITMENTS. . . . . . . . . . . . . . . . . . .53
13.3. REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . . .53
13.4. DISTRIBUTION OF COLLATERAL PROCEEDS.. . . . . . . . . . . . . .53
14. SETOFF. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
15. THE AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55
15.1. AUTHORIZATION.. . . . . . . . . . . . . . . . . . . . . . . . .55
15.2. EMPLOYEES AND AGENTS. . . . . . . . . . . . . . . . . . . . . .56
15.3. NO LIABILITY. . . . . . . . . . . . . . . . . . . . . . . . . .56
15.4. NO REPRESENTATIONS. . . . . . . . . . . . . . . . . . . . . . .56
15.4.1. GENERAL.. . . . . . . . . . . . . . . . . . . . . . .56
15.4.2. CLOSING DOCUMENTATION, ETC. . . . . . . . . . . . . .57
15.5. PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . .57
15.5.1. PAYMENTS TO AGENT.. . . . . . . . . . . . . . . . . .57
15.5.2. DISTRIBUTION BY AGENT.. . . . . . . . . . . . . . . .57
15.5.3. DELINQUENT BANKS. . . . . . . . . . . . . . . . . . .57
15.6. HOLDERS OF NOTES. . . . . . . . . . . . . . . . . . . . . . . .58
15.7. INDEMNITY.. . . . . . . . . . . . . . . . . . . . . . . . . . .58
15.8. AGENT AS BANK.. . . . . . . . . . . . . . . . . . . . . . . . .58
15.9. RESIGNATION.. . . . . . . . . . . . . . . . . . . . . . . . . .58
15.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT.. . . . . . . .59
15.11. DUTIES IN THE CASE OF ENFORCEMENT. . . . . . . . . . . . . . .59
16. EXPENSES AND INDEMNIFICATION.. . . . . . . . . . . . . . . . . . . . . .59
16.1. EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . .59
16.2. INDEMNIFICATION.. . . . . . . . . . . . . . . . . . . . . . . .60
16.3. SURVIVAL. . . . . . . . . . . . . . . . . . . . . . . . . . . .61
17. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION. . . . . . . . . . . . . .61
17.1. SHARING OF INFORMATION WITH SECTION 20 SUBSIDIARY.. . . . . . .61
17.2. CONFIDENTIALITY.. . . . . . . . . . . . . . . . . . . . . . . .61
17.3. PRIOR NOTIFICATION. . . . . . . . . . . . . . . . . . . . . . .62
17.4. OTHER.. . . . . . . . . . . . . . . . . . . . . . . . . . . . .62
18. SURVIVAL OF COVENANTS, ETC.. . . . . . . . . . . . . . . . . . . . . . .62
19. ASSIGNMENT AND PARTICIPATION.. . . . . . . . . . . . . . . . . . . . . .63
19.1. CONDITIONS TO ASSIGNMENT BY BANKS.. . . . . . . . . . . . . . .63
19.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS;
COVENANTS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63
19.3. REGISTER. . . . . . . . . . . . . . . . . . . . . . . . . . . .64
19.4. NEW NOTES.. . . . . . . . . . . . . . . . . . . . . . . . . . .65
19.5. PARTICIPATIONS. . . . . . . . . . . . . . . . . . . . . . . . .65
19.6. DISCLOSURE. . . . . . . . . . . . . . . . . . . . . . . . . . .65
19.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER OR
THE GUARANTOR.. . . . . . . . . . . . . . . . . . . . . . . . . . . . .66
19.8. MISCELLANEOUS ASSIGNMENT PROVISIONS.. . . . . . . . . . . . . .66

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19.9. ASSIGNMENT BY BORROWER OR GUARANTOR.. . . . . . . . . . . . . .66
20. NOTICES, ETC.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67
21. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67
22. HEADINGS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68
23. COUNTERPARTS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68
24. ENTIRE AGREEMENT, ETC. . . . . . . . . . . . . . . . . . . . . . . . . .68
25. WAIVER OF JURY TRIAL.. . . . . . . . . . . . . . . . . . . . . . . . . .68
26. CONSENTS, AMENDMENTS, WAIVERS, ETC.. . . . . . . . . . . . . . . . . . .69
27. SEVERABILITY.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69
28. TRANSITIONAL ARRANGEMENTS. . . . . . . . . . . . . . . . . . . . . . . .69
28.1. FIRST RESTATED CREDIT AGREEMENT SUPERSEDED. . . . . . . . . . .69
28.2. RETURN AND CANCELLATION OF NOTES. . . . . . . . . . . . . . . .70
28.3. FEES UNDER SUPERSEDED AGREEMENT.. . . . . . . . . . . . . . . .70

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LIST OF SCHEDULES

SCHEDULE 1 - Banks

SCHEDULE 1.1(a) - Restructuring Transactions

SCHEDULE 7.4 - Fiscal Periods

SCHEDULE 7.7 - Consents

SCHEDULE 7.11 - Bank Accounts

SCHEDULE 7.15 - Capital Structure

SCHEDULE 9.1 - Existing Indebtedness

SCHEDULE 9.2 - Existing Liens

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LIST OF EXHIBITS

EXHIBIT A - Form of Agency Account Agreement

EXHIBIT B - Form of Amended and Restated Revolving Credit Note

EXHIBIT C - Form of Loan Request

EXHIBIT D - Form of Compliance Certificate

EXHIBIT E - Form of Assignment and Acceptance

SECOND AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT

This SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT is made as of
December 23, 1998, by and among ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC. (the "Borrower"), a
California corporation having its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ HOLDING, INC., (the
"Guarantor"), a Delaware corporation, BANKBOSTON, N.A., a national banking
association, and the other lending institutions listed on SCHEDULE 1, and
BANKBOSTON, N.A., as agent for itself and such other lending institutions.

1. DEFINITIONS AND RULES OF INTERPRETATION.

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

ADMINISTRATION CONTRIBUTION AGREEMENT. The Capital
Contribution/Incorporation Agreement dated as of September 25, 1998 between the
Borrower and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Administration, as in effect on the Closing Date.

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

AGENCY ACCOUNT AGREEMENT. The several Agency Account Agreements, in
substantially the form of EXHIBIT A, entered into by any of the Transaction
Parties, the Agent and any depository institutions at which such Transaction
Party maintains depository accounts, subject to the requirements of Section 8.8.

AGENT'S FEE LETTER. The side letter dated as of the date hereof between
the Borrower and the Agent regarding the Borrower's payment of an annual Agent's
fee.

AGENT'S HEAD OFFICE. The Agent's head office located at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other location as the Agent or
its successor in such capacity may designate from time to time as its head
office.

AGENT. BankBoston, N.A. (or its successor, in such capacity), acting as
agent for the Banks.

AGENT'S SPECIAL COUNSEL. ▇▇▇▇▇▇▇ ▇▇▇▇ LLP or such other counsel as may be
approved by the Agent.

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APPLICABLE BASE RATE MARGIN. For any fiscal quarter or period thereof
within any Interest Period with respect to any Base Rate Loan, three quarters of
one percent (.75%) per annum; PROVIDED, HOWEVER, that from and after the Agent's
receipt of the financial statements required by Section 8.2 for the fiscal
quarter of the Borrower and the Guarantor ending March 27, 1999 and in the event
that the Interest Coverage Ratio as of the last day of any fiscal quarter
referred to above meets the requirements set forth in the chart below, the
Applicable Base Rate Margin shall be adjusted, on the dates and for the periods
set forth in the paragraph below, to the percentage set forth opposite the
applicable Interest Coverage Ratio in the table below:

Interest
Coverage Ratio Applicable Base Rate Margin
-------------- ---------------------------

Less than or equal to 2.00:1.00 1.00%
Greater than 2.00:1.00 and less
than or equal to 3.00:1.00 0.75%
Greater than 3.00:1.00 and less
than or equal to 3.50:1.00 0.50%
Greater than 3.50:1.00 0.25%

Changes in the Applicable Base Rate Margin resulting from changes in the
Interest Coverage Ratio shall become effective on the date on the 10th day after
which financial statements are received by the Agent pursuant to Section 8.2
(but with such receipt in no event to be later than the 45th day after the end
of each of the first three quarterly periods of each fiscal year or the 100th
day after the end of each fiscal year, as the case may be) and shall remain in
effect until the next change to be effected pursuant to this paragraph. If any
financial statements referred to above are not delivered within the time periods
specified above, then, until such financial statements are delivered, the
Applicable Base Rate Margin as at the end of the fiscal period that would have
been covered thereby shall, for the purposes of this definition, be deemed to be
1.00%. In addition, at all times while an Event of Default shall have occurred
and be continuing, the Applicable Base Rate Margin shall for the purposes of
this definition be deemed to be 1.00%. Each determination of the Interest
Coverage Ratio pursuant to this definition shall be made with respect to the
period of four consecutive fiscal quarters of the Borrower ending at the end of
the period covered by the relevant financial statements.

APPLICABLE EURODOLLAR RATE MARGIN. For any fiscal quarter or period
thereof within any Interest Period with respect to a Eurodollar Rate Loan, two
and one half percent (2.50%) per annum; PROVIDED, HOWEVER, that from and after
the Agent's receipt of the financial statements required by Section 8.2 for the
fiscal quarter of the Borrower and the Guarantor ending March 27, 1999 and in
the event that the Interest Coverage Ratio as of the last day of any fiscal
quarter referred to above meets the requirements set forth in the chart below,
the Applicable Eurodollar Rate Margin shall be adjusted, on the dates and for
the

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periods set forth in the paragraph below, to the percentage set forth opposite
the applicable Interest Coverage Ratio in the table below:

Interest
Coverage Ratio Applicable Eurodollar Rate Margin
-------------- ---------------------------------

Less than or equal to 2.00:1.00 2.75%
Greater than 2.00:1.00 and less than
or equal to 3.00:1.00 2.50%
Greater than 3.00:1.00 and less than
or equal to 3.50:1.00 2.25%
Greater than 3.50:1.00 2.00%

Changes in the Applicable Eurodollar Rate Margin resulting from changes in the
Interest Coverage Ratio shall become effective on the 10th day after the date on
which financial statements are received by the Agent pursuant to Section 8.2
(but with such receipt in no event to be later than the 45th day after the end
of each of the first three quarterly periods of each fiscal year or the 100th
day after the end of each fiscal year, as the case may be) and shall remain in
effect until the next change to be effected pursuant to this paragraph. If any
financial statements referred to above are not delivered within the time periods
specified above, then, until such financial statements are delivered, the
Applicable Eurodollar Rate Margin as at the end of the fiscal period that would
have been covered thereby shall, for the purposes of this definition, be deemed
to be 2.75%. In addition, at all times while an Event of Default shall have
occurred and be continuing, the Applicable Eurodollar Rate Margin shall for the
purposes of this definition be deemed to be 2.75%. Each determination of the
Interest Coverage Ratio pursuant to this definition shall be made with respect
to the period of four consecutive fiscal quarters of the Borrower ending at the
end of the period covered by the relevant financial statements.

ASSIGNMENT AND ACCEPTANCE. See Section 19.1.

BALANCE SHEET DATE. September 27, 1997.

BANKRUPTCY COURT ORDER. (i) The Revised Amended Order Granting Debtor's
Motion For Order Authorizing (1) Sale of Business Assets Free and Clear of
Liens, Claims and Encumbrances Outside The Ordinary Course of Business; and (2)
Assumption and Assignment of Real and Personal Property Leases In Connection
Therewith; Except With Respect to the Taubman Company Re: Store 2064 (▇▇▇▇▇▇▇
Center) and (ii) the Revised Order Granting Debtors' Motion for Order
Authorizing (1) Sale of Leasehold Interest In, and (2) Assumption and Assignment
of Real Property Lease With the Taubman Company of Store 2064 (▇▇▇▇▇▇▇ Center),
each entered by the United States Bankruptcy Court for the Central District of
California in Case No. LA 97-34276-SB on September 29, 1997.

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BANKS. BKB and the other lending institutions listed on SCHEDULE 1 hereto
and any other Person who or which becomes an assignee of any rights and
obligations of a Bank pursuant to Section 19.

BASE RATE. The higher of (i) the annual rate of interest announced from
time to time by BKB at its head office in Boston, Massachusetts, as its "base
rate" and (ii) one-half of one percent (1/2%) above the Federal Funds Effective
Rate. For the purposes of this definition, "Federal Funds Effective Rate" shall
mean for any day, the rate per annum equal to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three funds brokers of recognized
standing selected by the Agent.

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

BKB. BankBoston, N.A. (f/k/a The First National Bank of Boston), a
national banking association, in its individual capacity.

BORROWER. As defined in the preamble hereto.

BORROWER STOCK PLEDGE AGREEMENT. The Stock Pledge Agreement, dated or to
be dated on or prior to the Closing Date, between the Borrower and the Agent, in
form and substance satisfactory to the Banks and the Agent and in form
substantially the same as the Parent Stock Pledge Agreement.

BORROWER TRADEMARK AGREEMENT. The Second Amended and Restated Trademark
Collateral Security and Pledge Agreement, dated or to be dated on or prior to
the Closing Date, made by the Borrower in favor of the Agent and the several
Assignments of Trademarks delivered in connection therewith, in each case in
form and substance satisfactory to the Agent.

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

CAPITAL EXPENDITURES. Amounts paid or Indebtedness incurred by the
Guarantor or any of its Subsidiaries in connection with the purchase or lease by
the Guarantor or any of its Subsidiaries of fixed assets that would be required
to be capitalized and shown on the balance sheet of such Person in accordance
with generally accepted accounting principles (excluding amounts paid or
Indebtedness incurred in respect of Capitalized Leases); PROVIDED that Capital
Expenditures shall be calculated (i) net of any landlord allowances for the
purchase, lease or other acquisition or construction of fixed assets, (ii) in

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connection with the replacement or repair of any fixed asset, net of any cash
sale or insurance proceeds received by the Guarantor or its Subsidiaries in
respect of a sale of or casualty involving the fixed asset which is replaced or
repaired, and (iii) excluding amounts paid in connection with the Rampage
Acquisition pursuant to the Rampage Acquisition Documents.

CAPITALIZED LEASES. Leases under which the Guarantor or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with generally accepted accounting
principles.

▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ADMINISTRATION. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Administration, Inc., a
California corporation and wholly owned Subsidiary of the Borrower.

▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ MERCHANDISING. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Merchandising, Inc., a
California corporation and wholly owned Subsidiary of the Borrower.

▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ MERCHANDISING TRADEMARK AGREEMENT. The Trademark
Collateral Security and Pledge Agreement, dated or to be dated on or prior to
the Closing Date, made by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Merchandising in favor of the Agent,
and the several Assignments of Trademarks delivered in connection therewith, in
each case in form and substance satisfactory to the Agent.

CHARTER. The Certificate of Incorporation of the Guarantor, as in effect
on the Closing Date.

CHARTER DOCUMENTS. In respect of any entity, the certificate or articles
of incorporation or organization and the by-laws of such entity, or other
constitutive documents of such entity.

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

CODE. The Internal Revenue Code of 1986.

COLLATERAL. All of the property, rights and interests of the Borrower, the
Guarantor and their Subsidiaries that are or are intended to be subject to the
security interests and mortgages created by the Security Documents.

COMMITMENT. With respect to each Bank, the amount set forth on SCHEDULE 1
hereto as the amount of such Bank's commitment to make Loans to, and to
participate in the issuance, extension and renewal of Letters of Credit for the
account of, the Borrower, as the same may be reduced from time to time pursuant
to Section 2.3 or otherwise; or if such commitment is terminated pursuant to the
provisions hereof, zero.

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

CONSENT. In respect of any Person, any permit, license or exemption from,
approval, consent of, registration or filing with any local, state or federal
governmental or regulatory agency or authority, required under applicable law.

CONSOLIDATED OR CONSOLIDATED. With reference to any term defined herein,
shall mean that term as applied to the accounts of the Guarantor and its
Subsidiaries, consolidated in accordance with generally accepted accounting
principles.

CONSOLIDATED EBITDA. For any fiscal period, an amount equal to
Consolidated Net Income of the Guarantor and its Subsidiaries for such period,
PLUS, to the extent deducted in the calculation of Consolidated Net Income for
such period and without duplication, the sum of (a) depreciation and
amortization for such period, PLUS (b) income tax expense for such period, PLUS
(c) Consolidated Total Interest Expense paid or accrued during such period, PLUS
(d) fees and expenses paid by the Guarantor and its Subsidiaries during such
period in connection, and associated, with the closing of (i) the Loans (as
defined in the First Restated Credit Agreement) and the Rampage Acquisition, not
to exceed in aggregate amount $500,000 for all fiscal periods, and (ii) the
Loans, not to exceed in aggregate amount $100,000 for all fiscal periods, all as
determined in accordance with GAAP.

CONSOLIDATED FUNDED DEBT. At any time of determination, the sum of (i) the
amount of the Loans Outstanding (after giving account to any amounts requested)
PLUS (ii) the Maximum Drawing Amount and all Unpaid Reimbursement Obligations
PLUS (iii) the outstanding amount of any other Indebtedness For Borrowed Money.

CONSOLIDATED NET INCOME. For any period, the consolidated net income (or
net deficit) of the Guarantor and its Subsidiaries, after deduction of all
expenses, taxes and other proper charges, determined in accordance with GAAP,
after eliminating therefrom all extraordinary non-recurring non-cash items of
income and expense.

CONSOLIDATED TOTAL DEBT SERVICE. For any period, the sum of (a)
Consolidated Total Interest Expense for such period PLUS (b) the aggregate
liability of the Guarantor and its Subsidiaries for principal payments in
respect of Indebtedness relating to the borrowing of money or the obtaining of
credit (other than Indebtedness consisting of current liabilities permitted
under Section 9.1(d) hereof, other Indebtedness consisting of non-interest
bearing ordinary course obligations, principal payments on the Loans resulting
from prepayments required by Section 2.3.1 or Section 3.2, and Indebtedness
consisting of the Term Loan (as defined in the First Restated Credit Agreement)
repaid with the proceeds of the Loans on the Closing Date) due and payable
during such period.

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CONSOLIDATED TOTAL INTEREST EXPENSE. For any period, the aggregate
liability of the Guarantor and its Subsidiaries for interest on Indebtedness
relating to the borrowing of money or the obtaining of credit (other than
Indebtedness permitted under Section 9.1(d) hereof and other Indebtedness
consisting of non-interest bearing ordinary course obligations), whether
expensed or capitalized, including payments consisting of interest in respect of
Capitalized Leases and including commitment fees, agency fees, facility fees,
balance deficiency fees and similar fees and expenses in connection with the
borrowing of money or obtaining of credit.

CONSOLIDATED TOTAL LIABILITIES. All liabilities of the Guarantor and its
Subsidiaries that in accordance with GAAP are properly classified as
liabilities.

CONVERSION REQUEST. A notice given by the Borrower to the Agent of the
Borrower's election to convert or continue a Loan in accordance with
Section 2.7.

CREDIT AGREEMENT. This Second Amended and Restated Revolving Credit
Agreement, including the Schedules and Exhibits hereto.

DEFAULT. An event or act which with the giving of notice and/or the lapse
of time would become an Event of Default.

DELINQUENT BANK. See Section 15.5.3.

DOCUMENTARY LETTER OF CREDIT. Any Letter of Credit that is issued for the
benefit of a supplier of inventory to the Borrower to effect payment for such
inventory, the conditions of drawing under which include the presentation to the
Agent of bills of lading, invoices or similar documents.

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

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

DRAWDOWN DATE. The date on which any Loan is made or is to be made, and
the date on which any Loan is converted or continued in accordance with Section
2.7.

ELIGIBLE ASSIGNEE. Any of (i) a commercial bank or finance company
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000; (ii)
a savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia, and having a
net worth of at least $100,000,000, calculated in accordance with generally
accepted accounting principles; (iii) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation

-8-

and Development (the "OECD"), or a political subdivision of any such country,
and having total assets in excess of $1,000,000,000, PROVIDED that such bank is
acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; (iv) the
central bank of any country which is a member of the OECD; and (v) if, but only
if, any Event of Default has occurred and is continuing, any other bank,
insurance company, commercial finance company or other financial institution or
other Person approved by the Agent, such approval not to be unreasonably
withheld.

ENVIRONMENTAL LAWS. All laws pertaining to environmental matters,
including without limitation, the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response Compensation and Liability Act of 1980, the
Superfund Amendments and Reauthorization Act of 1986, the Federal Clean Water
Act, the Federal Clean Air Act, the Toxic Substances Control Act, in each case
as amended, and all rules, regulations, judgments, decrees, orders and licenses
arising under all such laws.

EQUITY DOCUMENTS. The Warrant, the Securityholders Agreement and the
Charter.

ERISA. The Employee Retirement Income Security Act of 1974, as amended,
and all rules, regulations, judgments, decrees and orders arising thereunder.

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

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

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

EURODOLLAR RATE. For any Interest Period with respect to a Eurodollar Rate
Loan, the rate of interest equal to (i) the rate at which BKB's Eurodollar
Lending Office is offered Dollar deposits two Eurodollar Business Days prior to
the beginning of such Interest Period in the interbank eurodollar market where
the eurodollar and foreign currency and exchange operations of such Eurodollar

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Lending Office are customarily conducted, for delivery on the first day of such
Interest Period for the number of days comprised therein and in an amount
comparable to the amount of the Eurodollar Rate Loan of BKB to which such
Interest Period applies, divided by (ii) a number equal to 1.00 minus the
Eurocurrency Reserve Rate, if applicable.

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

EVENT OF DEFAULT. Any of the events listed in Section 13.1 hereof.

FINANCIAL STATEMENTS. In respect of any period, the balance sheet of any
Person as at the end of such period, and the related statement of income and
statement of cash flow for such period, each setting forth in comparative form
the figures for the previous comparable fiscal period, all in reasonable detail
as prepared in accordance with generally accepted accounting principles except,
with respect to monthly and quarterly financial statements, the absence of
footnotes.

FIRST RESTATED CREDIT AGREEMENT. The Amended and Restated Revolving Credit
and Term Loan Agreement dated as of December 5, 1997 among the Borrower, the
Guarantor, the Agent and the Banks.

FUNDS. Collectively, The SK Equity Fund, L.P. and the SK Investment
Fund, L.P.

GENERALLY ACCEPTED ACCOUNTING PRINCIPLES or GAAP. Generally accepted
accounting principles consistent with those adopted by the Financial Accounting
Standards Board and its predecessor, (i) generally, as in effect from time to
time, and (ii) for purposes of determining compliance by the Guarantor and its
Subsidiaries with its financial covenants set forth herein, as in effect for the
fiscal year therein reported in the most recent Financial Statements submitted
to the Agent and the Banks prior to execution of this Credit Agreement.

GUARANTIES. The Parent Guaranty and each Subsidiary Guaranty.

GUARANTOR. See the preamble.

INDEBTEDNESS. All obligations, contingent and otherwise, that in
accordance with generally accepted accounting principles should be classified
upon the obligor's balance sheet as liabilities, or to which reference should be
made by footnotes thereto, including in any event and whether or not so
classified: (i) all debt and similar monetary obligations, whether direct or
indirect; (ii) all liabilities secured by any mortgage, pledge, security
interest, lien, charge, or other encumbrance existing on property owned or
acquired subject thereto, whether or not the liability secured thereby shall
have been assumed; and (iii) all guarantees, endorsements and other contingent
obligations whether direct or indirect in respect of indebtedness of others,

-10-

including any obligation to supply funds to or in any manner to invest in,
directly or indirectly, the debtor, to purchase indebtedness, or to assure the
owner of indebtedness against loss, through an agreement to purchase goods,
supplies, or services for the purpose of enabling the debtor to make payment of
the indebtedness held by such owner or otherwise, and the obligations to
reimburse the issuer in respect of any letters of credit; PROVIDED that solely
for purposes of the definitions of Capital Expenditures, Consolidated Funded
Debt, Consolidated Total Debt Service and Consolidated Total Interest Expense,
letters of credit issued to secure trade obligations for goods or services in
the ordinary course of business, consistent with past practices, workmen's
compensation or similar liabilities and other obligations (not otherwise
constituting Indebtedness) arising in the ordinary course of business shall be
considered Indebtedness only to the extent that the aggregate face amount of
such letters of credit exceeds $500,000.

INDEBTEDNESS FOR BORROWED MONEY. (a) All obligations for borrowed money,
whether secured or unsecured, absolute or contingent, including, without
limitation, unmatured reimbursement obligations with respect to letters of
credit (PROVIDED that solely for purposes of the definitions of Capital
Expenditures, Consolidated Funded Debt, Consolidated Total Debt Service and
Consolidated Total Interest Expense, letters of credit issued to secure trade
obligations for goods or services in the ordinary course of business, consistent
with past practices, workmen's compensation or similar liabilities and other
obligations (not otherwise constituting Indebtedness For Borrowed Money) arising
in the ordinary course of business shall be considered Indebtedness For Borrowed
Money only to the extent that the aggregate face amount of such letters of
credit exceeds $500,000), or guarantees issued for the account of or on behalf
of any of the Transaction Parties, and all obligations representing the deferred
purchase price of property or services, other than accounts payable or accrued
expenses arising in the ordinary course of business, (b) all obligations
evidenced by bonds, notes, debentures or other similar instruments, (c) all
obligations secured by any mortgage, pledge, security interest or other lien on
property owned or acquired by any of the Transaction Parties, whether or not the
obligations secured thereby shall have been assumed, (d) that portion of all
obligations arising under Capitalized Leases that is required to be capitalized
on the Guarantor's consolidated financial statements, and (e) all guaranties,
endorsements and other contingent obligations of any of the Transaction Parties,
whether direct or indirect, in respect of indebtedness of others, including any
obligation to supply funds to or in any manner to invest in, directly or
indirectly, the debtor, to purchase indebtedness, or to assure the owner of
indebtedness against loss, through an agreement to purchase goods, supplies or
services for the purpose of enabling the debtor to make payment of the
indebtedness held by such owner or otherwise.

INELIGIBLE SECURITIES. Securities which may not be underwritten or dealt
in by member banks of the Federal Reserve System under Section 16 of the Banking
Act of 1993 (12 U.S.C. Section 24, Seventh), as amended.

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INTEREST COVERAGE RATIO. With respect to the last day of any fiscal
quarter, the ratio of (i) the sum of Consolidated EBITDA for the period of four
consecutive fiscal quarters ending on such day PLUS Rental Obligations for such
fiscal period to (ii) the sum of Consolidated Total Interest Expense for such
fiscal period PLUS Rental Obligations for such fiscal period.

INTEREST PAYMENT DATE. (i) As to any Base Rate Loan, the last day of any
fiscal quarter of the Borrower; and (ii) as to any Eurodollar Rate Loan, the
last day of the Interest Period relating to such Eurodollar Rate Loan.

INTEREST PERIOD: With respect to each Loan, (i) initially, the period
commencing on the initial Drawdown Date of such Loan and ending on the last day
of one of the periods set forth below, as selected by the Borrower in a Loan
Request (A) for any Base Rate Loan, the last day of the fiscal quarter of the
Borrower; and (B) for any Eurodollar Rate Loan, 1, 2 or 3 months; and (ii)
thereafter, each period commencing on the last day of the immediately preceding
Interest Period applicable to such Loan and ending on the last day of one of the
periods set forth above, as selected by the Borrower in a Conversion Request;
PROVIDED that all of the foregoing provisions relating to Interest Periods are
subject to the following:

(a) if any Interest Period with respect to a Eurodollar Rate Loan
would otherwise end on a day that is not a Eurodollar Business Day, that
Interest Period shall be extended to the next succeeding Eurodollar
Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month, in which event such Interest
Period shall end on the immediately preceding Eurodollar Business Day;

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

(c) if the Borrower shall fail to give notice as provided in Section
2.7, the Borrower shall be deemed to have requested a conversion of the
affected Eurodollar Rate Loan to a Base Rate Loan and the continuance of
all Base Rate Loans as Base Rate Loans on the last day of the then current
Interest Period with respect thereto;

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

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(e) any Interest Period relating to any Eurodollar Rate Loan that
would otherwise extend beyond the Maturity Date shall end on the Maturity
Date.

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

LETTER OF CREDIT. See Section 4.1.1.

LETTER OF CREDIT APPLICATION. See Section 4.1.2.

LETTER OF CREDIT FEE. See Section 4.6.

LETTER OF CREDIT PARTICIPATION. See Section 4.1.4.

LICENSE AGREEMENT. The License Agreement dated as of September 30, 1997 by
and between Rampage Clothing Company, a California corporation, and the
Borrower, as in effect on September 30, 1997.

LIENS. Any encumbrance mortgage, pledge, hypothecation, charge,
restriction or other security interest of any kind securing any obligation of
any entity or person.

LOAN DOCUMENTS. This Credit Agreement, the Notes, the Letter of Credit
Applications, the Letters of Credit, the Agent's Fee Letter, the Subordination
Documents, the Equity Documents and the Security Documents.

LOAN REQUEST. See Section 2.6.

LOANS. Revolving credit loans made or to be made by the Banks to the
Borrower pursuant to Section 2.

MAJORITY BANKS. As of any date, the Banks holding at least sixty-six and
two thirds percent (66-2/3%) of the Outstanding principal amount of the Notes on
such date; and if no such principal is Outstanding, the Banks whose aggregate
Commitments constitutes at least sixty-six and two thirds percent (66-2/3%) of
the Total Commitment; PROVIDED, HOWEVER, that at any time when there are two
Banks party to this Credit Agreement, the term "Majority Banks" shall mean each
such Bank; and PROVIDED FURTHER that at any time when there are more than two
Banks party to this Credit Agreement and BKB holds sixty-six and two thirds
percent (66-2/3%) or more of the Outstanding principal amount of the Notes on
such date (or, if no such principal is Outstanding, if BKB's Commitment
constitutes sixty-six and two thirds percent (66-2/3%) or more of the Total
Commitment), the term "Majority Bank" shall mean BKB and at least one other
Bank.

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MATERIALLY ADVERSE EFFECT. Any materially adverse effect on the financial
condition, business operations or assets of the Guarantor or any of its
Subsidiaries, as the case may be, or material impairment of the ability of the
Guarantor or any of its Subsidiaries, as the case may be, to perform its
obligations hereunder or under any of the other Loan Documents.

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

MERCHANDISING CONTRIBUTION AGREEMENT. The Capital
Contribution/Incorporation Agreement dated as of September 25, 1998 between the
Borrower and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Merchandising, as in effect on the Closing Date.

NET CASH PROCEEDS. With respect to any sale of any assets of any of the
Transaction Parties, the gross consideration received by such Transaction Party
(in cash) from such sale, net of commissions, direct sales costs, normal closing
adjustments, income taxes attributable to such sale, amounts paid in connection
with the discharge of any liens on such assets and professional fees and
expenses incurred directly in connection therewith, to the extent that the
foregoing are actually paid in connection with such sale.

NOTES. See Section 2.4.

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

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

ORIGINAL ACQUISITION. The acquisition by the Guarantor in September, 1996
of all of the outstanding shares of the capital stock of the predecessors of the
Borrower.

PARENT GUARANTY. The Amended and Restated Guaranty, dated or to be dated
on or prior to the Closing Date, made by the Guarantor in favor of the Banks and
the Agent pursuant to which the Guarantor guaranties to the Banks and the Agent
the payment and performance of the Obligations, in form and

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substance satisfactory to the Banks and the Agent and in substantially the same
form as the Amended and Restated Guaranty executed and delivered pursuant to the
First Restated Credit Agreement.

PARENT STOCK PLEDGE AGREEMENT. The Second Amended and Restated Stock
Pledge Agreement, dated or to be dated on or prior to the Closing Date, between
the Guarantor and the Agent, in form and substance satisfactory to the Banks and
the Agent and in form substantially the same as the Amended and Restated Stock
Pledge Agreement executed and delivered pursuant to the First Restated Credit
Agreement.

PERFECTION CERTIFICATE. The Perfection Certificate as defined in the
Security Agreement.

PERMITTED LIENS. Liens, security interests and other encumbrances
permitted by Section 9.2.

PERSON. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.

PRIOR CREDIT AGREEMENT. The Revolving Credit and Term Loan Agreement dated
as of September 27, 1996 among the Borrower (f/k/a ▇▇▇▇▇▇▇▇ Merchandising
Corporation and successor by merger of ▇▇▇▇▇▇▇▇ Merchandising Corporation of
Nevada and ▇▇▇▇▇▇▇▇ Merchandising Corporation of Nevada II), the Guarantor and
BKB, as heretofore amended and in effect.

RAMPAGE ACQUISITION. The acquisition by the Borrower of the Rampage Assets
pursuant to the Rampage Acquisition Documents.

RAMPAGE ACQUISITION DOCUMENTS. Collectively, the Asset Purchase Agreement
dated as of September 30, 1997 by and between Rampage Retailing, Inc., a
Delaware corporation, and the Borrower, as in effect on September 30, 1997; the
License Agreement; and all other agreements and documents required to be entered
into or delivered pursuant thereto or in connection with the Rampage
Acquisition.

RAMPAGE ASSETS. Assets of Rampage acquired by the Borrower pursuant to the
terms of the Rampage Acquisition Documents.

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

REDUCTION DATE. See Section 2.8.1.

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REIMBURSEMENT OBLIGATION. The Borrower's obligation to reimburse the Agent
and the Banks on account of any drawing under any Letter of Credit as provided
in Section 4.2.

RENTAL OBLIGATIONS. For any period, all obligations in respect of base and
contingent rent and common area maintenance paid or due by the Guarantor or any
of its Subsidiaries during such period under any rental agreements or leases of
real or personal property (other than Capitalized Leases).

REQUIREMENT OF LAW. In respect of any Person, any law, treaty, rule,
regulation or determination of an arbitrator, court, or other governmental
authority, in each case applicable to or binding upon such Person or affecting
any of its property.

RESTRUCTURING AGREEMENTS. Those agreements listed on SCHEDULE 1.1(a), as
in effect on the Closing Date.

REVOLVING CREDIT LOAN MATURITY DATE. September 30, 2002.

SECTION 20 SUBSIDIARY. A Subsidiary of the bank holding company
controlling any Bank, which Subsidiary has been granted authority by the Federal
Reserve Board to underwrite and deal in certain Ineligible Securities.

SECURITY AGREEMENT. The Second Amended and Restated Security Agreement,
dated or to be dated on or prior to the Closing Date, among the Borrower, the
Guarantor, certain Subsidiaries of the Borrower and the Agent, in form and
substance satisfactory to the Banks and the Agent and in form substantially the
same as the Amended and Restated Security Agreement executed and delivered
pursuant to the First Restated Credit Agreement.

SECURITY DOCUMENTS. The Guaranties, the Security Agreement, the Trademark
Agreements, the Stock Pledge Agreements, the Agency Account Agreements and all
other instruments and documents, including without limitation Uniform Commercial
Code financing statements, required to be executed or delivered pursuant to any
Security Document.

SECURITYHOLDERS AGREEMENT: The Securityholders Rights Agreement dated as
of September 27, 1996 among the Guarantor, The SK Equity Fund, L.P., FSC Corp.,
as assignee of BKB, and such other stockholders of the Guarantor as may, from
time to time, become parties thereto in accordance with the provisions thereof.

STANDBY LETTER OF CREDIT: Any Letter of Credit other than a Documentary
Letter of Credit.

STOCK PLEDGE AGREEMENTS. The Borrower Stock Pledge Agreement and the
Parent Stock Pledge Agreement.

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SUBORDINATED DEBT. Unsecured Indebtedness of any of the Transaction
Parties other than ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Administration that is expressly subordinated
and made junior to the payment and performance in full of the Obligations, and
evidenced as such by the Subordination Agreement or by another written
instrument containing subordination provisions in form and substance approved by
the Majority Banks in writing.

SUBORDINATED NOTES. The Second Amended and Restated 12.5% Senior
Subordinated Notes due 2003 dated as of December 23, 1998, issued by the
Guarantor in favor of the Funds in the original aggregate principal amount of
$11,000,000.

SUBORDINATION AGREEMENT. The Second Amended and Restated Subordination and
Intercreditor Agreement, dated or to be dated as of the Closing Date, among the
Agent, the Funds, the Guarantor and the Borrower, in form and substance
satisfactory to the Banks and the Agent and in form substantially the same as
the Amended and Restated Subordination and Intercreditor Agreement executed and
delivered pursuant to the First Restated Credit Agreement.

SUBORDINATION DOCUMENTS. The Subordination Agreement and the Subordinated
Notes.

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

TOTAL COMMITMENT. The sum of the Commitments of the Banks, as in effect
from time to time.

TRADEMARK AGREEMENTS. The Borrower Trademark Agreement and the ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ Merchandising Trademark Agreement.

TRANSACTION PARTIES. Collectively, the Borrower, the Guarantor and each of
their Subsidiaries.

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

UNIFORM CUSTOMS. With respect to any Letter of Credit, the Uniform Customs
and Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500 or any successor version thereto adopted by the
Agent in the ordinary course of its business as a letter of credit issuer and in
effect at the time of issuance of such Letter of Credit.

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UNPAID REIMBURSEMENT OBLIGATION. Any Reimbursement Obligation for which
the Borrower does not reimburse the Agent and the Banks on the date specified
in, and in accordance with, Section 4.2.

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

WARRANT. The Warrant issued by the Guarantor on September 27, 1996 to FSC
Corp., assignee of BKB.

1.2. RULES OF INTERPRETATION.

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

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

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

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

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

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

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

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

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

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

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

2. THE REVOLVING CREDIT FACILITY.

2.1. COMMITMENT TO LEND. Subject to the terms and conditions set forth in
this Credit Agreement, each of the Banks severally agrees to lend to the
Borrower and the Borrower may borrow, repay, and reborrow from time to time from
the Closing Date up to but not including the Revolving Credit Loan Maturity Date
upon notice by the Borrower to the Agent given in accordance with Section 2.6,
such sums as are requested by the Borrower up to a maximum aggregate amount
Outstanding (after giving effect to all amounts requested) at any one time equal
to such Bank's Commitment MINUS such Bank's Commitment Percentage of the sum of
the Maximum Drawing Amount and all Unpaid Reimbursement Obligations, PROVIDED
that the sum of the Outstanding amount of the Loans (after giving effect to all
amounts requested) PLUS the Maximum Drawing Amount and all Unpaid Reimbursement
Obligations shall not at any time exceed the Total Commitment. The Loans shall
be made PRO RATA in accordance with each Bank's Commitment Percentage. Each
request for a Loan hereunder shall constitute a representation and warranty by
the Borrower that the conditions set forth in Section 11 and Section 12, in the
case of the initial Loans to be made on the Closing Date, and Section 12, in the
case of all other Loans, have been satisfied on the date of such request.

2.2. COMMITMENT FEE. The Borrower agrees to pay to the Agent for the
accounts of the Banks in accordance with their respective Commitment Percentages
a commitment fee calculated at the rate of one-quarter of one percent (0.25%)
per annum on the average daily amount during each fiscal quarter or portion
thereof, from the date hereof to the Revolving Credit Loan Maturity Date, by
which the Total Commitment MINUS the sum of the Maximum Drawing Amount and all
Unpaid Reimbursement Obligations exceeds the

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Outstanding amount of Loans during such fiscal quarter. The commitment fee
shall be payable quarterly in arrears on the first day of each fiscal quarter of
the Borrower for the immediately preceding fiscal quarter commencing on the
first such date following the date hereof, with a final payment on the Revolving
Credit Loan Maturity Date or any earlier date on which the Commitments shall
terminate.

2.3. REDUCTION OF TOTAL COMMITMENT.

2.3.1. MANDATORY REDUCTION OF TOTAL COMMITMENT. The Total Commitment
shall automatically and irrevocably be reduced, on the date set forth in
the table below under the column headed "Reduction Date," or, if such date
is not a Business Day, on the Business Day immediately following (each such
Business Day, a "Reduction Date") to the amount set forth in the table set
forth below under the column headed "Total Commitment" opposite such date
in the table below:

Reduction Date Total Commitment Amount of Reduction
-------------- ---------------- -------------------

October 1, 1999 $24,500,000 $1,500,000

October 1, 2000 $20,000,000 $4,500,000

October 1, 2001 $14,500,000 $5,500,000

Upon the occurrence of a Reduction Date, the Commitment of each Bank shall
be reduced PRO RATA in accordance with its Commitment Percentage of the
amount by which the Total Commitment is reduced. If, on any Reduction
Date, the sum of the outstanding amount of the Loans PLUS the Maximum
Drawing Amount PLUS all Unpaid Reimbursement Obligations exceeds the Total
Commitment in effect after giving effect to the reduction of the Total
Commitment that occurred on such date pursuant to this Section 2.3.1, then
the Borrower shall immediately pay the amount of such excess to the Agent
for the respective accounts of the Banks for application FIRST, to any
Unpaid Reimbursement Obligation; SECOND, to the Loans; and THIRD, to
provide to the Agent cash collateral for Reimbursement Obligations if
required pursuant to Section 4.2(b) or (c).

2.3.2. OPTION OF REDUCTION OF TOTAL COMMITMENT. The Borrower shall
have the right at any time and from time to time upon two (2) Business Days
prior written notice to the Agent to reduce by $100,000 or an integral
multiple thereof or terminate entirely the Total Commitment, whereupon the
Commitments of the Banks shall be reduced PRO RATA in accordance with their
respective Commitment Percentages of the amount specified in such notice
or, as the case may be, terminated. Promptly after receiving any notice of
the Borrower delivered pursuant to this Section 2.3, the Agent will notify
the Banks of the substance thereof. Upon the effective date of any such
reduction or termination, the Borrower shall pay to the Agent for the
respective accounts of the Banks the full

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amount of any commitment fee then accrued on the amount of the reduction.
No reduction or termination of the Commitments may be reinstated.

2.4. THE NOTES. The Loans shall be evidenced by separate promissory notes
of the Borrower in substantially the form of EXHIBIT B hereto (each a "Note"),
dated as of the Closing Date and completed with appropriate insertions. One
Note shall be payable to the order of each Bank in a principal amount equal to
such Bank's Commitment or, if less, the Outstanding amount of all Loans made by
such Bank, plus interest accrued thereon, as set forth below. The Borrower
irrevocably authorizes each Bank to make or cause to be made, at or about the
time of the Drawdown Date of any Loan or at the time of receipt of any payment
of principal on such Bank's Note, an appropriate notation on such Bank's Note
Record reflecting the making of such Loan or (as the case may be) the receipt of
such payment. The Outstanding amount of the Loans set forth on such Bank's Note
Record shall be PRIMA FACIE evidence of the principal amount thereof owing and
unpaid to such Bank, but the failure to record, or any error in so recording,
any such amount on such Bank's Note Record shall not limit or otherwise affect
the obligations of the Borrower hereunder or under any Note to make payments of
principal of or interest on any Note when due.

2.5. INTEREST ON LOANS. Except as otherwise provided in Section 5.10,

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

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

(d) There shall be no more than five (5) Outstanding Loans which are
Eurodollar Rate Loans at any time.

2.6. REQUESTS FOR LOANS.

2.6.1. GENERAL. The Borrower shall give to the Agent written notice
in the form of EXHIBIT C hereto (or telephonic notice confirmed in a
writing in the form of EXHIBIT C hereto) of each Loan requested hereunder
(a "Loan Request") no later than (i) 1:00 p.m., Boston time (10:00 a.m.,
San Diego, California time), on the proposed Drawdown Date of any Base Rate
Loan and (ii) 1:00 p.m., Boston time (10:00 a.m., San Diego,

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California time), three (3) Eurodollar Business Days prior to the proposed
Drawdown Date of any Eurodollar Rate Loan. Each such notice shall specify
(A) the principal amount of the Loan requested, (B) the proposed Drawdown
Date of such Loan, (C) the Interest Period for such Loan and (D) the Type
of such Loan. Promptly upon receipt of any such notice, the Agent shall
notify each of the Banks thereof. Each Loan Request shall be irrevocable
and binding on the Borrower and shall obligate the Borrower to accept the
Loan requested from the Banks on the proposed Drawdown Date. Each Loan
Request for Base Rate Loans shall be in a minimum aggregate amount of
$50,000 or an integral multiple thereof, and each Loan Request for
Eurodollar Rate Loan shall be in a minimum aggregate amount of $100,000 or
an integral multiple thereof.

2.6.2. LOANS TO REPAY UNPAID REIMBURSEMENT OBLIGATIONS.
Notwithstanding the notice and minimum borrowing requirements set forth
above in this Section 2.6, the Banks agree to make Loans (which Loans shall
be Base Rate Loans) to the Borrower sufficient to pay to the Banks any
Unpaid Reimbursement Obligations on the date on which such Reimbursement
Obligations become Unpaid Reimbursement Obligations. The Borrower hereby
requests and authorizes the Agent and the Banks to make from time to time
such Loans by means of paying Unpaid Reimbursement Obligations. The
Borrower acknowledges and agrees that, except as otherwise provided in this
Section 2.6.2, the making of such Loans shall, in each case, be subject in
all respects to the provisions of this Agreement, including, without
limitation, the limitations set forth in Section 2.1 and the requirements
of the applicable conditions in Sections 11 and 12. All actions taken by
the Agent and the Banks pursuant to the provisions of this Section 2.6.2
shall be conclusive and binding on the Borrower.

2.7. CONVERSION OPTIONS.

2.7.1. CONVERSION TO DIFFERENT TYPE OF LOAN. The Borrower may elect
from time to time to convert any Outstanding Loan to a Loan of another
Type, PROVIDED that (i) with respect to any such conversion of a Loan from
a Eurodollar Loan to a Base Rate Loan, the Borrower shall give the Agent at
least three (3) Business Days prior written notice of such election; (ii)
with respect to any such conversion of a Base Rate Loan to a Eurodollar
Rate Loan, the Borrower shall give the Agent at least three (3) Eurodollar
Business Days prior written notice of such election; (iii) with respect to
any such conversion of a Eurodollar Rate Loan into a Base Rate Loan, such
conversion shall only be made on the last day of the Interest Period with
respect thereto and (iv) no Loan may be converted into a Eurodollar Rate
Loan when any Event of Default has occurred and is continuing. On the date
on which such conversion is being made, each Bank shall take such action as
is necessary to transfer its Commitment Percentage of such Loans to its
Domestic Lending Office or its Eurodollar Lending Office, as the case may
be. All or any part of Outstanding Loans of any Type may be converted into
a Loan of another Type as provided

-22-

herein, PROVIDED that any partial conversion shall be in an aggregate
principal amount of $100,000 or a whole multiple thereof. Each Conversion
Request relating to the conversion of a Loan to a Eurodollar Rate Loan
shall be irrevocable by the Borrower.

2.7.2. CONTINUATION OF TYPE OF LOAN. Any Loan of any Type may be
continued as a Loan of the same Type upon the expiration of an Interest
Period with respect thereto by compliance by the Borrower with the notice
provisions contained in Section 2.7.1; PROVIDED that no Eurodollar Rate
Loan may be continued as such when any Event of Default has occurred and is
continuing, but shall be automatically converted to a Base Rate Loan on the
last day of the first Interest Period relating thereto ending during the
continuance of any Event of Default of which officers of the Agent active
upon the Borrower's account have actual knowledge. In the event that the
Borrower fails to provide any such notice with respect to the continuation
of any Eurodollar Rate Loan as such, then such Eurodollar Rate Loan shall
be automatically converted to a Base Rate Loan on the last day of the first
Interest Period relating thereto. The Agent shall notify the Banks
promptly when any such automatic conversion contemplated by this Section
2.7 is scheduled to occur.

2.7.3. EURODOLLAR RATE LOANS. Any conversion to or from Eurodollar
Rate Loans shall be in such amounts and be made pursuant to such elections
so that, after giving effect thereto, the aggregate principal amount of all
Eurodollar Rate Loans having the same Interest Period shall not be less
than $100,000 or an integral multiple thereof.

2.8. FUNDS FOR LOANS.

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

2.8.2. ADVANCES BY AGENT. The Agent may, unless notified to the
contrary by any Bank prior to a Drawdown Date, assume that such Bank has
made available to the Agent on such Drawdown Date the

-23-

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

3. REPAYMENT OF THE LOANS.

3.1. MATURITY. The Borrower promises to pay on the Revolving Credit Loan
Maturity Date, and there shall become absolutely due and payable on the
Revolving Credit Loan Maturity Date, all of the Loans Outstanding on such date,
together with any and all accrued and unpaid interest thereon.

3.2. MANDATORY REPAYMENTS OF LOANS. If at any time the sum of the
Outstanding amount of the Loans, the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations exceeds the Total Commitment (as the same may be
reduced from time to time pursuant to Section 2.3.1 or Section 2.3.2), then the
Borrower shall immediately pay the amount of such excess to the Agent for the
respective accounts of the Banks for application: first, to any Unpaid
Reimbursement Obligations; second, to the Loans; and third, to provide to the
Agent cash collateral for Reimbursement Obligations as contemplated by Section
4.2(b) and (c). In the event that any of the Transaction Parties shall, after
the Closing Date, effect any sale of assets (other than those permitted by
Section 9.5.2(i) and (ii)), such Transaction Party shall, within fifteen (15)
days following receipt thereof (or if later, the first date on which the
aggregate amount of Net Cash Proceeds so received exceeds $250,000), prepay the
Loans in the amount by which the aggregate Net Cash Proceeds from all such sales
exceed $250,000. Each payment of any Unpaid Reimbursement Obligations or
prepayment of Loans shall be allocated among the Banks, in proportion, as nearly
as practicable, to each Reimbursement Obligation or (as the case may be) the
respective unpaid principal amount of each Bank's Note, with adjustments to the
extent

-24-

practicable to equalize any prior payments or repayments not exactly in
proportion.

3.3. OPTIONAL REPAYMENTS OF LOANS. The Borrower shall have the right, at
its election, to repay the Outstanding amount of the Loans, as a whole or in
part, at any time without penalty or premium, PROVIDED that any full or partial
prepayment of the Outstanding amount of any Eurodollar Rate Loans pursuant to
this Section 3.3 may be made only on the last day of the Interest Period
relating thereto. The Borrower shall give the Agent, no later than 1:00 p.m.,
Boston time (10:00 a.m. San Diego time), (i) on the date of any proposed
prepayment pursuant to this Section 3.3 of Base Rate Loans, and (ii) at least
three (3) Eurodollar Business Days notice of any proposed prepayment pursuant to
this Section 3.3 of Eurodollar Rate Loans, in each case specifying the proposed
date of prepayment of Loans and the principal amount to be prepaid. Each such
partial prepayment of the Loans shall be in an integral multiple of $100,000,
shall be accompanied by the payment of accrued interest (except with respect to
Base Rate Loans, accrued interest with respect to which shall be payable on the
next Interest Payment Date applicable to Base Rate Loans) on the principal
prepaid to the date of prepayment and shall be applied, in the absence of
instruction by the Borrower, first to the principal of Base Rate Loans and then
to the principal of Eurodollar Rate Loans. Each partial prepayment shall be
allocated among the Banks, in proportion, as nearly as practicable, to the
respective unpaid principal amount of each Bank's Note, with adjustments to the
extent practicable to equalize any prior repayments not exactly in proportion.

4. LETTERS OF CREDIT.

4.1. LETTER OF CREDIT COMMITMENTS.

4.1.1. COMMITMENT TO ISSUE LETTERS OF CREDIT. Subject to the terms
and conditions hereof and the execution and delivery by the Borrower of a
letter of credit application on the Agent's customary form (a "Letter of
Credit Application"), the Agent on behalf of the Banks and in reliance upon
the agreement of the Banks set forth in Section 4.1.4 and upon the
representations and warranties of the Borrower contained herein, agrees, in
its individual capacity, to issue, extend and renew for the account of the
Borrower one or more standby or documentary letters of credit
(individually, a "Letter of Credit"), in such form as may be requested from
time to time by the Borrower and agreed to by the Agent; PROVIDED, HOWEVER,
that, after giving effect to such request, (a) the sum of the aggregate
Maximum Drawing Amount and all Unpaid Reimbursement Obligations shall not
exceed $5,000,000 at any one time and (b) the sum of (i) the Maximum
Drawing Amount on all Letters of Credit, (ii) all Unpaid Reimbursement
Obligations, and (iii) the amount of all Loans Outstanding shall not exceed
the Total Commitment.

4.1.2. LETTER OF CREDIT APPLICATIONS. Each Letter of Credit
Application shall be completed to the reasonable satisfaction of the

-25-

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

4.1.3. TERMS OF LETTERS OF CREDIT. Each Letter of Credit issued,
extended or renewed hereunder shall, among other things, (i) provide for
the payment of sight drafts for honor thereunder when presented in
accordance with the terms thereof and when accompanied by the documents
described therein, and (ii) have an expiry date no later than the date
which is thirty (30) days prior to the Revolving Credit Loan Maturity Date.
Each Letter of Credit so issued, extended or renewed shall be subject to
the Uniform Customs.

4.1.4. REIMBURSEMENT OBLIGATIONS OF BANKS. Each Bank severally
agrees that it shall be absolutely liable, without regard to the occurrence
of any Default or Event of Default or any other condition precedent
whatsoever, to the extent of such Bank's Commitment Percentage, to
reimburse the Agent on demand for the amount of each draft paid by the
Agent under each Letter of Credit to the extent that such amount is not
reimbursed by the Borrower pursuant to Section 4.2 (such agreement for a
Bank being called herein the "Letter of Credit Participation" of such
Bank).

4.1.5. PARTICIPATIONS OF BANKS. Each such payment made by a Bank
shall be treated as the purchase by such Bank of a participating interest
in the Borrower's Reimbursement Obligation under Section 4.2 in an amount
equal to such payment. Each Bank shall share in accordance with its
participating interest in any interest which accrues pursuant to Section
4.2.

4.2. REIMBURSEMENT OBLIGATION OF THE BORROWER. In order to induce the
Agent to issue, extend and renew each Letter of Credit and the Banks to
participate therein, the Borrower hereby agrees to reimburse or pay to the
Agent, for the account of the Agent or (as the case may be) the Banks, with
respect to each Letter of Credit issued, extended or renewed by the Agent
hereunder,

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

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

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

Unless funded by a Loan pursuant to Section 2.6.2, each such payment shall be
made to the Agent at the Agent's Head Office in immediately available funds.
Interest on any and all amounts remaining unpaid by the Borrower under this
Section 4.2 and not required to be funded by a Loan pursuant to Section 2.6.2 at
any time from the date such amounts become due and payable (whether as stated in
this Section 4.2, by acceleration or otherwise) until payment in full (whether
before or after judgment) shall be payable to the Agent on demand at the rate
specified in Section 5.10 for overdue principal on the Loans.

4.3. LETTER OF CREDIT PAYMENTS. If any draft shall be presented or other
demand for payment shall be made under any Letter of Credit, the Agent shall
notify the Borrower of the date and amount of the draft presented or demand for
payment and of the date and time when it expects to pay such draft or honor such
demand for payment. If the Borrower fails to reimburse the Agent as provided in
Section 4.2 on or before the date that such draft is paid or other payment is
made by the Agent, the Agent may at any time thereafter notify the Banks of the
amount of any such Unpaid Reimbursement Obligation. No later than 3:00 p.m.,
Boston time (12:00 p.m. San Diego, California time) on the Business Day next
following the receipt of such notice, each Bank shall make available to the
Agent, at the Agent's Head Office, in immediately available funds, such Bank's
Commitment Percentage of such Unpaid Reimbursement Obligation, together with an
amount equal to the product of (i) the average, computed for the period referred
to in clause (iii) below, of the weighted average interest rate paid by the
Agent for federal funds acquired by the Agent during each day included in such
period, TIMES (ii) the amount equal to such Bank's Commitment Percentage of such
Unpaid Reimbursement Obligation, TIMES (iii) a fraction, the numerator of which
is the number of days that elapse from and including the date the Agent paid the
draft presented for honor or otherwise made payment to the date on which such
Bank's Commitment Percentage of such Unpaid Reimbursement obligation shall
become immediately available to the Agent, and the denominator of which is 360.
The responsibility of the Agent to the Borrower and the Banks shall be only to
determine that the documents (including each draft) delivered under each Letter
of Credit in connection with such presentment shall be in conformity in all
material respects with such Letter of Credit.

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

4.5. RELIANCE BY ISSUER. To the extent not inconsistent with Section 4.4,
the Agent shall be entitled to rely, and shall be fully protected in relying
upon, any Letter of Credit, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Agent. The Agent shall be fully justified in
failing or refusing to take any action under this Credit Agreement with respect
to Letters of Credit issued hereunder unless it shall first have received,
following a request therefor, such advice or concurrence of the Majority Banks
as it reasonably deems appropriate or it shall first be indemnified to its
reasonable satisfaction by the Banks against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Credit Agreement in accordance with a request
of the Majority Banks, and such request and any action taken or failure to act
pursuant thereto shall be binding upon the Banks and all future holders of the
Notes or of a Letter of Credit Participation.

4.6. LETTER OF CREDIT FEE. The Borrower shall, as set forth below
(including with respect to any extensions or renewals of any Letter of Credit)
pay a fee (in each case, a "Letter of Credit Fee") to the Agent (i) quarterly in
arrears on the first day of each fiscal quarter of the Borrower for the
immediately preceding fiscal quarter of the Borrower, in respect of each Standby

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Letter of Credit an amount equal to two percent (2.00%) of the result of (A) the
average daily face amount of such Standby Letter of Credit during such period,
MULTIPLIED BY the number of days such Standby Letter of Credit is outstanding
and DIVIDED BY (B) three hundred and sixty (360), of which an amount equal to
one-eighth of one percent (0.125%) of the result of (x) the average daily face
amount of such Standby Letter of Credit during such period, MULTIPLIED by the
number of days such Standby Letter of Credit is outstanding and DIVIDED BY (y)
three hundred and sixty (360) shall be for the account of the Agent, as a
fronting fee, and the balance of which Letter of Credit Fee shall be for the
accounts of the Banks in accordance with their respective Commitment Percentages
and (ii) quarterly in arrears on the first day of each fiscal quarter of the
Borrower for the immediately preceding fiscal quarter of the Borrower, in
respect of each Documentary Letter of Credit an amount equal to one and
three-quarters percent (1.75%) of the result of (A) the average daily face
amount of such Documentary Letter of Credit during such period, MULTIPLIED BY
the number of days such Documentary Letter of Credit is outstanding, DIVIDED BY
(B) three hundred and sixty (360), of which an amount equal to one-eighth of one
percent (0.125%) of the result of (x) the average daily face amount of such
Documentary Letter of Credit during such period MULTIPLIED BY the number of days
such Documentary Letter of Credit is outstanding and DIVIDED BY (y) three
hundred sixty (360) shall be for the account of the Agent, as a fronting fee,
and the balance of which Letter of Credit Fee shall be for the accounts of the
Banks in accordance with their respective Commitment Percentages. In respect of
each Letter of Credit, the Borrower shall also pay to the Agent for the Agent's
own account, at such other time or times as such charges are customarily made by
the Agent, the Agent's customary issuance, amendment, negotiation or document
examination and other administrative fees as in effect from time to time.

5. CERTAIN GENERAL PROVISIONS.

5.1. FEES.

5.1.1. AGENT'S FEE The Borrower shall pay to the Agent annually in
advance, for the Agent's own account, an Agent's fee on the dates and in the
amounts set forth in the Agent's Fee Letter.

5.1.2. CLOSING FEE On the Closing Date, the Borrower shall pay to
the Agent, for the PRO RATA accounts of the Banks, a closing fee in the amount
of $32,500.

5.2. FUNDS FOR PAYMENTS.

5.2.1. PAYMENTS TO AGENT. All payments of principal, interest,
Reimbursement Obligations, commitment fees, Letter of Credit Fees and any
other amounts due hereunder or under any of the other Loan Documents shall
be made to the Agent, for the respective accounts of the Banks and the
Agent, at the Agent's Head Office or at such other location

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in the Boston, Massachusetts, area that the Agent may from time to time
designate, in each case in immediately available funds.

5.2.2. NO OFFSET, ETC. All payments by the Borrower hereunder and
under any of the other Loan Documents shall be made without setoff or
counterclaim and free and clear of and without deduction for any taxes,
levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or hereafter
imposed or levied by any jurisdiction or any political subdivision thereof
or taxing or other authority therein unless the Borrower is compelled by
law to make such deduction or withholding. If any such obligation is
imposed upon the Borrower with respect to any amount payable by it
hereunder or under any of the other Loan Documents, the Borrower will pay
to the Agent, for the account of the Banks or (as the case may be) the
Agent, on the date on which such amount is due and payable hereunder or
under such other Loan Document, such additional amount in Dollars as shall
be necessary to enable the Banks or the Agent to receive the same net
amount which the Banks or the Agent would have received on such due date
had no such obligation been imposed upon the Borrower. The Borrower will
deliver promptly to the Agent certificates or other valid vouchers for all
taxes or other charges deducted from or paid with respect to payments made
by the Borrower hereunder or under such other Loan Document.

5.3. COMPUTATIONS. All computations of interest on the Loans and of
commitment fees, Letter of Credit Fees or other fees shall be based on a 360-day
year and paid for the actual number of days elapsed. Except as otherwise
provided in the definition of the term "Interest Period" with respect to
Eurodollar Rate Loans, whenever a payment hereunder or under any of the other
Loan Documents becomes due on a day that is not a Business Day, the due date for
such payment shall be extended to the next succeeding Business Day, and interest
shall accrue during such extension.

5.4. INABILITY TO DETERMINE EURODOLLAR RATE. In the event that, prior to
the commencement of any Interest Period relating to any Eurodollar Rate Loan,
the Agent shall determine that adequate and reasonable methods do not exist for
ascertaining the Eurodollar Rate that would otherwise determine the rate of
interest to be applicable to any Eurodollar Rate Loan during any Interest
Period, the Agent shall forthwith give notice of such determination (which shall
be conclusive and binding on the Borrower and the Banks) to the Borrower and the
Banks. In such event (i) any Loan Request or Conversion Request with respect to
Eurodollar Rate Loans shall be automatically withdrawn and shall be deemed a
request for Base Rate Loans, (ii) each Eurodollar Rate Loan will automatically,
on the last day of the then current Interest Period relating thereto, become a
Base Rate Loan, and (iii) the obligations of the Banks to make Eurodollar Rate
Loans shall be suspended until the Agent determines that the circumstances
giving rise to such suspension no longer exist, whereupon the Agent shall so
notify the Borrower and the Banks.

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5.5. ILLEGALITY. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or in the interpretation
or application thereof shall make it unlawful for any Bank to make or maintain
Eurodollar Rate Loans, such Bank shall forthwith give notice of such
circumstances to the Borrower and the other Banks and thereupon (i) the
commitment of such Bank to make Eurodollar Rate Loans or convert Loans of
another Type to Eurodollar Rate Loans shall forthwith be suspended and (ii) such
Bank's Loans then Outstanding as Eurodollar Rate Loans, if any, shall be
converted automatically to Base Rate Loans on the last day of each Interest
Period applicable to such Eurodollar Rate Loans or within such earlier period as
may be required by law; PROVIDED, HOWEVER, that nothing herein contained shall
be deemed to affect or limit the commitment of any other Bank not affected by
the circumstances set forth in this Section 5.5 to make Eurodollar Rate Loans or
to convert Loans of another type to Eurodollar Rate Loans in accordance with the
other terms and conditions of this Credit Agreement. The Borrower hereby agrees
promptly to pay the Agent for the account of such Bank, upon demand by such Bank
by delivery of a certificate in accordance with Section 5.8, any additional
amounts necessary to compensate such Bank for any costs incurred by such Bank in
making any conversion in accordance with this Section 5.5 other than on the last
day of any applicable Interest Period, including any interest or fees payable by
such Bank to lenders of funds obtained by it in order to make or maintain its
Eurodollar Rate Loans hereunder.

5.6. CHANGE IN CIRCUMSTANCES. If, on or after the date hereof the Agent
or any Bank determines that (i) the adoption of, or any change in, any
applicable law, rule, regulation or guideline or the interpretation or
administration thereof (whether or not having the force of law), or (ii)
compliance by the Agent or such Bank or its parent holding company with any
newly adopted or change in any applicable guideline, request or directive
(whether or not having the force of law), (A) shall subject the Agent or such
Bank to any tax, duty or other charge with respect to any Loan, any Letters of
Credit or any Note, or shall change the basis of taxation of payments to the
Agent or such Bank of the principal of or interest on, any Loans or in respect
of any other amounts due under this Credit Agreement (other than with respect to
taxes based upon the Agent or such Bank's net income), or (B) shall impose,
modify or deem applicable any reserve, special deposit or similar requirement
(including, without limitation, any imposed by the Board of Governors of the
Federal Reserve System, but excluding with respect to any Eurodollar Rate Loan
any such requirement included in an applicable Eurocurrency Reserve Rate)
against assets of, deposits with or for the account of, or credit extended by,
the Agent or such Bank, or shall impose on the Agent or such Bank or the London
interbank market any other condition affecting the Loans, any Letters of Credit
or the Notes, and the result of any of the foregoing is to increase the cost to
the Agent or such Bank of making or maintaining any Loan or any Letter of
Credit, to reduce the amount of any sum received or receivable by the Agent or
such Bank under this Agreement, on account of any Letter of Credit or under the
Notes with respect to any Loan, or to require the Agent or such Bank to

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make any payment or to forego any interest or Reimbursement Obligation or other
sum payable hereunder, by an amount reasonably deemed by the Agent or such Bank
to be material, then, upon demand by the Agent or such Bank by delivery of a
cetificate in accordance with Section 5.8, the Borrower agrees to pay to the
Agent or such Bank such additional amount or amounts as will compensate the
Agent or such Bank for such increased cost or reduction.

5.7. CAPITAL ADEQUACY. If on or after the date hereof any Bank or the
Agent determines that (i) the adoption of or change in any law, governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law) regarding capital requirements for banks or bank holding companies
or any change in the interpretation or application thereof by a court or
governmental authority with appropriate jurisdiction, or (ii) compliance by such
Bank or the Agent or any corporation controlling such Bank or the Agent with any
law, governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law) of any such entity regarding capital adequacy, has
the effect of reducing the return on such Bank's or the Agent's commitment with
respect to any Loans to a level below that which such Bank or the Agent could
have achieved but for such adoption, change or compliance by any amount deemed
by such Bank or (as the case may be) the Agent to be material, then such Bank or
the Agent may notify the Borrower of such fact. To the extent that the amount
of such reduction in the return on capital is not reflected in the Base Rate,
the Borrower agrees to pay such Bank or (as the case may be) the Agent for the
amount of such reduction in the return on capital as and when such reduction is
determined upon presentation by such Bank or (as the case may be) the Agent of a
certificate in accordance with Section 5.8 hereof. Each Bank or (as the case
may be) the Agent shall allocate such cost increases among the Borrower and its
other customers similarly situated on a fair and non-discriminatory basis.

5.8. CERTIFICATE. A certificate setting forth any additional amounts
payable pursuant to Sections 5.5, 5.7 or 5.8 and a brief explanation of such
amounts which are due, submitted by any Bank or the Agent to the Borrower, shall
be conclusive, absent manifest error, that such amounts are due and owing. All
additional amounts payable pursuant to Section 5.6 or Section 5.5 shall be due
and payable fifteen (15) days after receipt by the Borrower of such certificate.

5.9. INDEMNITY. The Borrower agrees to indemnify each Bank and to hold
each Bank harmless from and against any loss, cost or expense (excluding loss of
anticipated profits) that such Bank may sustain or incur as a consequence of (i)
default by the Borrower in payment of the principal amount of or any interest on
any Eurodollar Rate Loans, as and when due and payable, including any such loss
or expense arising from interest or fees payable by such Bank to lenders of
funds obtained by it in order to maintain its Eurodollar Rate Loans, (ii)
default by the Borrower in making a borrowing or conversion after the Borrower
has given (or is deemed to have given) a Loan Request or a Conversion Request
relating thereto in accordance with Section 2.6 or Section 2.7 or (iii) the
making of any payment of a Eurodollar Rate Loan or the making of any

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conversion of any such Loan to a Base Rate Loan on a day that is not the last
day of the applicable Interest Period with respect thereto, including interest
or fees payable by such Bank to lenders of funds obtained by it in order to
maintain any such Loans.

5.10. INTEREST AFTER EVENT OF DEFAULT. While an Event of Default is
continuing, amounts payable under any of the Loan Documents shall bear interest
(compounded monthly and payable on demand in respect of overdue amounts) at a
rate per annum which is equal to (a) prior to the end of the Interest Period
applicable to such amounts, two percent (2%) above the rate of interest
otherwise applicable to such Loans pursuant to Section 2.4 and (b) after the end
of the Interest Period(s) applicable to such amounts, the sum of (i) the Base
Rate, and (ii) three and one-half percent (3.50%) until such amount is paid in
full or (as the case may be) such Event of Default has been cured or waived in
writing by the Majority Banks pursuant to Section 2.6 (after as well as before
judgment).

6. COLLATERAL SECURITY AND GUARANTIES.

The Obligations shall be secured pursuant to the terms of the Security
Documents to which the Borrower is a party, including a pledge of the stock of
all Subsidiaries of the Borrower. The Obligations shall be guaranteed by the
Guarantor and certain Subsidiaries of the Borrower pursuant to the terms of the
Guaranties, and such Guaranties shall be secured by a pledge of all of the stock
of the Borrower and otherwise on other assets of the Guarantor and such
Subsidiaries in accordance with the terms of the Security Documents to which the
Guarantor or, as the case may be, any of such Subsidiaries is a party.

7. REPRESENTATIONS AND WARRANTIES.

Each of the Borrower and the Guarantor represents and warrants to the Banks
and the Agent on the date hereof, on the date of any Loan Request, on the date
of each request for a Letter of Credit, on the initial Drawdown Date of each
Loan and on the date on which each Letter of Credit is issued, extended or
renewed that:

7.1. INCORPORATION; GOOD STANDING; AUTHORIZATION. Each of the Transaction
Parties is duly organized, validly existing, and in good standing under the laws
of its jurisdiction of incorporation and is duly qualified and in good standing
in every other jurisdiction where it is doing business except those
jurisdictions in which the failure to be so qualified would not have a
Materially Adverse Effect, and the execution, delivery and performance by each
of the Transaction Parties of the Loan Documents and the Rampage Acquisition
Documents to which such Transaction Party is a party (i) are within its
corporate authority, (ii) have been duly authorized, and (iii) do not conflict
with or contravene its Charter Documents.

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7.2. ENFORCEABILITY. Upon execution and delivery thereof, each Loan
Document to which any of the Transaction Parties is a party shall constitute the
legal, valid and binding obligation of such Transaction Party, as applicable,
enforceable in accordance with its terms.

7.3. TITLE TO PROPERTIES; FRANCHISES, INTELLECTUAL PROPERTY; CONSENT; NO
CONFLICT; INSURANCE. Each of the Transaction Parties has good and marketable
title to all of its material properties, subject only to Liens permitted
hereunder, and possesses all assets, including intellectual properties,
franchises and Consents, adequate for the conduct of its business as now
conducted, without known conflict with any rights of others, other than those
the failure of which to possess would not have a Materially Adverse Effect.
Each of the Transaction Parties maintains insurance with financially responsible
insurers, copies of the policies for which have been previously delivered to the
Agent, covering such risks and in such amounts and with such deductibles as are
customary in such Transaction Party's business and are adequate and are in
accordance with the terms of the Security Agreement, and have named the Agent as
loss payee under all property and casualty insurance and as additional insured
under all liability insurance.

7.4. FISCAL YEAR; FINANCIAL STATEMENTS AND FORECAST. Each of the
Transaction Parties has a fiscal year which is the twelve (12) months ending on
the last Saturday in September of each year; the fiscal quarters of the
Guarantor and its Subsidiaries for the 1998-2002 fiscal years are as set forth
on SCHEDULE 7.4 hereto; the Guarantor and the Borrower have provided to the
Agent and the Banks the Guarantor's audited consolidated Financial Statements as
at the Balance Sheet Date and for the fiscal period then ended, and such
Financial Statements are complete and correct and fairly present the position of
the Guarantor and its Subsidiaries as at such date and for such period in
accordance with generally accepted accounting principles consistently applied;
none of the Transaction Parties has any Indebtedness, or any financial
obligations under any contracts, or agreements, except for Indebtedness
permitted under Section 9.1 hereof. The Guarantor has also provided to the
Agent and the Banks, as of September 30, 1998, its forecast of the operations of
the Guarantor and its Subsidiaries for the period from September 30, 1998
through September 30, 2002, and such forecast was prepared in good faith based
upon reasonable assumptions at the time of preparation thereof; such forecast
shall not be construed as a representation or warranty of future performance.

7.5. NO MATERIAL CHANGES, ETC. Since the Balance Sheet Date, there has
been no materially adverse change of any kind in the Borrower or the Guarantor
which would have a Materially Adverse Effect.

7.6. LITIGATION. There are no legal or other proceedings or
investigations pending or, to the best of the knowledge of each of the Borrower
and the Guarantor, threatened against any of the Transaction Parties before any
court, tribunal or regulatory authority in which there is a reasonable
possibility of an outcome that could have a Materially Adverse Effect.

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7.7. CONSENTS; NO CONFLICT. The execution, delivery and performance of
its obligations, and exercise of its rights under the Loan Documents and the
Rampage Acquisition Documents to which it is a party by each of the Borrower and
any of the Transaction Parties, including borrowing under this Credit Agreement
and the obtaining of Letters of Credit (i) except as set forth on SCHEDULE 7.7
hereto, do not require any Consents other than those Consents that have been
obtained or that will be obtained prior to the Closing Date, including, without
limitation, all appropriate filings made pursuant to the provisions of the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, and the rules
and regulations promulgated thereunder, and other than those that the failure of
which to obtain would not have a Materially Adverse Effect; and (ii) are not and
will not be in conflict with or prohibited or prevented by (A) any Requirement
of Law, (B) any Charter Document, corporate minute or resolution, in each case
binding on it, or (C) any instrument, agreement or provision thereof, in each
case binding on it or affecting its property except for such conflicts which
would not have a Materially Adverse Effect.

7.8. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. None of the
Transaction Parties is in violation of (i) any Charter Document, corporate
minute or resolution, (ii) any instrument or agreement, in each case binding on
it or affecting its property, except for such violations which would not have a
Materially Adverse Effect or (iii) any Requirement of Law, in a manner which
could have a Materially Adverse Effect, including, without limitation, all
applicable federal and state tax laws, ERISA and Environmental Laws.

7.9. PERFECTION OF SECURITY INTEREST; ABSENCE OF FINANCING STATEMENTS,
ETC. Upon execution and delivery of the Security Documents and the filing of
documents thereby required, the Agent shall have first-priority perfected Liens
in substantially all of the Collateral (with such exceptions as are acceptable
to the Agent), subject only to Liens permitted hereunder and entitled to
priority under applicable law, with no financing statements, chattel mortgages,
real estate mortgages or similar filings on record anywhere which conflict with
such first-priority Liens of the Agent.

7.10. SUBSIDIARIES, ETC. The Borrower is the Guarantor's only Subsidiary.
The Borrower has no Subsidiaries other than ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Administration and
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Merchandising. Neither ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Administration nor
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Merchandising has any Subsidiaries. None of the Transaction
Parties is a party to any partnership or joint venture.

7.11. BANK ACCOUNTS. SCHEDULE 7.11 hereto (as such may be amended from
time to time in accordance with Section 9.12) sets forth the account numbers and
locations of all bank accounts of each of the Transaction Parties.

7.12. SENIOR INDEBTEDNESS. All Indebtedness of the Guarantor to the Banks
in respect of the Obligations constitutes "Senior Indebtedness" or "Senior Debt"
(or the analogous term used therein) under the terms of any instrument

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evidencing or pursuant to which there is issued indebtedness which purports to
be Subordinated Debt of any of the Transaction Parties.

7.13. STATUS OF GUARANTOR. As of the Closing Date, the Guarantor has not
carried on any business (other than holding the capital stock of the Borrower)
and has no liabilities (other than pursuant to the Loan Documents) except for
matters relating to and liabilities incurred in connection with its
incorporation and the original acquisition by the Guarantor of the capital stock
of the Borrower.

7.14. NO DEFAULT. No Default or Event of Default has occurred and is
continuing.

7.15. CAPITAL STRUCTURE. As of the Closing Date, the capital structure of
the Guarantor is as set forth on SCHEDULE 7.15 hereto.

7.16. USE OF PROCEEDS.

7.16.1. GENERAL. The proceeds of the Loans shall be used to
refinance the Term Loan (as defined in the First Restated Credit Agreement)
and for working capital and general corporate purposes. The Borrower will
obtain Letters of Credit solely for working capital and general corporate
purposes.

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

8. AFFIRMATIVE COVENANTS OF THE BORROWER AND THE
GUARANTOR.

Each of the Borrower and the Guarantor covenants and agrees that, so long
as any Loan, Unpaid Reimbursement Obligation, Letter of Credit or Note is
outstanding or any Bank has any obligation to make any Loans or the Agent has
any obligation to issue, extend or renew any Letters of Credit, each of the
Borrower and the Guarantor will comply with its obligations set forth throughout
this Agreement and:

8.1. PUNCTUAL PAYMENT. The Borrower will duly and punctually pay or cause
to be paid the principal and interest on the Loans, all Reimbursement
Obligations, the Letter of Credit Fees, the commitment fees, the Agent's fee and
all other amounts provided for in this Credit Agreement and the other Loan
Documents to which any of the Transaction Parties is a party, all in accordance
with the terms of this Credit Agreement and such other Loan Documents.

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8.2. FINANCIAL STATEMENTS; COMPLIANCE CERTIFICATE; BUDGET. Each of the
Borrower and the Guarantor will furnish the Agent, with sufficient copies for
each of the Banks: (i) as soon as available but in any event within one hundred
(100) days after the close of each fiscal year, the audited consolidated and
consolidating Financial Statements of the Guarantor and its Subsidiaries for
such fiscal year, certified by the Guarantor's accountants; (ii) as soon as
available but in any event within forty-five (45) days after the end of each
fiscal quarter the unaudited consolidated and, if requested by the Agent,
consolidating Financial Statements of the Guarantor and its Subsidiaries for
such quarter, certified by the Guarantor's chief financial officer; (iii) as
soon as available, but in any event within forty-five (45) days after the end of
each fiscal month, the unaudited consolidated and, if requested by the Agent,
consolidating Financial Statements of the Guarantor and its Subsidiaries for
such month (excluding a statement of cash flow for such period), monthly income
statements for each of the Borrower's and its Subsidiaries' stores and a report
of sales at each store of the Borrower or such Subsidiary for such month,
compared to sales at such store for the same month of the previous fiscal year;
(iv) together with the quarterly and annual audited Financial Statements, a
certificate of the Borrower and the Guarantor setting forth computations
demonstrating compliance with the Guarantor's and its Subsidiaries' financial
covenants set forth herein, and certifying that no Default or Event of Default
has occurred, or if it has, the actions taken by the Guarantor and its
Subsidiaries with respect thereto; and (v) as soon as practicable, but in any
event not later than sixty (60) days after the beginning of each fiscal year,
commencing with the 1999 fiscal year, a management-prepared budget for such
fiscal year, together with income and cash flow statements and capital
expenditure projections for such fiscal year.

8.3. BOOKS AND RECORDS; FISCAL YEAR; INSPECTIONS; COMMERCIAL FINANCE
EXAMINATIONS. Each of the Borrower and the Guarantor will, and will cause each
of the other Transaction Parties to, keep true and accurate books of account in
accordance with generally accepted accounting principles, maintain its current
fiscal year and permit the Agent, any Bank or its designated representatives to
inspect the Guarantor's and its Subsidiaries' premises during normal business
hours, to examine and be advised as to such or other business records upon the
request of the Agent or any Bank, and to permit the Agent's commercial finance
examiners to conduct periodic commercial finance examinations, all at the
Borrower's expense, PROVIDED that the number of commercial finance examinations
at the Borrower's expense shall not exceed two (2) per fiscal year so long as no
Default or Event of Default has occurred and is continuing.

8.4. MAINTENANCE OF EXISTENCE, RIGHTS, FRANCHISES, ETC.; MAINTENANCE OF
PROPERTIES, ETC . Each of the Borrower and the Guarantor shall, and shall cause
each of the other Transaction Parties to: (i) do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence,
rights and franchises and those of its Subsidiaries (except as otherwise
permitted in Section 9.5 hereof) and will not, and will not cause or permit any
of its Subsidiaries to, convert to a limited liability company, (ii) cause all
of

-37-

its properties and those of its Subsidiaries to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment,
(iii) cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of such Transaction
Party, may be necessary so that the business carried on in connection therewith
may be properly and advantageously conducted at all times, (iv) continue to
engage primarily in the businesses now conducted by it and in related
businesses; PROVIDED that nothing in these clauses (i)-(iv) shall prevent the
Guarantor or the Borrower from discontinuing the operation and maintenance of
any of its properties or those of its Subsidiaries if such discontinuance is, in
the judgment of the Guarantor or the Borrower, as the case may be, desirable in
the conduct of its or their business and that do not in the aggregate have a
Materially Adverse Effect.

8.5. INSURANCE; CHIEF EXECUTIVE OFFICE; COMPLIANCE WITH LAW; PAYMENT OF
TAXES. Each of the Borrower and the Guarantor shall, and shall cause each of
the other Transaction Parties to: (i) keep its business and assets insured with
financially responsible insurers, covering such risks and in such amounts and
with such deductibles as are customary in such Transaction Party's business and
are adequate and in accordance with the terms of the Security Agreement; (ii)
maintain its chief executive office in the United States, (iii) comply with all
Requirements of Law, including ERISA and Environmental Laws, except for any
noncompliance which would not have a Materially Adverse Effect; and (iv) duly
pay and discharge, or cause to be paid and discharged, before the same shall
become overdue, all taxes, assessments and other governmental charges (other
than taxes, assessments and other governmental charges imposed by foreign
jurisdictions that in the aggregate would not have a Materially Adverse Effect)
imposed upon it and its real properties, sales and activities, or any part
thereof, or upon the income or profits therefrom, as well as all claims for
labor, materials, or supplies that if unpaid might by law become a lien or
charge upon any of its property; PROVIDED that any such tax, assessment, charge,
levy or claim need not be paid if the validity or amount thereof shall currently
be contested in good faith by appropriate proceedings and if such Transaction
Party shall have set aside on its books adequate reserves with respect thereto;
and PROVIDED FURTHER that the Guarantor and the Borrower will, and will cause
the other Transaction Parties to, pay all such taxes, assessments, charges,
levies or claims forthwith upon the commencement of proceedings to foreclose any
lien that may have attached as security therefor.

8.6. NOTICES. Each of the Borrower and the Guarantor shall notify the
Agent promptly in writing promptly upon any Transaction Party's chief executive
officer, president, chief financial officer, vice president, treasurer or other
responsible officer becoming aware thereof of (i) the occurrence of any Default
or Event of Default, (ii) any noncompliance with ERISA or any Environmental Law
or proceeding in respect thereof which could have a Materially Adverse Effect,
(iii) in accordance with the Security Agreement, any change of address or
additional location, (iv) any threatened or pending litigation or similar
proceeding affecting any of the Transaction Parties

-38-

involving an uninsured claim against such Transaction Party in which there is a
reasonable possibility of an outcome that could have a Materially Adverse Effect
or any material change in any such litigation or proceeding previously reported
and (v) claims against any assets or properties of any of the Transaction
Parties encumbered in favor of the Bank.

8.7. USE OF PROCEEDS. The Borrower will use the proceeds of the Loans
solely to refinance the Term Loan (as defined in the First Restated Credit
Agreement) and for working capital and general corporate purposes. The Borrower
will obtain Letters of Credit solely for working capital and general corporate
purposes.

8.8. AGENCY ACCOUNT AGREEMENTS. Each of the Borrower and the Guarantor
shall, and shall cause each of the other Transaction Parties to, enter into and
maintain Agency Account Agreements with each of the depository institutions at
which it maintains depository accounts, which accounts are listed on SCHEDULE
7.11 hereof (as such may be amended from time to time in accordance with Section
9.12); PROVIDED THAT the Borrower, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Merchandising and ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ Administration need not enter into Agency Account Agreements with respect
to Account No. 3660044698 with NationsBank, Account No. 002-670399 with Bank of
Hawaii, Account No. 323-838065 with Chase Manhattan Bank, Account No. ▇▇▇▇▇▇▇▇▇▇
with ▇▇▇▇▇ Fargo Bank, Account No. 1939799456 with Michigan National Bank and
Account Nos. ▇▇▇▇▇-▇▇▇▇▇ and ▇▇▇▇▇-▇▇▇▇▇ with Bank of America (collectively, the
"Excluded Accounts") (a) for so long as the aggregate amount held at any time in
any or all of such Excluded Accounts does not exceed $1,000,000; PROVIDED,
HOWEVER, that in connection with its obligations under this Section 8.8, the
Borrower shall deliver to the Agent, within thirty days following the end of
each fiscal quarter, a report of the activity in each such Excluded Account
during such fiscal quarter to enable it to monitor amounts held in such Excluded
Accounts; (b) unless a Default or Event of Default has occurred and is
continuing and the Agent has requested that the Borrower execute and deliver and
cause each of the applicable institutions to execute and deliver an Agency
Account Agreement; and (c) the Borrower causes all amounts contained in such
Excluded Accounts to be transferred to Account No. ▇▇▇▇▇-▇▇▇▇▇ with Bank of
America on a daily basis (unless the amount held in any such Excluded Account an
any day is less than $10,000, in which case such amounts need only be so
transferred when the amount in such account exceeds $10,000); PROVIDED, FURTHER,
that for purposes of this Section 8.8, the term "Excluded Accounts" shall
include any other depository account which the Borrower may from time to time
open so long as the aggregate amount held at any time in any or all of the
Excluded Accounts does not exceed $1,000,000, and the Borrower causes all
amounts contained in any such additional Excluded Account to be transferred to
Account No. ▇▇▇▇▇-▇▇▇▇▇ with Bank of America in accordance with the requirement
of clause (c) hereof.

8.9. FURTHER ASSURANCES. Each of the Borrower and the Guarantor will, and
will cause each of the Transaction Parties to, cooperate with the Banks

-39-

and the Agent and execute such further instruments and documents as the Banks or
the Agent shall reasonably request to carry out to their satisfaction the
transactions contemplated by and the purposes of this Credit Agreement and the
other Loan Documents.

8.10. POST-CLOSING MATTERS. Each of the Borrower and the Guarantor agrees
to use its best efforts (which shall not include any payment to Rampage) to
obtain, on or before January 15, 1998, the consent of Rampage Clothing Company
to the grant and enforcement of a security interest in favor of the Agent, for
the benefit of the Agent and the Banks and pursuant to the Security Agreement,
in and to the Borrower's or, as the case may be, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Merchandising's
rights and interests in, to and under the License Agreement, in order to secure
the Obligations.

8.11. AGREEMENTS REGARDING LOAN TO ▇▇. ▇▇▇▇▇▇▇▇. Each of the Borrower
and the Guarantor agrees that, in the event that a Default or Event of Default
has occurred and is continuing, the Borrower or, as the case may be, the
Guarantor shall pay to the Agent any amounts received by it or them in payment
of the loan to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ described in Section 9.3(h)(ii), with any such
amounts to be applied by the Agent in accordance with Section 13.4.

9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER AND THE
GUARANTOR.

9.1. RESTRICTIONS ON INDEBTEDNESS. Neither the Borrower nor the Guarantor
will, or will permit any of the other Transaction Parties to, create, incur,
assume, guarantee or be or remain liable, contingently or otherwise, with
respect to any Indebtedness other than:

(a) Indebtedness to the Agent or any of the Banks under the Loan
Documents or any Interest Rate Agreement;

(b) Indebtedness assumed by the Borrower pursuant to the Rampage
Acquisition Documents in an aggregate amount not to exceed $3,825,000;

(c) Indebtedness in respect of obligations of the Borrower or
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Merchandising under Capitalized Leases (except as otherwise
permitted under clause (e) hereof) which does not exceed $2,500,000 in the
aggregate outstanding at any time;

(d) liabilities of the Borrower or any of its Subsidiaries incurred in
the ordinary course of business not incurred through the borrowing of

-40-

money, Capitalized Leases or the obtaining of credit except credit on an
open account customarily extended and in fact extended in connection with
normal purchases of goods and services but including all liabilities under
leases other than Capitalized Leases;

(e) obligations under the Capitalized Lease of the Borrower's new
headquarters and distribution center (including equipment installed
therein) not exceeding $12,500,000 in aggregate amount at any time
outstanding;

(f) Indebtedness owed by the Borrower or ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Merchandising
to trade vendors, in the amount of the cost to the Borrowers of inventory
on consignment from such trade vendors not to exceed $1,500,000 at any time
outstanding;

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

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

(i) Indebtedness in respect of taxes, assessments, governmental
charges or levies and claims for labor, materials and supplies to the
extent that payment therefor shall not at the time be required to be made
in accordance with the provisions of Section 8.8;

(j) Subordinated Debt;

(k) Indebtedness of the Borrower to the Guarantor;

(l) (i) obligations in respect of the fees and related expenses
payable to ▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇, ▇.▇. to the extent such fees and
expenses are permitted by Section 9.11, and (ii) other obligations in
respect of fees and expenses payable in connection with the Rampage
Acquisition and the Loan Documents, not to exceed $500,000 in aggregate
amount;

(m) Indebtedness in respect of the Guarantor's obligations under the
Stock Purchase Agreement;

(n) Indebtedness of the Guarantor in respect of obligations owing to
the Borrower evidencing advances made by the Borrower from time to time
equal to (i) interest payments on the Subordinated Debt made within five
(5) Business Days of when such payment is due at any time

-41-

when payment of the Subordinated Debt is not restricted under the terms of
the Subordination Agreement and (ii) expenses incurred in the ordinary
course of business by the Guarantor and payable by the Guarantor within
thirty (30) days of receipt of such advance from the Borrower;

(o) Indebtedness consisting of liabilities resulting from the marking
up of the Borrower's existing leases to reflect market rents;

(p) existing Indebtedness not included above and listed on
SCHEDULE 9.1 hereto;

(q) other Indebtedness not included in the foregoing provisions of
this Section 9.1 not to exceed $750,000 in the aggregate at any time
outstanding;

9.2. RESTRICTIONS ON LIENS. Neither the Borrower nor the Guarantor will,
nor will they permit any of the other Transaction Parties to, create, incur,
permit to exist or assume any Liens on any of the property or assets of the
Guarantor or the Borrower except:

(a) Liens in favor of the Agent and the Banks securing the
Obligations;

(b) Liens securing taxes, assessments and other governmental charges
or liens on properties to secure claims for labor, material or supplies, in
each case to the extent the Indebtedness in respect to which is permitted
under Section 9.1(i);

(c) deposits or pledges made in connection with worker's compensation,
unemployment insurance, old age pensions or other social security
obligations;

(d) Liens of carriers, warehousemen, mechanics and materialmen (i)
less than 120 days old in respect of obligations not overdue or (ii) with
respect to which the obligations related thereto are contested by the
applicable Transaction Party in good faith by appropriate proceedings and
such Transaction Party shall have set aside on its book adequate reserves
with respect thereto, PROVIDED that the Guarantor or the Borrower will pay,
or will cause such other Transaction Party to pay, all such carriers,
warehousemen, mechanics and materialmen forthwith upon the commencement of
proceedings to foreclose any lien that may have attached as security
therefor;

(e) Liens on properties in respect of judgments or awards, the
Indebtedness with respect to which is permitted by Section 9.1(g);

(f) easements, rights-of-way, zoning restrictions, restrictions on the
use of real property and defects and irregularities in the title thereto,

-42-

landlord's or lessor's liens under leases to which any of the Transaction
Parties other than ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Administration is a party and similar
minor liens which individually and in the aggregate do not have a
Materially Adverse Effect;

(g) purchase money security interests in or purchase money mortgages
on, or Capitalized Leases in respect of, real or personal property securing
Indebtedness permitted by Section 9.1(c) or (e), covering only the property
so acquired or leased;

(h) Liens of consignors securing Indebtedness permitted under Section
9.1(f);

(i) in connection with the Rampage Acquisition, rights of equipment
lessors identified by the Bankruptcy Court Order with respect to leased
equipment, to the extent permitted by the Rampage Acquisition Documents;
and

(j) other Liens existing on the date hereof and listed on SCHEDULE 9.2
hereto.

9.3. RESTRICTIONS ON SUBSIDIARIES AND INVESTMENTS. Neither the Borrower
nor the Guarantor will, or will permit any of the other Transaction parties to,
create, form or permit to exist any Subsidiary (other than the Borrower and
those Subsidiaries set forth in Section 7.10), or make or permit to exist or to
remain outstanding any Investment except Investments in:

(a) Investments in marketable direct or guaranteed obligations of the
United States maturing within one (1) year;

(b) Investments in certificates of deposit, bankers' acceptances and
time and demand deposits of United States banks having total assets in
excess of $1,000,000,000;

(c) Investments in securities commonly known as "commercial paper"
issued by a corporation that at the time of purchase have been rated and
the ratings for which are not less than "P1" if rated by ▇▇▇▇▇'▇ Investors
Services, Inc., and not less than "A1" if rated by Standard and Poor's;

(d) Investments in money market mutual funds utilized in the ordinary
course of business, the investment objectives and policies of which require
it to invest substantially all of its assets in investments of the type
permitted under clauses (a), (b) and (c) hereof;

(e) Investments consisting of the Guaranties or other investments by
the Guarantor in the Borrower;

-43-

(f) Investments by the Borrower (i) in the Guarantor; (ii) in
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Administration consisting of $1,000 in cash and the other
assets described in Section 9.5.2(iv); and (iii) in ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Merchandising consisting of (A) $1,000 in cash and the other assets
described in Section 9.5.2(v) and (B) other Investments made in accordance
with the Restructuring Agreements or in the ordinary course of business;

(g) Investments as contemplated by Section 9.5.2(ii) and (iii);

(h) Investments consisting of (i) loans and advances to employees for
moving, entertainment, travel and other similar expenses in the ordinary
course of business not to exceed $50,000 in the aggregate at any time
outstanding and (ii) a loan from the Borrower or the Guarantor to ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ in an aggregate amount not to exceed $1,500,000;

(i) such other investments as the Agent and the Majority Banks may
from time to time approve in writing;

PROVIDED, HOWEVER, that with respect to Investments in excess of $1,000,000 in
aggregate amount, such Investments will be considered Investments permitted by
this Section 9.3 only if all actions have been taken to the satisfaction of the
Agent to provide to the Agent, for the benefit of the Banks and the Agent, a
first priority perfected security interest in all of such Investments free of
all encumbrances other than Permitted Liens.

9.4. DISTRIBUTIONS. Neither the Borrower nor the Guarantor will make any
dividends or distributions on or in respect of any class of its capital stock of
any nature whatsoever, other than (i) dividends payable solely in shares of its
common stock and (ii) dividends and distributions by the Borrower to the
Guarantor.

9.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.

9.5.1. MERGERS AND ACQUISITIONS. Neither the Borrower nor the
Guarantor will, or will permit any of the other Transaction Parties to,
become a party to any merger or consolidation, or purchase, lease or
otherwise acquire assets other than (a) the acquisition of assets in the
ordinary course of business (which includes the opening of new stores)
consistent with past practices, (b) subject to Section 9.1(e), the purchase
or lease of the Borrower's new headquarters and distribution center, (c) so
long as no Event of Default has occurred and is continuing or would result
therefrom and the Borrower has taken all steps necessary to grant the
Agent, for the benefit of the Banks, a first priority security interest in
substantially all of such assets, the acquisition by the Borrower of the
stock or assets of Persons engaged primarily in the same line of business
as the Borrower for an aggregate amount not to exceed $750,000 per fiscal
year of the Borrower, PROVIDED that with respect to any stock acquisitions,
the acquired entity is, concurrently with such acquisition,

-44-

merged with and into the Borrower, with the Borrower being the surviving
entity, and (d) the merger of one or more Subsidiaries of the Borrower with
and into the Borrower, with the Borrower as the surviving entity.

9.5.2. DISPOSITION OF ASSETS. Neither the Borrower nor the Guarantor
will, or will permit any of the other Transaction Parties to, become a
party to or agree to or effect any disposition of assets, other than (i)
assets sales or dispositions in the ordinary course, consistent with past
practices (not including the termination of store leases); (ii) so long as
no Event of Default has occurred and is continuing, other asset sales
(including the termination of store leases of the Borrower not to exceed
eight (8) in any fiscal year) for cash, PROVIDED that the aggregate amount
of Net Cash Proceeds from all such sales in each fiscal year of the
Borrower in excess of $250,000 are applied by the Borrower, concurrently
with receipt of such proceeds by the Guarantor or the Borrower to make
prepayments on the Loans in accordance with Section 3.2; (iii) the
acquisition of the Rampage Assets on the terms and conditions set forth in
the Rampage Acquisition Documents; (iv) transfer of cash not in excess of
$1,000 in the aggregate and of rights to services of certain employees, in
each case to ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Administration pursuant to the Administration
Contribution Agreement; or (v) transfer of leasehold improvements with an
aggregate net book value not in excess of $3,000,000, trademark and related
intellectual property rights and associated goodwill, an operating lease in
respect of the lease of equipment at the Borrower's distribution center in
San Diego, California, rights to services of certain employees, one Ford
truck and cash not in excess of $1,000 in the aggregate, in each case to
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Merchandising pursuant to the Merchandising Contribution
Agreement; PROVIDED, HOWEVER, that ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Merchandising shall have
executed and delivered to the Agent a trademark agreement in substantially
the form of the Trademark Agreement with respect to such trademark and
related intellectual property rights and associated goodwill, and the Agent
shall have made such Uniform Commercial Code and Patent and Trademark
Office filings as it shall deem necessary or appropriate.

9.6. SALE AND LEASEBACK. Neither the Borrower nor the Guarantor will, or
will permit any of the other Transaction Parties to, enter into any arrangement,
directly or indirectly, whereby any such Transaction Party shall sell or
transfer any property owned by it in order then or thereafter to lease such
property or lease other property that such Transaction Party intends to use for
substantially the same purpose as the property being sold or transferred, other
than the sale leaseback of the Borrower's new headquarters and distribution
center.

-45-

9.7. GUARANTIES. Neither the Borrower nor the Guarantor will, or will
permit any of the other Transaction Parties to, guarantee payment on any loan
(other than pursuant to the Guaranties).

9.8. SUBORDINATED DEBT. Neither the Guarantor nor the Borrower will, or
will permit any of the other Transaction Parties to, amend, supplement or
otherwise modify the terms of any of the Subordinated Debt or prepay, redeem or
repurchase any of the Subordinated Debt.

9.9. BUSINESS ACTIVITIES. The Borrower will not engage directly or
indirectly in any type of business other than the businesses conducted by it on
the Closing Date and in related businesses. The Guarantor will not conduct any
business or other activities other than the ownership of the stock of the
Borrower and the business and activities incidental thereto. Neither the
Borrower nor the Guarantor will permit ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Administration to hold
assets with a fair market value in excess of $1,000 (excluding rights to
services of certain employees) or to engage in any business or activity other
than conducting administrative and management duties for the Borrower and the
other Transaction Parties.

9.10. FISCAL YEAR. Neither the Borrower nor the Guarantor will change
the date of the end of its fiscal year from that set forth in Section 7.4.1.

9.11. TRANSACTIONS WITH AFFILIATES. Neither the Borrower nor the
Guarantor will, or will permit any of the other Transaction Parties to, engage
in any transaction with any Affiliate (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
such Affiliate or, to the knowledge of the Borrower, the Guarantor or any other
Transaction Party, any corporation, partnership, trust or other entity in which
any such Affiliate has a substantial interest or is an officer, director,
trustee or partner, on terms more favorable to such Person than would have been
obtainable on an arm's-length basis in the ordinary course of business, except:

(a) the agreement with ▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇ requiring the payment of
(i) an annual monitoring fee in an amount up to $250,000 per year and (ii)
other amounts in reimbursement of ▇▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇'▇ reasonable
out-of-pocket expense;

(b) (i) transactions or agreements among and between the Guarantor and
the Borrower and (ii) the loan to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ permitted by
Section 9.3(h)(ii);

-46-

(d) transactions or agreements among and between ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Merchandising and the Borrower.

9.12. BANK ACCOUNTS. Neither the Borrower nor the Guarantor will, or
will permit any of the other Transaction Parties to, establish any bank accounts
other than those listed on SCHEDULE 7.12 (as the same shall be deemed amended
from time to time to include these depository institutions which have executed
and delivered an Agency Account Agreement) without entering into an Agency
Account Agreement with such depository institution.

9.13. RESTRUCTURING AGREEMENTS. Neither the Borrower nor the Guarantor
will, or will permit any of the other Transaction Parties to, amend, supplement
or otherwise modify the terms of any of the Restructuring Agreements.

10. FINANCIAL COVENANTS OF THE BORROWER.

10.1. CAPITAL EXPENDITURES. The Borrower and the Guarantor will not make,
and will not permit any of the other Transaction Parties to make, Capital
Expenditures during any fiscal year described in the table below (excluding
Capital Expenditures in respect of the purchase or lease of the Borrower's new
headquarters and distribution center (including any equipment installed
therein)) which in the aggregate exceed the greater of (i) the dollar amount set
forth opposite such fiscal year in such table and (ii) the amount equal to the
percentage of Consolidated EBITDA as measured for the prior fiscal year set
forth opposite such fiscal year in such table:

Maximum Capital Expenditures

Dollar
Fiscal Period Amount Maximum Percentage
------------- ------ ------------------

September 27, 1998 - September 25, 1999 $13,000,000 54% of Consolidated EBITDA
September 26, 1999 - September 30, 2000 $15,250,000 58% of Consolidated EBITDA
October 1, 2000 - September 29, 2001 $17,750,000 56% of Consolidated EBITDA
September 30, 2001 - Maturity Date $19,700,000 52% of Consolidated EBITDA

PROVIDED, HOWEVER, that if during any fiscal year the amount of Capital
Expenditures permitted by the foregoing for that fiscal year is not so utilized,
such unutilized amount, not in excess of $500,000, may be utilized in the next
succeeding fiscal year, after the maximum Capital Expenditures permitted in such
fiscal year have been utilized but not in any subsequent fiscal year.

10.2. FUNDED DEBT TO EBITDA. The Borrower and the Guarantor will not
permit the ratio of Consolidated Funded Debt measured on the last day of

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each fiscal quarter ending during any period described in the table below to
Consolidated EBITDA as measured for the period of four consecutive fiscal
quarters ending on such last day to exceed the ratio set forth opposite such
period in such table:

Fiscal Period Maximum Ratio
------------- -------------

September 27, 1998 - June 26, 1999 1.70:1.00
June 27, 1999 - September 25, 1999 1.60:1.00
September 26, 1999 - September 30, 2000 1.50:1.00
October 1, 2000 - September 29, 2001 1.25.1.00
September 30, 2001 - Maturity Date 1.25:1.00

10.3. FIXED CHARGE RATIO. The Borrower and the Guarantor will not permit
the ratio of the result of Consolidated EBITDA for any period of four
consecutive fiscal quarters ending during any period described in the table
below MINUS Capital Expenditures (excluding Capital Expenditures in respect of
the purchase or lease of the Borrower's new headquarters and distribution center
(including any equipment installed therein)) made during such fiscal period to
Consolidated Total Debt Service for such period of four consecutive fiscal
quarters to be less than the ratio set forth opposite such period in such table:

Fiscal Period Minimum Ratio
------------- -------------

September 27, 1998 - September 25, 1999 1.90:1.00
September 26, 1999 - September 30, 2000 1.90:1.00
October 1, 2000 - September 29, 2001 2.10:1.00
September 30, 2001 - Maturity Date 2.10:1.00

10.4. INTEREST COVERAGE RATIO. The Borrower and the Guarantor will not
permit the Interest Coverage Ratio for any period of four consecutive fiscal
quarters ending during the period described in the table below to be less than
the ratio set forth opposite such period in such table:

Fiscal Period Minimum Ratio
------------- -------------

September 27, 1998 - June 26, 1999 1.50:1.00
June 27, 1999 - September 25, 1999 1.60:1.00
September 26, 1999 - September 30, 2000 1.60:1.00
October 1, 2000 - September 29, 2001 1.65:1.00
September 30, 2001 - Maturity Date 1.70:1.00

10.5. INVENTORY TURN RATIO. The Borrower and the Guarantor will not, at
the end of each fiscal quarter of the Borrower, permit the ratio of (i) "cost of
merchandise sold" of the Borrower for the period consisting of the four

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consecutive fiscal quarters of the Borrower ending during any fiscal period
described in the table below to (ii) the average book value of inventory of the
Borrower as of the end of each fiscal quarter ending during such period, to be
less than the ratio set forth opposite such period in such table:

Fiscal Period Minimum Ratio
------------- -------------

September 27, 1998 - September 25, 1999 5.80:1.00
September 26, 1999 - September 30, 2000 5.50:1.00
October 1, 2000 - September 29, 2001 5.30:1.00
September 30, 2001 - Maturity Date 5.20:1.00

11. CLOSING CONDITIONS.

The obligations of the Banks to make the initial Loans and of the Agent to
issue any initial Letters of Credit shall be subject to the satisfaction of the
following conditions precedent:

11.1. LOAN DOCUMENTS. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to each of the Banks
and in each case in form substantially similar to those Loan Documents (as
defined in the First Restated Credit Agreement) executed and delivered pursuant
to the First Restated Credit Agreement. The Agent shall have received fully
executed copies of each such document in sufficient quantities for each Bank.

11.2. CERTIFIED COPIES OF CHARTER DOCUMENTS. The Agent shall have
received from each of the Transaction Parties copies, in sufficient quantities
for each Bank, certified by a duly authorized officer of such Person to be true
and complete on the Closing Date, of each of (i) its charter or other
incorporation documents as in effect on such date of certification, and (ii) its
by-laws as in effect on such date.

11.3. CORPORATE ACTION. All corporate action necessary for the valid
execution, delivery and performance by each of the Transaction Parties of this
Credit Agreement and the other Loan Documents to which it is or is to become a
party shall have been duly and effectively taken, and evidence thereof
satisfactory to the Agent shall have been provided to the Agent, in sufficient
quantities for each of the Banks.

11.4. INCUMBENCY CERTIFICATE. The Agent shall have received, in
sufficient quantities for each of the Banks, from each of the Transaction
Parties, an incumbency certificate, dated as of the Closing Date, signed by a
duly authorized officer of such Transaction Party, and giving the name and
bearing a specimen signature of each individual who shall be authorized: (i) to
sign, in the name and on behalf of each of such Transaction Party, each of the
Loan Documents and Subordination Documents to which such Transaction Party is or
is to become a party; (ii) in the case of the Borrower, to make Loan Requests
and

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Conversion Requests and to apply for Letters of Credit; and (iii) to give
notices and to take other action on its behalf under the Loan Documents.

11.5. VALIDITY OF LIENS. The Security Documents shall be effective to
create in favor of the Agent a legal, valid and enforceable first priority
(except for Permitted Liens entitled to priority under applicable law) security
interest in and lien upon the Collateral (with such exceptions to a lien on all
assets of the Transaction Parties as are consistent with those accepted by the
Agent under the First Restated Credit Agreement). All filings, recordings,
deliveries of instruments and other actions necessary or desirable in the
opinion of the Agent to protect and preserve such security interests shall have
been duly effected. The Agent shall have received evidence thereof in form and
substance satisfactory to the Agent.

11.6. PERFECTION CERTIFICATES. The Agent shall have received from each of
the Transaction Parties a completed and fully executed Perfection Certificate.

11.7. CERTIFICATES OF INSURANCE. The Agent shall have received (i) a
certificate of insurance from an independent insurance broker dated as of the
Closing Date, identifying insurers, types of insurance, insurance limits, and
policy terms, naming the Agent as loss payee under all property and casualty
insurance and additional insured under all liability insurance, requiring the
issuer to give the Agent at least thirty (30) days prior written notice of
cancellation of any insurance and otherwise describing the insurance obtained in
accordance with the provisions of the Security Agreement and (ii) certified
copies of all policies evidencing such insurance (or certificates therefore
signed by the insurer or an agent authorized to bind the insurer).

11.8. AGENCY ACCOUNT AGREEMENTS. The Agent shall have received an Agency
Account Agreement executed by each depository institution listed on
SCHEDULE 8.20.

11.9. SOLVENCY CERTIFICATE. Each of the Banks shall have received an
officer's certificate of the Borrower and the Guarantor dated as of the Closing
Date as to the solvency of the Borrower individually and of the Transaction
Parties considered as a whole following the consummation of the transactions
contemplated herein and in form and substance satisfactory to the Banks.

11.10. OPINIONS OF COUNSEL. Each of the Banks and the Agent shall have
received a favorable legal opinion addressed to the Banks and the Agent, dated
as of the Closing Date, in form and substance satisfactory to the Banks and the
Agent, from ▇▇▇▇▇▇, Godward LLP, counsel to the Borrower and the other
Transaction Parties.

11.11. PAYMENT OF FEES. The Borrower shall have paid to the Banks or the
Agent, as appropriate, the Agent's fee pursuant to Section 5.1 and the closing
fee pursuant to Section 5.1.2, together with all reasonable out-of-pocket
expenses of the

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Agent, including but not limited to reasonable attorneys' fees and
disbursements.

11.12 POST-CLOSING MATTERS. The conditions, actions and items set forth
in Section 8.10 shall not be deemed waived by virtue of the fact that they are
not completed on the Closing Date.

12. CONDITIONS TO ALL BORROWINGS.

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

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

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

13. EVENTS OF DEFAULT; ACCELERATION; ETC.

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

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

(b) the Borrower or any of the other Transaction Parties shall fail
to pay any interest on the Loans, the commitment fee, any Letter of Credit
Fee, or the Agent's fee or other sums due hereunder or under any

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of the other Loan Documents, when the same shall become due and payable,
whether at the stated date of maturity or any accelerated date of maturity
or at any other date fixed for payment;

(c) the Borrower or the Guarantor shall fail to comply with any of
its covenants contained in Section 8 (other than Sections 8.3, 8.4, 8.5 and
8.9), 9 (other than Section 9.11) or 10;

(d) the Borrower, the Guarantor or any of the other Transaction
Parties shall fail to perform any term, covenant or agreement contained
herein or in any of the other Loan Documents (other than those specified
elsewhere in this Section 13.1) for fifteen (15) days after written notice
of such failure has been given to the Borrower by the Agent or shall fail
to pay any sum due under any of the Loan Documents (other than the sums
referred to in paragraphs (a) and (b) of this Section 13.1) within fifteen
(15) days after written notice of such failure has been given to the
Borrower by the Agent;

(e) any representation or warranty of the Borrower or any of the
other Transaction Parties in this Credit Agreement or any of the other Loan
Documents, in any certificate or notice given in connection therewith shall
prove to have been false in any material respect upon the date when made or
deemed to have been made or repeated;

(f) the Borrower or any of the other Transaction Parties shall fail
to pay at maturity, or within any applicable period of grace, any
obligation in respect of any Indebtedness For Borrowed Money (the aggregate
amount of which Indebtedness For Borrowed Money exceeds $500,000) or fail
to observe or perform any material term, covenant or agreement contained in
any agreement by which it is bound, evidencing or securing any Indebtedness
For Borrowed Money (the aggregate amount of which Indebtedness For Borrowed
Money exceeds $500,000) for such period of time as would permit (assuming
the giving of appropriate notice if required) the holder or holders thereof
or of any obligations issued thereunder to accelerate the maturity thereof;

(g) the Borrower or any of the other Transaction Parties (i) shall
make an assignment for the benefit of creditors, (ii) shall be adjudicated
bankrupt or insolvent, (iii) shall seek the appointment of, or be the
subject of an order appointing, a trustee, liquidator or receiver as to all
or part of its assets, (iv) shall commence, approve or consent to, any case
or proceeding under any bankruptcy, reorganization or similar law and, in
the case of an involuntary case or proceeding, such case or proceeding is
not dismissed within forty-five (45) days following the commencement
thereof, or (v) shall be the subject of an order for relief in an
involuntary case under federal bankruptcy law;

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(h) the Borrower or any of the other Transaction Parties shall be
unable to pay its debts as they mature;

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

(j) the holders of all or any part of the Subordinated Debt shall
accelerate the maturity of all or any part of the Subordinated Debt or the
Subordinated Debt shall be prepaid, redeemed or repurchased in whole or in
part;

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

(l) (i) the Guarantor shall at any time, legally or beneficially cease
to own 100% of the Voting Stock of the Borrower, except as permitted by
Section 9.5.1, (ii) the Funds or their affiliates, collectively shall cease
to own legally or beneficially fifty-one percent (51%) or more of the
Voting Stock of the Guarantor on a fully-diluted basis or (iii) ▇▇▇▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇, ▇.▇. shall cease to manage the Funds;

then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Banks shall, by notice in writing to
the Borrower declare all amounts owing with respect to this Credit Agreement,
the Notes and the other Loan Documents and all Reimbursement Obligations to be,
and they shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower; PROVIDED that in the event of any Event
of Default specified in Sections 13.1(g) or 13.1(h), all such amounts shall
become immediately due and payable automatically and without any requirement of
notice from the Agent or any Bank.

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13.2. TERMINATION OF COMMITMENTS. If any one or more of the Events of
Default specified in Section 13.1(g) or Section 13.1(h) shall occur, any unused
portion of the Commitments hereunder shall forthwith terminate and each of the
Banks shall be relieved of all further obligations to make Loans to the Borrower
and the Agent shall be relieved of all further obligations to issue, extend or
renew Letters of Credit. If any other Event of Default shall have occurred and
be continuing, the Agent may and, upon the request of the Majority Banks, shall,
by notice to the Borrower, terminate the unused portion of the Commitments
hereunder, and upon such notice being given such unused portion of the
Commitments hereunder shall terminate immediately and each of the Banks shall be
relieved of all further obligations to make Loans and the Agent shall be
relieved of all further obligations to issue, extend or renew Letters of Credit.
No termination of the Commitments hereunder shall relieve the Borrower or any of
the other Transaction Parties of any of the Obligations.

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

13.4. DISTRIBUTION OF COLLATERAL PROCEEDS. In the event that, following
the occurrence or during the continuance of any Default or Event of Default, the
Agent or any Bank, as the case may be, receives any monies in connection with
the enforcement of any the Security Documents, or otherwise with respect to the
realization upon any of the Collateral, such monies shall be distributed for
application as follows:

(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agent for or in respect of all reasonable costs,
expenses, disbursements and losses which shall have been incurred or
sustained by the Agent in connection with the collection of such monies by
the Agent, for the exercise, protection or enforcement by the Agent of all
or any of the rights, remedies, powers and privileges of the Agent under
this Credit Agreement or any of the other Loan Documents or in

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respect of the Collateral or in support of any provision of adequate
indemnity to the Agent against any taxes or liens which by law shall have,
or may have, priority over the rights of the Agent to such monies;

(b) Second, to all other Obligations consisting of fees; PROVIDED,
HOWEVER, that (i) distributions shall be made (A) PARI PASSU among
Obligations with respect to the Agent's fee payable pursuant to Section 5.1
and all other Obligations and (B) with respect to Obligations consisting of
fees owing to the Banks, among the Banks PRO RATA, and (ii) the Agent may
in its discretion make proper allowance to take into account any
Obligations not then due and payable;

(c) Third, to all Obligations in respect of the Loans (first to
interest and then to principal in respect of the Loans); PROVIDED, HOWEVER,
that (i) distributions shall be made among the Banks PRO RATA and (ii) the
Agent may in its discretion make proper allowance to take into account any
Obligations in respect of the Loans not then due and payable;

(d) Fourth, upon payment and satisfaction in full or other provisions
for payment in full satisfactory to the Banks and the Agent of all of the
Obligations, to the payment of any obligations required to be paid pursuant
to Section 9-504(1)(c) of the Uniform Commercial Code of the Commonwealth
of Massachusetts; and

(e) Fifth, the excess, if any, shall be returned to the Borrower or
to such other Persons as are entitled thereto.

14. SETOFF.

Regardless of the adequacy of any collateral for the Obligations, during
the continuance of any Event of Default, any deposits or other sums credited by
or due from any of the Banks to the Borrower or any of the other Transaction
Parties and any securities or other property of the Borrower and any of the
other Transaction Parties in the possession of such Bank may be applied to or
set off by such Bank against the payment of Obligations and any and all other
liabilities, direct, or indirect, absolute or contingent, due or to become due,
now existing or hereafter arising, of the Borrower or such other Transaction
Party to such Bank. Each of the Banks agrees with each other Bank that (i) if
an amount to be set off is to be applied to Indebtedness of the Borrower or such
other Transaction Party to such Bank, other than Indebtedness evidenced by the
Notes held by such Bank or constituting Reimbursement Obligations owed to such
Bank, such amount shall be applied ratably to such other Indebtedness and to the
Indebtedness evidenced by all such Notes held by such Bank or constituting
Reimbursement Obligations owed to such Bank, and (ii) if such Bank shall receive
from the Borrower or such other Transaction Party, whether by voluntary payment,
exercise of the right of setoff, counterclaim, cross action, enforcement of the
claim evidenced by the Notes held by, or constituting Reimbursement Obligations
owed to, such Bank by proceedings against the

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Borrower or such other Transaction Party at law or in equity or by proof thereof
in bankruptcy, reorganization, liquidation, receivership or similar proceedings,
or otherwise, and shall retain and apply to the payment of the Note or Notes
held by, or Reimbursement Obligations owed to, such Bank any amount in excess of
its ratable portion of the payments received by all of the Banks with respect to
the Notes held by, and Reimbursement Obligations owed to, all of the Banks, such
Bank will make such disposition and arrangements with the other Banks with
respect to such excess, eitherby way of distribution, PRO TANTO assignment of
claims, subrogation or otherwise as shall result in each Bank receiving in
respect of the Notes held by it or Reimbursement obligations owed it, its
proportionate payment as contemplated by this Credit Agreement; PROVIDED that if
all or any part of such excess payment is thereafter recovered from such Bank,
such disposition and arrangements shall be rescinded and the amount restored to
the extent of such recovery, but without interest.

15. THE AGENT.

15.1. AUTHORIZATION.

(a) The Agent is authorized to take such action on behalf of each of
the Banks and to exercise all such powers as are hereunder and under any of
the other Loan Documents and any related documents delegated to the Agent,
together with such powers as are reasonably incident thereto, PROVIDED that
no duties or responsibilities not expressly assumed herein or therein shall
be implied to have been assumed by the Agent.

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

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

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

15.3. NO LIABILITY. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.

15.4. NO REPRESENTATIONS.

15.4.1. GENERAL. The Agent shall not be responsible for the
execution or validity or enforceability of this Credit Agreement, the
Notes, the Letters of Credit, any of the other Loan Documents or any
instrument at any time constituting, or intended to constitute, collateral
security for the Notes, or for the value of any such collateral security or
for the validity, enforceability or collectability of any such amounts
owing with respect to the Notes, or for any recitals or statements,
warranties or representations made herein or in any of the other Loan
Documents or in any certificate or instrument hereafter furnished to it by
or on behalf of the Borrower or any of the other Transaction Parties, or be
bound to ascertain or inquire as to the performance or observance of any of
the terms, conditions, covenants or agreements herein or in any instrument
at any time constituting, or intended to constitute, collateral security
for the Notes or to inspect any of the properties, books or records of the
Borrower or any of the other Transaction Parties. The Agent shall not be
bound to ascertain whether any notice, consent, waiver or request delivered
to it by the Borrower or any holder of any of the Notes shall have been
duly authorized or is true, accurate and complete. The Agent has not made
nor does it now make any representations or warranties, express or implied,
nor does it assume any liability to the Banks, with respect to the credit
worthiness or financial conditions of the Borrower or any of the other
Transaction Subsidiaries. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank, and
based upon such information and documents as it has deemed appropriate,
made its own credit analysis and decision to enter into this Credit
Agreement.

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15.4.2. CLOSING DOCUMENTATION, ETC. For purposes of determining
compliance with the conditions set forth in Section 11, each Bank that has
executed this Credit Agreement shall be deemed to have consented to,
approved or accepted, or to be satisfied with, each document and matter
either sent, or made available, by the Agent or BancBoston ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Inc. or its predecessor, BankBoston Securities Inc., as arranger
(the "Arranger"), to such Bank for consent, approval, acceptance or
satisfaction, or required thereunder to be to be consent to or approved by
or acceptable or satisfactory to such Bank, unless an officer of the Agent
or the Arranger active upon the Borrower's account shall have received
notice from such Bank prior to the Closing Date specifying such Bank's
objection thereto and such objection shall not have been withdrawn by
notice to the Agent or the Arranger to such effect on or prior to the
Closing Date.

15.5. PAYMENTS.

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

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

15.5.3. DELINQUENT BANKS. Notwithstanding anything to the contrary
contained in this Credit Agreement or any of the other Loan Documents, any
Bank that fails (i) to make available to the Agent its PRO RATA share of
any Loan or to purchase any Letter of Credit Participation or (ii) to
comply with the provisions of Section 14 with respect to making
dispositions and arrangements with the other Banks, where such Bank's share
of any payment received, whether by setoff or otherwise, is in excess of
its PRO RATA share of such payments due and payable to all of the Banks, in
each case as, when and to the full extent required by the provisions of
this Credit Agreement, shall be deemed delinquent (a "Delinquent Bank") and
shall be deemed a Delinquent Bank until such

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time as such delinquency is satisfied. A Delinquent Bank shall be deemed
to have assigned any and all payments due to it from the Borrower, whether
on account of Outstanding Loans, Unpaid Reimbursement Obligations,
interest, fees or otherwise, to the remaining nondelinquent Banks for
application to, and reduction of, their respective PRO RATA shares of all
Outstanding Loans and Unpaid Reimbursement Obligations. The Delinquent
Bank hereby authorizes the Agent to distribute such payments to the
nondelinquent Banks in proportion to their respective PRO RATA shares of
all Outstanding Loans and Unpaid Reimbursement Obligations. A Delinquent
Bank shall be deemed to have satisfied in full a delinquency when and if,
as a result of application of the assigned payments to all Outstanding
Loans and Unpaid Reimbursement Obligations of the nondelinquent Banks, the
Banks' respective PRO RATA shares of all Outstanding Loans and Unpaid
Reimbursement Obligations have returned to those in effect immediately
prior to such delinquency and without giving effect to the nonpayment
causing such delinquency.

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

15.7. INDEMNITY. The Banks ratably agree hereby to indemnify and hold
harmless the Agent and its affiliates from and against any and all claims,
actions and suits (whether groundless or otherwise), losses, damages, costs,
expenses (including any expenses for which the Agent or such affiliate has not
been reimbursed by the Borrower or the Guarantor as required by Section 16), and
liabilities of every nature and character arising out of or related to this
Credit Agreement, the Notes, or any of the other Loan Documents or the
transactions contemplated or evidenced hereby or thereby, or the Agent's actions
taken hereunder or thereunder, except to the extent that any of the same shall
be directly caused by the Agent's willful misconduct or gross negligence.

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

15.9. RESIGNATION. The Agent may resign at any time by giving sixty (60)
days prior written notice thereof to the Banks and the Borrower. Upon any such
resignation, the Majority Banks shall have the right to appoint a successor
Agent. Unless an Event of Default shall have occurred and be continuing, such
successor Agent shall be reasonably acceptable to the Borrower. If no successor
Agent shall have been so appointed by the Majority Banks and shall have accepted
such appointment within thirty (30) days after the retiring Agent's

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giving of notice of resignation, then the retiring Agent may, on behalf of the
Banks, appoint a successor Agent, which shall be a financial institution having
a rating of not less than A or its equivalent by Standard & Poor's Corporation.
Upon the acceptance of any appointment as Agent hereunder 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 from its duties and obligations hereunder. After any
retiring Agent's resignation, the provisions of this Credit Agreement and the
other Loan Documents shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.

15.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Bank hereby
agrees that, upon learning of the existence of a Default or an Event of Default,
it shall promptly notify the Agent thereof. The Agent hereby agrees that upon
receipt of any notice under this Section 15.10 it shall promptly notify the
other Banks of the existence of such Default or Event of Default.

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

16. EXPENSES AND INDEMNIFICATION.

16.1. EXPENSES. Each of the Borrower and the Guarantor agrees to pay (i)
the reasonable costs of producing and reproducing this Credit Agreement, the
other Loan Documents and the other agreements and instruments mentioned herein,
(ii) any taxes (including any interest and penalties in respect thereto) payable
by the Agent or any of the Banks (other than taxes based upon the Agent's or any
Bank's net income) on or with respect to the transactions contemplated by this
Credit Agreement (the Borrower and the Guarantor hereby agreeing to indemnify
the Agent and each Bank with respect thereto), (iii) the reasonable fees,
expenses and disbursements of the Agent's Special Counsel or any local counsel
to the Agent incurred in connection with the preparation, syndication,
administration or interpretation of the Loan Documents and other instruments
mentioned herein, each closing hereunder, any amendments,

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modifications, approvals, consents or waivers hereto or hereunder, or the
cancellation of any Loan Document upon payment in full in cash of all of the
Obligations or pursuant to any terms of such Loan Document for providing for
such cancellation, (iv) the fees, expenses and disbursements of the Agent or any
of its affiliates incurred by the Agent or such affiliate in connection with the
preparation, syndication, administration or interpretation of the Loan Documents
and other instruments mentioned herein, including all title insurance premiums
and surveyor, engineering and appraisal charges, (v) any fees, costs, expenses
and bank charges, including bank charges for returned checks, incurred by the
Agent in establishing, maintaining or handling agency accounts for the
collection of any of the Collateral; (vi) all reasonable out-of-pocket expenses
(including without limitation reasonable attorneys' fees and costs, which
attorneys may be employees of any Bank or the Agent, and reasonable consulting,
accounting, appraisal, investment banking and similar professional fees and
charges) incurred by any Bank or the Agent in connection with (A) the
enforcement of or preservation of rights under any of the Loan Documents against
the Borrower or any of the other Transaction Parties or the administration
thereof after the occurrence of a Default or Event of Default and (B) any
litigation, proceeding or dispute whether arising hereunder or otherwise, in any
way related to any Bank's or the Agent's relationship with the Borrower or any
of the other Transaction Parties and (vii) all reasonable fees, expenses and
disbursements of any Bank or the Agent incurred in connection with UCC searches,
UCC filings or mortgage recordings.

16.2. INDEMNIFICATION. Each of the Borrower and the Guarantor agrees to
indemnify and hold harmless the Agent, its affiliates and the Banks from and
against any and all claims, actions and suits whether groundless or otherwise,
and from and against any and all liabilities, losses, damages and expenses of
every nature and character arising out of this Credit Agreement or any of the
other Loan Documents or the transactions contemplated hereby including, without
limitation, (i) any actual or proposed use by the Borrower or any of the other
Transaction Parties of the proceeds of any of the Loans or Letters of Credit,
(ii) the reversal or withdrawal of any provisional credits granted by the Agent
upon the transfer of funds from agency accounts or in connection with the
provisional honoring of checks or other items, (iii) any actual or alleged
infringement of any patent, copyright, trademark, service ▇▇▇▇ or similar right
of the Borrower or any of the other Transaction Parties comprised in the
Collateral, (iv) the Borrower or any of the other Transaction Parties entering
into or performing this Credit Agreement or any of the other Loan Documents or
(v) with respect to the Borrower and any of the other Transaction Parties and
their respective properties and assets, the violation of any Environmental Law,
the presence, disposal, escape, seepage, leakage, spillage, discharge, emission,
release or threatened release of any Hazardous Substances or any action, suit,
proceeding or investigation brought or threatened with respect to any Hazardous
Substances (including, but not limited to, claims with respect to wrongful
death, personal injury or damage to property), in each case including, without
limitation, the reasonable fees and disbursements of counsel and

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allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding; PROVIDED, HOWEVER, that such
indemnity shall not apply to the portion, if any, of such losses, claims,
damages, liabilities or related expenses of any Person seeking indemnification
that is determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the willful misconduct or gross
negligence of the Person seeking indemnification. In litigation, or the
preparation therefor, the Banks and the Agent and its affiliates shall be
entitled to select their own counsel and, in addition to the foregoing
indemnity, each of the Borrower and the Guarantor agrees to pay promptly the
reasonable fees and expenses of such counsel. If, and to the extent that the
obligations of the Borrower or the Guarantor under this Section 16.2 are
unenforceable for any reason, each of the Borrower and the Guarantor hereby
agrees to make the maximum contribution to the payment in satisfaction of such
obligations which is permissible under applicable law.

16.3. SURVIVAL. The covenants contained in this Section 16 shall survive
payment or satisfaction in full of all other Obligations.

17. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.

17.1. SHARING OF INFORMATION WITH SECTION 20 SUBSIDIARY. Each of the
Borrower and the Guarantor acknowledges that from time to time financial
advisory, investment banking and other services may be offered or provided to
the Borrower, the Guarantor or the other Transaction Parties in connection with
this Credit Agreement or otherwise, by a Section 20 Subsidiary. Each of the
Borrower and the Guarantor hereby authorizes (a) such Section 20 Subsidiary to
share with the Agent and each Bank any information delivered to such Section 20
Subsidiary by the Borrower or the Guarantor, and (b) the Agent and each Bank to
share with such Section 20 Subsidiary any information delivered to the Agent or
such Bank by the Borrower or any of the other Transaction Parties pursuant to
this Credit Agreement, or in connection with the decision of such Bank to enter
into this Credit Agreement; it being understood, in each case, that any such
Section 20 Subsidiary receiving such information shall be bound by the
confidentiality provisions of this Credit Agreement. Such authorization shall
survive the payment and satisfaction in full of all of the Obligations.

17.2. CONFIDENTIALITY. Each of the Banks and the Agent agrees, on behalf
of itself and each of its affiliates, directors, officers, employees and
representatives, to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of the same nature and in accordance with safe and sound banking practices, any
non-public information supplied to it by the Borrower or any of the other
Transaction Parties pursuant to this Credit Agreement that is identified by such
Person as being confidential at the time the same is delivered to the Banks or
the Agent, PROVIDED that nothing herein shall limit the disclosure of any such
information (a) after such information shall have become public other than
through a violation of this Section 17, (b) to the extent required by

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statute, rule, regulation or judicial process, (c) to counsel for any of the
Banks or the Agent, (d) to bank examiners or any other regulatory authority
having jurisdiction over any Bank or the Agent, or to auditors or accountants,
(e) to the Agent, any Bank or any Section 20 Subsidiary, (f) in connection with
any litigation to which any one or more of the Banks, the Agent or any Section
20 Subsidiary is a party, or in connection with the enforcement of rights or
remedies hereunder or under any other Loan Document, (g) to a Subsidiary or
affiliate of such Bank as provided in Section 17.1 or (h) to any assignee or
participant (or prospective assignee or participant) so long as such assignee or
participant agrees to be bound by the provisions of Section 19.6.

17.3. PRIOR NOTIFICATION. Unless specifically prohibited by applicable
law or court order, each of the Banks and the Agent shall, prior to disclosure
thereof, notify the Borrower of any request for disclosure of any such
non-public information by any governmental agency or representative thereof
(other than any such request in connection with an examination of the financial
condition of such Bank by such governmental agency) or pursuant to legal
process.

17.4. OTHER. In no event shall any Bank or the Agent be obligated or
required to return any materials furnished to it or any Section 20 Subsidiary by
the Borrower or any of the other Transaction Parties. The obligations of each
Bank under this Section 17 shall supersede and replace the obligations of such
Bank under any confidentiality letter in respect of this financing signed and
delivered by such Bank to the Borrower and/or the Guarantor prior to the date
hereof and shall be binding upon any assignee of, or purchaser of any
participation in, any interest in any of the Loans or Reimbursement Obligations
from any Bank.

18. SURVIVAL OF COVENANTS, ETC.

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

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19. ASSIGNMENT AND PARTICIPATION.

19.1. CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided herein, each
Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Credit Agreement (including all or
a portion of its Commitment Percentage and Commitment and the same portion of
the Loans at the time owing to it, the Notes held by it and its participating
interest in the risk relating to any Letters of Credit); PROVIDED that (i) each
of the Agent and, unless an Event of Default shall have occurred and be
continuing, the Borrower shall have given its prior written consent to such
assignment, which consent, in the case of the Borrower, will not be unreasonably
withheld, (ii) each such assignment shall be of a constant, and not a varying,
percentage of all the assigning Bank's rights and obligations under this Credit
Agreement, (iii) each assignment shall be in a minimum amount of $5,000,000 and
(iv) BKB shall retain, free of any such assignment (other than an assignment of
100% of its interests, rights and obligations under this Credit Agreement), an
amount of its Commitment of not less than the lesser of (A) $13,260,000 and (B)
fifty-one percent (51%) of the sum of the Total Commitment as of the date of
such assignment and (v) the parties to such assignment shall execute and deliver
to the Agent, for recording in the Register (as hereinafter defined), an
Assignment and Acceptance, substantially in the form of EXHIBIT F hereto (an
"Assignment and Acceptance"), together with any Notes subject to such
assignment. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five (5) Business Days after the execution
thereof, (i) the assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and obligations of a
Bank hereunder, and (ii) the assigning Bank shall, to the extent provided in
such assignment and upon payment to the Agent of the registration fee referred
to in Section 19.3, be released from its obligations under this Credit
Agreement.

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

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

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

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

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

(e) such assignee represents and warrants that it is an Eligible
Assignee;

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

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

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

(i) such assignee acknowledges that it has made arrangements with the
assigning Bank satisfactory to such assignee with respect to its PRO RATA
share of Letter of Credit Fees in respect of Outstanding Letters of Credit.

19.3. REGISTER. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Banks and the Commitment
Percentage of, and principal amount of the Loans owing to and Letter of Credit
Participations purchased by, the Banks from time to time. The entries in the

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Register shall be conclusive, in the absence of manifest error, and the
Borrower, the other Transaction Parties, the Agent and the Banks may treat each
Person whose name is recorded in the Register as a Bank hereunder for all
purposes of this Credit Agreement. The Register shall be available for
inspection by the Borrower and the Banks at any reasonable time and from time to
time upon reasonable prior notice. Upon each such recordation, the assigning
Bank agrees to pay to the Agent a registration fee in the sum of $3,500.

19.4. NEW NOTES. Upon its receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with each Note subject to
such assignment, the Agent shall (i) record the information contained therein in
the Register, and (ii) give prompt notice thereof to the Borrower and the Banks
(other than the assigning Bank). Within five (5) Business Days after receipt of
such notice, the Borrower, at its own expense, shall execute and deliver to the
Agent, in exchange for each surrendered Note, a new Note to the order of such
Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, if the assigning Bank
has retained some portion of its obligations hereunder, a new Note to the order
of the assigning Bank in an amount equal to the amount retained by it hereunder.
Such new Notes shall provide that they are replacements for the surrendered
Notes, shall be in an aggregate principal amount equal to the aggregate
principal amount of the surrendered Notes, shall be dated the effective date of
such an Assignment and Acceptance and shall otherwise be substantially the form
of the assigned Notes. The surrendered Notes shall be canceled and returned to
the Borrower.

19.5. PARTICIPATIONS. Each Bank may sell participations to one or more
banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; PROVIDED
that (i) each such participation shall be in an amount of not less than
$5,000,000, (ii) any such sale or participation shall not affect the rights and
duties of the selling Bank hereunder to the Borrower and (iii) the only rights
granted to the participant pursuant to such participation arrangements with
respect to waivers, amendments or modifications of the Loan Documents shall be
the rights to approve waivers, amendments or modifications that would reduce the
principal of or the interest rate on any Loans, extend the term or increase the
amount of the Commitment of such Bank as it relates to such participant, reduce
the amount of any commitment fees or Letter of Credit Fees to which such
participant is entitled or extend any regularly scheduled payment date for
principal or interest.

19.6. DISCLOSURE. Each of the Borrower and the Guarantor agrees that in
addition to disclosures made in accordance with standard and customary banking
practices any Bank may disclose information obtained by such Bank pursuant to
this Credit Agreement to assignees or participants and potential assignees or
participants hereunder; PROVIDED that such assignees or participants or
potential assignees or participants shall agree (i) to treat in confidence such
information unless such information otherwise becomes public

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knowledge, (ii) not to disclose such information to a third party, except as
required by law or legal process and (iii) not to make use of such information
for purposes of transactions unrelated to such contemplated assignment or
participation.

19.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER OR THE
GUARANTOR. If any assignee Bank is an Affiliate of the Borrower or the
Guarantor, then any such assignee Bank shall have no right to vote as a Bank
hereunder or under any of the other Loan Documents for purposes of granting
consents or waivers or for purposes of agreeing to amendments or other
modifications to any of the Loan Documents or for purposes of making requests to
the Agent pursuant to Section 13.1 or Section 13.2, and the determination of the
Majority Banks shall for all purposes of this Credit Agreement and the other
Loan Documents be made without regard to such assignee Bank's interest in any of
the Loans or Reimbursement Obligations. If any Bank sells a participating
interest in any of the Loans or Reimbursement Obligations to a participant, and
such participant is the Borrower or an Affiliate of the Borrower, then such
transferor Bank shall promptly notify the Agent of the sale of such
participation. A transferor Bank shall have no right to vote as a Bank
hereunder or under any of the other Loan Documents for purposes of granting
consents or waivers or for purposes of agreeing to amendments or modifications
to any of the Loan Documents or for purposes of making requests to the Agent
pursuant to Section 13.1 or Section 13.2 to the extent that such participation
is beneficially owned by the Borrower or any Affiliate of the Borrower, and the
determination of the Majority Banks shall for all purposes of this Credit
Agreement and the other Loan Documents be made without regard to the interest of
such transferor Bank in the Loans or Reimbursement Obligations to the extent of
such participation.

19.8. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Bank shall
retain its rights to be indemnified pursuant to Section 16 with respect to any
claims or actions arising prior to the date of such assignment. If any assignee
Bank is not incorporated under the laws of the United States of America or any
state thereof, it shall, prior to the date on which any interest or fees are
payable hereunder or under any of the other Loan Documents for its account,
deliver to the Borrower and the Agent certification as to its exemption from
deduction or withholding of any United States federal income taxes. Anything
contained in this Section 19 to the contrary notwithstanding, any Bank may at
any time pledge all or any portion of its interest and rights under this Credit
Agreement (including all or any portion of its Notes) to any of the twelve
Federal Reserve Banks organized under Section 4 of the Federal Reserve Act, 12
U.S.C. Section 341. No such pledge or the enforcement thereof shall release the
pledgor Bank from its obligations hereunder or under any of the other Loan
Documents.

19.9. ASSIGNMENT BY BORROWER OR GUARANTOR. Neither the Borrower nor the
Guarantor shall assign or transfer any of its rights or obligations under any of
the Loan Documents without the prior written consent of each of the Banks.

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20. NOTICES, ETC.

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

(a) if to the Borrower or the Guarantor, at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Financial
Officer, Fax: ▇▇▇-▇▇▇-▇▇▇▇ with a copy to ▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇, ▇.▇., ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn. ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇,
Fax: ▇▇▇-▇▇▇-▇▇▇▇, or at such other address for notice as the Borrower or
the Guarantor shall last have furnished in writing to the Person giving the
notice;

(b) if to the Agent, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, or such other address for
notice as the Agent shall last have furnished in writing to the Person
giving the notice; and

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

Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof.

21. GOVERNING LAW.

THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). EACH OF THE
BORROWER AND THE GUARANTOR AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS
CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS
OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND

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CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS
IN ANY SUCH SUIT BEING MADE UPON THE BORROWER OR THE GUARANTOR BY MAIL AT THE
ADDRESS SPECIFIED IN Section 20. EACH OF THE BORROWER AND THE GUARANTOR HEREBY
WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.

22. HEADINGS.

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

23. COUNTERPARTS.

This Credit Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when
executed and delivered shall be an original, and all of which together shall
constitute one instrument. In proving this Credit Agreement it shall not be
necessary to produce or account for more than one such counterpart signed by the
party against whom enforcement is sought.

24. ENTIRE AGREEMENT, ETC.

The Loan Documents and any other documents executed in connection herewith
or therewith express the entire understanding of the parties with respect to the
transactions contemplated hereby. Neither this Credit Agreement nor any term
hereof may be changed, waived, discharged or terminated, except as provided in
Section 27.

25. WAIVER OF JURY TRIAL.

Each of the parties hereto hereby waives its right to a jury trial with
respect to any action or claim arising out of any dispute in connection with
this Credit Agreement, the Notes or any of the other Loan Documents, any rights
or obligations hereunder or thereunder or the performance of which rights and
obligations. Except as prohibited by law, each of the Borrower and the
Guarantor hereby waives any right it may have to claim or recover in any
litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages. Each of the Borrower and the Guarantor (i) certifies that no
representative, agent or attorney of any Bank or the Agent has represented,
expressly or otherwise, that such Bank or the Agent would not, in the event of
litigation, seek to enforce the foregoing waivers and (ii) acknowledges that the
Agent and the Banks have been induced to enter into this Credit Agreement, the
other Loan Documents to which it is a party and the Subordination Documents

-69-

to which it is a party by, among other things, the waivers and certifications
contained herein.

26. CONSENTS, AMENDMENTS, WAIVERS, ETC.

Any consent or approval required or permitted by this Credit Agreement to
be given by the Banks may be given, and any term of this Credit Agreement, the
other Loan Documents or any other instrument related hereto or mentioned herein
may be amended, and the performance or observance by the Borrower or any of the
other Transaction Parties of any terms of this Credit Agreement, the other Loan
Documents or such other instrument or the continuance of any Default or Event of
Default may be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of the
Borrower or, as applicable, such other Transaction Party, and the written
consent of the Majority Banks. Notwithstanding the foregoing, the rate of
interest on the Notes (other than interest accruing pursuant to Section 5.10.2
following the effective date of any waiver by the Majority Banks of the Default
or Event of Default relating thereto), the amount of the Commitments of the
Banks, and the amount of commitment fee or Letter of Credit Fees hereunder may
not be changed without the written consent of the Borrower and the written
consent of each Bank affected thereby; the Revolving Credit Loan Maturity Date
may not be postponed without the written consent of each Bank affected thereby;
this Section 26 and the definition of Majority Banks may not be amended, without
the written consent of all of the Banks; and the amount of the Agent's Fee or
any Letter of Credit Fees payable for the Agent's account and Section 15 may not
be amended without the written consent of the Agent. No waiver shall extend to
or affect any obligation not expressly waived or impair any right consequent
thereon. No course of dealing or delay or omission on the part of the Agent or
any Bank in exercising any right shall operate as a waiver thereof or otherwise
be prejudicial thereto. No notice to or demand upon any of the Transaction
Parties shall entitle any of the Transaction Parties to other or further notice
or demand in similar or other circumstances.

27. SEVERABILITY.

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

28. TRANSITIONAL ARRANGEMENTS.

28.1. FIRST RESTATED CREDIT AGREEMENT SUPERSEDED. This Agreement shall
supersede the First Restated Credit Agreement in its entirety, except as
provided in this Section 28.1. On the Closing Date, the rights and obligations
of the parties under the First Restated Credit Agreement and the "Notes" (as

-70-

defined in the First Restated Credit Agreement) issued in favor of BKB under the
First Restated Credit Agreement as defined therein shall be subsumed within and
be governed by this Agreement and the other Loan Documents, PROVIDED, HOWEVER,
that each of the "Loans" (as defined in the First Restated Credit Agreement)
outstanding under the First Restated Credit Agreement on the Closing Date shall,
for purposes of this Agreement, be Loans, and shall continue to bear interest or
be subject to fees at the respective rates in effect immediately prior to the
Closing Date to the Closing Date, in the case of Base Rate Loans, and to the end
of the applicable Interest Period in the case of Eurodollar Rate Loans.

28.2. RETURN AND CANCELLATION OF NOTES. Upon its receipt of its Notes
hereunder on the Closing Date, BKB will promptly return to the Borrower, marked
"Canceled", any notes of the Borrower held by such Bank pursuant to the First
Restated Credit Agreement.

28.3. FEES UNDER SUPERSEDED AGREEMENT. All commitment and other fees
expenses owing or accruing under or in respect of the First Restated Credit
Agreement through the Closing Date shall be calculated as of the Closing Date
(prorated in the case of any fractional periods), and shall be paid in
accordance with the method, and on the dates, specified in the First Restated
Credit Agreement, as if the First Restated Credit Agreement were still in
effect.

-71-

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

▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.

By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: CFO

▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ HOLDING, INC.

By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: CFO

BANKBOSTON, N.A., individually and
as Agent

By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Director

UNION BANK OF CALIFORNIA, N.A.

By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President

SCHEDULE 1

-----------------------------------------------------------------------------
REVOLVING
BANKS REVOLVING CREDIT CREDIT
COMMITMENT COMMITMENT
PERCENTAGE
-----------------------------------------------------------------------------

BankBoston, N.A. $19,259,259.24 74.074074%
-----------------------------------------------------------------------------
Union Bank of California, N.A. $ 6,740,740.76 25.925926%
-----------------------------------------------------------------------------
TOTAL $ 26,000,000 100%
-----------------------------------------------------------------------------

SCHEDULE 1-1(a)

Restructuring Transactions

1. Capital Contribution/Incorporation Agreement, dated as of September 25,
1998, by and between ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc. and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Administration, Inc.;

2. Capital Contribution/Incorporation Agreement, dated as of September 25,
1998, by and between ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc. and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Merchandising, Inc.;

3. Sales and Distribution Agreement, dated as of September 27, 1998, by and
between ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Merchandising, Inc. and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc.;

4. Management and Administrative Services Agreement, dated as of September 27,
1998, by and between ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Administration, Inc. and ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Inc.;

5. Management and Administrative Services Agreement, dated as of September 27,
1998, by and between ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Administration, Inc. and ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ Merchandising, Inc.;

6. Master Employment Services Agreement, dated as of September 27, 1998, by
and between ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc. and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Administration, Inc.;

7. Master Employment Services Agreement, dated as of September 27, 1998, by
and between ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc. and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Merchandising, Inc.;

8. Equipment Lease, dated as of September 27, 1998, by and between ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Inc. and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Administration, Inc.;

9. Equipment Lease, dated as of September 27, 1998, by and between ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Inc. and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Merchandising, Inc.;

10. Trademark Assignment, dated as of December 23, 1998, by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Inc.; and

11. Trademark License Agreement, dated as of December 23, 1998, by and between
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Merchandising, Inc. and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc.

-2-

SCHEDULE 7.4

Fiscal Periods

YEAR/QUARTER DATE ENDING

1997/98 (FY98)
First Quarter 12/27/97
Second Quarter 3/28/98
Third Quarter 8/27/98
Fourth Quarter 9/26/98

1998/99 (FY99)
First Quarter 12/26/98
Second Quarter 3/27/99
Third Quarter 6/26/99
Fourth Quarter 9/25/99

1999/00 (FY00)
First Quarter 1/1/00
Second Quarter 4/1/00
Third Quarter 7/1/00
Fourth Quarter 9/30/00

2000/01 (FY01)
First Quarter 12/30/00
Second Quarter 3/31/01
Third Quarter 6/30/01
Fourth Quarter 9/29/01

2001/02 (FY02)
First Quarter 12/29/01
Second Quarter 3/30/02
Third Quarter 6/29/02
Fourth Quarter 9/29/02

2002/03 (FY03)
First Quarter 12/28/02
Second Quarter 3/29/03
Third Quarter 6/28/03
Fourth Quarter 9/27/03

-3-

SCHEDULE 7.7

Consents

NONE

-4-

SCHEDULE 7.11

▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.
BANK ACCOUNTS

Bank Account No. Type of Account
---- ----------- ---------------

Bank of America 14508-02607 Concentration
San Diego Corp. Bkg. Group
#1450 14504-02420 Payroll
▇▇▇ "▇" ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇

14501-02672 Bankcards
14500-03318 Bankcards
14507-04178 Bankcards
14503-03529 Insurance/PR Tax

14506-04305 Disbursement

Bank of America 896-961 Horizon Gov't Svc
Mutual Fund Services #9011 Shares Fund
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇

NationsBank 3660044698 Depository
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇

Bank of Hawaii 0002-670399 Depository
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇

Chase Manhattan Bank 323-838065 Depository
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇

-5-

BankBoston, N.A. 512-98005 Corporate Checking
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Mail Stop: 01-09-05 4000209186 Money Market
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇

▇▇▇▇▇ Fargo Bank ▇▇▇▇▇▇▇▇▇▇ Bankcards
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇

Michigan National Bank 1939799456 Depository
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇

-6-

▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ MERCHANDISING, INC.
BANK ACCOUNTS

Bank Account No. Type of Account
---- ----------- ---------------

Bank of America 14501-08339 Disbursement
San Diego Corp. Bkg. Group
#1450 ▇▇▇ "▇" ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Contact: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇-VP
(▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇

-7-

▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ADMINISTRATION, INC.
BANK ACCOUNTS

Bank Account No. Type of Account
---- ----------- ---------------

Bank of America 14508-08340 Disbursement
San Diego Corp. Bkg. Group
#1450 ▇▇▇ "▇" ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Contact: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇-VP
(▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇

-8-

SCHEDULE 7.15

▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Holding, Inc.
Capital Structure

Authorized Shares = 250,000

Primary Fully Diluted
------- -------------
Amount Shares Ownership Shares Ownership
------ ------- --------- -------------- --------

Subordinated Debt:

SKEP. . . . . . . . $10,891,354 0.0 0.0% 19,450.0 8.6%

SKIF. . . . . . . . $ 108,646 0.0 0.0% 194.0 0.1%
------------- --- --- -------- ----
TOTAL . . . $11,000,000 0.0 0.0% 19,644.1 8.7%
============= === === ======== ====
Common Equity:

SKEP. . . . . . . . $17,369,252 173,692.5 94.9% 173,692.5 76.6%

SKIF. . . . . . . . $ 180,748 1,807.5 1.0% 1,807.5 0.8%

▇. ▇▇▇▇▇▇▇▇ . . . . $ 750,000 7,500.0 4.1% 7,500.0 3.3%

BankBoston,N.A. . . $0 0.0 0.0% 4,136.6 1.8%

Sub Debt Holders. . $0 0.0 0.0% 19,644.1 8.7%

Stock Option Plan . $0 0.0 0.0% 20,000.0 8.8%
------------- --- --- -------- ----
Total . . . $18,300,000 183,000.0 100.0% 226,779.7 100.0%
============= ========= ===== ========= =====

-9-

SCHEDULE 9.1

Existing Indebtedness

Institution Indebtedness
----------- ------------

None

-10-

SCHEDULE 9.2

Existing Liens

Institution Lien
----------- ----

COMDISCO Leased Equipment: HP K100
computer and related
equipment and software.

AMERICAN NATIONAL LEASING Leased Equipment: water
CORP. coolers in stores

BANCBOSTON LEASING, INC. Leased Equipment:
Materials Handling System in
distribution center

-11-

EXHIBIT A

FORM OF AGENCY ACCOUNT AGREEMENT

▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇

______________, ___

[Agency Account Institution]
[Address]

Re: Account No. _______________

Ladies and Gentlemen:

This letter refers to Account No. and all other accounts (collectively,
the "Store Account") which [Name of Borrower] (the "Company") maintains with
you ("you" or the "Bank").

The Company hereby notifies you that it has entered into certain
financial arrangements with BankBoston, N.A., as agent (the "Agent") for
itself and other lending institutions and, in connection with those financial
arrangements, it has transferred exclusive ownership and control of the Store
Account to the Agent.

By its execution and delivery of this letter to the Agent, the Bank
irrevocably acknowledges and agrees as follows: (a) the Bank has been advised
that all funds which may from time to time be on deposit in the Store Account
are the property of the Agent; (b) the Bank shall disclose to the Agent such
information relating to the Store Account and the debits and credits thereto
as the Agent may from time to time reasonably request; (c) except as set
forth below, the Bank will not exercise any right of set-off, banker's lien
or any similar right in favor of itself or any other person in connection
with any monies, checks, drafts, instruments or other items of payment
deposited into the Store Account, or any funds on deposit thereon; (d) the
Bank will collect all monies, checks, drafts, instruments and other items of
payment deposited into the Store Account; and (e) upon the Bank's receipt of
written notice from the Agent, it will on a daily basis transfer the
collected available balance of funds standing to the credit of the Store
Account by wire transfer (or other means acceptable to the Agent) solely to:

BankBoston, N.A.
Account #________________
ABA 0 11000930

-12-

Re: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc.
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Large Corporate

(the "Agent Concentration Account") or such other destination as the Agent
shall designate. The Agent hereby notifies you that the Agent will from time
to time access the Store Account for the sole purpose of facilitating the
transfer of funds therein to the Agent Concentration Account pursuant to the
instructions set forth in the foregoing sentence.

For providing the services described in this letter agreement, the
Company shall pay to the Bank a nonrefundable monthly fee of $_, payable in
advance. This fee is in addition to the Bank's customary wire transfer of
funds. The Bank is authorized to debit the Store Account to pay this fee and
the wire transfer charges.

Notwithstanding anything in this letter to the contrary, the Bank Shall
have the right to deduct from or set off against amounts from time to time in
the Store Account (1) its usual and customary costs and expenses in respect
of interest on overdrafts and any return items, and its usual and customary
fees and expenses associated with any such return item, overdraft and/or the
maintenance of the Store Account and (ii) the face amount (or portion
thereof) of any check, instrument or other item which was deposited in the
Store Account and which has been returned unpaid for reasons of insufficient
funds or has otherwise not been collected. You hereby acknowledge and agree
that all such interest, costs, fees and expenses shall be for the account of
the Company and in the event the amounts in the Store Account are
insufficient to reimburse you for the same, the Company hereby agrees to
reimburse you for such interest, costs, fees and/or expenses immediately upon
your demand therefor in immediately available funds.

The Bank shall have no duty to inquire into the source or use of any
monies, checks, drafts, instruments or other items or amounts deposited into
the Store Account. The Company hereby agrees that any deposits of monies,
checks, drafts, instruments or other items into or withdrawals from the Store
Account now or hereafter directed by the Agent are authorized by the Company
and the Company acknowledges that it has no right to direct such transfers at
any time. The Bank shall be fully protected in acting on any instruction of
the Agent with respect to the Store Account without making any inquiry as to
the Agent's authority to give such instruction.

The Company consents and agrees to the foregoing, authorizes the Bank to
enter into this letter agreement, and agrees to indemnify and hold harmless
the Bank from and against any and all claims, actions and suits (whether
groundless or otherwise), losses, damages, costs, expenses and liabilities of
every nature and character arising out of the Bank's compliance with the
terms of this letter, except such as result from the Bank's gross negligence
or willful misconduct, and in no event shall the Bank be liable for any
consequential, indirect or special damages.

This letter agreement is binding upon each of the undersigned and you
and each of our respective successors and assigns and shall inure to the
benefit of each of us and other respective successors and assigns. It
supersedes all prior agreements, oral or written, with respect to the

-13-

subject matter hereof, and may not be modified without the prior written
consent of each of the parties hereto.

This letter agreement may be terminated only as follows: (1) you may
terminate this letter agreement and the Store Account at any time which is
thirty (30) days or more after the date you shall have given written notice
of such termination to the Agent and (ii) the Agent may terminate this letter
agreement and the Store Account at any time which is thirty (30) days or more
after the date the Agent shall have given written notice of such termination
(sent to each of the Company and you).

Any notice hereunder shall be delivered to the relevant party hereto at
the address and to the attention of such party set forth below, or at such
other address or to the attention of such other party as the party to be
addressed may specify by written notice delivered to each other party hereto.
No termination shall affect or impair any of the agreements, rights or
obligations hereunder of any party with respect to any periods of time prior
to the date of such termination.

-14-

This letter agreement shall be governed by and construed in accordance
with the internal laws of the Commonwealth of Massachusetts and applicable
federal law. This letter agreement shall become effective immediately upon
being executed by all of the parties hereto.

Very truly yours,

▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.

By:______________________________
Name:
Title:
Address:

Telephone:
Telecopier:
Attention:

BANKBOSTON, N.A., AS THE AGENT

By:______________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇

Acknowledged and agreed to this
_____ day of ____________, 19__

[NAME OF BANK]

By:________________________________
Name:
Title:
Address:

Telephone:
Telecopier:
Attention:

-15-

EXHIBIT B

FORM OF AMENDED AND RESTATED
REVOLVING CREDIT NOTE

$____________ ____________, ___

FOR VALUE RECEIVED, the undersigned ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC., a California
corporation, (the "Borrower"), hereby promises to pay to the order of I a
national banking association (the "Bank") at the Agent's head office at
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇:

(a) prior to or on the Revolving Credit Loan Maturity Date the
principal amount of DOLLARS ($ ) or, if less, the aggregate unpaid
principal amount of Loans advanced by the Bank to the Borrower pursuant to
the Second Amended and Restated Revolving Credit Agreement dated as of
December 23, 1998 (as amended and in effect from time to time, the "Credit
Agreement"), among the Borrower, the Guarantor (as defined therein), the
Bank and other lending institutions which are or may become parties thereto
from time to time, (the Bank and such other lending institutions being
collectively referred to as the "Banks") and BankBoston, N.A., as agent for
the Banks (the "Agent");

(b) the principal outstanding hereunder from time to time at the times
provided in the Credit Agreement; and

(c) interest on the principal balance hereof from time to time
outstanding from the Closing Date under the Credit Agreement through and
including the maturity date hereof at the times and at the rate provided in
the Credit Agreement.

This Amended and Restated Revolving Credit Note (this "Note") is an amendment
and restatement of the [Amended and Restated] Revolving Credit Note of the
Borrower dated December 15, 1997 and issued by the Borrower to [, which was in
turn an amendment and restatement of the Revolving Credit Notes of the
Borrower dated as of December 5, 1997, September 30, 1997 and September 27,
1996].* This Note evidences borrowings under and has been issued by the
Borrower in accordance with the terms of the Credit Agreement. The Bank and
any holder hereof is entitled to the benefits of the Credit Agreement, the
Security Documents and the other Loan Documents, and may enforce the
agreements of the Borrower contained therein, and any holder hereof may
exercise the respective remedies provided for thereby or otherwise available
in respect thereof, all in accordance with the respective terms thereof. All
capitalized terms used in this Note and not otherwise defined herein shall
have the same meanings herein as in the Credit Agreement.

-----------------
* Bracketed language to be inserted into note issued to BankBoston, N.A.

-16-

The Borrower irrevocably authorizes the Bank to make or cause to be
made, at or about the time of the Drawdown Date of any Loan or at the time of
receipt of any payment of principal of this Note, an appropriate notation on
the grid attached to this Note, or the continuation of such grid, or any
other similar record, including computer records, reflecting the making of
such Loan or (as the case may be) the receipt of such payment. The
outstanding amount of the Loans set forth on the grid attached to this Note,
or the continuation of such grid, or any other similar record, including
computer records, maintained by the Bank with respect to any Loans shall be
prima facie evidence of the principal amount thereof owing and unpaid to the
Bank, but the failure to record, or any error in so recording, any such
amount on any such grid, continuation or other record shall not limit or
otherwise affect the obligation of the Borrower hereunder or under the Credit
Agreement to make payments of principal of and interest on this Note when due.

The Borrower has the right in certain circumstances and the obligation
under certain other circumstances to prepay the whole or part of the
principal of this Note on the terms and conditions specified in the Credit
Agreement.

If any one or more of the Events of Default shall occur, the entire
unpaid principal amount of this Note and all of the unpaid interest accrued
thereon may become or be declared due and payable in the manner and with the
effect provided in the Credit Agreement.

No delay or omission on the part of the Bank or any holder hereof in
exercising any right hereunder shall operate as a waiver of such right or of
any other rights of the Bank or such holder, nor shall any delay, omission or
waiver on any one occasion be deemed a bar or waiver of the same or any other
right on any further occasion.

The Borrower and every endorser and guarantor of this Note or the
obligation represented hereby waives presentment, demand, notice, protest and
all other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note, and assents to any
extension or postponement of the time of payment or any other indulgence, to
any substitution, exchange or release of collateral and to the addition or
release of any other party or person primarily or secondarily liable.

THIS NOTE AND THE OBLIGATIONS OF THE BORROWER HEREUNDER SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW). THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS
NOTE MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY
FEDERAL COURT SITTING THEREIN AND THE CONSENT TO THE NONEXCLUSIVE
JURISDICTION OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING
MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED BY REFERENCE IN
SECTION 20 OF THE CREDIT

-17-

AGREEMENT. THE BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH
SUIT IS BROUGHT IN AN INCONVENIENT COURT.

This Note shall be deemed to take effect as a sealed instrument under
laws of the Commonwealth of Massachusetts.

IN WITNESS WHEREOF, the undersigned have caused this Note to be signed
in its corporate name by its duly authorized officer as of the day and year
first above written.

▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.

By:__________________________
Title:

-18-

--------------------------------------------------------------------------------
AMOUNT AMOUNT OF BALANCE OF
OF REVOLVING PRINCIPAL PAID PRINCIPAL NOTATION
DATE CREDIT LOAN OR PREPAID UNPAID MADE BY:
--------------------------------------------------------------------------------

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

-19-

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

-▇▇-

▇▇▇▇▇▇▇ ▇

▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇

____________ __, ____

BankBoston, N.A., as Agent
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇

Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Large Corporate Retail-Apparel

RE: REQUEST UNDER THE SECOND AMENDED AND
RESTATED REVOLVING CREDIT AGREEMENT

Ladies and Gentlemen:

Reference is hereby made to that certain Second Amended and Restated
Revolving Credit Agreement dated as of December 23, 1998 by and among
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc. (the "Borrower"), ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Holding, Inc.,
BankBoston, N.A. and the other lending institutions listed on Schedule I
thereto and BankBoston, N.A., as agent (the "Agent") for itself and such
other lending institutions (as amended and in effect from time to time, the
"Credit Agreement"). Capitalized terms which are used herein without
definition and which are defined in the Credit Agreement shall have the same
meanings herein as in the Credit Agreement.

FOR BORROWINGS:

Pursuant to Section 2.6 of the Credit Agreement, we hereby request that
a Loan consisting of [**a Base Rate Loan in the principal amount of $_________,
or a Eurodollar Rate Loan in the principal amount of $___________** with an
Interest Period commencing on ____________ and maturing on _____________**]
be made on ___________ __, ____. We understand that this request is
irrevocable and binding on us and obligates us to accept the requested Loan
on such date.

-----------------
** Note: Eurodollar Rate Loans shall not be less than $100,000 or a multiple
of $100,000 in excess thereof.

-21-

BankBoston, N.A.
Page 2

We hereby certify (a) that the aggregate outstanding principal amount of
the Loans on today's date is $ , (b) that we will use the proceeds of the
requested Loan in accordance with the provisions of the Credit Agreement,
(c) that each of the representations and warranties contained in the Credit
Agreement, any of the other Loan Documents or any documents, certificate or
other paper or notice delivered pursuant to or in connection with the Credit
Agreement was true and correct in all material respects as of the date as of
which they were made and each of the representations and warranties contained
in the Credit Agreement are true at and as of the date hereof (except, in
each case, to the extent of changes resulting from transactions contemplated
or permitted by the Credit Agreement and changes occurring in the ordinary
course of business that singly or in the aggregate are not materially
adverse, and to the extent that such representations and warranties relate
expressly to an earlier date) and (d) that no Default or Event of Default has
occurred and is continuing.

FOR REPAYMENTS:

Pursuant to the Credit Agreement, we hereby request that $ applied as
payment of principal on our outstanding [**Loans **].

Very truly yours,

▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.

By:____________________________
Title:

-22-

EXHIBIT D

FORM OF
COMPLIANCE CERTIFICATE

[Date]

BankBoston, N.A., as Agent
and the Banks referred to below
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇

Ladies and Gentlemen:

Reference is hereby made to that certain Second Amended and Restated
Revolving Credit Agreement dated as of December 23, 1998, (as amended, modified,
supplemented or restated and in effect from time to time, the "Credit
Agreement") among ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc. (the "Borrower"), ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Holding, Inc. (the "Guarantor), the lending institutions referred to therein as
Banks (collectively, the "Banks"), and BankBoston, N.A., as agent for itself and
the Banks (in such capacity, the "Agent"). Capitalized terms used herein without
definition shall have the same meanings herein as in the Credit Agreement.

This is a certificate delivered pursuant to Section 8.2 of the Credit
Agreement with respect to calculations of certain components of the criteria for
determining the Applicable Margin and for purposes of evidencing compliance with
the financial covenants provided for in Section 10 of the Credit Agreement. This
certificate has been duly executed by the principal financial or accounting
officer of the Borrower.

To the best of the knowledge and belief of the undersigned: (a) each of the
representations and warranties contained in the Credit Agreement and the other
Loan Documents are true in all material respects as of the date hereof, with the
same effect as if made at and as of the date hereof (except to the extent of any
changes resulting from transactions contemplated or permitted by the Credit
Agreement and the other Loan Documents and changes occurring in the ordinary
course of business that singly or in the aggregate are not materially adverse
and to the extent that such representations and warranties relate expressly to
an earlier date); (b) attached hereto as Appendix I and set forth in reasonable
detail are computations evidencing compliance with the covenants contained in
Section 10 of the Credit Agreement as of the date and for the applicable period
to which the financial statements delivered herewith relate as well as
calculations relating to the Interest Coverage Ratio component of the Applicable
Base Rate Margin or Applicable Eurodollar Rate Margin criteria as of the date
and for the applicable period to which the financial statements delivered
herewith relate; (c) the calculations present the financial information
contained therein as of the last day of such period and for such applicable
period, as the case may be, subject to normal year end adjustments; (d) as of
the date hereof, no Default or Event of

-23-

Default has occurred or is continuing and (e) the [quarterly] [annual]
financial statements delivered to the Banks and the Agent herewith were
prepared in accordance with generally accepted accounting principles (except
for the absence of footnotes required by generally accepted accounting
principles) and presents fairly the financial position of the Borrower and
its Subsidiaries as of the date thereof [(subject, in the case of the
quarterly financial statements, to year-end adjustments)].

In addition, together with this certificate, the Borrower is delivering to
the Agent the financial statements [describe date and period of applicable
financial statements] required pursuant to Section 8.2 of the Credit Agreement.

IN WITNESS WHEREOF, the undersigned has executed this certificate as an
instrument under seal as of the date first written above.

▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.

By:______________________
Name:
Title:

-24-

APPENDIX I

COMPLIANCE CERTIFICATE WORKSHEET

▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ HOLDING, INC.

As of ______________

Section Calculation
------- -----------

10.1 CAPITAL EXPENDITURES

Capital Expenditures (in $____________
the aggregate) (not to exceed
the greater of (i) the dollar
amount set forth opposite the
relevant fiscal year
described in the table in
Section 10.1 and (ii) the
amount equal to the
percentage of Consolidated
EBITDA as measured for the
prior fiscal year set forth
opposite the relevant
fiscal year in such table)

10.2 FUNDED DEBT TO EBITDA. $____________

A. CONSOLIDATED FUNDED
DEBT:
(measured on the last
day of the fiscal
quarter ending during
the relevant period
described in the table
in Section 10.2)

(1) amount of Loans $__________
outstanding, PLUS

(2) Maximum Drawing $__________
Amount and all
unpaid Reimbursement
Obligations, PLUS

(3) outstanding $__________
amount of any other
Indebtedness For
Borrowed Money:

-25-

B. CONSOLIDATED EBITDA: $___________
(measured for the period
of four consecutive
fiscal quarters ending
during the relevant
period described in the
table in Section 10.2)

(1) Consolidated net $__________
income (or net
deficit), PLUS
(after deduction of
all expenses, taxes,
and other proper
charges)

(2) depreciation and $__________
amortization, plus

(3) income tax $__________
expense, PLUS

(4) Consolidated
Total Interest
Expense, PLUS

(5) fees and $__________
expenses paid in
connection with the
closing of the Loans
and the Rampage
Acquisition (up to a
maximum of
$__________)

C. RATIO OF A TO B: _____:_____
(not to exceed the ratio
for the relevant period
as set forth in the table
in Section 10.2)

10.3 FIXED CHARGE RATIO. $__________
A. CONSOLIDATED EBITDA
MINUS CAPITAL
EXPENDITURES
(measured for the period
of four consecutive
fiscal quarters ending
during the relevant
period described in the
table in Section 10.3)

(1) Consolidated $__________
EBITDA, MINUS

-26-

(2) Capital $__________
Expenditures:
(excluding Capital
Expenditures in
respect of the
purchase or lease of
the Borrower's new
headquarters and
distribution center
(including any
equipment installed
therein))

B. CONSOLIDATED TOTAL $_________
DEBT SERVICE:
(measured for the period
of four consecutive
fiscal quarters ending
during the relevant
period described in the
table in Section 10. 3)

(1) Consolidated $__________
Total Interest
Expense, plus

(2) aggregate $__________
liability for
principal payments
in respect of
Indebtedness
relating to the
borrowing of money
or the obtaining of
credit (other than
Indebtedness
consisting of
current liabilities
permitted under
Section 9.1(d) and
other Indebtedness
consisting of non-
interest bearing
ordinary course
obligations due and
payable)

C. RATIO OF A TO B: ____:____
(not to be less than the
ratio set forth opposite
the relevant period
described in the table in
Section 10.3)

-27-

10.4 INTEREST COVERAGE RATIO

A. CONSOLIDATED EBITDA $_________
PLUS RENTAL OBLIGATIONS:
(measured for the period
of four consecutive
fiscal quarters ending
during the relevant
period described in the
table in Section 10.4)

(1) Consolidated net $__________
income (or net
deficit), PLUS
(after deduction of
all expenses, taxes,
and other proper
charges)

(2) depreciation and $__________
amortization, PLUS

(3) income tax $__________
expense, PLUS

(4) Consolidated $__________
Total Interest
Expense, PLUS

(5) fees and $__________
expenses paid in
connection with the
closing of the
Loans, PLUS

(6) Rental $__________
Obligations:

B. CONSOLIDATED TOTAL
INTEREST EXPENSE PLUS $__________
RENTAL OBLIGATIONS:
(measured for the period
of four consecutive
fiscal quarters ending
during the relevant
period described in the
table in Section 10.4)

(1) Consolidated $__________
Total Interest
Expense, PLUS

(2) Rental $__________
Obligations:

-28-

C. RATIO OF A TO B: _____:____
(not to be less than the
ratio set forth opposite
the relevant period
described in the table in
Section 10.4)

10.5 INVENTORY TURN RATIO.

A. COST OF MERCHANDISE $_________
SOLD OF THE BORROWER:
(measured for the period
of four consecutive
fiscal quarters ending
during the relevant
period described in the
table in Section 10.5)

B. AVERAGE BOOK VALUE OF $_________
INVENTORY OF THE
BORROWER:

C. RATIO OF A TO B: ____:____
(not to be less than the
ratio set forth opposite
the relevant period
described in the table in
Section 10.5)

-29-

EXHIBIT E

FORM OF
ASSIGNMENT AND ACCEPTANCE

Dated as of ____________, ___

Reference is made to the Second Amended and Restated Revolving Credit
Agreement, dated as of December 23, 1998 (as from time to time amended and in
effect, the "Credit Agreement"), by and among ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC., a
California corporation (the "Borrower"), ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ HOLDING, INC., a
Delaware corporation (the "Guarantor"), the banking institutions referred to
therein as Banks (collectively, the "Banks"), and BANKBOSTON, N.A., a national
banking association, as agent (in such capacity, the "Agent") for the Banks.
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned to such terms in the Credit Agreement.

________________________________________ (the "Assignor") and
________________________________ (the "Assignee") hereby agree as follows:

1. ASSIGNMENT. Subject to the terms and conditions of this Assignment and
Acceptance, the Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes without recourse to the Assignor, a
$__________ interest in and to the rights, benefits, indemnities and obligations
of the Assignor under the Credit Agreement equal to % in respect of the Total
Commitment immediately prior to the Effective Date (as hereinafter defined).

2. ASSIGNOR'S REPRESENTATIONS. The Assignor (i) represents and warrants
that (A) it is legally authorized to enter into this Assignment and Acceptance,
(B) as of the date hereof, its Commitment is $______________ its Commitment
Percentage is the aggregate outstanding principal balance of its Loans equals $
the aggregate amount of its Letter of Credit Participations equals $ (in each
case after giving effect to the assignment contemplated hereby but without
giving effect to any contemplated assignments which have not yet become
effective), and (C) immediately after giving effect to all assignments which
have not yet become effective, the Assignor's Commitment Percentage will be
sufficient to give effect to this Assignment and Acceptance, (ii) makes no
representation or warranty, express or implied, and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with the Credit Agreement or any of the other Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement, the other Loan Documents or any other instrument or
document furnished pursuant thereto or the attachment, perfection or priority of
any security interest or mortgage, other than that it is the legal and
beneficial owner of the interest being assigned by it hereunder free and clear
of any

-30-

claim or encumbrance; (111) makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the Borrower or
the Guarantor or any other Person primarily or secondarily liable in respect
of any of the Obligations, or the performance or observance by the Borrower
or the Guarantor or any other Person primarily or secondarily liable in
respect of any of the Obligations of any of its obligations under the Credit
Agreement or any of the other Loan Documents or any other instrument or
document delivered or executed pursuant thereto; and (iv) attaches hereto the
Note delivered to it under the Credit Agreement.

The Assignor requests that the Borrower exchange the Assignor's Note for
new Notes payable to the Assignor and the Assignee as follows:

Notes Payable to Amount of
the Order of: Note
---------------- ---------

Assignor $___________
Assignee $___________

3. ASSIGNEE'S REPRESENTATIONS. The Assignee (1) represents and warrants
that (A) it is duly and legally authorized to enter into this Assignment and
Acceptance, (B) the execution, delivery and performance of this Assignment and
Acceptance do not conflict with any provision of law or of the charter or bylaws
of the Assignee, or of any agreement binding on the Assignee, (C) all acts,
conditions and things required to be done and performed and to have occurred
prior to the execution, delivery and performance of this Assignment and
Acceptance, and to render the same the legal, valid and binding obligation of
the Assignee, enforceable against it in accordance with its terms, have been
done and performed and have occurred in due and strict compliance with all
applicable laws; (11) confirms that it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 8.2 thereof and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (iii) agrees that it
will, independently and without reliance upon the Assignor, the Agent or any
other Bank 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 Credit Agreement; (iv) represents and warrants that
it is an Eligible Assignee; (v) appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under the Credit
Agreement and the other Loan Documents as are delegated to the Agent by the
terms thereof, together with such powers as are reasonably incidental thereto;
(vi) agrees that it will perform in accordance with their terms all the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Bank; and (vii) acknowledges that it has made arrangements
with the Assignor satisfactory to the Assignee with respect to its pro rata
share of Letter of Credit Fees in respect of outstanding Letters of Credit.

4. EFFECTIVE DATE. The effective date for this Assignment and Acceptance
shall be (the "Effective Date"). Following the execution of this Assignment and
Acceptance and, prior to the

-31-

occurrence of a Default or Event of Default, the consent of the Borrower
hereto having been obtained, each party hereto shall deliver its duly
executed counterpart hereof to the Agent for acceptance by the Agent and
recording in the Register by the Agent. Upon the recordation of this
Assignment and Acceptance, the Assignor shall pay to the Agent a registration
fee in the sum of $3,500. Schedule I to the Credit Agreement shall thereupon
be replaced as of the Effective Date by the Schedule I annexed hereto.

5. RIGHTS UNDER CREDIT AGREEMENT. Upon such acceptance and recording,
from and after the Effective Date, (i) the Assignee shall be a party to the
Credit Agreement and, to the extent provided in this Assignment and Acceptance,
have the rights and obligations of a Bank thereunder, and (ii) the Assignor
shall, with respect to that portion of its interest under the Credit Agreement
assigned hereunder, relinquish its rights and be released from its obligations
under the Credit Agreement; provided, however, that the Assignor shall retain
its rights to be indemnified pursuant to Section 16 of the Credit Agreement with
respect to any claims or actions arising prior to the Effective Date.

6. PAYMENTS. Upon such acceptance of this Assignment and Acceptance by the
Agent and such recording, from and after the Effective Date, the Agent shall
make all payments in respect of the rights and interests assigned hereby
(including payments of principal, interest, fees and other amounts) to the
Assignee. The Assignor and the Assignee shall make any appropriate adjustments
in payments for periods prior to the Effective Date by the Agent or with respect
to the making of this assignment directly between themselves.

7. GOVERNING LAW. THIS ASSIGNMENT AND ACCEPTANCE IS INTENDED TO TAKE
EFFECT AS A SEALED INSTRUMENT TO BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS (WITHOUT REFERENCE TO
CONFLICT OF LAWS).

8. COUNTERPARTS. This Assignment and Acceptance may be executed in any
number of counterparts which shall together constitute but one and the same
agreement.

IN WITNESS WHEREOF, intending to be legally bound, each of the undersigned
has caused this Assignment and Acceptance to be executed on its behalf by its
officer thereunto duly authorized, as of the date first above written.

ASSIGNOR:

By:_______________________
Title:

ASSIGNEE:

-32-

By:________________________
Title:
CONSENTED TO:

▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.

By:
_________________________
Title:

BANKBOSTON, N.A., as
Agent

By:_______________________
Title:

-33-

FIRST AMENDMENT AND MODIFICATION AGREEMENT

FIRST AMENDMENT AND MODIFICATION AGREEMENT dated as of June 10, 1999
(this "Amendment") by and among ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC., a California
corporation (the "Borrower"); ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ HOLDING, INC., a Delaware
corporation (the "Guarantor"); ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ MERCHANDISING, INC., a
California corporation (the "Subsidiary Guarantor"); BANKBOSTON, N.A., as
Agent (the "Agent") and BANKBOSTON, N.A., individually, and the other lending
institutions (collectively, the "Banks") listed on SCHEDULE 1 to the Second
Amended and Restated Revolving Credit Agreement dated as of December 23, 1998
(as amended and in effect from time to time, the "Credit Agreement") among
the Borrower, the Guarantor, the Banks and the Agent. Terms not otherwise
defined herein which are defined in the Credit Agreement shall have the
respective meanings assigned to such terms in the Credit Agreement, as
amended hereby.

WHEREAS, the Borrower has requested that the Agent and the Banks amend
certain provisions of the Credit Agreement in order, among other things, to
increase the size of the Total Commitment to $32,000,000 and to permit the
redemption of the Subordinated Notes;

WHEREAS, upon the terms and subject to the conditions contained herein,
the Agent and the Banks are willing so to increase the total Commitment and
to consent to such redemption;

NOW, THEREFORE, in consideration of the mutual agreements contained in
the Credit Agreement, the other Loan Documents and this Amendment and for
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:

SECTION 1. AMENDMENT OF SECTION 1.1 OF THE CREDIT AGREEMENT. Section
1.1 of the Credit Agreement is hereby amended by:

(a) deleting the table contained in the definition of "Applicable
Eurodollor Rate Margin" and substituting in lieu thereof the table set forth
below:

APPLICABLE EURODOLLAR
" INTEREST COVERAGE RATIO RATE MARGIN
----------------------------- -----------------------

Less than or equal to 2.00:1.00.......... 2.50%

Greater than 2.00:1.0 and less
than or equal to 3.00:1.00.............. 2.25%

Greater than 3.00:1.00 and less
than or equal to 3.50:1.00.............. 2.00%

Greater than 3.50:1.00................... 1.75%"

(b) deleting from the definition of "Applicable Eurodollar Rate Margin"
the percentage "2.75%" in each place it appears and substituting in lieu
thereof in each such place the percentage "2.50%";

(c) amending the definition of "Consolidated EBITDA" by (i) deleting the
word "and" between clauses (i) and (ii) of clause (d) thereof, and (ii)
inserting, immediately before the period (".") at the end thereof the
following text:

", and (iii) the redemption of the Subordinated Notes in their entirety,
on or before June 30, 1999, in accordance with the terms of Section 5.1 of
each Subordinated Note".

(d) amending the definition of "Consolidated Total Debt Service" by
inserting in the parenthetical in clause (b) thereof, immediately after the
text "other than" and immediately before the text "Indebtedness consisting of
current liabilities...", the text "Indebtedness consisting of the
Subordinated Notes, to the extent each of such Subordinated Notes is redeemed
in its entirety on or before June 30, 1999 in accordance with the terms of
Section 5.1 of each Subordinated Note,".

(e) amending the definition of "Consolidated Total Interest Expense" by
inserting, immediately before the period (".") at the end thereof, the text:
"and excluding, to the extent applicable, premiums and other amounts payable
and non-cash amounts expensed, in each case in connection with the
redemption, on or before June 30, 1999, of the Subordinated Notes in
accordance with the terms of Section 5.1 of each Subordinated Note."

(f) deleting the definition of "Reduction Date" in its entirety and
substituting in lieu thereof the following new definition:

"REDUCTION DATE. See Section 2.3.1."

(g) inserting, in the order required by alphabetical order, the
following new definition:

-2-

"SUBSIDIARY GUARANTY. The Guaranty, dated or to be dated on or prior
to the Closing Date, made by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Merchandising in favor of the
Banks and the Agent pursuant to which ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Merchandising
guaranties to the Banks and the Agent the payment and performance of the
Obligations, in form and substance satisfactory to the Agent."

SECTION 2. AMENDMENT OF SECTION 2.3.1 OF THE CREDIT AGREEMENT.
Section 2.3.1 of the Credit Agreement is hereby amended by deleting the table
set forth therein and substituting in lieu thereof the following table:

TOTAL COMMITMENT
"REDUCTION DATE FOLLOWING REDUCTION AMOUNT OF REDUCTION
-------------- ------------------- -------------------

October 1, 1999 $30,500,000 $1,500,000
October 1, 2000 $25,000,000 $5,500,000
October 1, 2001 $18,000,000 $7,000,000"

SECTION 3. AMENDMENT OF 7.16.1 OF THE CREDIT AGREEMENT. Section 7.16.1
of the Credit Agreement is hereby amended by deleting the first sentence
thereof in its entirety and substituting in lieu thereof the following
sentence: "The proceeds of the Loans shall be used to refinanced the Term
Loan (as defined in the First Restated Credit Agreement), to enable the
Guarantor to redeem, on or before June 30, 1999, the Subordinated Notes in
their entirety in accordance with the terms of Section 5.1 of each
Subordinated Note and for working capital and general corporate purposes."

SECTION 4. AMENDMENT OF SECTION 8.7 OF THE CREDIT AGREEMENT. Section 8.7
of the Credit Agreement is hereby amended by deleting the first sentence
thereof in its entirety and substituting in lieu thereof the following
sentence: "The Borrower will use the proceeds of the Loans solely to
refinance the Term Loan (as defined in the First Restated Credit Agreement),
to redeem, on or before June 30, 1999, the Subordinated Notes in their
entirety in accordance with the terms of Section 5.1 of each Subordinated
Note and for working capital and general corporate purposes."

SECTION 5. AMENDMENT OF SECTION 9.1 OF THE CREDIT AGREEMENT. Section 9.1
of the Credit Agreement is hereby amended by:

(a) inserting in subsection (j) thereof immediately prior to the
semicolon (";") at the end thereof the text "(but excluding, after June 30,
1999, the Subordinated Notes)";

(b) deleting clause (i) from subsection (n) thereof and
substituting in lieu thereof the following text:

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(i) in connection with the redemption of the Subordinated
Notes in accordance with the terms of Section 5.1 of each
Subordinated Note, the outstanding principal amount of the
Subordinated Notes, together with any accrued interest, premiums or
fees thereon, in an aggregate amount not to exceed $11,800,000 and
which aggregate amount is paid on or before June 30, 1999".

SECTION 6. AMENDMENT OF SECTION 9.8 OF THE CREDIT AGREEMENT. Section 9.8
of the Credit Agreement is hereby amended by deleting the period (".") at the
end thereof and substituting in lieu thereof the following text: ";PROVIDED,
HOWEVER, that, on or prior to June 30, 1999, the Guarantor may redeem the
Subordinated Notes in accordance with the terms of Section 5.1 of each
Subordinated Note."

SECTION 7. REPLACEMENT OF EXHIBIT B AND SCHEDULE 1 TO THE CREDIT
AGREEMENT. EXHIBIT B and SCHEDULE 1 to the Credit Agreement are hereby
deleted in their entirety, and EXHIBIT B and SCHEDULE 1 attached hereto are
hereby respectively substituted in lieu thereof.

SECTION 8. LIMITED CONSENT UNDER THE SUBORDINATION AGREEMENT. Pursuant
to Section 2.1 of the Subordination Agreement, payments of any kind on the
Subordinated Notes (other than regularly scheduled payments of interest on
the Subordinated Notes which are otherwise permitted to be paid by the terms
of the Subordination Agreement) are subordinated to the Obligations and
deferred until the full and final payment in cash of the Obligations.
Notwithstanding the foregoing, the Agent and the Banks hereby consent to the
redemption on or before June 30, 1999, by the Guarantor of the Subordinated
Notes in accordance with Section 5.1 of each of the Subordinated Notes so
long as the Subordinated Notes (a) are redeemed in their entirety on or
before June 30, 1999 and (b) the aggregate amount paid in respect of such
redemption (including principal, interest, premiums, fees and any other
amounts) does not exceed $11,800,000.

SECTION 9. CONDITIONS TO EFFECTIVENESS. This Amendment shall be deemed
to be effective as of the date first written above (the "Effective Date")
upon the Agent's receipt of the following, each in form and substance
satisfactory to the Agent:

(a) facsimile copies of original counterparts (to be followed
promptly by original counterparts) or original counterparts of this
Amendment, duly executed by each of the Borrower, the Guarantor, the
Subsidiary Guarantor, the Agent and the Banks;

(b) a duly executed promissory note in the form of EXHIBIT B
hereto, issued in favor of each Bank in the respective original principal
amounts set forth on SCHEDULE 1 hereto;

(c) a duly executed Secretary's certificate of the Assistant
Secretary of each of the Borrower, the Guarantor and the Subsidiary

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Guarantor certifying (and where applicable, attaching copies of) the
Borrower's, the Guarantor's and the Subsidiary Guarantor's (i) charter
document; (ii) by-laws; (iii) resolutions of its Board of Directors
authorizing the transactions contemplated hereby; and (iv) the
incumbency of officers entitled to sign this Amendment on behalf of the
Borrower, the Guarantor and the Subsidiary Guarantor, as the case may be;

(d) the legal opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to the Borrower,
the Guarantor and the Subsidiary Guarantor;

(e) such corporate good standing certificates of each of the
Borrower, the Guarantor and the Subsidiary Guarantor as the Agent may
require;

(f) payment in cash to the Agent, for the PRO RATA accounts of the
Banks, of an amendment fee in the amount of $60,000; and

(g) such other documents, agreements and items as the Agent may
require.

SECTION 10. REPRESENTATIONS AND WARRANTIES; NO DEFAULT;
AUTHORIZATION. Each of the Borrower, the Guarantor and the Subsidiary
Guarantor hereby represents and warrants to each of the Agent and the Banks
as follows:

(a) Each of the representations and warranties of the Borrower, the
Guarantor and the Subsidiary Guarantor contained in the Credit
Agreement, the other Loan Documents or in any document or instrument
delivered pursuant to or in connection with the Credit Agreement, the
other Loan Documents or this Amendment was true as of the date as of
which it was made and is true as of the Effective Date (except to the
extent of changes resulting from transactions contemplated or permitted
by the Credit Agreement, as amended hereby, and the other Loan Documents
and changes occurring in the ordinary course of business that singly or
in the aggregate are not materially adverse and to the extent that such
representations and warranties relate expressly to an earlier date), and
no Default or Event of Default has occurred and is continuing as of the
date of this Amendment or would occur after giving effect to the
transactions contemplated by this Amendment; and

(b) This Amendment has been duly authorized, executed and delivered
by each of the Borrower, the Guarantor and the Subsidiary Guarantor, and
shall be in full force and effect upon the satisfaction of the condition
set forth in Section 9 hereof, and the agreements of each of the
Borrower, the Guarantor and the Subsidiary Guarantor contained herein,
in the Credit Agreement, as herein amended, or in the other Loan
Documents respectively constitute the legal, valid and binding
obligations of each of the Borrower, the Guarantor and the Subsidiary
Guarantor

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party hereto or thereto, enforceable against the Borrower, the Guarantor
and the Subsidiary Guarantor in accordance with their respective terms,
except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights and except to the extent
that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any
proceeding therefor may be brought.

SECTION 11. RATIFICATION, ETC. Except as expressly amended hereby,
the Credit Agreement, the other Loan Documents and all documents, instruments
and agreements related thereto are hereby ratified and confirmed in all
respects and shall continue in full force and effect. All references in the
Credit Agreement or such other Loan Documents or in any related agreement or
instrument to the Credit Agreement or such other Loan Documents shall
hereafter refer to such agreements as amended hereby, pursuant to the
provisions of the Credit Agreement.

SECTION 12. NO PRESENT CLAIMS. In order to eliminate any possibility
that any past conditions, acts, omissions, events, circumstances or matters
would impair or otherwise adversely affect any of the rights, interests,
contracts, collateral security or remedies of the Agent or any of the Banks,
each of the Borrower, the Guarantor and the Subsidiary Guarantor hereby
acknowledges and agrees that: (i) neither it nor any of its Subsidiaries has
any claim or cause of action against the Agent, any of the Banks or any of
their directors, officers, employees or agents; (ii) neither it nor any of
its Subsidiaries has any offset right, counterclaim or defense of any kind
against any of its obligations, indebtedness or liabilities to the Agent
and/or the Banks, including, without limitation, the Obligations; and (iii)
each of the Agent and the Banks has heretofore properly performed and
satisfied in a timely manner all of its obligations to each of the Borrower,
the Guarantor and the Subsidiary Guarantor and their Subsidiaries.

SECTION 13. EXPENSES. Without limiting the expense reimbursement
requirements set forth in Section 16 of the Credit Agreement, the Borrower
agrees to pay on demand all costs and expenses, including reasonable
attorneys' fees, of the Agent incurred in connection with this Amendment.

SECTION 14. NO IMPLIED WAIVER, ETC. Except as expressly provided
herein, nothing contained herein shall constitute a waiver of, impair or
otherwise affect any of the Obligations, any other obligations of the
Borrower, the Guarantor and the Subsidiary Guarantor or any of their
Subsidiaries or any right of the Agent or the Banks consequent thereon. The
waivers and consents provided herein are limited strictly to their terms.
Neither the Agent nor any of the Banks shall have any obligation to issue any
further waiver or consent with respect to the subject matter hereof or any
other matter.

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SECTION 15. COUNTERPARTS. This Amendment may be executed in one or
more counterparts, each of which shall be deemed an original but which
together shall constitute one and the same instrument.

SECTION 16. GOVERNING LAW. THIS AMENDMENT SHALL FOR ALL PURPOSES
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH
OF MASSACHUSETTS (WITHOUT REFERENCE TO CHOICE OR CONFLICTS OF LAWS).

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as a
document under seal as of the date first above written.

▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.

By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: CFO

▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ HOLDING, INC.

By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: CFO

BANKBOSTON, N.A., Individually and
as Agent

By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Director

UNION BANK OF CALIFORNIA, N.A.

By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President

CHARLOTTE RUSSE, INC. SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT DATED as of December 23, 1998

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