AMENDED AND RESTATED CREDIT AGREEMENT

 AMENDED AND RESTATED CREDIT AGREEMENT

                                 among

                     FREMONT GENERAL CORPORATION,

                     VARIOUS LENDING INSTITUTIONS,

                                  and

                    THE CHASE MANHATTAN BANK, N.A.,

                               AS AGENT

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

                      Dated as of August 24, 1995
                     -----------------------------

                             $200,000,000

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                           TABLE OF CONTENTS

                                                                    Page

SECTION 1.  Amount and Terms of Credit................................1

      1.01  Commitments...............................................1
      1.02  Minimum Amount of Each Borrowing; Maximum
           Number of Borrowings.......................................2
      1.03  Notice of Borrowing of Loans..............................2
      1.04  Competitive Bid Borrowings................................3
      1.05  Disbursement of Funds.....................................5
      1.06  Notes; Register...........................................6
      1.07  Conversions...............................................7
      1.08  Pro Rata Borrowings.......................................8
      1.09  Interest..................................................8
      1.10  Interest Periods..........................................9
      1.11  Increased Costs, Illegality, etc.........................10
      1.12  Compensation.............................................13
      1.13  Change of Lending Office.................................14

SECTION 2.  Fees; Commitments........................................14

      2.01  Fees.....................................................14
      2.02  Voluntary Reduction of Commitments.......................14
      2.03  Mandatory Reduction of Commitments.......................15

SECTION 3.  Payments.................................................15

      3.01  Voluntary Prepayments....................................15
      3.02  Mandatory Prepayments and Repayments.....................16
      3.03  Method and Place of Payment..............................17
      3.04  Net Payments.............................................18

SECTION 4.  Conditions Precedent.....................................19

      4.01     Conditions Precedent to Amendment and
               Restatement...........................................19
      4.02     Conditions Precedent to Borrowings....................23

SECTION 5.  Representations, Warranties and
            Agreements...............................................24

      5.01  Corporate Status.........................................24
      5.02  Corporate Power and Authority............................24
      5.03  No Violation.............................................25
      5.04  Litigation...............................................25

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                                                                   Page

      5.05  Use of Proceeds..........................................25
      5.06  Governmental Approvals...................................26
      5.07  Investment Company Act...................................26
      5.08  Public Utility Holding Company Act.......................26
      5.09  True and Complete Disclosure.............................27
      5.10  Financial Condition; Financial Statements................27
      5.11  Security Interests.......................................28
      5.12  Tax Returns and Payments.................................28
      5.13  Compliance with ERISA....................................29
      5.14  Subsidiaries.............................................29
      5.15  Intellectual Property....................................30
      5.16  Pollution and Other Regulations..........................31
      5.17  Properties...............................................31
      5.18  Labor Relations; Collective Bargaining
           Agreements................................................31
      5.19  Capitalization...........................................32
      5.20  Indebtedness.............................................32
      5.21  Compliance with Statutes, etc............................32

SECTION 6.  Affirmative Covenants....................................32

      6.01  Information Covenants....................................33
      6.02  Books, Records and Inspections...........................39
      6.03  Insurance................................................40
      6.04  Payment of Taxes.........................................40
      6.05  Corporate Franchises.....................................40
      6.06  Compliance with Statutes, etc............................40
      6.07  ERISA....................................................40
      6.08  Performance of Obligations...............................41
      6.09  Good Repair..............................................42
      6.10  End of Fiscal Years; Fiscal Quarters.....................42
      6.11  NAIC Tests...............................................42

SECTION 7.  Negative Covenants.......................................42

      7.01  Changes in Business......................................42
      7.02  Consolidation, Merger, Sale or Purchase of
           Assets, etc...............................................43
      7.03  Liens....................................................44
      7.04  Indebtedness.............................................47
      7.05  Investments..............................................49
      7.06  Prepayments and Modifications of Permitted
           Subordinated Debt and Liquid Yield Option
           Notes.....................................................50
      7.07  Restrictions on Subsidiary Payments......................51
      7.08  Transactions with Affiliates.............................52
      7.09  Issuance of Stock........................................52
      7.10  Liabilities to Policyholder Surplus Ratio................52

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                                                                            Page

      7.11  Net Premiums Written Ratio...............................52
      7.12  Leverage Ratio...........................................52
      7.13  Minimum Consolidated Net Worth...........................52
      7.14  Interest Coverage Ratio..................................52
      7.15  FIC Consolidated Surplus.................................53
      7.16  Insured Depository Subsidiaries..........................53
      7.17  Permitted CIC Acquisition Subordinated
           Note......................................................53

SECTION 8.  Events of Default........................................53

      8.01  Payments.................................................53
      8.02  Representations, etc.....................................53
      8.03  Covenants................................................54
      8.04  Default Under Other Agreements...........................54
      8.05  Bankruptcy, etc..........................................54
      8.06  ERISA....................................................55
      8.07  Pledge Agreement.........................................56
      8.08  Judgments................................................56
      8.09  Ownership................................................56

SECTION 9.  Definitions..............................................57

SECTION 10.  The Agent...............................................77

      10.01  Appointment.............................................77
      10.02  Delegation of Duties....................................77
      10.03  Exculpatory Provisions..................................77
      10.04  Reliance by Agent.......................................78
      10.05  Notice of Default.......................................78
      10.06  Non-Reliance on Agent and Other Banks...................79
      10.07  Indemnification.........................................79
      10.08  Agent in Its Individual Capacity........................80
      10.09  Resignation of the Agent; Successor Agent...............80

SECTION 11.  Miscellaneous...........................................81

      11.01  Payment of Expenses, etc................................81
      11.02  Right of Setoff.........................................81
      11.03  Notices.................................................82
      11.04  Benefit of Agreement....................................82
      11.05  No Waiver; Remedies Cumulative..........................84
      11.06  Payments Pro Rata.......................................84
      11.07  Calculations; Computations..............................85
      11.08  Governing Law; Submission to Jurisdiction;
               Venue.................................................85

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      11.09  Counterparts............................................86
      11.10  Headings Descriptive....................................86
      11.11  Amendment or Waiver.....................................86
      11.12  Survival................................................87
      11.13  Domicile of Loans.......................................87
      11.14  Confidentiality.........................................87
      11.15  WAIVER OF JURY TRIAL....................................88

ANNEX I         --   List of Banks and Commitments
ANNEX II        --   Bank Addresses
ANNEX III       --   Subsidiaries
ANNEX IV        --   Collective Bargaining Agreements
ANNEX V         --   Existing Indebtedness
ANNEX VI        --   Existing Liens

EXHIBIT A-1     --   Form of Notice of Borrowing
EXHIBIT A-2     --   Form of Notice of Competitive Bid
                    Borrowing
EXHIBIT B       --   Form of Note
EXHIBIT C-1     --   Form of Opinion of Wilson, Sonsini,
                     Goodrich & Rosati
EXHIBIT C-2     --   Form of Opinion of Alan W. Faigin, Esq.
EXHIBIT C-3     --   Form of Opinion of White & Case
EXHIBIT D       --   Form of Officer's Certificate
EXHIBIT E       --   Form of Amended and Restated Pledge
                     Agreement
EXHIBIT F       --   Form of Assignment and Assumption
                     Agreement
EXHIBIT G       --   Form of CT Corporation Consent Letter

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              AMENDED  AND  RESTATED  CREDIT  AGREEMENT,  dated as of August 24,
1995, among FREMONT GENERAL CORPORATION,  a Nevada corporation (the "Borrower"),
the  lending  institutions  listed  from time to time on Annex I hereto  (each a
"Bank" and,  collectively,  the "Banks"), and THE CHASE MANHATTAN BANK, N.A., as
Agent (the "Agent"). Unless otherwise defined herein, all capitalized terms used
herein and defined in Section 9 are used herein as so defined.

                         W I T N E S S E T H :

              WHEREAS,  the  Borrower,  the Agent and  certain of the Banks have
previously  entered into a Credit  Agreement,  dated as of August 11,  1994,  as
amended by the First  Amendment,  dated as of  December  16,  1994 (such  Credit
Agreement, as so amended, the "Existing Credit Agreement"); and

              WHEREAS,  the Borrower,  the Agent and the Banks wish to amend and
restate the Existing  Credit  Agreement  upon the terms and conditions set forth
herein;

              NOW, THEREFORE,  IT IS AGREED THAT, upon satisfaction or waiver of
the  conditions  precedent  set  forth in  Section  4.01,  the  Existing  Credit
Agreement shall be amended and restated in its entirety to read as follows:

              SECTION 1. Amount and Terms of Credit.

              1.01 Commitments. (a) Subject to and upon the terms and conditions
herein set forth,  each Bank  severally  agrees to make a loan or loans  (each a
"Loan" and, collectively, the "Loans") to the Borrower, which Loans (i) shall be
made at any time and from time to time on and after the Amendment Effective Date
and prior to the Conversion  Date,  (ii) may, at the option of the Borrower,  be
incurred and maintained as, and/or converted into, Base Rate Loans or Eurodollar
Loans,  provided that all Loans made by all Banks pursuant to the same Borrowing
shall, unless otherwise  specifically provided herein, consist entirely of Loans
of the same  Type,  (iii)  prior  to the  Conversion  Date,  may be  repaid  and
reborrowed  in  accordance  with the  provisions  hereof,  (iv) on and after the
Conversion Date, shall be repaid in accordance with the provisions  hereof,  (v)
prior  to the  Conversion  Date,  shall  not  exceed  for any  Bank at any  time
outstanding  that aggregate  principal  amount which equals (A) if the Permitted
CIC  Acquisition  Subordinated  Note has been repaid in full,  the Commitment of
such Bank at such time or (B) if the Permitted CIC Acquisition Subordinated Note
has not been repaid in full,  the Commitment of such Bank at such time less such
Bank's Percentage of $50,000,000 and (vi)

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prior to the Conversion Date, shall not exceed in the aggregate for all Banks at
any time  outstanding that aggregate  principal amount which,  when added to the
then aggregate outstanding principal amount of all Competitive Bid Loans, equals
(A) if the Permitted CIC Acquisition  Subordinated Note has been repaid in full,
the  Total  Commitment  at such  time or (B) if the  Permitted  CIC  Acquisition
Subordinated Note has not been repaid in full, the Total Commitment at such time
less $50,000,000.

              (b) Subject to and upon the terms and conditions herein set forth,
each Bank  severally  agrees that the Borrower may incur a loan or loans (each a
"Competitive Bid Loan" and  collectively,  the "Competitive Bid Loans") pursuant
to a  Competitive  Bid  Borrowing at any time and from time to time on and after
the Amendment  Effective  Date and prior to the date which is the third Business
Day preceding the date which is 14 days prior to the Conversion  Date,  provided
that after giving  effect to any  Competitive  Bid  Borrowing and the use of the
proceeds thereof, the aggregate  outstanding principal amount of Competitive Bid
Loans, when combined with the then aggregate outstanding principal amount of all
Loans,  shall not exceed (A) if the Permitted CIC Acquisition  Subordinated Note
has been  repaid  in  full,  the  Total  Commitment  at such  time or (B) if the
Permitted CIC  Acquisition  Subordinated  Note has not been repaid in full,  the
Total Commitment at such time less $50,000,000.

              1.02  Minimum  Amount  of  Each   Borrowing;   Maximum  Number  of
Borrowings. The aggregate principal amount of each Borrowing hereunder shall not
be less than (i) $5,000,000, in the case of Loans, and (ii) $10,000,000,  in the
case of  Competitive  Bid  Loans,  and,  if in  excess  thereof,  shall be in an
integral multiple of $1,000,000.  More than one Borrowing may be incurred on any
day;  provided  that at no  time  shall  there  be  outstanding  more  than  six
Borrowings of Eurodollar Loans.

              1.03 Notice of  Borrowing  of Loans.  (a)  Whenever  the  Borrower
desires to incur Loans hereunder,  it shall give the Agent at its Notice Office,
(x) in  the  case  of a  Borrowing  of  Eurodollar  Loans,  written  notice  (or
telephonic  notice  promptly  confirmed in writing) of such  proposed  Borrowing
which  notice  must be given  prior to 12:00 Noon (New York time) at least three
Business Days prior to the date of such  proposed  Borrowing and (y) in the case
of a Borrowing of Base Rate Loans, written notice (or telephonic notice promptly
confirmed  in writing) of such  proposed  Borrowing,  which notice must be given
prior to 11:00 A.M.  (New York time) at least one Business Day prior to the date
of such proposed  Borrowing.  Each such notice (each, a "Notice of  Borrowing"),
except as otherwise  expressly  provided in Section 1.11,  shall be irrevocable,
and, in the case of a

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written notice or a confirmation of telephonic  notice,  shall be in the form of
Exhibit  A-1  hereto,  appropriately  completed  to  specify  (i) the  aggregate
principal  amount of the Loans to be made pursuant to such  Borrowing,  (ii) the
date of such  Borrowing  (which shall be a Business  Day) and (iii)  whether the
respective  Borrowing shall consist of Base Rate Loans or Eurodollar  Loans and,
if Eurodollar Loans, the Interest Period to be initially applicable thereto. The
Agent  shall  promptly  give each Bank  written  notice  (or  telephonic  notice
promptly  confirmed  in  writing)  of each  proposed  Borrowing,  of such Bank's
proportionate  share thereof and of the other  matters  covered by the Notice of
Borrowing.

              (b) Without in any way limiting the  obligation of the Borrower to
confirm in writing any notice it may give hereunder by telephone,  the Agent may
act prior to receipt of written confirmation without liability upon the basis of
such  telephonic  notice,  believed  by the  Agent  in good  faith to be from an
Authorized Officer of the Borrower. In each such case the Borrower hereby waives
the right to  dispute  the  Agent's  record of the terms of any such  telephonic
notice.

              1.04 Competitive Bid Borrowings. (a) Whenever the Borrower desires
to incur a Competitive  Bid Borrowing,  it shall deliver to the Agent,  prior to
12:00 Noon (New York time) (x) at least five  Business Days prior to the date of
such proposed Competitive Bid Borrowing, in the case of a Spread Borrowing,  and
(y) at least two Business  Days prior to the date of such  proposed  Competitive
Bid  Borrowing,  in the case of an Absolute  Rate  Borrowing,  a written  notice
substantially  in the form of Exhibit A-2 hereto (a "Notice of  Competitive  Bid
Borrowing"),  which notice shall  specify in each case (i) the date (which shall
be a Business  Day) and the  aggregate  amount of the proposed  Competitive  Bid
Borrowing,  (ii) the maturity date for  repayment of each and every  Competitive
Bid Loan to be made as part of such  Competitive  Bid Borrowing  (which maturity
date may be (A) one, two, three or six months after the date of such Competitive
Bid  Borrowing,  in the case of a Spread  Borrowing,  and (B) between 14 and 364
days, inclusive,  after the date of such Competitive Bid Borrowing,  in the case
of an Absolute Rate Borrowing, provided that in no event shall the maturity date
of any  Competitive Bid Borrowing be later than the third Business Day preceding
the Conversion Date), (iii) the interest payment date or dates relating thereto,
(iv) whether the proposed  Competitive  Bid  Borrowing is to be an Absolute Rate
Borrowing or a Spread Borrowing,  and if a Spread  Borrowing,  the Interest Rate
Basis,  and (v) any  other  terms  to be  applicable  to  such  Competitive  Bid
Borrowing.  The Agent shall  promptly  notify each Bidder Bank by  telephone  or
facsimile of each such request for a Competitive  Bid  Borrowing  received by it
from the Borrower and of the contents of the related Notice of  Competitive  Bid
Borrowing.

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                                  -3-

              (b) Each Bidder Bank shall, if, in its sole discretion,  it elects
to do so,  irrevocably  offer to make one or more  Competitive  Bid Loans to the
Borrower as part of such proposed  Competitive  Bid Borrowing at a rate or rates
of interest  specified by such Bidder Bank in its sole discretion and determined
by such Bidder Bank  independently  of each other Bidder Bank,  by notifying the
Agent (which shall give prompt notice thereof to the Borrower) before 10:00 A.M.
(New York time) on the date (the  "Reply  Date")  which is (x) in the case of an
Absolute  Rate  Borrowing,  one  Business  Day before the date of such  proposed
Competitive  Bid  Borrowing  and (y) in the  case of a  Spread  Borrowing,  four
Business Days before the date of such proposed Competitive Bid Borrowing, of the
minimum amount and maximum amount of each Competitive Bid Loan which such Bidder
Bank would be willing to make as part of such proposed Competitive Bid Borrowing
(which  amounts  may,  subject to the  proviso to the first  sentence of Section
1.01(b),  exceed such Bidder Bank's  Commitment),  the rate or rates of interest
therefor and such Bidder Bank's lending office with respect to such  Competitive
Bid Loan;  provided that if the Agent in its capacity as a Bidder Bank shall, in
its sole discretion,  elect to make any such offer, it shall notify the Borrower
of such offer before 9:45 A.M.  (New York time) on the Reply Date. If any Bidder
Bank shall elect not to make such an offer, such Bidder Bank shall so notify the
Agent, before 10:00 A.M. (New York time) on the Reply Date, and such Bidder Bank
shall not be obligated to, and shall not, make any  Competitive Bid Loan as part
of such Competitive Bid Borrowing;  provided that the failure by any Bidder Bank
to give such notice shall not cause such Bidder Bank to be obligated to make any
Competitive Bid Loan as part of such proposed Competitive Bid Borrowing.

              (c) The Borrower  shall,  in turn, (x) before 12:00 Noon (New York
time) on the Reply Date in the case of a proposed  Absolute  Rate  Borrowing and
(y) before 12:00 Noon (New York time) on the Business  Day  following  the Reply
Date in the case of a proposed Spread Borrowing, either:

              (i) cancel  such  Competitive  Bid  Borrowing  by giving the Agent
      notice to such effect (it being understood and agreed that if the Borrower
      gives no such notice of cancellation and no notice of acceptance  pursuant
      to clause (ii) below,  then the Borrower shall be deemed to have cancelled
      such Competitive Bid Borrowing), or

            (ii)  accept  one or more of the offers  made by any Bidder  Bank or
      Bidder Banks  pursuant to clause (b) above by giving notice (in writing or
      by  telephone  confirmed  in  writing)  to the Agent of the amount of each
      Competitive  Bid Loan (which  amount shall be equal to or greater than the
      minimum amount, and equal to or less than the

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                                  -4-

      maximum  amount,  notified to the  Borrower by the Agent on behalf of such
      Bidder  Bank for such  Competitive  Bid  Borrowing  pursuant to clause (b)
      above)  to be made by each  Bidder  Bank as part of such  Competitive  Bid
      Borrowing,  and reject any remaining  offers made by Bidder Banks pursuant
      to clause (b) above by giving the Agent  notice to that  effect;  provided
      that the  acceptance  of offers may only be made on the basis of ascending
      Absolute Rates (in the case of an Absolute Rate  Borrowing) or Spreads (in
      the case of a Spread  Borrowing),  in each case commencing with the lowest
      rate so offered;  provided further,  however, if offers are made by two or
      more Bidder Banks at the same rate and acceptance of all such equal offers
      would result in a greater  principal amount of Competitive Bid Loans being
      accepted than the aggregate principal amount requested by the Borrower, if
      the Borrower elects to accept any of such offers the Borrower shall accept
      such offers pro rata from such  Bidder  Banks (on the basis of the maximum
      amounts of such offers) unless any such Bidder Bank's pro rata share would
      be less than the  minimum  amount  specified  by such  Bidder  Bank in its
      offer,  in which case the  Borrower  shall have the right to accept one or
      more such equal offers in their  entirety and reject the other equal offer
      or offers or to  allocate  acceptance  among all such  equal  offers  (but
      giving effect to the minimum and maximum  amounts  specified for each such
      offer pursuant to clause (b) above), as the Borrower may elect in its sole
      discretion.

              (d) If the Borrower  notifies the Agent that such  Competitive Bid
Borrowing  is  cancelled,  or  if  such  Competitive  Bid  Borrowing  is  deemed
cancelled,  pursuant to clause (c)(i) above,  the Agent shall give prompt notice
thereof to the Bidder  Banks and such  Competitive  Bid  Borrowing  shall not be
made.

              (e) If the Borrower  accepts one or more of the offers made by any
Bidder Bank or Bidder Banks pursuant to clause (c)(ii) above, the Agent shall in
turn promptly notify (x) each Bidder Bank that has made an offer as described in
clause (b)  above,  of the date and  aggregate  amount of such  Competitive  Bid
Borrowing  and  whether  or not any offer or  offers  made by such  Bidder  Bank
pursuant  to clause (b) above have been  accepted by the  Borrower  and (y) each
Bidder Bank that is to make a Competitive  Bid Loan as part of such  Competitive
Bid  Borrowing,  of the amount of each  Competitive  Bid Loan to be made by such
Bidder Bank as part of such Competitive Bid Borrowing.

              1.05  Disbursement of Funds.  (a)  Subject to the
terms and conditions herein set forth, no later than 11:00
A.M. (New York time) on the date of each incurrence of Loans

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or Competitive  Bid Loans (1:00 P.M. (New York time) on such date in the case of
a Borrowing of Base Rate Loans or a Competitive  Bid Borrowing  constituting  an
Absolute Rate  Borrowing),  each Bank will make available its pro rata share, if
any, of each Borrowing  requested to be made on such date in the manner provided
below.

              (b) Each Bank shall make available all amounts it is to fund under
any Borrowing in U.S.  dollars and  immediately  available funds to the Agent at
the Agent's  Payment Office and the Agent will make available to the Borrower by
depositing  to its account at the Agent's  Payment  Office the  aggregate of the
amounts so made available in the type of funds received.  Unless the Agent shall
have been notified by any Bank prior to the date of any such Borrowing that such
Bank does not intend to make available to the Agent its portion of the Borrowing
or Borrowings  to be made on such date,  the Agent may assume that such Bank has
made such  amount  available  to the Agent on such  date of  Borrowing,  and the
Agent, in reliance upon such assumption, may (in its sole discretion and without
any obligation to do so) make available to the Borrower a corresponding  amount.
If such corresponding  amount is not in fact made available to the Agent by such
Bank and the Agent has made available  same to the Borrower,  the Agent shall be
entitled to recover such corresponding  amount from such Bank. If such Bank does
not pay such  corresponding  amount  forthwith upon the Agent's demand therefor,
the Agent shall promptly notify the Borrower, and the Borrower shall immediately
pay such corresponding  amount to the Agent. The Agent shall also be entitled to
recover  from such Bank or the  Borrower,  as the case may be,  interest on such
corresponding  amount in  respect  of each day from the date such  corresponding
amount  was made  available  by the  Agent  to the  Borrower  to the  date  such
corresponding amount is recovered by the Agent, at a rate per annum equal to (x)
if paid by such Bank, the overnight  Federal Funds Effective Rate or (y) if paid
by the Borrower, the then applicable rate of interest,  calculated in accordance
with Section 1.09, for the respective Loans or Competitive Bid Loans.

              (c)  Nothing in this  Section  1.05 shall be deemed to relieve any
Bank from its  obligation to fulfill its  commitments  hereunder or to prejudice
any  rights  which the  Borrower  may have  against  any Bank as a result of any
default by such Bank hereunder.

              1.06 Notes;  Register.  (a) The  Borrower's  obligation to pay the
principal  of,  and  interest  on,  the Loans  made to it by each Bank  shall be
evidenced by a  promissory  note  substantially  in the form of Exhibit B hereto
with blanks  appropriately  completed in conformity  herewith (each a "Note" and
collectively the "Notes").

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                                  -6-

              (b) The Note  issued to each Bank  shall  (i) be  executed  by the
Borrower,  (ii) be payable to the order of such Bank and be dated the  Amendment
Effective Date, (iii) be in a stated principal amount equal to the Commitment of
such Bank and be payable in the principal amount of the Loans evidenced thereby,
(iv) mature on the Final  Maturity  Date,  (v) bear  interest as provided in the
appropriate  clause  of  Section  1.09 in  respect  of the Base  Rate  Loans and
Eurodollar  Loans,  as the case may be,  evidenced  thereby,  (vi) be subject to
mandatory  repayment  as provided  in Section  3.02 and (vii) be entitled to the
benefits of this Agreement and the other Credit Documents.

              (c) Each Bank will  record on its  internal  records the amount of
each  Loan and  Competitive  Bid Loan  made by it and each  payment  in  respect
thereof and will prior to any  transfer of its Note  endorse on the reverse side
thereof the  outstanding  principal  amount of Loans and  Competitive  Bid Loans
evidenced  thereby.  Failure to make any such  notation or any error in any such
notation  shall not affect the  Borrower's  obligations in respect of such Loans
and Competitive Bid Loans.

              (d) The Agent shall  maintain at its Payment Office a register for
the recordation of the names and addresses of the Banks,  the Commitments of the
Banks from time to time, and the principal  amount of the Loans and  Competitive
Bid Loans owing to each Bank from time to time  together  with the  maturity and
interest  rates  applicable to each such  Competitive  Bid Loan, and other terms
applicable  thereto  (the  "Register").   The  entries  in  the  Register  shall
constitute prima facie evidence as to the information set forth therein.

              1.07 Conversions. The Borrower shall have the option to convert on
any  Business  Day all or a portion at least  equal to  $5,000,000  (and,  if in
excess thereof, an integral multiple of $1,000,000) of the outstanding principal
amount  of the  Loans of one Type  owing by the  Borrower  into a  Borrowing  or
Borrowings of the other Type;  provided that (i) except as otherwise provided in
Section 1.11(b),  Eurodollar Loans may be converted into Base Rate Loans only on
the last day of an Interest Period applicable thereto, and no partial conversion
of a Borrowing of Eurodollar Loans shall reduce the outstanding principal amount
of the Eurodollar Loans pursuant to such Borrowing to less than $5,000,000, (ii)
Base Rate Loans may only be  converted  into  Eurodollar  Loans if no Default or
Event of Default is in existence on the date of the conversion, (iii) Borrowings
of Eurodollar  Loans resulting from this Section 1.07 shall be limited in number
as provided in Section 1.02 and (iv) each such conversion shall be made pro rata
among the Loans of each Bank of the Type being  converted.  Each such conversion
shall be effected

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                                  -7-

by the  Borrower by giving the Agent at its Notice  Office,  prior to 12:00 Noon
(New York time),  at least three  Business  Days' (or one Business  Day's in the
case of a conversion  into Base Rate Loans) prior written  notice (or telephonic
notice promptly confirmed in writing) (each a "Notice of Conversion") specifying
the Loans to be so converted,  the Type of Loans to be converted into and, if to
be converted  into a Borrowing of Eurodollar  Loans,  the Interest  Period to be
initially  applicable  thereto.  The Agent shall give each Bank prompt notice of
any such proposed conversion.

              1.08 Pro Rata  Borrowings.  All  Borrowings  of Loans  under  this
Agreement shall be loaned by the Banks pro rata on the basis of their respective
Commitments.  It is understood that no Bank shall be responsible for any default
by any other  Bank in its  obligation  to make  Loans or  Competitive  Bid Loans
hereunder  and  that  each  Bank  shall  be  obligated  to make  the  Loans  and
Competitive  Bid Loans  provided to be made by it  hereunder,  regardless of the
failure of any other Bank to fulfill its commitments hereunder.

              1.09 Interest.  (a) The unpaid  principal amount of each Base Rate
Loan shall bear interest from the date of the incurrence  thereof until maturity
(whether by  acceleration  or  otherwise) at a rate per annum which shall at all
times be the Applicable  Base Rate Margin plus the Base Rate in effect from time
to time.

              (b) The unpaid  principal  amount of each Euro-  dollar Loan shall
bear interest from the date of the incurrence thereof until maturity (whether by
acceleration  or  otherwise) at a rate per annum which shall at all times be the
Applicable Eurodollar Margin plus the relevant Eurodollar Rate.

              (c) The unpaid principal amount of each Competitive Bid Loan shall
bear  interest  from the date the  proceeds  thereof are made  available  to the
Borrower until maturity  (whether by  acceleration  or otherwise) at the rate or
rates per annum  specified by a Bidder Bank or Bidder Banks, as the case may be,
pursuant to Section  1.04(b) and  accepted by the  Borrower  pursuant to Section
1.04(c).

              (d) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and Competitive Bid Loan shall bear interest at
a rate per annum equal to the Base Rate in effect from time to time plus the sum
of (i) 2% and (ii) the Applicable  Base Rate Margin;  provided that principal in
respect of Eurodollar  Loans and Competitive Bid Loans shall bear interest after
the same becomes due (whether by acceleration or otherwise) until the end of the
applicable  Interest Period for such Eurodollar Loans, or the original scheduled
maturity of such Competitive

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                                  -8-

Bid Loans,  as the case may be, at a per annum rate equal to 2% plus the rate of
interest applicable on the due date therefor.

              (e)  Interest  shall  accrue  from and  including  the date of any
incurrence of a Loan or a Competitive  Bid Loan to and including the date of any
repayment  thereof  and shall be payable  (i) in respect of each Base Rate Loan,
quarterly in arrears on the last Business Day of each calendar quarter,  (ii) in
respect of each  Competitive  Bid Loan, at such times as specified in the Notice
of  Competitive  Bid  Borrowing  relating  thereto,  (iii)  in  respect  of each
Eurodollar Loan, on the last day of each Interest Period applicable thereto and,
in the case of an  Interest  Period  in  excess  of three  months,  on each date
occurring at three month  intervals  after the first day of such Interest Period
and (iv) in respect of each Loan or  Competitive  Bid Loan, on any conversion or
prepayment  (on the amount so  converted or  prepaid),  at maturity  (whether by
acceleration or otherwise) and, after such maturity, on demand.

              (f)  All  computations  of  interest  hereunder  shall  be made in
accordance with Section 11.07(b).

              (g)  The  Agent,  upon  determining  the  interest  rate  for  any
Borrowing of Eurodollar Loans for any Interest Period, shall promptly notify the
Borrower and the Banks thereof.

              1.10 Interest Periods.  At the time the Borrower gives a Notice of
Borrowing or Notice of  Conversion,  in respect of the making of, or  conversion
into,  a Borrowing  of  Eurodollar  Loans (in the case of the  initial  Interest
Period applicable thereto),  or prior to 12:00 Noon (New York time) on the third
Business  Day prior to the  expiration  of an Interest  Period  applicable  to a
Borrowing of  Eurodollar  Loans,  it shall have the right to elect by giving the
Agent written notice (or telephonic notice promptly confirmed in writing) of the
Interest Period to be applicable to such Borrowing, which Interest Period shall,
at the  option  of the  Borrower,  be a one,  two,  three or six  month  period.
Notwithstanding anything to the contrary contained above:

              (i) the initial  Interest  Period for any  Borrowing of Eurodollar
      Loans shall commence on the date of such Borrowing  (including the date of
      any  conversion  from a Borrowing  of Base Rate  Loans) and each  Interest
      Period occurring thereafter in respect of such Borrowing shall commence on
      the day on which the next preceding Interest Period expires;

          (ii)  if any Interest Period begins on a day for
      which there is no numerically corresponding day in the

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      calendar month at the end of such Interest  Period,  such Interest  Period
      shall end on the last Business Day of such calendar month;

         (iii) if any Interest Period would  otherwise  expire on a day which is
      not a  Business  Day,  such  Interest  Period  shall  expire  on the  next
      succeeding  Business  Day,  provided  that if any  Interest  Period  would
      otherwise  expire on a day which is not a Business Day but is a day of the
      month  after  which no further  Business  Day occurs in such  month,  such
      Interest Period shall expire on the next preceding Business Day;

          (iv)  no Interest Period may be elected if it would
      extend beyond the Final Maturity Date;

           (v) no  Interest  Period in respect of any Loans may be elected  that
      would  extend  beyond any date upon which Loans are  required to be repaid
      pursuant to Section  3.02(b) if, after giving  effect to the  selection of
      such Interest Period,  the aggregate  principal amount of Loans maintained
      as  Eurodollar  Loans with Interest  Periods  ending after such date would
      exceed the aggregate principal amount of Loans permitted to be outstanding
      after such date; and

          (vi) no  Interest  Period may be elected at any time when a Default or
      Event of Default is then in existence.

If upon the expiration of any Interest  Period,  the Borrower has failed,  or is
not permitted,  to elect a new Interest Period to be applicable to any Borrowing
of  Eurodollar  Loans as provided  above,  the Borrower  shall be deemed to have
elected to convert such Borrowing into a Borrowing of Base Rate Loans  effective
as of the expiration date of such current Interest Period.

              1.11 Increased Costs,  Illegality,  etc. (a) In the event that (x)
in the case of clause  (i) below,  the Agent or (y) in the case of clauses  (ii)
and (iii) below,  any Bank shall have  determined  (which  determination  shall,
absent  manifest  error,  be final and  conclusive  and binding upon all parties
hereto):

              (i) on any  date  for  determining  the  Eurodollar  Rate  for any
      Interest Period or in respect of any Spread  Borrowing priced by reference
      to the  Eurodollar  Rate that, by reason of any changes  arising after the
      date of this Agreement affecting the interbank Eurodollar market, adequate
      and fair means do not exist for ascertaining the applicable  interest rate
      on the basis provided for in the definition of Eurodollar Rate; or

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          (ii) at any time,  that  such  Bank  shall  incur  increased  costs or
      reductions in the amounts received or receivable hereunder with respect to
      any Eurodollar  Loans or  Competitive  Bid Loans because of (x) any change
      since  the date of this  Agreement  (or,  in the case of any such  cost or
      reduction with respect to any  Competitive  Bid Loan,  since the making of
      such  Competitive  Bid Loan) in any  applicable  law,  governmental  rule,
      regulation,  guideline,  order or request (whether or not having the force
      of law) or in the  interpretation or administration  thereof and including
      the  introduction  of  any  new  law  or  governmental  rule,  regulation,
      guideline,  order or request (such as, for example,  but not limited to, a
      change in official  reserve  requirements,  but, in all events,  excluding
      reserves  required  under  Regulation  D to  the  extent  included  in the
      computation  of the Euro-  dollar  Rate)  and/or  (y) other  circumstances
      affecting the interbank  Eurodollar market or the position of such Bank in
      such market; or

         (iii) at any time,  that the making or  continuance  of any  Eurodollar
      Loan or  Competitive  Bid Loan has become  unlawful by  compliance by such
      Bank in good faith with any law, governmental rule, regulation,  guideline
      or order (or would conflict with any such governmental  rule,  regulation,
      guideline  or order not  having  the force of law but with which such Bank
      customarily  com- plies even though the failure to comply  therewith would
      not be unlawful), or has become impracticable as a result of a contingency
      occurring  after  the  Amendment   Effective  Date  which  materially  and
      adversely affects the interbank Eurodollar market;

then,  and in any such event,  such Bank (or the Agent in the case of clause (i)
above to the extent  applicable  to Loans) shall on such date give notice (if by
telephone  promptly  confirmed  in writing) to the  Borrower and to the Agent of
such  determination  (which notice the Agent shall promptly  transmit to each of
the other  Banks).  Thereafter  (x) in the case of clause (i) above,  Eurodollar
Loans  (or  Competitive  Bid Loans  constituting  a Spread  Borrowing  priced by
reference to the Eurodollar  Rate) shall no longer be available  until such time
as the Agent notifies the Borrower and the Banks that the  circumstances  giving
rise to such notice by the Agent no longer  exist,  and any Notice of Borrowing,
Notice  of  Competitive  Bid  Borrowing  or Notice  of  Conversion  given by the
Borrower  with  respect to  Eurodollar  Loans (or any affected  Competitive  Bid
Loans)  which  have  not yet been  incurred  shall be  deemed  rescinded  by the
Borrower,  (y) in the case of clause (ii) above,  the Borrower shall pay to such
Bank, upon written demand therefor,  such additional  amounts (in the form of an
increased rate of, or a different  method of calculating,  interest or otherwise
as such Bank in its

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sole  discretion  shall  determine) as shall be required to compensate such Bank
for such  increased  costs or  reductions  in amounts  receivable  hereunder  (a
written  notice as to the  additional  amounts  owed to such  Bank,  showing  in
reasonable detail the basis for the calculation  thereof,  including such Bank's
method of allocating such costs among its affected  customers,  submitted to the
Borrower by such Bank shall,  absent manifest error, be final and conclusive and
binding upon all parties hereto) and (z) in the case of clause (iii) above,  the
Borrower shall take one of the actions  specified in Section 1.11(b) as promptly
as possible and, in any event, within the time period required by law.

              (b) At any  time  that  any  Eurodollar  Loan is  affected  by the
circumstances  described  in  Section  1.11(a)(ii)  or any  Eurodollar  Loan  or
Competitive  Bid Loan is  affected  by the  circumstances  described  in Section
1.11(a)(iii),  the  Borrower  may  (and  in the  case  of a  Eurodollar  Loan or
Competitive Bid Loan affected pursuant to Section 1.11(a)(iii) shall) either (x)
if the  affected  Eurodollar  Loan or  Competitive  Bid Loan is then  being made
pursuant to a Borrowing,  cancel said  Borrowing by giving the Agent  telephonic
notice  (promptly  confirmed  in  writing)  thereof  on the same  date  that the
Borrower was notified by a Bank pursuant to Section 1.11(a)(ii) or (iii), (y) if
the affected Euro- dollar Loan is then outstanding, upon at least three Business
Days'  notice to the Agent,  require  the  affected  Bank to  convert  each such
Eurodollar  Loan into a Base  Rate  Loan or (z)  subject  to the  provisions  of
Section  3.02(d),  if the  affected  Competitive  Bid Loan is then  outstanding,
prepay such Competitive Bid Loan in full (which  prepayment may be made with the
proceeds  of a Loan);  provided,  that if more than one Bank is  affected at any
time,  then all affected Banks must be treated the same pursuant to this Section
1.11(b).

              (c) If any Bank shall have  determined that the adoption after the
Amendment  Effective  Date of any applicable  law, rule or regulation  regarding
capital adequacy,  or any change therein after the Amendment  Effective Date, or
any  change  after  the  Amendment  Effective  Date  in  the  interpretation  or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration  thereof, or compliance
by such  Bank or its  parent  with any  request  or  directive  made  after  the
Amendment  Effective Date regarding  capital adequacy (whether or not having the
force of law) of any such authority,  central bank or comparable  agency, has or
would  have the  effect of  reducing  the rate of  return on such  Bank's or its
parent's  capital or assets as a consequence  of its  commitments or obligations
hereunder  to a level  below  that  which  such Bank or its  parent  could  have
achieved but for such adoption,  change or compliance (taking into consideration
such Bank's or its parent's policies with respect to

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capital  adequacy),  then from time to time, within 30 days after demand by such
Bank  (with a copy to the  Agent),  the  Borrower  shall pay to such Bank or its
parent such  additional  amount or amounts as will  compensate  such Bank or its
parent for such reduction.  Each Bank,  upon  determining in good faith that any
additional  amounts will be payable pursuant to this Section 1.11(c),  will give
prompt written  notice thereof to the Borrower,  which notice shall set forth in
reasonable  detail  the basis of the  calculation  of such  additional  amounts,
including  such  Bank's  method of  allocating  such  costs  among its  affected
customers,  although  the failure to give any such  notice  shall not release or
diminish any of the Borrower's obligations to pay additional amounts pursuant to
this Section 1.11(c) upon receipt of such notice.

              1.12  Compensation.  The Borrower shall compensate each Bank, upon
its written request (which request shall set forth the basis for requesting such
compensation),  for all reasonable losses,  expenses and liabilities (including,
without  limitation,  any loss,  expense or liability  incurred by reason of the
liquidation or  reemployment of deposits or other funds required by such Bank to
fund its  Eurodollar  Loans or  Competitive  Bid Loans but excluding any loss of
anticipated  profit with respect to such Loans or  Competitive  Bid Loans) which
such Bank may sustain:  (i) if for any reason (other than a default by such Bank
or the  Agent) a  Borrowing  of  Eurodollar  Loans or of  Competitive  Bid Loans
accepted by the Borrower in accordance with Section 1.04(c)(ii),  does not occur
on a date specified therefor in a Notice of Borrowing, Notice of Competitive Bid
Borrowing or Notice of  Conversion  (whether or not withdrawn by the Borrower or
deemed withdrawn pursuant to Section 1.11(a)); (ii) if any repayment, prepayment
or conversion of any of its Eurodollar Loans or any repayment of Competitive Bid
Loans  occurs  on a date  which  is not  the  last  day  of an  Interest  Period
applicable  thereto;  (iii) if any prepayment of any of its Eurodollar  Loans or
Competitive  Bid  Loans  is not  made  on any  date  specified  in a  notice  of
prepayment  given by the  Borrower;  or (iv) as a  consequence  of (x) any other
default by the Borrower to repay its Eurodollar  Loans or Competitive  Bid Loans
when required by the terms of this Agreement or (y) an election made pursuant to
Section 1.11(b). Calculation of all amounts payable to a Bank under this Section
1.12 in respect of Eurodollar Loans or Competitive Bid Loans priced by reference
to the Eurodollar Rate shall be made as though that Bank had actually funded its
relevant  Loan or  Competitive  Bid Loan  through the  purchase of a  Eurodollar
deposit bearing interest at the Eurodollar Rate in an amount equal to the amount
of that  Loan or  Competitive  Bid Loan,  having a  maturity  comparable  to the
relevant  Interest  Period and through the transfer of such  Eurodollar  deposit
from an offshore  office of that Bank or other bank to a domestic office of that
Bank in the United States of America;

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provided,  however,  that each Bank may fund each of its Euro-  dollar  Loans or
Competitive  Bid Loans in any  manner it sees fit and the  foregoing  assumption
shall be utilized only for the calculation of amounts payable under this Section
1.12.

              1.13 Change of Lending  Office.  Each Bank agrees  that,  upon the
occurrence of any event giving rise to the operation of Section  1.11(a)(ii)  or
(iii) or 3.04 with respect to such Bank,  it will, if requested by the Borrower,
use reasonable  efforts (subject to overall policy  considerations of such Bank)
to  designate  another  lending  office for any Loans or  Competitive  Bid Loans
affected by such event;  provided,  that such  designation is made on such terms
that,  in the opinion of such Bank,  such Bank and its lending  office suffer no
economic,  legal or  regulatory  disadvantage,  with the object of avoiding  the
consequence  of the event  giving  rise to the  operation  of any such  Section.
Nothing in this Section 1.13 shall affect or postpone any of the  obligations of
the Borrower or the right of any Bank provided in Section 1.11 or 3.04.

              SECTION 2.  Fees; Commitments.

              2.01 Fees. (a) The Borrower  agrees to pay to the Agent a facility
fee (the  "Facility  Fee") for the account of the Banks pro rata on the basis of
(i) their respective Commitments for the period from and including the Amendment
Effective Date to and excluding the earlier of (A) the date the Total Commitment
has been  terminated  and (B) the  Conversion  Date,  and  (ii) the  outstanding
principal amount of their Loans for the period from and including the Conversion
Date to and  including  the date the Loans are  repaid  in full,  in each  case,
computed at a rate per annum equal to the  Applicable  Facility  Fee  Percentage
from time to time of the Total  Commitment  as in effect or aggregate  principal
amount of Loans  outstanding,  as the case may be,  from  time to time.  Accrued
Facility  Fees shall be due and payable in arrears on the last  Business  Day of
each  March,  June,  September  and  December,  on the date upon which the Total
Commitment is terminated and the date on which the Loans are repaid in full.

              (b) In addition to any fees set forth herein,  the Borrower  shall
pay to the Agent,  for the account of the Agent,  when and as due,  such fees as
have been, or are from time to time, separately agreed upon.

              (c)    All computations of Fees shall be made in
accordance with Section 11.07(b).

              2.02  Voluntary Reduction of Commitments.  Upon at
least three Business Days' prior written notice (or tele-
phonic notice promptly confirmed in writing) given by the

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Borrower to the Agent at its Notice Office  (which  notice shall be  irrevocable
and  shall be  promptly  transmitted  by the  Agent to each of the  Banks),  the
Borrower  shall have the right,  without  premium or penalty,  to terminate,  in
whole or in part, the Total Unutilized Commitment (or to the extent that at such
time  there  are no Loans  outstanding,  to  terminate  the  Total  Commitment),
provided,  that (x) any partial  reduction  of the Total  Unutilized  Commitment
pursuant  to this  Section  2.02 shall be in the amount of at least  $10,000,000
(and,  if greater,  in an integral  multiple  of  $1,000,000),  and (y) any such
termination shall apply to proportionately and permanently reduce the Commitment
of each of the Banks.

              2.03  Mandatory Reduction of Commitments.  The
Total Commitment shall terminate on the Conversion Date.

              SECTION 3.  Payments.

              3.01 Voluntary  Prepayments.  The Borrower shall have the right to
prepay Loans, without premium or penalty, in whole or in part, from time to time
on the following terms and conditions:  (i) the Borrower shall give the Agent at
its Notice Office  written notice (or telephonic  notice  promptly  confirmed in
writing) of its intent to prepay the Loans,  the amount of such  prepayment  and
(in the case of Eurodollar  Loans) the specific  Borrowing(s)  pursuant to which
made,  which notice shall be given by the Borrower no later than 12:00 Noon (New
York time) two  Business  Days prior to the date of such  prepayment,  and which
notice shall  promptly be  transmitted  by the Agent to each of the Banks;  (ii)
each partial  prepayment  of any  Borrowing  shall be in an aggregate  principal
amount of at least  $5,000,000  (and,  if greater,  in an  integral  multiple of
$1,000,000),  provided  that no  partial  prepayment  of  Eurodollar  Loans made
pursuant to a Borrowing shall reduce the aggregate principal amount of the Loans
outstanding pursuant to such Borrowing to an amount less than $5,000,000;  (iii)
prepayments  of Eurodollar  Loans made pursuant to this Section 3.01 may only be
made on the last day of an Interest  Period  applicable  thereto;  and (iv) each
prepayment in respect of any Loans made pursuant to a Borrowing shall be applied
pro rata among such Loans.  Upon receipt of a notice of  prepayment  pursuant to
this Section  3.01,  the Agent shall  promptly  notify each Bank of the contents
thereof and of such Bank's ratable share of such prepayment.  The Borrower shall
have no right  under this  Section  3.01 to prepay any  principal  amount of any
Competitive Bid Loans.

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                                 -15-

              3.02  Mandatory Prepayments and Repayments.               (a)
                    ------------------------------------
If on any date prior to the Conversion Date the sum of the outstanding principal
amount of Loans and Competitive Bid Loans (all the foregoing,  collectively, the
"Aggregate Loan  Outstandings")  exceeds the Total Commitment as then in effect,
the  Borrower  shall prepay on such date the  principal  of Loans,  in an amount
equal  to  such  excess.  If,  after  giving  effect  to the  prepayment  of all
outstanding Loans as set forth above, the remaining  Aggregate Loan Outstandings
exceed the Total Commitment, the Borrower shall repay on such date the principal
of Competitive Bid Loans in an aggregate  amount equal to such excess,  provided
that no Competitive Bid
                             --------
Loan shall be prepaid  pursuant to this sentence  unless the Bank that made same
consents to such prepayment.  In the absence of such consent,  the provisions of
Section 3.02(d) shall be applicable.

              (b) If on the Conversion Date the outstanding  principal amount of
Loans  exceeds  $100,000,000  (after  giving  effect  to  the  repayment  of all
outstanding  Competitive  Bid Loans on such date),  the Borrower shall prepay on
such date the principal of Loans,  in an amount equal to such excess.  Following
the  Conversion  Date,  the Borrower  shall repay on each date set forth below a
principal  amount of Loans  equal to the  amount  obtained  by  multiplying  the
aggregate principal amount of Loans outstanding on the Conversion Date and after
giving  effect to the  prepayment  required to be made pursuant to the preceding
sentence by the percentage set forth below opposite such date:

Scheduled Repayment Date                                     Percentage

      February 28, 1998                                         6.25%
      August   31, 1998                                         6.25%
      February 28, 1999                                         8.75%
      August   31, 1999                                         8.75%
      February 29, 2000                                        16.25%
      August   31, 2000                                        16.25%
      February 28, 2001                                        18.75%
      August   31, 2001                                        18.75%

In the event the Borrower  elects to prepay Loans after the  Conversion  Date in
part in  accordance  with Section  3.01,  such  prepayments  shall be applied to
reduce the foregoing scheduled payments in reverse order of maturity.

              (c) With respect to each prepayment or repayment of Loans required
by this Section 3.02, the Borrower may designate the Types of Loans which are to
be prepaid and the specific Borrowing(s) pursuant to which made; provided,  that
(i) if any  prepayment of Eurodollar  Loans made pursuant to a single  Borrowing
shall reduce the outstanding  Loans made pursuant to such Borrowing to an amount
less than $5,000,000,

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such  Borrowing  shall be immediately  converted into Base Rate Loans;  and (ii)
each  prepayment of any Loans made pursuant to a Borrowing  shall be applied pro
rata among such Loans.  In the absence of a designation of Loans by the Borrower
as  described in this Section  3.02(c),  the Agent shall,  subject to the above,
make such designation in its sole discretion with a view, but no obligation,  to
minimize breakage costs owing under Section 1.12.

              (d) At any time that the  Borrower  is  obligated  to  prepay  any
Competitive Bid Loan pursuant to Section 1.11(b) or 3.02(a) on a date other than
the scheduled  maturity date thereof,  such prepayment shall only be made if the
respective Bank that made such Competitive Bid Loan has consented in writing (or
by telephone  confirmed in writing) to the Borrower to such prepayment within 48
hours after  notice (in  writing or by  telephone  confirmed  in writing) by the
Borrower to such Bank of such prepayment (it being  understood that the Borrower
will give such  notice  and that any  failure to  respond  to such  notice  will
constitute a rejection  thereof);  if such  prepayment is not so consented to by
the  respective  Bank  then,  in the  case of a  prepayment  otherwise  required
pursuant  to Section  3.02(a),  the  provisions  of the  immediately  succeeding
sentence  will be  applicable.  At the time any such  Competitive  Bid Loans are
otherwise required to be prepaid the Borrower will deposit 100% of the principal
amount that  otherwise  would have been paid in respect of the  Competitive  Bid
Loans with the Agent to be held as security for the  obligations of the Borrower
hereunder pursuant to a cash collateral agreement to be entered into in form and
substance  satisfactory  to the Agent,  with such cash collateral to be released
from such cash collateral  account (and applied to repay the principal amount of
such  Competitive Bid Loans) upon each occurrence  thereafter of the last day of
an Interest Period  applicable to the relevant  Competitive Bid Loans,  with the
amount to be so released and applied on the last day of each Interest  Period to
be the amount of the Competitive Bid Loans to which such Interest Period applies
(or, if less, the amount remaining in such cash collateral account).

              3.03 Method and Place of Payment. Except as otherwise specifically
provided  herein,  all payments under this Agreement and the Notes shall be made
to the Agent for the ratable  account of the Banks entitled  thereto,  not later
than  12:00  Noon  (New  York  time) on the date  when due and  shall be made in
immediately  available funds and in lawful money of the United States of America
at the Agent's  Payment  Office,  it being  understood  that  written,  telex or
facsimile  notice by the  Borrower to the Agent to make a payment from the funds
in the Borrower's  account at the Agent's  Payment  Office shall  constitute the
making of such  payment to the extent of such  funds held in such  account.  Any
payments under this Agreement which are made later than 12:00 Noon

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(New  York  time)  shall be  deemed  to have  been  made on the next  succeeding
Business Day.  Whenever any payment to be made  hereunder  shall be stated to be
due on a day which is not a Business Day, the due date thereof shall be extended
to the next succeeding  Business Day and, with respect to payments of principal,
interest shall be payable during such extension at the applicable rate in effect
immediately prior to such extension.

              3.04 Net  Payments.  All payments  made by the Borrower  hereunder
will be made without setoff or counterclaim.  Promptly upon notice from any Bank
to the  Borrower,  the Borrower will pay,  prior to the date on which  penalties
attach thereto,  all present and future income,  stamp and other taxes,  levies,
costs and charges  whatsoever  imposed,  assessed,  levied or collected on or in
respect of a Loan or a  Competitive  Bid Loan solely as a result of the interest
rate being  determined by reference to the Eurodollar Rate and/or the provisions
of  this  Agreement  relating  to the  Eurodollar  Rate  and/or  the  recording,
registration,  notarization  or other  formalization  of any thereof  and/or any
payments of principal, interest or other amounts made on or in respect of a Loan
or a  Competitive  Bid Loan when the interest rate is determined by reference to
the  Eurodollar  Rate (all such taxes,  levies,  costs and charges  being herein
collectively  called  "Taxes");  provided  that Taxes  shall not  include  taxes
imposed on or  measured by the overall net income or overall net profits of that
Bank by the  United  States of America or any  political  subdivision  or taxing
authority thereof or therein,  or taxes on or measured by the overall net income
or overall net profits of any foreign  branch or  subsidiary of that Bank by any
foreign  country or  subdivision  thereof in which that branch or  subsidiary is
doing  business.  The Borrower shall also pay such  additional  amounts equal to
increases in taxes payable by that Bank described in the foregoing proviso which
increases are  attributable  to payments  made by the Borrower  described in the
immediately  preceding sentence of this Section 3.04. Promptly after the date on
which  payment of any such Tax is due pursuant to  applicable  law, the Borrower
will, at the request of that Bank,  furnish to that Bank  evidence,  in form and
substance  satisfactory  to that Bank,  that the Borrower has met its obligation
under this Section 3.04.  The Borrower  will  indemnify  each Bank against,  and
reimburse each Bank on demand for, any Taxes,  as determined by that Bank in its
good faith  discretion.  Such Bank shall provide the Borrower  with  appropriate
receipts for any  payments or  reimbursements  made by the Borrower  pursuant to
this  Section  3.04.  Notwithstanding  the  foregoing,  the  Borrower  shall  be
entitled,  to the extent it is  required  to do so by law, to deduct or withhold
(and shall not be  required  to make  payments  as  otherwise  required  in this
Section  3.04 on account of such  deductions  or  withholdings)  income or other
similar taxes imposed by the

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United States of America from interest,  fees or other amounts payable hereunder
for the  account  of any Bank  other  than a Bank (i) who is a U.S.  Person  for
Federal  income tax purposes or (ii) who has the  Prescribed  Forms on file with
the Borrower for the applicable  year to the extent  deduction or withholding of
such taxes is not required as a result of the filing of such  Prescribed  Forms,
provided  that if the Borrower  shall so deduct or withhold  any such taxes,  it
shall  provide a statement to the Agent and such Bank,  setting forth the amount
of such  taxes so  deducted  or  withheld,  the  applicable  rate and any  other
information  or  documentation  which  such  Bank  may  reasonably  request  for
assisting such Bank to obtain any allowable  credits or deductions for the taxes
so deducted or withheld in the  jurisdiction or jurisdictions in which such Bank
is subject to tax.

              SECTION 4.  Conditions Precedent.

              4.01  Conditions  Precedent to  Amendment  and  Restatement.  This
Agreement shall become  effective,  and the Existing  Credit  Agreement shall be
amended and  restated  in its  entirety  as set forth  herein,  on the date (the
"Amendment  Effective Date") on which all of the following  conditions have been
satisfied or waived:

              (a) Effectiveness; Notes. The Borrower and each of the Banks shall
      have  signed  a copy of this  Agreement  (whether  the  same or  different
      copies)  and shall  have  delivered  the same to the Agent at the  Agent's
      Notice Office or, in the case of the Banks,  shall have given to the Agent
      telephonic  (confirmed  in  writing),  written,  telex or telecopy  notice
      (actually  received)  at such  office  that the same has been  signed  and
      mailed to it. In  addition,  there shall have been  delivered to the Agent
      for the  account  of each  Bank  the  appropriate  Notes  executed  by the
      Borrower in the amount, maturity and as otherwise provided herein.

              (b) No Default;  Representations and Warranties.  On the Amendment
      Effective  Date  (before  and after  giving  effect to the  amendment  and
      restatement),  (i) there  shall  exist no Default or Event of Default  and
      (ii) all of the representations and warranties  contained herein or in the
      other Credit Documents shall be true and correct in all material  respects
      with the same effect as though such  representations  and  warranties  had
      been made on and as of such  date,  unless  stated to relate to a specific
      earlier date, in which case such  representations  and warranties shall be
      true and correct in all material respects as of such earlier date.

              (c)  Officer's Certificate.  On the Amendment
      Effective Date, the Agent shall have received a

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      certificate  dated  such  date,  signed by an  appropriate  officer of the
      Borrower,  stating  that all of the  applicable  conditions  set  forth in
      Section 4.01(b), (f), (g), (h) and (k) exist as of such date.

              (d) Opinions of Counsel.  On the  Amendment  Effective  Date,  the
      Agent shall have received an opinion,  or opinions,  in form and substance
      reasonably  satisfactory to the Agent,  addressed to each of the Banks and
      dated the Amendment Effective Date, from (i) Wilson,  Sonsini,  Goodrich &
      Rosati,   special  counsel  to  the  Borrower,   which  opinion  shall  be
      substantially  in the form of Exhibit  C-1  hereto,  (ii) Alan W.  Faigin,
      Associate  General  Counsel  of  the  Borrower,  which  opinion  shall  be
      substantially  in the form of Exhibit  C-2 hereto and (iii)  White & Case,
      special counsel to the Banks,  which opinion shall be substantially in the
      form of Exhibit C-3 hereto.

              (e)  Corporate Proceedings.                  (i)  On the Amendment
                   ---------------------
      Effective  Date,  the Banks shall have received a  certificate,  dated the
      Amendment  Effective  Date,  signed by the  President,  any Executive Vice
      President or any Senior Vice President of the Borrower, and attested to by
      the Secretary or any Assistant  Secretary of the Borrower,  in the form of
      Exhibit D hereto with appropriate insertions,  together with copies of the
      Certificate of Incorporation  and By-Laws of each of the Borrower and FIG,
      the  resolutions  of the Borrower and the other  documents  referred to in
      such  certificate,  and the foregoing shall be reasonably  satisfactory to
      the Agent.

                  (ii) All corporate and legal  proceedings  and all instruments
      and agreements in connection  with the  transactions  contemplated by this
      Agreement and the other Credit Documents shall be reasonably  satisfactory
      in form and substance to the Agent,  and the Agent shall have received all
      information  and  copies  of  all  certificates,   documents  and  papers,
      including records of corporate proceedings and governmental  approvals, if
      any,  which  the  Agent   reasonably  may  have  requested  in  connection
      therewith,  such documents and papers where appropriate to be certified by
      proper corporate or governmental authorities.

              (f) Repayment of Existing Obligations.  After giving effect to the
      application  of the  proceeds  of any  Borrowing  which  may  occur on the
      Amendment Effective Date, all Existing Obligations shall have been paid in
      full through and including such date, whether or not then due and payable.

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              (g) Adverse  Change,  etc. Since December 31, 1994,  nothing shall
      have occurred  which the Agent or the Required  Banks shall  determine (i)
      has, or could reasonably be expected to have, a material adverse effect on
      the rights or remedies of the Agent or the Banks, or on the ability of the
      Borrower to perform its obligations to them, (ii) has, or could reasonably
      be  expected  to  have,  a  material  adverse  effect  on  the  corporate,
      organizational  or legal structure of the Borrower or its  Subsidiaries or
      (iii) has, or could  reasonably be expected to have, a materially  adverse
      effect on the condition  (financial or otherwise,  determined  pursuant to
      GAAP or SAP), businesses,  operations,  properties,  assets,  liabilities,
      investments or prospects of the Borrower and its  Subsidiaries  taken as a
      whole, it being understood that, changes in the market value of securities
      held in the Borrower's  investment  portfolio alone shall not constitute a
      material adverse effect of the type described in clause (iii) above.

              (h) Litigation. On the Amendment Effective Date, there shall be no
      actions,  suits or proceedings  pending or threatened  with respect to the
      Borrower or any of its Subsidiaries  which in the judgment of the Agent or
      the  Required  Banks could  reasonably  be expected to (i) have a material
      adverse  effect  on the  condition  (financial  or  otherwise,  determined
      pursuant  to GAAP or SAP),  businesses,  operations,  properties,  assets,
      liabilities, investments or prospects of the Borrower and its Subsidiaries
      taken as a whole or (ii) have a material  adverse  effect on the rights or
      remedies of the Banks  hereunder or under any other Credit  Document or on
      the  ability of the  Borrower  to  perform  its  obligations  to the Banks
      hereunder or under any other Credit Document.

              (i)  Amended and  Restated  Pledge  Agreement.  On or prior to the
      Amendment  Effective  Date,  the  Borrower  shall  have  duly  authorized,
      executed and  delivered the Amended and Restated  Pledge  Agreement in the
      form of Exhibit E hereto (the "Pledge Agreement") and shall have delivered
      to the Collateral Agent, as pledgee there- under, all of the Pledged Stock
      referred to therein, together with undated stock powers executed in blank.

              (j)  Financial Statements.  Prior to the
      Amendment  Effective  Date, the Borrower shall have delivered or caused to
      be delivered to the Agent and to each Bank:

                   (i)  the audited consolidated and unaudited
      consolidating balance sheet of the Borrower as of
      December 31, 1994, and the related consolidated and

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      consolidating  statements  of  income  and  of  stockholders'  equity  and
      consolidated  statements of cash flows for the fiscal year then ended,  in
      each case prepared in accordance with GAAP;

                  (ii) the unaudited balance sheet of each of the Borrower,  FFC
      and FIG as of December 31, 1994, and the related  statements of income and
      of  stockholders'  equity for the  fiscal  year then  ended,  in each case
      prepared in accordance with GAAP;

                 (iii) the audited balance sheet of FIL as of December 31, 1994,
      and the related statements of income, of stockholders'  equity and of cash
      flows for the fiscal year then ended,  in each case prepared in accordance
      with GAAP;

                  (iv) the  unaudited  consolidated  balance  sheet of FIC as of
      December 31, 1994, and the related  consolidated  statements of income, of
      stockholders'  equity and of cash flows for the fiscal year then ended, in
      each case prepared in accordance with SAP;

                   (v) the  audited  consolidated  balance  sheet of the Workers
      Compensation  Subsidiaries  as of  December  31,  1994,  and  the  related
      statements of income,  of  stockholders'  equity and of cash flows for the
      fiscal year then ended,  in each case prepared in accordance  with SAP and
      as filed with the Applicable Insurance Regulatory Authority;

                  (vi) the audited  balance  sheet of each of FRC,  Comstock and
      Bermuda as of December 31, 1994, and the related  statements of income, of
      stockholders'  equity and of cash flows for the fiscal year then ended, in
      the case of each of FRC and Comstock, prepared in accordance with SAP and,
      in the case of Bermuda, prepared in accordance with GAAP;

                 (vii) the unaudited  consolidated balance sheet of the Borrower
      as of June 30, 1995, and the related consolidated statements of income, of
      stockholders'  equity  and of cash  flows for the  six-month  period  then
      ended,  in each case prepared in  accordance  with GAAP (subject to normal
      year-end audit adjustments); and

                (viii)  the  unaudited  call  report  for FIL for the  six-month
      period ended June 30, 1995,  prepared in accordance  with GAAP (subject to
      normal year-end audit adjustments).

              (k)  Approvals.  On the Amendment Effective Date,
      all necessary and material governmental and third party

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      approvals  and  filings  in  connection  with  the  Credit  Documents  and
      otherwise  referred to herein  including  the  approval of the  California
      Department  of  Insurance,  to the extent such  approvals  and filings are
      required  to be obtained or made prior to the  Amendment  Effective  Date,
      shall have been  obtained  and remain in full  force and  effect,  and all
      applicable  waiting  periods  shall have expired  without any action being
      taken by any competent authority which restrains,  prevents or imposes, in
      the  judgment  of the  Required  Banks or the  Agent,  materially  adverse
      conditions upon the consummation of the transactions contemplated thereby.

              (l) Payment of Fees. On the Amendment  Effective  Date, all costs,
      fees  and  expenses,  and  all  other  compensation  contemplated  by this
      Agreement  or the other  Credit  Documents,  due to the Agent or any Banks
      shall have been paid to the extent due.

              (m) Consent  Letter.  On the Amendment  Effective  Date, the Agent
      shall have received a letter from CT Corporation System,  substantially in
      the form of Exhibit G hereto, indicating its consent to its appointment by
      the  Borrower as its agent to receive  service of process as  specified in
      Section 11.08.

All of the certificates,  legal opinions and other documents and papers referred
to in this Section 4.01, unless otherwise  specified,  shall be delivered to the
Agent at its Notice Office for the account of each of the Banks and,  except for
the  Notes,  in  sufficient  counterparts  for each of the  Banks  and  shall be
reasonably satisfactory in form and substance to the Agent.

              4.02  Conditions  Precedent to  Borrowings.  The obligation of the
Banks to make any Loan or  Competitive  Bid Loan to the  Borrower  hereunder  is
subject,  at the time of the making of such Loan or Competitive Bid Loan, to the
satisfaction of the following conditions:

              (a) Notice of Borrowing. The Agent shall have received a Notice of
      Borrowing  satisfying  the  requirements  of Section 1.03 in the case of a
      Borrowing of Loans,  or a Notice of Competitive  Bid Borrowing  satisfying
      the requirements of Section 1.04 in the case of a Borrowing of Competitive
      Bid Loans.

              (b) No Default; Representations and Warranties. At the time of the
      making of such Loan or  Competitive  Bid Loan and also after giving effect
      thereto, (i) there shall exist no Default or Event of Default and (ii) all
      representations  and  warranties  contained  herein or in the other Credit
      Documents shall be true and correct in

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      all material respects with the same effect as though such  representations
      and  warranties  had  been  made on and as of the  date  of  such  Loan or
      Competitive  Bid Loan,  as the case may be,  unless  stated to relate to a
      specific earlier date, in which case such  representations  and warranties
      shall  have been true and  correct  in all  material  respects  as of such
      earlier date.

The  acceptance  of the  benefits  of each Loan and  Competitive  Bid Loan shall
constitute  a  representation  and warranty by the Borrower to each of the Banks
that  all of the  applicable  conditions  specified  above  exist  or have  been
satisfied as of such date.

              SECTION 5. Representations, Warranties and Agreements. In order to
induce  the  Banks to enter  into  this  Agreement  and to make  the  Loans  and
Competitive  Bid Loans  provided for herein,  the Borrower  makes the  following
representations  and warranties to, and agreements with, the Banks, all of which
shall survive the execution and delivery of this Agreement and the making of the
Loans and  Competitive  Bid Loans (with the making of each Loan and  Competitive
Bid Loan being deemed to  constitute  a  representation  and  warranty  that the
matters  specified  in this  Section  5 are true  and  correct  in all  material
respects  on and as of the date of the  making of each such Loan or  Competitive
Bid Loan, as the case may be, unless such  representation and warranty expressly
indicates  that it is being  made as of any  specific  date in which  case  such
representation  and warranty shall be true and correct in all material  respects
as of such specified date):

              5.01 Corporate  Status.  The Borrower and each of its Subsidiaries
(i) is a duly organized and validly existing  corporation in good standing under
the laws of the  jurisdiction of its organization and has the corporate or other
organizational  power  and  authority  to own its  property  and  assets  and to
transact  the business in which it is engaged and  presently  proposes to engage
and (ii) has duly  qualified  and is  authorized  to do business  and is in good
standing in all jurisdictions  where it is required to be so qualified and where
the  failure to be so  qualified  would have a  material  adverse  effect on the
condition  (financial  or  otherwise,  determined  pursuant  to  GAAP  or  SAP),
businesses,  operations,  properties,  assets, liabilities or investments of the
Borrower and its Subsidiaries taken as a whole.

              5.02 Corporate Power and Authority. The Borrower has the corporate
power and authority to execute,  deliver and carry out the terms and  provisions
of the  Credit  Documents  and has  taken  all  necessary  corporate  action  to
authorize the execution,  delivery and performance of the Credit Documents.  The
Borrower has duly  executed  and  delivered  each Credit  Document and each such
Credit Document constitutes the legal,

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valid and binding obligation of the Borrower, enforceable in
accordance with its terms.

              5.03 No Violation. Neither the execution, delivery and performance
by the  Borrower  of the  Credit  Documents  nor  compliance  with the terms and
provisions  thereof,  nor  the  consummation  of the  transactions  contemplated
therein (i) will contravene any applicable provision of any law, statute,  rule,
regulation,  order,  writ,  injunction  or decree  of any court or  governmental
instrumentality,  (ii) will  conflict or be  inconsistent  with or result in any
breach  of any  of  the  terms,  covenants,  conditions  or  provisions  of,  or
constitute a default  under,  or (other than  pursuant to the Pledge  Agreement)
result in the creation or imposition of (or the  obligation to create or impose)
any Lien  upon any of the  property  or  assets  of the  Borrower  or any of its
Subsidiaries pursuant to the terms of, any indenture,  mortgage,  deed of trust,
loan agreement or other material  instrument to which the Borrower or any of its
Subsidiaries  is a party or by which it or any of its  property  or  assets  are
bound or to which it may be subject or (iii) will  violate any  provision of the
charter or By-Laws of the Borrower or any of its Subsidiaries.

              5.04  Litigation.  There  are no  actions,  suits  or  proceedings
pending  or,  to the  Borrower's  knowledge,  threatened,  with  respect  to the
Borrower or any of its  Subsidiaries  (i) that are  reasonably  likely to have a
material  adverse  effect on the condition  (financial or otherwise,  determined
pursuant  to  GAAP  or  SAP),  businesses,   operations,   properties,   assets,
liabilities or investments of the Borrower and its Subsidiaries taken as a whole
or (ii) that could  reasonably be expected to have a material  adverse effect on
the  rights  or  remedies  of the Banks or the  Agent or on the  ability  of the
Borrower to perform its obligations to them hereunder and under the other Credit
Documents.

              5.05 Use of Proceeds. (a) Subject to Section 5.05(b), (c), (d) and
(e),  all proceeds of the Loans and  Competitive  Bid Loans shall be utilized to
repay  the  Existing  Obligations,   to  repay  the  Permitted  CIC  Acquisition
Subordinated  Note and for general  corporate  purposes of the  Borrower and its
Subsidiaries.

              (b)  Neither  the  making  of any  Loan or  Competitive  Bid  Loan
hereunder,  nor the use of the proceeds thereof, will violate or be inconsistent
with the  provisions of Regulation G, T, U or X of the Board of Governors of the
Federal  Reserve  System.  At the time of the making of each Loan or Competitive
Bid Loan, not more than 25% of the value of the assets subject to the provisions
of Section 7 of the  Borrower,  or of the  Borrower  and its  Subsidiaries  on a
consolidated basis, shall constitute Margin Stock.

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              (c) The aggregate  outstanding  principal  amount of the Loans and
Competitive  Bid Loans the proceeds of which are permitted to be  transferred to
Financial Services  Subsidiaries by means of a capital  contribution shall, when
added to amount of all other capital contributions made pursuant to this Section
5.05(c),  acquisitions  made pursuant to Section  7.02(d) and  investments  made
pursuant to Section 7.05(g), at no time exceed the Permitted Basket Amount.

              (d) To the extent that any portion of the  proceeds of any Loan or
Competitive Bid Loan are transferred to a Financial Services  Subsidiary,  other
than any such  transfer by means of a capital  contribution  permitted by clause
(c) above,  such transfer shall be effected by means of a loan from the Borrower
to such Financial  Services  Subsidiary (each such loan, a "Proceeds Loan"), and
each such  Proceeds  Loan shall rank pari  passu  with,  or senior to, all other
Indebtedness of the respective Financial Services Subsidiary.

              (e) Notwithstanding the foregoing provisions of this Section 5.05,
no proceeds of any Loan or any Competitive Bid Loan will be utilized to purchase
any capital stock or other ownership interests of a Person in a transaction,  or
as part of a series of transactions, the result of which is the ownership by the
Borrower  and/or its  Subsidiaries  of 5% or more of the capital  stock or other
ownership  interests of such Person  unless the Board of  Directors  (or similar
body if such  Person is not a  corporation)  of such  Person has  approved  such
transaction prior to any public  announcement of the purchase,  or the intent to
purchase, any such capital stock or ownership interests.

              5.06 Governmental Approvals. No order, consent, approval, license,
authorization,  or validation of, or filing,  recording or registration with, or
exemption by, any foreign or domestic  governmental or public body or authority,
or  any  subdivision  thereof,  is  required  to  authorize  or is  required  in
connection  with (i) the  execution,  delivery  and  performance  of any  Credit
Document or (ii) the legality, validity, binding effect or enforceability of any
Credit Document.

              5.07  Investment Company Act.  Neither the Bor-
rower nor any of its Subsidiaries is an "investment company"
or a company "controlled" by an "investment company," within
the meaning of the Investment Company Act of 1940, as
amended.

              5.08  Public Utility Holding Company Act.  Neither
the Borrower nor any of its Subsidiaries is a "holding com-
pany," or a "subsidiary company" of a "holding company," or
an "affiliate" of a "holding company" or of a "subsidiary

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company"  of a  "holding  company,"  within the  meaning  of the Public  Utility
Holding Company Act of 1935, as amended.

              5.09 True and Complete Disclosure.  All factual information (taken
as a whole)  heretofore  or  contemporaneously  furnished by or on behalf of the
Borrower  or any of its  Subsidiaries  in  writing  to  the  Agent  or any  Bank
(including,   without  limitation,  all  information  contained  in  the  Credit
Documents)  for  purposes  of  or in  connection  with  this  Agreement  or  any
transaction  contemplated  herein  is, and all other  such  factual  information
(taken  as a whole)  hereafter  furnished  by or on behalf  of the  Borrower  in
writing  to the Agent or any Bank will be,  true and  accurate  in all  material
respects on the date as of which such  information is dated or certified and not
incomplete  by  omitting  to state  any  material  fact  necessary  to make such
information  (taken  as a whole)  not  misleading  at such  time in light of the
circumstances under which such information was provided.  There is no fact known
to the Borrower which materially and adversely affects the condition  (financial
or  otherwise,  determined  pursuant  to GAAP or SAP),  businesses,  operations,
assets,  liabilities,   properties  or  investments  of  the  Borrower  and  its
Subsidiaries,  taken as a whole,  which has not been disclosed herein or in such
other documents,  certificates and statements  furnished to the Banks for use in
connection with the transactions contemplated hereby.

              5.10 Financial Condition;  Financial Statements.  (a) On and as of
the date of the  making of each  Loan and each  Competitive  Bid Loan,  on a pro
forma basis after giving effect to all  Indebtedness  incurred on such date, and
to be incurred,  and Liens created and to be created,  in  connection  with this
Agreement,  (x) the sum of the assets, at a fair valuation, of the Borrower will
exceed its debts,  (y) the Borrower  will not have  incurred nor intended to, or
believe  that it will,  incur debts beyond its ability to pay such debts as such
debts mature and (z) the  Borrower  will have  sufficient  capital with which to
conduct its  business.  For purposes of this Section  5.10(a),  "debt" means any
liability on a claim, and "claim" means (i) right to payment whether or not such
a right is reduced to judgment,  liquidated,  unli- quidated, fixed, contingent,
matured,  unmatured,   disputed,   undisputed,   legal,  equitable,  secured  or
unsecured;  or (ii) right to an equitable  remedy for breach of  performance  if
such breach  gives rise to a payment,  whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent,  matured, unmatured, disputed,
undisputed, secured or unsecured.

              (b) The financial  statements  delivered to the Banks  pursuant to
Section 4.01(j) present fairly the financial  position of the Persons  specified
therein, at the dates of said statements and the results of operations for

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the periods covered thereby. All such financial statements have been prepared in
accordance  with SAP or GAAP,  as  indicated  in Section  4.01(j),  consistently
applied except to the extent provided in the notes to said financial statements.

              (c)  Except  as  fully  disclosed  in  the  financial   statements
delivered  pursuant to Section 4.01(j),  there are no liabilities or obligations
with respect to the Borrower or any of its Subsidiaries of any nature whatsoever
(whether  absolute,  accrued,  contingent  or otherwise  and whether or not due)
which, either individually or in aggregate, would be material to the Borrower or
to the Borrower and its  Subsidiaries  taken as a whole.  The Borrower  does not
know of any basis for the assertion against it of any liability or obligation of
any nature  whatsoever that is not fully  disclosed in the financial  statements
delivered  pursuant to Section  4.01(j)  which,  either  individually  or in the
aggregate,  could  reasonably  be expected to be material to the Borrower or the
Borrower and its Subsidiaries taken as a whole.

              (d) There has been no  material  adverse  change in the  condition
(financial  or  otherwise,  determined  pursuant  to GAAP or  SAP),  businesses,
operations, properties, assets or liabilities of the Borrower or of the Borrower
and its  Subsidiaries  taken  as a whole  from  that of the  Borrower  or of the
Borrower and its Subsidiaries taken as a whole as of December 31, 1994.

              5.11 Security Interests. The Pledge Agreement creates, as security
for the Obligations,  valid and enforceable  perfected security interests in and
Liens on all of the Collateral, superior to and prior to the rights of all third
persons,  and subject to no other Liens  (except for Non-  Consensual  Permitted
Liens),  in favor of the  Collateral  Agent for the  benefit of the  Banks.  The
Borrower has good and marketable  title to all Collateral  free and clear of all
Liens  (except  as  created  pursuant  to the  Pledge  Agreement  and except for
Non-Consensual Permitted Liens). No filings,  recordings or consents (except for
those  that have been  made)  are  required  in order to  perfect  the  security
interests created under the Pledge Agreement.

              5.12  Tax  Returns  and  Payments.  The  Borrower  and each of its
Subsidiaries has filed all federal income tax returns and all other tax returns,
domestic and foreign, required to be filed by it and has paid all material taxes
and  assessments  payable by it which have become due,  other than those not yet
delinquent and except for those  contested in good faith.  The Borrower and each
of its  Subsidiaries  has paid, or has provided  adequate  reserves (in the good
faith  judgment  of the  management  of such  Person)  for the  payment  of, all
federal, state and foreign income taxes applicable

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for all prior fiscal years and for the current fiscal year to
the date hereof.

              5.13 Compliance with ERISA. Each Plan is in substantial compliance
with ERISA and the Code;  no  Reportable  Event has  occurred  with respect to a
Plan;  no Plan is  insolvent  or in  reorganization;  the  aggregate  amount  of
Unfunded Current Liabilities in respect of all Plans does not exceed $1,000,000;
no Plan has an accumulated or waived funding deficiency, has permitted decreases
in  its  funding  standard  account  or has  applied  for  an  extension  of any
amortization  period within the meaning of Section 412 of the Code;  neither the
Borrower nor any  Subsidiary  nor any ERISA  Affiliate has incurred any material
liability to or on account of a Plan  pursuant to Section 409,  502(i),  502(l),
515, 4062,  4063,  4064,  4069, 4201 or 4204 of ERISA or Section 4971 or 4975 of
the Code or has been  notified that it will incur any material  liability  under
any of the foregoing Sections with respect to any Plan; no proceedings have been
instituted by the PBGC to terminate any Plan; no condition exists which presents
a material  risk to the  Borrower or any  Subsidiary  or any ERISA  Affiliate of
incurring  a  material  liability  to or on account  of a Plan  pursuant  to the
foregoing  provisions  of ERISA and the Code; no material lien imposed under the
Code or ERISA on the  assets  of the  Borrower  or any  Subsidiary  or any ERISA
Affiliate  exists nor has the Borrower,  any  Subsidiary or any ERISA  Affiliate
been  notified  that such a lien will be imposed on the assets of the  Borrower,
any  Subsidiary or any ERISA  Affiliate on account of any Plan; and the Borrower
and its  Subsidiaries  do not maintain or  contribute  to any  employee  welfare
benefit plan (as defined in Section 3(1) of ERISA)  (other than such an employee
welfare  benefit  plan which is a  "multiemployer  plan"  within the  meaning of
Section 414(f) of the Code) which provides  benefits to retired employees (other
than as required by Section 601 of ERISA) or any employee  pension  benefit plan
(as  defined in Section  3(2) of ERISA)  (other than any such  employee  pension
benefit  plan which is  intended to be  qualified  under  Section  401(a) of the
Code),  the obligations  with respect to which employee welfare benefit plans or
employee pension benefit plans,  individually or in the aggregate,  would have a
material adverse effect upon the condition  (financial or otherwise,  determined
pursuant  to  GAAP  or  SAP),  businesses,   operations,   properties,   assets,
liabilities  or  investments  of the  Borrower and its  Subsidiaries  taken as a
whole. With respect to Plans that are multiemployer plans (as defined in Section
3(37) of ERISA) the  representations  and warranties in this Section 5.13, other
than any made with respect to liability under Section 4201 or 4204 of ERISA, are
made to the best knowledge of the Borrower.

              5.14  Subsidiaries.  (a)  Annex III lists each
Subsidiary of the Borrower (and the direct and indirect own-

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ership interest of the Borrower therein) in each case exist-
ing on the Amendment Effective Date.  As of the Amendment
Effective Date, all such Subsidiaries are Wholly-Owned
Subsidiaries of the Borrower.

              (b) There are no  restrictions  on the  Borrower or any of its P&C
Insurance  Subsidiaries  which prohibit or otherwise restrict (x) the ability of
any P&C Insurance Subsidiary to (a) pay dividends or make other distributions or
pay any Indebtedness owed to the Borrower or any P&C Insurance  Subsidiary,  (b)
make loans or advances  to the  Borrower or any P&C  Insurance  Subsidiary,  (c)
transfer any of its  properties  or assets to the Borrower or any P&C  Insurance
Subsidiary or (d) guarantee the  Obligations  or (y) the ability of the Borrower
or any P&C  Insurance  Subsidiary  of the Borrower to create,  incur,  assume or
suffer to exist any Lien upon its property or assets to secure the  Obligations,
other than prohibitions or restrictions  existing under or by reason of (i) this
Agreement  or  the  other  Credit  Documents,  (ii)  Legal  Requirements,  (iii)
customary  non-assignment  provisions  entered  into in the  ordinary  course of
business and consistent with past practices, (iv) purchase money obligations for
property  acquired  in  the  ordinary  course  of  business,  so  long  as  such
obligations  are  permitted  under  this  Agreement,   (v)  any  restriction  or
encumbrance  with respect to a P&C Insurance  Subsidiary  imposed pursuant to an
agreement  which has been  entered  into for the sale or  disposition  of all or
substantially  all  of the  capital  stock  or  assets  of  such  P&C  Insurance
Subsidiary,  so  long as  such  sale or  disposition  is  permitted  under  this
Agreement,  and (vi) Liens  permitted  under  Section 7.03 and any  documents or
instruments governing the terms of any Indebtedness or other obligations secured
by any such Liens,  provided,  that such prohibitions or restrictions apply only
to the assets subject to such Liens.

              (c) There are no  restrictions  on the  Borrower or any  Financial
Services  Subsidiary  which is the  obligor in respect of a Proceeds  Loan which
prohibit or otherwise restrict the ability of such Financial Services Subsidiary
to repay  such  Proceeds  Loan,  together  with  interest  thereon,  other  than
prohibitions or  restrictions  existing under or by reason of (i) this Agreement
or the other Credit Documents or (ii) Legal Requirements.

              5.15  Intellectual   Property.   The  Borrower  and  each  of  its
Subsidiaries  have  obtained or are in the process of applying  for all material
patents, trademarks,  servicemarks,  trade names, copyrights, licenses and other
rights, free from burdensome restrictions,  that are necessary for the operation
of their  respective  businesses  as presently  conducted  and as proposed to be
conducted.

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              5.16 Pollution and Other Regulations. The Borrower and each of its
Subsidiaries  are in  compliance  with  all  laws and  regulations  relating  to
pollution and environmental  control,  equal employment opportunity and employee
safety in all domestic and foreign  jurisdictions in which the Borrower and each
of its  Subsidiaries is presently  doing business,  and the Borrower will comply
and cause each of its  Subsidiaries to comply with all such laws and regulations
which may be imposed in the future in  jurisdictions  in which the  Borrower  or
such  Subsidiary may then be doing  business;  in each case other than those the
non-compliance  with  which  would  not have a  material  adverse  effect on the
condition  (financial  or  otherwise,  determined  pursuant  to  GAAP  or  SAP),
businesses,  operations,  properties,  assets, liabilities or investments of the
Borrower and its Subsidiaries taken as a whole or on the ability of the Borrower
to perform its obligations under any Credit Document.

              5.17  Properties.  The Borrower and each of its  Subsidiaries  has
good and marketable title to all properties owned by them, free and clear of all
Liens, other than as permitted by Section 7.03.

              5.18 Labor Relations;  Collective Bargaining  Agreements.  (a) Set
forth on Annex IV is a list and description  (including dates of termination) of
all  collective  bargaining or similar  agreements  between or applicable to the
Borrower or any of its Subsidiaries and any union,  labor  organization or other
bargaining  agent  in  respect  of the  employees  of the  Borrower  and/or  any
Subsidiary on the Amendment Effective Date.

              (b) Neither the Borrower nor any of its Subsidiaries is engaged in
any unfair labor practice that is reasonably  likely to have a material  adverse
effect on the Borrower or on the Borrower and its Subsidiaries taken as a whole.
There is (i) no significant  unfair labor practice complaint pending against the
Borrower or any of its  Subsidiaries  or, to the best knowledge of the Borrower,
threatened  against any of them,  before the National Labor Relations Board, and
no significant grievance or significant arbitration proceeding arising out of or
under any collective bargaining agreement is now pending against the Borrower or
any of its  Subsidiaries  or, to the best knowledge of the Borrower,  threatened
against any of them,  (ii) no significant  strike,  labor  dispute,  slowdown or
stoppage is pending against the Borrower or any of its  Subsidiaries  or, to the
best  knowledge of the Borrower,  threatened  against the Borrower or any of its
Subsidiaries  and  (iii)  to the  best  knowledge  of  the  Borrower,  no  union
representation  question exists with respect to the employees of the Borrower or
any of its Subsidiaries,  except (with respect to any matter specified in clause
(i), (ii) or (iii) above, either in-

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dividually  or in the  aggregate)  such as is not  reasonably  likely  to have a
material  adverse  effect on the condition  (financial or otherwise,  determined
pursuant to GAAP or SAP) businesses, operations, properties, assets, liabilities
or investments of the Borrower and its Subsidiaries taken as a whole.

              5.19   Capitalization.   On  the  Amendment  Effective  Date,  the
authorized  capital stock of the Borrower  consists of (i) 30,000,000  shares of
common stock,  $1.00 par value, of which  16,926,948 were issued and outstanding
as of July 31, 1995 and (ii)  2,000,000  shares of  preferred  stock,  $0.01 par
value, none of which are issued and outstanding.  As of the Amendment  Effective
Date,  all such  outstanding  shares of the Borrower  have been duly and validly
issued and are fully paid and nonassessable.  Except for the Liquid Yield Option
Notes,  neither the Borrower nor any of its  Subsidiaries  has  outstanding  any
securities convertible into or exchangeable for its capital stock or outstanding
any rights to subscribe for or to purchase,  or any options for the purchase of,
or any  agreements  providing for the issuance  (contingent or otherwise) of, or
any calls,  commitments  or claims of any  character  relating  to, its  capital
stock.

              5.20 Indebtedness.  Annex V sets forth a true and complete list of
all Indebtedness (including, without limitation,  Contingent Obligations) of the
Borrower as of the Amendment  Effective Date (other than Indebtedness  having an
aggregate principal amount not to exceed  $1,000,000),  in each case showing the
aggregate  principal  amount thereof,  the name of the lender in respect thereof
and the name of any other  entity which has  directly or  indirectly  guaranteed
such Indebtedness.

              5.21 Compliance  with Statutes,  etc. The Borrower and each of its
Subsidiaries  is in  compliance  in all material  respects  with all  applicable
statutes, regulations and orders of, and all applicable restrictions imposed by,
all governmental bodies, domestic or foreign, in respect of the conduct of their
businesses and the ownership of their properties (including applicable statutes,
regulations,  orders and restrictions  relating to  environmental  standards and
controls).

              SECTION 6.  Affirmative  Covenants.  The Borrower hereby covenants
and agrees that on the Amendment  Effective Date and thereafter,  for so long as
this  Agreement  is in effect  and until such time as the Total  Commitment  has
terminated,  no Notes are  outstanding  and the Loans and Competitive Bid Loans,
together with interest,  Fees and all other Obligations incurred hereunder,  are
paid in full:

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              6.01  Information Covenants.  The Borrower will
furnish to each Bank:

              (a) Annual Financial  Statements.  (i) As soon as available and in
      any event  within  120 days  after the  close of each  fiscal  year of the
      Borrower,  (x) the  consolidated  and  consolidating  balance sheet of the
      Borrower  and its  Subsidiaries  as at the end of such fiscal year and the
      related  consolidated  and  consolidating  statements  of  income  and  of
      stockholders'  equity and  consolidated  statement  of cash flows for such
      fiscal year,  and (y) the balance sheet of each of the  Borrower,  FFC and
      FIG  (on a  stand  alone  basis  in  the  case  of the  Borrower  and on a
      consolidated  basis  in the  case  of FFC  and  FIG) as at the end of such
      fiscal  year and the  related  statements  of income and of  stockholders'
      equity for such fiscal year, in each case prepared in accordance with GAAP
      and setting forth comparative  figures for the preceding fiscal year, and,
      (1) in the case of such  consolidated  financial  statements  furnished to
      each Bank with respect to the Borrower  and FFC,  examined by  independent
      certified public accountants of recognized national standing whose opinion
      shall not be qualified as to the scope of audit or as to the status of the
      Borrower,  FFC or any of their respective  Subsidiaries as a going concern
      and (2) in the case of such  financial  statements  furnished to each Bank
      with  respect  to  the  Borrower  on  an  unconsolidated  basis  and  FIG,
      accompanied  by an  opinion  of  the  Chief  Financial  Officer  or  other
      Authorized Officer of the Borrower stating that such financial  statements
      fairly  present the  financial  condition and results of operations of the
      Borrower or FIG, as the case may be, in accordance with GAAP.

          (ii) As soon as  available  and in any event within 180 days after the
      close  of each  fiscal  year of the  Borrower,  (x)  the  annual  combined
      financial statements of FCIC and its Subsidiaries  (prepared in accordance
      with SAP) for such fiscal year, setting forth comparative  figures for the
      preceding  fiscal year,  together  with an opinion of the Chief  Financial
      Officer or other  Authorized  Officer of the  Borrower  stating  that such
      financial  statements fairly present the combined financial  condition and
      results of operations of FCIC and each respective Subsidiary in accordance
      with SAP,  (y) the annual  combined  financial  statements  of FIC and its
      Subsidiaries  (prepared in  accordance  with SAP) for such fiscal year, as
      filed with the respective  Applicable  Insurance  Regulatory Authority and
      setting forth comparative  figures for the preceding fiscal year, together
      with an opinion of the Chief Financial Officer or other Authorized Officer
      of the Borrower stating that such financial  statements fairly present the
      combined finan-

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      cial  condition  and  results  of  operations  of FIC and each  respective
      Subsidiary in accordance with SAP, and (z) the annual financial statements
      of each P&C Insurance  Subsidiary  (prepared in  accordance  with SAP) for
      such fiscal  period,  as filed with the  respective  Applicable  Insurance
      Regulatory  Authority  and  setting  forth  comparative  figures  for  the
      preceding  fiscal  year,  and  examined by  independent  certified  public
      accountants  of recognized  national  standing  whose opinion shall not be
      qualified  as to the  scope  of  audit  or as to  the  status  of any  P&C
      Insurance Subsidiary as a going concern.

              (iii) As soon as available  and in any event within 120 days after
      the close of each fiscal year of the Borrower,  (x) the  consolidated  and
      consolidating balance sheet of Investors Bancor and its Subsidiaries as at
      the end of such fiscal year and the related consolidated and consolidating
      statements of income and of  stockholders'  equity for such year,  setting
      forth comparative  figures for the preceding fiscal year, together with an
      opinion of the Chief Financial Officer or other Authorized  Officer of the
      Borrower  stating  that,  in  the  case  of  such  consolidated  financial
      statements,  such financial  statements  fairly  present the  consolidated
      financial condition and results of operations of Investors Bancor and each
      respective  Subsidiary in accordance  with GAAP,  (y) the balance sheet of
      FIL as at the end of  such  fiscal  year  and the  related  statements  of
      income,  of  stockholders'  equity and of cash flows for such fiscal year,
      setting  forth  comparative  figures for the  preceding  fiscal year,  and
      examined  by  independent   certified  public  accountants  of  recognized
      national  standing  whose  opinion  shall not be  qualified as to scope of
      audit or as to the status of FIL as a going  concern and (z) to the extent
      not included in clause (y) above,  the balance sheet of each Subsidiary of
      Investors  Bancor  as at the  end of such  fiscal  year  and  the  related
      statement of income,  setting forth comparative  figures for the preceding
      fiscal year,  together with an opinion of the Chief  Financial  Officer or
      other  Authorized  Officer of the Borrower stating that such balance sheet
      fairly presents the assets and  liabilities  such Subsidiary in accordance
      with GAAP.

              (iv) As soon as  available  and in any event no later than June 15
      of each  year  (September  15 of each  year in the case of  Bermuda),  the
      balance  sheet of each Material  Discontinued  Subsidiary as at the end of
      the fiscal year ending on the  immediately  preceding  December 31 and the
      related  statements of income,  of stockholders'  equity and of cash flows
      for such fiscal year, in each case prepared in accordance with SAP (or, in
      the case of any Material Discontinued Subsidiary

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      which is not a Regulated  Insurance  Subsidiary,  GAAP) and setting  forth
      comparative  figures  for the  preceding  fiscal  year,  and  examined  by
      independent  certified public accountants of recognized  national standing
      whose opinion shall not be qualified as to the scope of audit.

              (v) As soon as  available  and in any event  within 120 days after
      the  close  of each  fiscal  year of the  Borrower,  a  written  favorable
      opinion,  in form and substance  satisfactory  to the Agent, by either the
      firm of independent  certified  public  accountants  providing the opinion
      referred  to in Section  6.01(a)(i)  in respect of such  fiscal year or an
      independent  actuarial  consulting  firm  reasonably  satisfactory  to the
      Agent,  which firm shall be  provided  access to or copies of all  reserve
      analyses and valuations relating to the insurance business of each Workers
      Compensation  Subsidiary in the possession of or available to the Borrower
      or its  Subsidiaries  stating,  with respect to each Workers  Compensation
      Subsidiary,  that its loss reserves as of the last day of such fiscal year
      (A) make a reasonable provision in the aggregate for all unpaid losses and
      loss adjustment expenses, gross and net as to reinsurance ceded, under the
      terms of such Workers Compensation Subsidiary's policies, (B) are computed
      in a manner that conforms to the appropriate  Standards of Practice of the
      Actuarial  Standards  Board,  (C) are  computed  on the  basis of  similar
      general  methods as used as of the last day of the  preceding  fiscal year
      and (D)  meet  the  relevant  requirements  of the  insurance  laws of the
      jurisdiction where such Workers Compensation Subsidiary is domiciled.

              (b) Quarterly Financial  Statements.  (i) As soon as available and
      in any  event  within 60 days  after the close of each of the first  three
      quarterly accounting periods in each fiscal year of the Borrower,  (x) the
      consolidated  balance sheet of the Borrower and its Subsidiaries as at the
      end of such quarterly  period and the related  consolidated  statements of
      income,  of  stockholders'  equity  and of cash  flows for such  quarterly
      period and for the elapsed  portion of the fiscal year ended with the last
      day of such  quarterly  period,  and (y) the balance sheet of the Borrower
      and FFC (on a stand  alone  basis  in the  case of the  Borrower  and on a
      consolidated  basis  in the  case of  FFC)  as at the  end of such  fiscal
      quarter and the related  statements of income and of stockholders'  equity
      for such quarterly  period and for the elapsed  portion of the fiscal year
      ended with the last day of such  quarterly  period;  in each case  setting
      forth comparative figures for the related periods in the prior fiscal year
      (prepared in accordance with GAAP), and all of which

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      shall be  certified  by the Chief  Financial  Officer or other  Authorized
      Officer of the Borrower, subject to changes resulting from normal year-end
      audit adjustments.

          (ii) As soon as  available  and in any event (x)  within 90 days after
      the close of each of the first three quarterly  accounting periods in each
      fiscal year of the Borrower,  quarterly combined  financial  statements of
      FCIC and its  Subsidiaries  (prepared  in  accordance  with  SAP) for such
      fiscal period,  together with the opinion  thereon of the Chief  Financial
      Officer or other  Authorized  Officer of the  Borrower  stating  that such
      financial  statements fairly present the combined financial  condition and
      results of operations of FCIC and its Subsidiaries in accordance with SAP,
      and (y)  within  60 days  after  the  close  of  each of the  first  three
      quarterly  accounting  periods  in  each  fiscal  year  of  the  Borrower,
      quarterly financial  statements of each P&C Insurance Subsidiary (prepared
      in accordance with SAP) for such fiscal period,  together with the opinion
      thereon of the Chief Financial Officer or other Authorized  Officer of the
      Borrower  stating  that  such  financial  statements  fairly  present  the
      financial  condition and results of operations of each such  Subsidiary in
      accordance with SAP.

         (iii) As soon as  available  and in any event  within 45 days after the
      close of each of the first  three  quarterly  accounting  periods  in each
      fiscal year of the Borrower,  the call report with respect to FIL for such
      fiscal  quarter,  certified  by  the  Chief  Financial  Officer  or  other
      Authorized  Officer of the  Borrower,  subject to changes  resulting  from
      normal year-end audit adjustments.

              (c)  Officer's  Certificates.  At the time of the  delivery of the
      financial   statements  provided  for  in  Sections  6.01(a)  and  (b),  a
      certificate of the Chief Financial Officer or other Authorized  Officer of
      the Borrower to the effect that no Default or Event of Default  exists or,
      if any Default or Event of Default does exist,  specifying  the nature and
      extent  thereof,  which  certificate  shall  set  forth  the  calculations
      required to establish  whether the Borrower and its  Subsidiaries  were in
      compliance  with the  provisions of Sections  6.11,  7.05 and 7.10 through
      7.15 as at the end of such fiscal year or quarter, as the case may be.

              (d)    Notice of Default or Litigation.  Promptly,
      and in any event within three Business Days after a
      senior officer of the Borrower obtains knowledge
      thereof, notice of (x) the occurrence of any event which

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      constitutes a Default or Event of Default,  which notice shall specify the
      nature  thereof,  the  period of  existence  thereof  and what  action the
      Borrower  proposes to take with respect  thereto and (y) any litigation or
      governmental or regulatory  proceeding pending against the Borrower or any
      of its  Subsidiaries  which is likely to have a material adverse effect on
      the  condition  (financial or  otherwise,  determined  pursuant to GAAP or
      SAP),  businesses,   operations,   properties,   assets,   liabilities  or
      investments of the Borrower and its  Subsidiaries  taken as a whole or the
      ability of the Borrower to perform its obligations  hereunder or under any
      other Credit Document.

              (e) Auditors'  Reports.  Promptly upon receipt thereof,  a copy of
      each other report or "management  letter" submitted to the Borrower or any
      of its  Subsidiaries  by  their  independent  accountants  or  independent
      actuaries in connection with any annual,  interim or special audit made by
      them of the books of the  Borrower  or any of its  Subsidiaries  (it being
      understood  and agreed that if the  Borrower  receives  any such report or
      "management letter" that relates to the Borrower and its Subsidiaries on a
      consolidated basis, the delivery of such report or letter will satisfy the
      provisions of this clause (e).

              (f) Loss Reserve  Report.  As promptly as  reasonably  practicable
      following a request  therefor by the Agent or the Required Banks, a report
      prepared by an  independent  accounting  or actuarial  consulting  firm of
      recognized  professional  standing  selected by the Agent or the  Required
      Banks reviewing the adequacy of loss reserves of each Workers Compensation
      Subsidiary,  which  firm  shall be  provided  access  to or  copies of all
      reserve analyses and valuations relating to the insurance business of each
      such Workers Compensation  Subsidiary in the possession of or available to
      the  Borrower  or its  Subsidiaries;  provided  that (x) no more  than one
      request  may  be  made  pursuant  to  this  clause  (f)  during  any  four
      consecutive  fiscal  quarters  of the  Borrower,  and (y) the cost of such
      review  and  report  shall  be for the  account  of the  Banks  (pro  rata
      according to their respective Commitments).

              (g) Other  Regulatory  Statements and Reports.  Promptly (A) after
      their becoming  available,  copies of any statutory  financial  statements
      that the Borrower or any Regulated  Insurance Company  periodically  files
      with the Applicable  Insurance  Regulatory Authority of the state in which
      it is  domiciled  or any state in which it is  deemed  to be  commercially
      domiciled or any governmental agency or agencies substituted therefor (in-

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      cluding all exhibits and schedules  thereto),  (B) after receipt  thereof,
      copies of all  regular  and  periodic  reports of reviews or  examinations
      (including,  without  limitation,  triennial  examinations  and risk based
      capital reports) of any Regulated  Insurance Company that is a Subsidiary,
      or any of them,  delivered  to such  Person  by any  Applicable  Insurance
      Regulatory   Authority,   insurance   commission  or  similar   regulatory
      authority,  (C) after receipt thereof,  written notice of any assertion by
      any Applicable  Insurance  Regulatory Authority or any governmental agency
      or  agencies  substituted  therefor,  as  to  a  violation  of  any  Legal
      Requirement by any Regulated  Insurance  Company which is likely to have a
      material  adverse  effect  on  the  condition   (financial  or  otherwise,
      determined pursuant to GAAP or SAP), businesses,  operations,  properties,
      assets,  liabilities or  investments of the Borrower and its  Subsidiaries
      taken as a whole or the ability of the Borrower to perform its obligations
      hereunder or under any other Credit Document, (D) after receipt thereof, a
      copy of the final report to each Regulated Insurance Company from the NAIC
      for each fiscal year, as to such  Company's  compliance  or  noncompliance
      with each of the NAIC Tests,  (E) after  receipt  thereof,  a copy of A.M.
      Best's  rating  analysis  for each  Regulated  Insurance  Company for each
      fiscal year, (F) and in any event within three Business Days after receipt
      thereof,  copies  of any  notice  of  actual  suspension,  termination  or
      revocation  of any  license  of any  Regulated  Insurance  Company  by any
      Applicable  Insurance  Regulatory  Authority  (other than any  termination
      voluntarily  effected by such Regulated Insurance Company),  including any
      request by an Applicable  Insurance  Regulatory  Authority which commits a
      Regulated  Insurance  Company to take or refrain from taking any action or
      which otherwise affects the authority of such Regulated  Insurance Company
      to conduct its  business,  and (G) and in any event within three  Business
      Days  after the  Borrower  or any of its  Subsidiaries  obtains  knowledge
      thereof, notice of any actual changes in the insurance laws enacted in any
      state in which any Regulated  Insurance Company is domiciled which, in the
      case of the foregoing clause (F) or (G), could (in the reasonable judgment
      of  the  Borrower)  have  a  material  adverse  effect  on  the  condition
      (financial or otherwise,  determined pursuant to GAAP or SAP), businesses,
      operations, properties, assets, liabilities or investments of the Borrower
      and its Subsidiaries taken as a whole or on the ability of the Borrower to
      perform its obligations under any Credit Document.

              (h)  Credit Rating Changes.  Promptly, and in any
      event within three Business Days after a senior officer
      of the Borrower obtains knowledge thereof, notice of any

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      change in the credit  rating  assigned by Moody's or S&P to any  long-term
      debt of the  Borrower  (including  without  limitation  any  change in the
      Moody's Credit Rating or the S&P Credit Rating).

              (i) Other Information.  Promptly upon transmission thereof, copies
      of any  filings  and  registrations  with,  and reports to, the SEC by the
      Borrower or any of its Subsidiaries (other than any registration statement
      on Form S-8) and copies of all  financial  statements,  proxy  statements,
      notices and reports as the Borrower or any of its Subsidiaries  shall send
      to analysts  generally or to the holders  (other than the Borrower and its
      Subsidiaries) of their capital stock in their capacity as such holders (in
      each case to the extent not theretofore delivered to the Banks pursuant to
      this Agreement) and, with reasonable promptness, such other information or
      documents (financial or otherwise) as the Agent or any Bank may reasonably
      request from time to time. By August 31, 1995, the unaudited  consolidated
      balance  sheet of the  Workers  Compensation  Subsidiaries  as of June 30,
      1995, and the related statements of income, of stockholders' equity and of
      cash flows for the six-month  period then ended,  in each case prepared in
      accordance with SAP (subject to normal year-end audit adjustments).

              6.02 Books,  Records and Inspections.  The Borrower will, and will
cause each of its  Subsidiaries  to, keep proper  books of record and account in
which full, true and correct entries in conformity in all material respects with
GAAP or SAP,  as the case may be, and all  requirements  of law shall be made of
all dealings and  transactions in relation to its business and  activities.  The
Borrower will, and will cause each of its  Subsidiaries  to, permit officers and
designated representatives of the Agent or any Bank to visit and inspect, during
regular  business  hours and under  guidance of officers of the Borrower or such
Subsidiary,  any of the  properties  or  assets of the  Borrower  and any of its
Subsidiaries in whomsoever's  possession (but only to the extent the Borrower or
such  Subsidiary  has the  right to do so to the  extent  in the  possession  of
another Person),  and to examine the books of account of the Borrower and any of
its Subsidiaries and discuss the affairs,  finances and accounts of the Borrower
and of any of its  Subsidiaries  with, and be advised as to the same by, its and
their officers and independent  accountants and independent  actuaries,  if any,
all at such reasonable times and intervals and to such reasonable  extent as the
Agent or such Bank may  request;  provided,  that so long as no Event of Default
has  occurred  and is  continuing,  such  inspections  shall  not be  made  more
frequently than semi-annually.

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              6.03  Insurance.  The  Borrower  will,  and will cause each of its
Subsidiaries  to, at all times  maintain in full force and effect  insurance  in
such amounts,  covering such risks and liabilities and with such  deductibles or
self-insured  retentions as are in accordance with normal industry practice. The
Borrower will, and will cause each of its  Subsidiaries  to, furnish annually to
the Banks a summary of the insurance carried.

              6.04 Payment of Taxes.  The Borrower will pay and  discharge,  and
will cause each of its Subsidiaries to pay and discharge, all taxes, assessments
and  governmental  charges  or  levies  imposed  upon it or upon its  income  or
profits,  or upon any  properties  belonging  to it,  prior to the date on which
penalties  attach thereto,  and all lawful claims (other than claims relating to
the  adjustment or settling,  in the ordinary  course of business,  of claims in
respect of insurance policies or reinsurance  contracts) which, if unpaid, might
become  a Lien or  charge  upon any  properties  of the  Borrower  or any of its
Subsidiaries;  provided  that neither the Borrower nor any  Subsidiary  shall be
required to pay any such tax,  assessment,  charge, levy or claim which is being
contested in good faith and by proper proceedings if it has maintained  adequate
reserves with respect  thereto in  accordance  with GAAP or SAP, as the case may
be.

              6.05  Corporate  Franchises.  The Borrower will do, and will cause
each Subsidiary to do, or cause to be done, all things necessary to preserve and
keep in full force and effect its  corporate  existence,  rights and  authority,
provided that any  transaction  permitted by Section 7.02 will not  constitute a
breach of this Section 6.05.

              6.06  Compliance  with Statutes,  etc. The Borrower will, and will
cause each  Subsidiary  to, comply in all material  respects with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed by,
all governmental  bodies,  domestic or foreign, in respect of the conduct of its
business  and the  ownership  of its property  (including  applicable  statutes,
regulations,  orders and restrictions  relating to  environmental  standards and
controls).

              6.07 ERISA. As soon as possible and, in any event,  within 10 days
after the  Borrower  or any  Subsidiary  knows or has  reason to know any of the
following  (and with  regard to Plans with  respect to which an ERISA  Affiliate
contributes  pursuant to collective  bargaining  requirements or maintains,  the
Borrower shall use its best efforts to obtain  information  therefrom  regarding
any of the  following),  the  Borrower  will  deliver  to  each  of the  Banks a
certificate of the Chief Financial  Officer or other  Authorized  Officer of the
Borrower setting forth details as to such occurrence and

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such action, if any, which the Borrower, such Subsidiary or such ERISA Affiliate
is required or proposes to take,  together with any notices required or proposed
to be given to or filed  with or by the  Borrower,  the  Subsidiary,  the  ERISA
Affiliate,  the PBGC,  a Plan  participant  (other than  notices  relating to an
individual  participant's  benefits)  or the  plan  administrator  with  respect
thereto:  that a Reportable  Event has  occurred,  that an  accumulated  funding
deficiency has been incurred or an application  has been or could  reasonably be
expected  to  be  made  to  the  Secretary  of  the  Treasury  for a  waiver  or
modification of the minimum funding standard (including any required installment
payments) or an extension of any  amortization  period under  Section 412 of the
Code with respect to a Plan, that a Plan which has an Unfunded Current Liability
has  been  or  could  reasonably  be  expected  to be  terminated,  reorganized,
partitioned or declared  insolvent  under Title IV of ERISA,  that a Plan has an
Unfunded  Current  Liability giving rise to a lien under ERISA or the Code, that
proceedings  have been or could  reasonably  be  expected  to be  instituted  to
terminate a Plan which has an Unfunded Current Liability,  that a proceeding has
been  instituted  pursuant  to  Section  515 of ERISA to  collect  a  delinquent
contribution  to a Plan,  or that the  Borrower,  any  Subsidiary  or any  ERISA
Affiliate will or could reasonably be expected to incur any liability (including
any contingent or secondary liability) to or on account of the termination of or
withdrawal  from a Plan under Section 4062,  4063,  4064, 4201 or 4204 of ERISA.
Upon request of a Bank,  the Borrower  will deliver to such Bank a complete copy
of the annual  report  (Form  5500) of each Plan  required  to be filed with the
Internal Revenue Service.  In addition to any certificates or notices  delivered
to the  Banks  pursuant  to the first  sentence  hereof,  copies of any  notices
received by the Borrower or any Subsidiary required to be delivered to the Banks
hereunder  shall be delivered to the Banks no later than 10 days after the later
of the date such notice has been filed with the Internal  Revenue Service or the
PBGC, given to Plan  participants  (other than notices relating to an individual
participant's benefits) or received by the Borrower or such Subsidiary.

              6.08 Performance of Obligations. The Borrower will, and will cause
each of its Subsidiaries  to, perform all of its obligations  under the terms of
each mortgage,  deed of trust,  indenture,  loan agreement,  security agreement,
other debt instrument and each other material agreement,  contract or instrument
by which it is bound or to which it is a party,  except such  non-performance as
could not  individually  or in the  aggregate,  reasonably be expected to have a
material adverse effect on the condition (financial or otherwise,  determined in
accordance  with  GAAP or  SAP),  businesses,  operations,  properties,  assets,
liabilities  or  investments  of the  Borrower and its  Subsidiaries  taken as a
whole.

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              6.09 Good Repair.  The Borrower  will,  and will cause each of its
Subsidiaries  to, to the extent and in the manner  customary  for  companies  in
similar  businesses,  ensure that its material  properties and equipment used or
useful in its business in whomsoever's  possession they may be, are kept in good
repair,  working order and condition,  normal wear and tear  excepted,  and that
from time to time there are made in such  properties  and  equipment all needful
and proper repairs, renewals, replacements,  extensions,  additions, betterments
and improvements thereto.

              6.10 End of Fiscal Years; Fiscal Quarters.  The Borrower will, for
financial  reporting  purposes,   cause  (i)  each  of  its,  and  each  of  its
Subsidiaries'  fiscal  years to end on December 31 of each year and (ii) each of
its, and each of its Subsidiaries', fiscal quarters to end on March 31, June 30,
September 30 and December 31 of each year.

              6.11 NAIC Tests. The Borrower shall cause FIC and its Subsidiaries
to maintain risk-based capital ratios that are above the minimum levels required
by the NAIC Tests  below  which FIC or such  Subsidiary  may be required to take
action  of any kind as a result of such  ratios  (including  communication  with
regulatory authorities, etc.).

              SECTION 7. Negative  Covenants.  The Borrower hereby covenants and
agrees that on the Amendment Effective Date and thereafter,  for so long as this
Agreement  is in  effect  and  until  such  time  as the  Total  Commitment  has
terminated,  no Notes are  outstanding  and the Loans and Competitive Bid Loans,
together with interest,  Fees and all other Obligations incurred hereunder,  are
paid in full:

              7.01  Changes in  Business.  The  Borrower  will not, and will not
permit  any of its  Subsidiaries  to,  engage  in any  business  other  than the
ownership and management of property,  casualty and life insurance and annuities
operations and financial services operations,  and businesses reasonably related
or  incidental  thereto,  provided  that  investments  by the  Borrower  and its
Subsidiaries  after the Amendment  Effective Date in businesses other than those
of the type in which the  Borrower  and its  Subsidiaries  are engaged as of the
Amendment  Effective Date shall be limited to $20,000,000  (it being  understood
that for the purpose of this  Section 7.01 an  investment  shall be deemed to be
the amount paid for the equity of a business,  exclusive of Indebtedness of such
business  assumed  or  remaining  outstanding).  Notwithstanding  the  preceding
sentence,  no P&C Insurance  Subsidiary  shall engage in any business other than
the ownership and management of property and casualty  insurance  operations and
businesses  reasonably  related or  incidental  thereto;  no Financial  Services
Non-Thrift Subsidiary shall engage in any

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business  other  than  the  ownership  and  management  of  financial   services
operations  and  businesses  reasonably  related or incidental  thereto;  and no
Thrift  Subsidiary  shall engage in any business  other than the  ownership  and
management of thrift operations and businesses  reasonably related or incidental
thereto.

              7.02  Consolidation,  Merger, Sale or Purchase of Assets, etc. The
Borrower will not, and will not permit any Subsidiary to, wind up,  liquidate or
dissolve its affairs,  or enter into any transaction of merger or consolidation,
or convey,  sell, lease or otherwise  dispose of (in one transaction or a series
of related  transactions) all or any substantial part of its property or assets,
(but  excluding  any sale or  disposition  of property or assets in the ordinary
course of business), or purchase, lease or otherwise acquire (in one transaction
or a series of related  transactions)  all or any part of the property or assets
of any Person (excluding any purchases, leases or other acquisitions of property
or assets  in,  and for use in,  the  ordinary  course of  business,  other than
Capital  Expenditures,  except to the extent  permitted by clause (e) below, and
Investments,  except to the extent permitted by clause (f) below) or agree to do
any of the  foregoing at any future  time,  except that the  following  shall be
permitted:

              (a) So long as no  Default  or Event of  Default  exists  or would
      exist immediately after giving effect thereto, the merger or consolidation
      of any  Wholly-Owned  Subsidiary  of the  Borrower  with or  into  another
      Wholly- Owned  Subsidiary of the Borrower,  provided that no P&C Insurance
      Subsidiary   may  merge  or  consolidate   with  any  Financial   Services
      Subsidiary;

              (b)  Any Subsidiary that is a Discontinued
      Subsidiary as of the Amendment Effective Date may be
      sold, liquidated, wound up or dissolved;

              (c) Any Subsidiary (other than FIG) not engaged to any significant
      extent in any  business  other than acting as a holding  company for other
      Subsidiaries of the Borrower may be liquidated,  wound up,  dissolved,  or
      merged  with its  direct  parent (if other  than the  Borrower)  or direct
      Subsidiary;

              (d) The Borrower and its  Subsidiaries  may acquire new businesses
      or   operations   (including   without   limitation   by   acquiring   new
      Subsidiaries),  provided that (i) no Default or Event of Default exists or
      would exist  immediately  after giving effect thereto,  (ii) to the extent
      that  the  consideration  paid by the  Borrower  in  respect  of any  such
      acquisition consists solely of capital stock of the Borrower, the value of
      the assets

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      of such  acquired  entity,  together  with the value of the  assets of any
      other acquired entity or entities  purchased with the capital stock of the
      Borrower in the same fiscal year, shall not exceed 20% of the value of the
      assets of the Borrower and its Subsidiaries on a consolidated  basis as of
      the  last  day of such  fiscal  year  and  (iii)  to the  extent  that the
      consideration  paid by the Borrower in respect of any such  acquisition is
      other than all capital stock of the Borrower (including without limitation
      cash  and/or  assumption  of   Indebtedness),   the  aggregate  amount  of
      consideration  paid  by the  Borrower  and  its  Subsidiaries  in  respect
      thereof,  together with the aggregate amount paid in connection with other
      acquisitions made pursuant to this clause (d), contributions made pursuant
      to Section 5.05(c) and other investments made pursuant to Section 7.05(g),
      in each case  after the  Amendment  Effective  Date,  shall not exceed the
      Permitted Basket Amount;

              (e)  The   Borrower   and  its   Subsidiaries   may  make  Capital
      Expenditures  so long as the aggregate  amount  thereof made in any fiscal
      year does not exceed $11,000,000;

              (f) The Borrower and its  Subsidiaries  may acquire and dispose of
      Investments  so long as the  Borrower is in  compliance  with Section 7.05
      before and after giving effect thereto; and

              (g) The  Securitization  Subsidiaries may (i) convey and transfer,
      or, as the case may be, purchase and acquire,  the interests  contemplated
      by the securiti- zation transactions to which they respectively are or may
      after the date hereof become parties,  (ii) purchase or sell participating
      interests,  whether  evidenced  by  certificates,   debt  instruments,  or
      otherwise,  in the securitization  transactions to which they respectively
      are or may after the date hereof become  parties and (iii) be  liquidated,
      wound up or dissolved  following  the  termination  of the  securitization
      transactions to which they are respectively parties.

              7.03 Liens.  The Borrower will not, and will not permit any of its
Subsidiaries to, create,  incur, assume or suffer to exist any Lien upon or with
respect to any  property  or assets of any kind (real or  personal,  tangible or
intangible)  of the  Borrower  or any  such  Subsidiary  whether  now  owned  or
hereafter  acquired,  or  sell  any  such  property  or  assets  subject  to  an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts  receivable or notes with recourse to the
Borrower or any of its  Subsidiaries) or assign any right to receive income,  or
file or permit the filing of any finan-

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cing  statement  under the UCC or any  other  similar  notice of Lien  under any
similar recording or notice statute, except:

              (a) Liens for taxes not yet due or Liens for taxes being contested
      in good faith and by appropriate  proceedings for which adequate  reserves
      have been established in accordance with GAAP or SAP, as the case may be;

              (b)  Liens  in  respect  of  property  or  assets  of  any  of the
      Borrower's Subsidiaries imposed by law which were incurred in the ordinary
      course of business, such as carriers', warehousemen's and mechanics' Liens
      and other similar Liens  arising in the ordinary  course of business,  and
      (x) which do not in the  aggregate  materially  detract  from the value of
      such  property  or assets or  materially  impair  the use  thereof  in the
      operation of the business of the Borrower or any  Subsidiary  or (y) which
      are  being  contested  in good  faith by  appropriate  proceedings,  which
      proceedings  have the effect of preventing  the  forfeiture or sale of the
      property or asset subject to such Lien;

              (c)    Liens created by this Agreement or the other
      Credit Documents;

              (d) Liens in existence on the Amendment  Effective  Date which are
      listed,  and the property subject thereto on the Amendment  Effective Date
      described,  in Annex  VI,  without  giving  effect  to any  extensions  or
      renewals thereof;

              (e) Liens  arising  from  judgments,  decrees  or  attachments  in
      circumstances not constituting an Event of Default under Section 8.08;

              (f) Liens  (other  than any Lien  imposed  by ERISA)  incurred  or
      deposits  made in the  ordinary  course of  business  in  connection  with
      workers'  compensation,  unemployment  insurance and other types of social
      security, or to secure the performance of tenders,  statutory obligations,
      surety and appeal bonds, bids, leases,  government contracts,  performance
      and return-of-money  bonds and other similar  obligations  incurred in the
      ordinary  course of business  (exclusive of  obligations in respect of the
      payment for borrowed money);

              (g) Leases or subleases  granted to others not  interfering in any
      material  respect  with  the  business  of  the  Borrower  or  any  of its
      Subsidiaries  and any interest or title of a lessor under any lease not in
      violation of this Agreement;

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              (h)  Easements,  rights-of-way,  restrictions,  minor  defects  or
      irregularities  in title and other  similar  charges or  encumbrances  not
      interfering  in any  material  respect  with the  ordinary  conduct of the
      business of the Borrower or any of its Subsidiaries;

              (i)    Liens arising from UCC financing statements
      regarding leases not in violation of this Agreement;

              (j)  Liens  incurred  in the  ordinary  course  of  business  by a
      Regulated Insurance Company on securities to secure repurchase and reverse
      repurchase obligations in respect of such securities;

              (k) Liens  constituting  pledges or deposits of cash or securities
      made by any  Regulated  Insurance  Company as a condition  to obtaining or
      maintaining  any  licenses  issued  to  it  by  any  Applicable  Insurance
      Regulatory Authority;

              (l) Liens arising  pursuant to purchase money  mortgages  securing
      Indebtedness representing the purchase price (or financing of the purchase
      price within 90 days after the  respective  purchase)  of assets  acquired
      after the  Amendment  Effective  Date,  provided  that (i) any such  Liens
      attach only to the assets so purchased,  attachments  thereto and proceeds
      thereof, (ii) the principal amount of the Indebtedness secured by any such
      Lien does not exceed 100%, nor is less than 70%, of the lesser of the fair
      market value or the purchase price of the property being  purchased at the
      time of the  incurrence  of such  Indebtedness  and  (iii)  the  aggregate
      outstanding principal amount of Indebtedness secured by Liens permitted by
      this clause (l) shall not exceed $5,000,000 at any time;

              (m) Liens on  property  or assets  acquired  pursuant  to  Section
      7.02(d) after the Amendment  Effective Date, or on property or assets of a
      Subsidiary  of the Borrower in existence  at the time such  Subsidiary  is
      acquired  pursuant to Section 7.02(d),  provided that (i) any Indebtedness
      that is secured by such Liens is otherwise  permitted to be incurred under
      Section  7.04,  and (ii) such Liens are not incurred in  contemplation  of
      such  acquisition  and do not attach to any other asset of the Borrower or
      any of its Subsidiaries;

              (n) Liens which constitute rights of set-off of a customary nature
      or bankers' liens on amounts on deposit, whether arising by contract or by
      operation  of law,  in  connection  with  arrangements  entered  into with
      depository institutions in the ordinary course of business;

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              (o)  Liens  encumbering  customary  initial  deposits  and  margin
      deposits,  and similar Liens  attaching to commodity  trading  accounts or
      other brokerage  accounts and the funds or investments on deposit therein,
      incurred in the ordinary course of business,  securing  Indebtedness under
      Interest Rate  Protection  Agreements  or Other  Hedging  Agreements or in
      respect of repurchase obligations permitted by Section 7.04(f);

              (p) Liens constituting extensions, renewals or replacements of any
      Lien  referred to in clause (l) or (m) above,  provided that the principal
      amount of the  Indebtedness  secured thereby is not increased and that any
      such extension,  renewal or replacement Lien attaches only to the property
      originally encumbered thereby;

              (q)  Liens  on  assets  of  the   Thrift   Subsidiaries   securing
      Indebtedness  owing by such Thrift  Subsidiaries  to the Federal Home Loan
      Bank;

              (r)  Liens on assets of the Securitization
      Subsidiaries; and

              (s) liens on assets of FGC or on assets of any  Subsidiary  of FGC
      (other  than any  such  Subsidiary  that  engages  in  banking  or  thrift
      operations or the  activities of which are limited to holding the stock or
      securities of another Subsidiary or Subsidiaries of FGC engaged in banking
      or  thrift  operations),  provided  that (i) the  principal  amount of the
      Indebtedness secured by any such Lien does not exceed 80% of the lesser of
      the fair market value or the purchase  price of asset being  encumbered at
      the time of the  incurrence  of such  Indebtedness  and (ii) the aggregate
      outstanding principal amount of Indebtedness secured by Liens permitted by
      this clause (s) shall not exceed $300,000,000 at any time.

              7.04 Indebtedness.  The Borrower will not, and will not permit any
of its Subsidiaries to, contract,  create,  incur, assume or suffer to exist any
Indebtedness, except:

              (a)    Indebtedness incurred pursuant to this
      Agreement and the other Credit Documents;

              (b)    Permitted Subordinated Debt;

              (c)  Indebtedness  (including,   without  limitation,   Contingent
      Obligations) in existence on the Amendment  Effective Date which is listed
      on Annex V, without giving effect to any subsequent extension,  renewal or
      refinancing thereof;

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              (d)  Indebtedness  of the Borrower  incurred  after the  Amendment
      Effective Date  constituting  guaranties of  Indebtedness of the Financial
      Services Non-Thrift Subsidiaries;

              (e)    Permitted Acquisition Debt of any P&C
      Insurance Subsidiary;

              (f)  Repurchase   obligations  of  any  P&C  Insurance  Subsidiary
      incurred  in the  ordinary  course of  business  for short term  liquidity
      management purposes;

              (g)  Additional   Indebtedness   of  P&C  Insurance   Subsidiaries
      consisting of  reimbursement  obligations in respect of letters of credit,
      or other  Contingent  Obligations,  so long as the  aggregate  outstanding
      principal  amount of Indebtedness  incurred under this clause (g) does not
      exceed $20,000,000 at any time;

              (h) other Indebtedness of P&C Insurance Subsidiaries not to exceed
      $1,000,000 in aggregate outstanding principal amount for all P&C Insurance
      Subsidiaries at any time;

              (i)  Indebtedness  of  (x)  the  Financial   Services   Non-Thrift
      Subsidiaries, provided, that the proceeds of such Indebtedness (other than
      the proceeds of securitization transactions entered into by Securitization
      Subsidiaries)  are used to fund the  operations of, and  acquisitions  by,
      such  Financial  Services  Non-Thrift  Subsidiaries  and no  part  of such
      proceeds are advanced, loaned or distributed to the Borrower or any of its
      other  Subsidiaries   (other  than  other  Financial  Services  Non-Thrift
      Subsidiaries),  and  (y)  the  Thrift  Subsidiaries,  provided,  that  the
      proceeds  of such  Indebtedness  are used to fund the  operations  of, and
      acquisitions by, such Thrift Subsidiaries and no part of such proceeds are
      advanced,  loaned  or  distributed  to the  Borrower  or any of its  other
      Subsidiaries (other than other Thrift Subsidiaries);

              (j)   Indebtedness   owing  to  brokers  in  respect  of  accounts
      maintained with such brokers,  including margin deposits,  incurred in the
      ordinary course of business;

              (k) Indebtedness consisting of Interest Rate Protection Agreements
      or Other  Hedging  Agreements  entered  into by the Borrower or any of its
      Subsidiaries  in  the  ordinary  course  of  business,  so  long  as  such
      Agreements are entered into in respect of the assets or obligations of the
      Borrower or such  Subsidiary  for bona fide  hedging  purposes and not for
      purposes of speculation;

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              (l)  Indebtedness  of the Borrower owing to any Subsidiary  (other
      than a Thrift  Subsidiary),  Indebtedness of any Subsidiary  (other than a
      Thrift  Subsidiary)  owing  to  the  Borrower,  Indebtedness  of  any  P&C
      Insurance  Subsidiary  owing  to  any  other  P&C  Insurance   Subsidiary,
      Indebtedness of any Financial Services Non-Thrift  Subsidiary owing to any
      other Financial Services  Non-Thrift  Subsidiaries and Indebtedness of any
      Thrift Subsidiary owing to any other Thrift Subsidiary; and

              (m) any guaranty by a P&C Insurance  Subsidiary of the obligations
      of another P&C Insurance Subsidiary, or by a Financial Services Non-Thrift
      Subsidiary of the  obligations of another  Financial  Services  Non-Thrift
      Subsidiary, or by a Thrift Subsidiary of the obligations of another Thrift
      Subsidiary.

              7.05  Investments.  (a)  The  Borrower  will  not  permit  any P&C
Insurance  Subsidiary to purchase or otherwise acquire any Non-Investment  Grade
Security if at such time, or immediately  after giving effect thereto,  the fair
market value (determined on a consolidated  basis) of all Investments of the P&C
Insurance   Subsidiaries   (other  than   Investments   in  the  P&C   Insurance
Subsidiaries)  in  Non-Investment  Grade Securities would exceed 10% of the fair
market value (determined on a consolidated  basis) of all Investments of the P&C
Insurance Subsidiaries (other than Investments in P&C Insurance Subsidiaries).

              (b) The Borrower will not permit the fair market value (determined
on a consolidated basis) of all real property (including real property leasehold
interests) and mortgage loans (excluding mortgage-backed securities) held by the
P&C Insurance  Subsidiaries to exceed 5% of the fair market value (determined on
a consolidated basis) of all Investments of the P&C Insurance Subsidiaries.

              (c) The Borrower will not permit the fair market value of all real
property  (including  real  property  leasehold  interests)  and mortgage  loans
(excluding   mortgage-backed   securities)   held  by  the  Borrower  to  exceed
$35,000,000.

              (d) The  Borrower  will  not,  and  will  not  permit  FIC and its
Subsidiaries to,  materially alter their respective  investment  strategies from
those in effect on the Amendment Effective Date.

              (e) The Borrower will not permit any P&C  Insurance  Subsidiary to
make or permit to remain  outstanding  any  Investment in the Borrower or any of
its Subsidiaries or Affiliates (other than another P&C Insurance Subsidiary) if

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the aggregate book value of all such Investments shall at any time exceed 25% of
FIC Consolidated Surplus at such time.

              (f)  The  Borrower  will  not,  and  will  not  permit  any of its
Subsidiaries to, make any real estate construction loans.

              (g)  The  Borrower  will  not,  and  will  not  permit  any of its
Subsidiaries to, lend money or credit or make advances to any Financial Services
Subsidiary,  or purchase or acquire any capital  stock,  obligations  (including
loans)  or  securities  of,  or any  other  interest  in,  or make  any  capital
contribution to, any Financial Services Subsidiary,  except (i) the Borrower may
purchase,  acquire or  otherwise  participate  in mortgage  loans  purchased  or
originated  by FIL to the extent  permitted  by Section  7.05(c) and (ii) to the
extent the aggregate amount of such purchases,  acquisitions  and  contributions
(excluding  from  such  aggregate  amount  those  purchases,   acquisitions  and
participations  described  in clause (i) above) made  pursuant  to this  Section
7.05(g),  contributions  made pursuant to Section 5.05(c) and acquisitions  made
pursuant to Section  7.02(d),  in each case after the Amendment  Effective Date,
does not exceed the  Permitted  Basket  Amount.  Notwithstanding  the  foregoing
sentence,  in no event shall the Borrower permit any of its Subsidiaries  (other
than  Thrift  Subsidiaries)  to,  lend money or credit or make  advances  to any
Thrift  Subsidiary,  or  purchase  or acquire  any  capital  stock,  obligations
(including  loans)  or  securities  of, or any  other  interest  in, or make any
capital contribution to, any Thrift Subsidiary.

              7.06  Prepayments and Modifications of Permitted
Subordinated Debt and Liquid Yield Option Notes.  The Bor-
rower will not, and will not permit any of its Subsidiaries
to:

              (a) make (or give any notice in respect  thereof) any voluntary or
      optional  payment or prepayment or redemption or repurchase  (including by
      virtue  of the  exercise  of any put  right) or  acquisition  for value of
      (including, without limitation, by way of depositing with the trustee with
      respect  thereto money or securities  before due for the purpose of paying
      when due),  or exchange  of, the Liquid  Yield  Option Notes or, after its
      issuance, any Permitted Subordinated Debt; or

              (b) amend or modify (or permit the amendment or  modification  of)
      any of the terms or  provisions of the Liquid Yield Option Notes or, after
      its issuance,  any Permitted  Subordinated  Debt, except for amendments or
      modifications  the sole  effect of which is to reduce the  interest  rate,
      extend  the  maturity,   waive  covenant  compliance  or  reduce  covenant
      requirements and do not

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      involve the payment of any fee or other compensation to the holders of the
      Liquid  Yield  Option  Notes  or,  after  its  issuance,   such  Permitted
      Subordinated Debt.

              7.07  Restrictions on Subsidiary  Payments.  (a) The Borrower will
not, and will not permit any of its P&C  Insurance  Subsidiaries  to,  create or
otherwise  cause or  suffer  to  exist  any  encumbrance  or  restriction  which
prohibits or otherwise restricts (x) the ability of any P&C Insurance Subsidiary
to (a) pay dividends or make other distributions or pay any Indebtedness owed to
the Borrower or any P&C Insurance Subsidiary,  (b) make loans or advances to the
Borrower or any P&C Insurance Subsidiary,  (c) transfer any of its properties or
assets to the Borrower or any P&C  Insurance  Subsidiary  or (d)  guarantee  the
Obligations  or (y) the ability of the Borrower or any P&C Insurance  Subsidiary
of the  Borrower to create,  incur,  assume or suffer to exist any Lien upon its
property  or  assets to secure  the  Obligations,  other  than  prohibitions  or
restrictions  existing  under or by  reason of (i) this  Agreement  or the other
Credit  Documents,  (ii) Legal  Requirements,  (iii)  customary non-  assignment
provisions  entered into in the ordinary  course of business and consistent with
past practices,  (iv) purchase money  obligations  for property  acquired in the
ordinary  course of business,  so long as such  obligations  are permitted under
this  Agreement,  (v) any  restriction  or  encumbrance  with  respect  to a P&C
Insurance  Subsidiary of the Borrower imposed pursuant to an agreement which has
been entered into for the sale or disposition of all or substantially all of the
capital stock or assets of such P&C Insurance  Subsidiary,  so long as such sale
or disposition is permitted under this Agreement,  (vi) any provision  contained
in the Credit  Agreement,  dated as of August 24,  1995,  among FFC, the various
lenders party thereto,  First  Interstate Bank of California and Natwest Bank as
co-agents,  and The Chase Manhattan Bank, N.A. as agent, which restricts payment
of  dividends  to the  Borrower on common or  preferred  stock of FFC, and (vii)
Liens  permitted  under Section 7.03 and any documents or instruments  governing
the terms of any  Indebtedness or other  obligations  secured by any such Liens,
provided,  that such  prohibitions  or  restrictions  apply  only to the  assets
subject to such Liens.

              (b) The  Borrower  will not,  and will not  permit  any  Financial
Services  Subsidiary  which is an obligor in respect of a Proceeds Loan (so long
as such Proceeds  Loan remains  outstanding)  to,  create or otherwise  cause or
suffer to exist any  encumbrance  or  restriction  which  prohibits or otherwise
restricts  the  ability  of such  Financial  Services  Subsidiary  to repay such
Proceeds  Loan,  together  with interest  thereon,  other than  prohibitions  or
restrictions  existing  under or by  reason of (i) this  Agreement  or the other
Credit Documents or (ii) Legal Requirements.

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              7.08 Transactions with Affiliates. The Borrower will not, and will
not  permit  any  Subsidiary  to,  enter  into  any  transaction  or  series  of
transactions  with any Affiliate (other than the Borrower or a Subsidiary of the
Borrower),  other than on terms and conditions substantially as favorable to the
Borrower  or such  Subsidiary  as would be  obtainable  by the  Borrower or such
Subsidiary at the time in a comparable  arm's-length  transaction  with a Person
other than an  Affiliate.  In addition,  in  transactions  in which the Borrower
purchases or participates in loans made by a Financial Services Subsidiary,  the
Borrower and such Financial Services  Subsidiary will not use selection criteria
for determining  the particular  loans that will be purchased or participated in
by the Borrower that are adverse to the Borrower.

              7.09 Issuance of Stock.  The Borrower will not issue any shares of
preferred stock, preference stock or redeemable common stock. The Borrower shall
not permit any of its P&C Insurance  Subsidiaries  to issue any shares of common
stock,  preferred  stock,  preference  stock or  redeemable  common stock or any
options or warrants to purchase, or securities convertible into, any such stock,
except for common stock issued to the Borrower or  Wholly-Owned  Subsidiaries of
the Borrower.

              7.10 Liabilities to Policyholder Surplus Ratio. The Borrower shall
not  permit  the  Liabilities  to  Policyholder  Surplus  Ratio  of FIC  and its
Subsidiaries  (determined on a consolidated basis) at any time to exceed 6.00 to
1.

              7.11 Net Premiums  Written Ratio. The Borrower will not permit the
ratio of (i) Net Premiums Written of the Workers Compensation Subsidiaries (on a
consolidated  basis) for any  fiscal  year to (ii)  Policyholder  Surplus of the
Workers  Compensation  Subsidiaries (on a consolidated basis) on the last day of
such fiscal year to exceed 3.0:1.0.

              7.12 Leverage Ratio. The Borrower will not permit the ratio of (i)
Total  Indebtedness  to (ii) Total  Capitalization  at any time to exceed 0.6 to
1.0:

              7.13  Minimum Consolidated Net Worth.  The
Borrower will not permit Consolidated Net Worth at any time
to be less than $375,000,000.

              7.14  Interest  Coverage  Ratio.  The Borrower will not permit the
ratio of (i)  Consolidated  EBIT to (ii)  Consolidated  Interest Expense for any
period  of four  consecutive  fiscal  quarters  of the  Borrower  (taken  as one
accounting period) to be less than 3.0 to 1.0.

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              7.15 FIC  Consolidated  Surplus.  The Borrower will not permit FIC
Consolidated Surplus at any time to be less than $225,000,000.

              7.16  Insured Depository Subsidiaries.  (a)  The
Borrower will not permit any Insured Depository Subsidiary to
be or become "undercapitalized", "significantly
undercapitalized" or "critically undercapitalized" for
purposes of 12 U.S.C. ss. 1831o, as amended, restated or
redesignated from time to time.

              (b) The  Borrower  shall not,  nor shall it permit any  Subsidiary
(including,  without limitation, any Insured Depository Subsidiary) to, submit a
"capital restoration plan" or enter into a "capital management  agreement" under
12 U.S.C. ss. 1831o(b)(2)(C),  as amended, restated or redesignated from time to
time,  with  respect  to any  Insured  Depository  Subsidiary,  except  for  the
Permitted  Capital  Management  Agreement.  The Borrower shall not, nor shall it
permit FIL or any other Subsidiary to, amend, modify or supplement the Permitted
Capital Management Agreement in any material respect.

              7.17  Permitted CIC  Acquisition  Subordinated  Note. The Borrower
will not amend, modify or change (or permit the amendment or modification of) or
enter into any new agreement  with respect to, any of the terms or provisions of
the Permitted CIC  Acquisition  Subordinated  Note. The Borrower shall repay the
Permitted CIC Acquisition  Subordinated  Note in full no later than December 31,
1995.

              SECTION 8. Events of Default.  Upon the  occurrence  of any of the
following specified events (each an "Event of Default"):

              8.01 Payments.  The Borrower shall (i) default in the payment when
due of any principal of the Loans or Competitive Bid Loans or (ii) default,  and
such default shall continue for two or more days, in the payment when due of any
interest on the Loans or Competitive  Bid Loans or any Fees or any other amounts
owing hereunder or under any other Credit Document; or

              8.02  Representations,   etc.  Any  representation,   warranty  or
statement made or deemed made by the Borrower or any of its Subsidiaries  herein
or in any other Credit Document or in any statement or certificate  delivered or
required to be  delivered  pursuant  hereto or thereto  shall prove to have been
untrue in any material respect on the date as of which made or deemed made; or

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              8.03  Covenants.  The  Borrower  shall  (a)  default  in  the  due
performance or observance by it of any term,  covenant or agreement contained in
Section 6.10,  6.11 or 7, or (b) default in the due performance or observance by
it of any term,  covenant or agreement (other than those referred to in Sections
8.01, 8.02, 8.07 or clause (a) of this Section 8.03) contained in this Agreement
or in the Pledge  Agreement and such default  shall  continue  unremedied  for a
period of at least 30 consecutive days; or

              8.04 Default  Under Other  Agreements.  (a) The Borrower or any of
its  Subsidiaries  shall (i) default in any payment with respect to Indebtedness
(other  than the  Loans and  Competitive  Bid  Loans)  in  excess of  $5,000,000
individually or in the aggregate, for the Borrower and its Subsidiaries,  beyond
the period of grace, if any, provided in the instrument or agreement under which
such  Indebtedness  was created or (ii) default in the observance or performance
of any agreement or condition  relating to any such Indebtedness or contained in
any instrument or agreement  evidencing,  securing or relating  thereto,  or any
other event shall occur or condition exist, the effect of which default or other
event or  condition  is to cause,  or to permit  the  holder or  holders of such
Indebtedness  (or a trustee  or agent on behalf of such  holder or  holders)  to
cause  (determined  without  regard to  whether  any  notice or lapse of time is
required),  any such Indebtedness to become due prior to its stated maturity; or
(b) any such  Indebtedness of the Borrower or any of its  Subsidiaries  shall be
declared  to be due and  payable,  or  required  to be  prepaid  other than by a
regularly scheduled required  prepayment,  prior to the stated maturity thereof;
or

              8.05  Bankruptcy,  etc.  The  Borrower or any of its  Subsidiaries
shall commence a voluntary case  concerning  itself under Title 11 of the United
States Code entitled "Bankruptcy," as now or hereafter in effect and applicable,
or any successor  thereto (the  "Bankruptcy  Code");  or an involuntary  case is
commenced  against the Borrower or any of its Subsidiaries  and, with respect to
any  such  case  commenced  under  the  Bankruptcy  Code,  the  petition  is not
controverted  within 10 days, or is not dismissed  within 60  consecutive  days,
after  commencement  of the case; or a custodian  (as defined in the  Bankruptcy
Code) is  appointed  for, or takes  charge of, all or  substantially  all of the
property of the Borrower or any of its  Subsidiaries;  or the Borrower or any of
its  Subsidiaries  commences  (including by way of applying for or consenting to
the appointment of, or the taking of possession by, a  rehabilitator,  receiver,
custodian, trustee, conservator or liquidator (collectively, a "conservator") of
itself  or all or any  substantial  portion  of  its  property,  whether  or not
confidential)  any  other  proceeding  under  any  reorganization,  arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency, liquidation,

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rehabilitation,  conservatorship or similar law of any jurisdiction  whether now
or hereafter in effect relating to the Borrower or any of its  Subsidiaries;  or
any such  proceeding is commenced  against (a) any Regulated  Insurance  Company
which is engaged in the business of underwriting insurance and/or reinsurance in
the  United  States,  whether or not such  proceeding  is  consented  to by such
Person, or (b) the Borrower or any of its Subsidiaries (other than any Regulated
Insurance Company described in the immediately preceding clause (a)), whether or
not such  proceeding  is consented to by such Person but only to the extent that
such proceeding remains  undismissed for a period of 60 consecutive days; or the
Borrower or any of its Subsidiaries is adjudicated insolvent or bankrupt; or any
order of relief or other order approving any such case or proceeding is entered;
or (a) any  Regulated  Insurance  Company  which is engaged in the  business  of
underwriting  insurance  and/or  reinsurance  in the United  States  suffers any
appointment of any conservator or the like for it or any substantial part of its
property,  or (b)  the  Borrower  or any of its  Subsidiaries  (other  than  any
Regulated  Insurance Company described in the immediately  preceding clause (a))
suffers any appointment of any  conservator or the like for it or  substantially
all of its property which continues  undischarged or unstayed for a period of 60
consecutive  days;  or the Borrower or any of its  Subsidiaries  makes a general
assignment for the benefit of creditors; or any formal corporate action is taken
by the Borrower or any of its  Subsidiaries  for the purpose of effecting any of
the foregoing; or

              8.06  ERISA.  (a) Any Plan  shall  fail to  maintain  the  minimum
funding  standard  required by Section 412 of the Code for any plan year or part
thereof or a waiver of such standard or extension of any amortization  period is
sought or granted  under  Section 412 of the Code or shall  provide  security to
induce the issuance of such waiver or  extension,  (b) any Plan is or shall have
been  terminated  or the subject of  termination  proceedings  under ERISA or an
event has occurred  entitling the PBGC to terminate a Plan under Section 4042(a)
of ERISA,  (c) any Plan  shall have an  Unfunded  Current  Liability  or (d) the
Borrower or a  Subsidiary  or any ERISA  Affiliate  has incurred or is likely to
incur a material  liability to or on account of a termination of or a withdrawal
from a Plan under Section 515,  4062,  4063,  4064,  4201 or 4204 of ERISA;  and
there shall  result  from any such event or events  described  in the  preceding
clauses of this  Section  8.06 the  imposition  of a lien upon the assets of the
Borrower or any  Subsidiary or any ERISA  Affiliate,  the granting of a security
interest, or a liability or a material risk of incurring a liability to the PBGC
or a Plan or a trustee  appointed under ERISA or a penalty under Section 4971 or
4975 of the Code or  Section  409,  502(i) or  502(l)  of  ERISA,  any of which,
individually or in the aggregate, would have a material adverse

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effect upon the condition  (financial or otherwise,  determined pursuant to GAAP
or SAP), businesses, operations, properties, assets, liabilities, investments or
prospects of the Borrower and its Subsidiaries taken as a whole; or

              8.07 Pledge Agreement. Except in each case to the extent resulting
from the  negligent  or  willful  failure  of the  Collateral  Agent  to  retain
possession of any Pledged Stock,  the Pledge Agreement shall cease to be in full
force and effect, or shall cease to give the Collateral Agent the Liens, rights,
powers and  privileges  purported  to be  created  thereby  (including,  without
limitation, a first priority perfected security interest in, and Lien on, all of
the Collateral  subject thereto,  in favor of the Collateral Agent,  superior to
and prior to the rights of all third  Persons,  and  subject  to no other  Liens
other than Non-Consensual Permitted Liens), or the Borrower or any other pledgor
thereunder  shall default in the due  performance  or observance of any material
term,  covenant or agreement on its part to be performed or observed pursuant to
the Pledge Agreement; or

              8.08 Judgments.  One or more judgments or decrees shall be entered
against  the  Borrower  or any of its  Subsidiaries  involving  a  liability  of
$1,000,000 or more in the  aggregate for all such  judgments and decrees for the
Borrower and its  Subsidiaries  and any such judgments or decrees shall not have
been vacated,  discharged,  stayed or bonded  pending appeal within 30 days from
the entry thereof; or

              8.09  Ownership.  (a)  There shall occur a Change
of Control;

then, and in any such event, and at any time thereafter, if any Event of Default
shall then be  continuing,  the Agent  shall,  upon the  written  request of the
Required  Banks,  by  written  notice  to the  Borrower,  take any or all of the
following  actions,  without prejudice to the rights of the Agent or any Bank to
enforce  its claims  against  the  Borrower,  except as  otherwise  specifically
provided for in this Agreement  (provided that if an Event of Default  specified
in Section 8.05 shall occur with respect to the Borrower, the result which would
occur upon the giving of written notice by the Agent as specified in clauses (i)
and (ii) below shall occur automatically without the giving of any such notice):
(i) declare the Total Commitment (or the unutilized portion thereof) terminated,
whereupon the Commitment (or the unutilized portion thereof, as the case may be)
of each Bank shall forthwith terminate  immediately;  (ii) declare the principal
of and any accrued  interest in respect of all Loans and  Competitive  Bid Loans
and all Obligations  owing hereunder and under the other Credit Documents to be,
whereupon the same shall  become,  forthwith  due and payable  without  present-
ment, demand, protest or other notice of any kind, all of

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which are hereby waived by the  Borrower;  and/or (iii)  enforce,  as Collateral
Agent (or direct the Collateral  Agent to enforce),  any or all of the Liens and
security interests created pursuant to the Pledge Agreement.

              SECTION 9. Definitions.  As used herein, the following terms shall
have the  meanings  herein  specified  unless the  context  otherwise  requires.
Defined terms in this Agreement  shall include in the singular number the plural
and in the plural the singular:

              "Absolute  Rate"  shall  mean an  interest  rate  (rounded  to the
nearest .0001) expressed as a decimal.

              "Absolute Rate  Borrowing"  shall mean a Competitive Bid Borrowing
with respect to which the Borrower  has  requested  that the Banks offer to make
Competitive Bid Loans at Absolute Rates.

              "Affiliate"  shall mean,  with  respect to any  Person,  any other
Person  directly or  indirectly  controlling  (including  but not limited to all
directors  and  officers  of such  Person),  controlled  by, or under  direct or
indirect common control with, such Person. A Person shall be deemed to control a
corporation if such Person possesses,  directly or indirectly,  the power (i) to
vote 10% or more of the securities having ordinary voting power for the election
of directors of such corporation or (ii) to direct or cause the direction of the
management and policies of such  corporation,  whether  through the ownership of
voting securities, by contract or otherwise.

              "Agent" shall have the meaning  provided in the first paragraph of
this Agreement and shall include any successor to the Agent  appointed  pursuant
to Section 10.09.

              "Aggregate Loan Outstandings" shall have the
meaning provided in Section 3.02(a).

              "Agreement" shall mean this Amended and Restated Credit Agreement,
as the same may be from time to time modified, amended and/or supplemented.

              "Amendment Effective Date" shall have the meaning
provided in Section 4.01.

              "Applicable  Base Rate Margin"  shall mean,  for any day, the rate
per annum set forth below opposite the Applicable Rating Period then in effect:

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      Applicable Rating             Applicable Base
           Period                     Rate Margin

      Category A Period                          0.000%
      Category B Period                          0.000%
      Category C Period                          0.000%
      Category D Period                          0.100%

            "Applicable Eurodollar Margin" shall mean, for any day, the rate per
annum set forth below opposite the Applicable Rating Period then in effect:

      Applicable Rating             Applicable Eurodollar
           Period                          Margin

      Category A Period                          0.350%
      Category B Period                          0.450%
      Category C Period                          0.875%
      Category D Period                          1.300%

            "Applicable  Facility Fee  Percentage"  shall mean, for any day, the
percentage set forth below opposite the Applicable Rating Period then in effect:

      Applicable Rating             Applicable Facility
           Period                      Fee Percentage

      Category A Period                          0.250%
      Category B Period                          0.300%
      Category C Period                          0.375%
      Category D Period                          0.450%

            "Applicable  Insurance  Regulatory  Authority" shall mean, when used
with respect to any Regulated  Insurance  Company,  the insurance  department or
similar  administrative  authority or agency  located in (x) each state or other
jurisdiction  in which such Regulated  Insurance  Company is domiciled or (y) to
the extent  asserting  regulatory  jurisdiction  over such  Regulated  Insurance
Company,  the insurance  department,  authority or agency in each state or other
jurisdiction in which such Regulated  Insurance  Company is licensed,  and shall
include any Federal insurance  regulatory  department,  authority or agency that
may be created and that  asserts  regulatory  jurisdiction  over such  Regulated
Insurance Company.

            "Applicable  Rating  Period"  shall  mean,  subject to the terms and
conditions set forth below in this  definition,  the period set forth below then
in effect:

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Applicable Rating
     Period                      Criteria

Category                      A Period The S&P Credit Rating is BBB+ or above or
                              the Moody's Credit Rating is Baa1 or above.

Category                      B Period The S&P Credit Rating is BBB- or above or
                              the Moody's Credit Rating is Baa3 or above, but no
                              Category A Period is in effect at such time.

Category                      C Period The S&P Credit  Rating is BB+ or above or
                              the Moody's Credit Rating is Ba1 or above,  but no
                              Category A or B Period is in effect at such time.

Category                      D Period  The S&P  Credit  Rating is below BB+ and
                              the Moody's Credit Rating is below Ba1.

If (a) only one of a Moody's  Credit  Rating and an S&P Credit  Rating exists at
any time (the Rating  Agency which has assigned a Credit  Rating is  hereinafter
referred to as the "Assigning  Rating Agency" and the Rating Agency which has no
assigned Credit Rating is hereinafter  referred to as the "Non-Assigning  Rating
Agency") and (b) the  Non-Assigning  Rating  Agency either (i) states an implied
rating for the  Borrower's  senior  long-term  debt and/or (ii) assigns a Credit
Rating to the Liquid Yield Option Notes, then the Applicable Rating Period shall
be  determined  as set forth above based on the Credit  Rating of the  Assigning
Rating  Agency and the stated  implied  senior debt rating of the  Non-Assigning
Rating Agency or, if no such stated implied senior debt rating exists, one "full
rating" above the Credit Rating assigned by the  Non-Assigning  Rating Agency to
the Liquid Yield Option Notes (it being  understood  that a "full  rating" shall
include  numerical  modifiers and (+) and (-)  modifiers).  In the event that an
Assigning  Rating  Agency  has  assigned a Credit  Rating and the  Non-Assigning
Rating  Agency  does not  state an  implied  rating  for the  Borrower's  senior
long-term debt or assign a Credit Rating to the Liquid Yield Option Notes,  then
the  Applicable  Rating  Period shall be  determined as set forth above based on
such Credit Rating.

In the event that (a) no Credit  Rating  exists with  respect to the  Borrower's
senior long-term debt, then the Applicable  Rating Period shall be determined as
follows:  (a) if both  Moody's  and S&P state an  implied  rating for any senior
long-term  debt of the  Borrower,  then the  Applicable  Rating  Period shall be
determined  by  reference  to such  implied  ratings;  or (b) if (i) only one of
Moody's and S&P states an implied

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rating for any senior long-term debt of the Borrower and (ii) the  Non-Assigning
Rating Agency assigns a Credit Rating to the Liquid Yield Option Notes, then the
Applicable  Rating  Period shall be  determined  as set forth above based on the
stated implied  senior debt rating of the Assigning  Rating Agency and one "full
rating" above the Credit Rating of the  Non-Assigning  Rating Agency assigned to
the Liquid Yield Option Notes.

In the event that (a) no Credit  Rating  exists with  respect to the  Borrower's
senior  long-term  debt and no  stated  implied  rating  exists  for the  senior
long-term  debt of the  Borrower,  then the  Applicable  Rating  Period shall be
determined as follows: (a) if both Moody's and S&P assign a Credit Rating to the
Liquid Yield Option Notes,  then the Applicable Rating Period shall be one "full
rating" above such assigned ratings;  (b) if only one of Moody's and S&P assigns
a Credit Rating to the Liquid Yield Option  Notes,  then the  Applicable  Rating
Period shall be one "full rating" above the Credit Rating assigned to the Liquid
Yield Option Notes assigned by the Assigning Rating Agency.

In the event of a split  rating of two or more rating  levels,  the rating level
one below the higher  rating  level shall apply.  If any Credit  Rating shall be
changed by Moody's or S&P,  such change shall be effective  for purposes of this
definition  as of the  Business  Day  following  the day on which  the  Borrower
notifies the Banks of such change pursuant to Section 6.01(h),  provided that if
such change  represents a downgrade  and the Borrower  fails to notify the Banks
thereof pursuant to Section 6.01(h),  then such change shall be effective on the
fourth Business Day after a senior officer obtained knowledge of such downgrade.
Any change in the  Applicable  Rating  Period due to a change in a Credit Rating
shall  apply  during the  effective  date of such  change and ending on the date
immediately  preceding the effective date of the next such change.  In the event
that and for so long as the  Borrower  has no senior debt or Liquid Yield Option
Notes that is rated by  Moody's or S&P  including,  without  limitation,  stated
implied rating, then a Category D Period shall be deemed to exist.

            "Authorized  Officer"  shall mean any senior officer of the Borrower
designated as such in writing by the Borrower to, and found  acceptable  by, the
Agent.

            "Bank" shall have the meaning provided in the first
paragraph of this Agreement.

            "Bankruptcy Code" shall have the meaning provided
in Section 8.05.

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            "Base  Rate" at any time shall mean the higher of (x) the rate which
is 1/2 of 1% plus the Federal  Funds  Effective  Rate and (y) the Prime  Lending
Rate as in effect from time to time.

            "Base Rate Loans" shall mean each Loan bearing interest at the rates
provided in Section 1.09(a).

            "Bermuda" shall mean Fremont Reinsurance Company,
Ltd., a Bermuda corporation.

            "Bidder Bank" shall mean each Bank that has notified in writing (and
has not  withdrawn  such  notice)  the  Agent  that it  desires  to  participate
generally in the bidding arrangements relating to Competitive Bid Borrowings.

            "Borrower" shall have the meaning provided in the
first paragraph of this Agreement.

            "Borrowing" shall mean (i) the incurrence of one Type of Loan by the
Borrower from all of the Banks on a pro rata basis on a given date (or resulting
from  conversions on a given date),  having in the case of Eurodollar  Loans the
same Interest Period, provided that Base Rate Loans incurred pursuant to Section
1.11(b) shall be considered part of any related Borrowing of Eurodollar Loans or
(ii) a Competitive Bid Borrowing.

            "Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any day which shall
be in  the  City  of  New  York  a  legal  holiday  or a day  on  which  banking
institutions  are authorized by law or other  governmental  actions to close and
(ii) with respect to all notices and  determinations  in  connection  with,  and
payments of principal and interest on, Eurodollar Loans or Competitive Bid Loans
priced by  reference  to the  Eurodollar  Rate,  any day which is a Business Day
described in clause (i) and which is also a day for trading by and between banks
in U.S. dollar deposits in the interbank Eurodollar market.

            "Capital  Expenditures"  shall mean expenditures by any Person that,
in  conformity  with GAAP,  are or are required to be included in the  property,
plant or equipment reflected in the balance sheet of such Person.

            "Capital  Lease" as applied to any  Person,  shall mean any lease of
any property  (whether real,  personal or mixed) by that Person as lessee which,
in conformity  with GAAP,  is, or is required to be,  accounted for as a capital
lease on the balance sheet of that Person.

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            "Capitalized  Lease  Obligations"  shall mean all obligations  under
Capital Leases of the Borrower or any of its  Subsidiaries in each case taken at
the amount thereof accounted for as liabilities in accordance with GAAP.

            "Change of Control"  shall mean (i) the Borrower shall cease to own,
directly,  100% of the capital stock of FIG, or FIG shall cease to own, directly
or indirectly,  100% of the capital stock of FIC, (ii) the acquisition,  whether
directly or indirectly, by any Person or "group" (as defined in Section 13(d)(3)
of the  Securities  Exchange  Act of 1934,  as amended)  (other than an employee
benefit or stock  ownership plan of the Borrower) of more than 30% of the voting
stock of the  Borrower  or (iii)  during any period of 25  consecutive  calendar
months,  a majority of the Board of Directors of the Borrower shall no longer be
composed of  individuals  (x) who were members of said Board on the first day of
such  period,  (y) whose  election or  nomination  to said Board was approved by
individuals  referred  to in clause (x) above  constituting  at the time of such
election or nomination  at least a majority of said Board or (z) whose  election
or nomination to said Board was approved by  individuals  referred to in clauses
(x) and (y) above  constituting  at the time of such  election or  nomination at
least a majority of said Board.

            "Chase" shall mean The Chase Manhattan Bank, N.A.

            "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.

            "Collateral" shall mean all of the Collateral as
defined in the Pledge Agreement.

            "Collateral Agent" shall mean the Agent acting as
collateral agent for the Banks.

            "Commitment"  shall mean,  with respect to each Bank, the amount set
forth opposite such Bank's name in Annex I hereto, as the same may be reduced or
terminated pursuant to Sections 2.02, 2.03 and/or 8.

            "Competitive Bid Borrowing" shall mean a Borrowing
of Competitive Bid Loans pursuant to Section 1.04.

            "Competitive Bid Loan" shall have the meaning
provided in Section 1.01(b).

            "Comstock"  shall mean  Comstock  Insurance  Company,  an  insurance
company organized under the laws of California.

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            "Consolidated  EBIT"  shall  mean,  for any  period,  the sum of (i)
Consolidated  Net Income of the Borrower for such period,  (ii)  provisions  for
taxes  based on income or  profits  to the extent  such  income or profits  were
included  in  computing  Consolidated  Net  Income  for such  period  and  (iii)
Consolidated Interest Expense (including amortization of original issue discount
and the interest  component of Capitalized Lease  Obligations),  net of interest
income,  thereto-  fore deducted  from  earnings in computing  Consolidated  Net
Income for such period,  provided that in determining  Consolidated EBIT for any
period there shall be excluded any portion thereof  otherwise  included  therein
(whether positive or negative) attributable to FFC and its Subsidiaries.

            "Consolidated  Interest  Expense" shall mean, for any period,  total
interest  expense  (including that  attributable to Capital Leases in accordance
with GAAP) of the Borrower and its Subsidiaries  for such period,  but excluding
therefrom all Excluded Interest Expense.

            "Consolidated Net Income" shall mean, for any period, the net income
(or loss) of the Borrower and its Subsidiaries on a consolidated  basis for such
period taken as a single  accounting  period,  as determined in accordance  with
GAAP.

            "Consolidated  Net Worth" shall mean, at any time,  Net Worth of the
Borrower and its Subsidiaries  determined on a consolidated  basis in accordance
with  GAAP  after   appropriate   deduction   for  any  minority   interests  in
Subsidiaries.

            "Contingent  Obligations"  shall  mean,  as to any  Person,  without
duplication, any obligation of such Person guaranteeing or intended to guarantee
any Indebtedness, leases, dividends or other obligations ("primary obligations")
of any other Person (the "primary  obligor") in any manner,  whether directly or
indirectly,  including,  without  limitation,  any  obligation  of such  Person,
whether or not  contingent,  (a) to purchase any such primary  obligation or any
property  constituting  direct or indirect security therefor,  (b) to advance or
supply funds (i) for the purchase or payment of any such primary  obligation  or
(ii) to maintain  working  capital or equity  capital of the primary  obligor or
otherwise  to  maintain  the  net  worth  or  solvency  of the  primary  obligor
(excluding any obligation or commitment of any Financial Services  Subsidiary to
advance funds to any borrower pursuant to a lending contract entered into in the
ordinary course of business),  (c) to purchase property,  securities or services
primarily  for the purpose of assuring the owner of any such primary  obligation
of the ability of the primary obligor to make payment of such primary obligation
or (d) otherwise to assure or hold harmless the owner of

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such primary obligation against loss in respect thereof; provided, however, that
the term Contingent Obligation shall not include (x) endorsements of instruments
for deposit or collection in the ordinary course of business,  (ii)  indemnities
granted  in  the  ordinary  course  of  business  and  (iii)  any  insurance  or
reinsurance  obligation of any Regulated  Insurance  Company entered into in the
ordinary course of the insurance  business of such Regulated  Insurance Company.
The  amount of any  Contingent  Obligation  shall,  subject  to any  contractual
limitation stated in such Contingent Obligation, be deemed to be an amount equal
to the stated or  determinable  amount of the primary  obligation  in respect of
which such Contingent Obligation is made or, if not stated or determinable,  the
maximum  reasonably  anticipated  liability in respect  thereof  (assuming  such
Person is required to perform there- under) as determined by such Person in good
faith.

            "Conversion Date" shall mean August 31, 1997.

            "Credit Documents" shall mean this Agreement, the
Notes and the Pledge Agreement.

            "Credit Rating" shall mean the Moody's Credit
Rating and the S&P Credit Rating.

            "Default"  shall mean any event,  act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.

            "Discontinued  Subsidiary" shall mean any Subsidiary of the Borrower
all of whose operations constitute discontinued operations.

            "ERISA" shall mean the Employee  Retirement  Income  Security Act of
1974, as amended from time to time. Section references to ERISA are to ERISA, as
in effect at the date of this Agreement and any subsequent  provisions of ERISA,
amend- atory thereof, supplemental thereto or substituted therefor.

            "ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which, from and after the Amendment  Effective Date, together with the
Borrower,  or any Subsidiary of the Borrower,  would be deemed to be a member of
the same "controlled  group" within the meaning of Section 414(b),  (c), (m) and
(o) of the Code.

            "Eurodollar  Loans"  shall mean each Loan  bearing  interest  at the
rates provided in Section 1.09(b).

            "Eurodollar  Rate" shall mean with respect to each Interest  Period,
(i) the arithmetic  average  (rounded to the nearest 1/100 of 1%) of the offered
quotations  to  first-class  banks in the  interbank  Eurodollar  market by each
Reference

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Bank for  dollar  deposits  of  amounts  in same  day  funds  comparable  to the
outstanding  principal  amount of the Eurodollar Loan of such Reference Bank for
which an interest rate is then being determined (or in the case of a Competitive
Bid Loan that is a Spread  Borrowing priced by reference to the Eurodollar Rate,
the arithmetic average (rounded to the nearest 1/100 of 1%) of the offered rates
for deposits in U.S.  dollars for the applicable  Interest Period (or the period
closest to such  applicable  Interest  Period) which appear on the Telerate Page
3750, British Bankers Association Interest Settlement Rates (or if such Telerate
Page is unavailable,  the comparable page on the Reuters Screen LIBO Page)) with
maturities  comparable to the Interest Period,  determined as of 10:00 A.M. (New
York time) on the date which is two Business Days prior to the  commencement  of
such Interest Period,  divided (and rounded upward to the next whole multiple of
1/16 of 1%) by (ii) a  percentage  equal to 100% minus the then  stated  maximum
rate of all reserve requirements (including,  without limitation,  any marginal,
emergency,  supplemental,  special or other  reserves)  applicable to any member
bank of the Federal  Reserve  System in respect of  Eurocurrency  liabilities as
defined  in  Regulation  D (or  any  successor  category  of  liabilities  under
Regulation  D);  provided  that if one or more of the  Reference  Banks fails to
provide the Agent with its aforesaid  rate,  then the  Eurodollar  Rate shall be
determined  based on the  rate or  rates  provided  to the  Agent  by the  other
Reference Bank or Banks.

            "Event of Default" shall have the meaning provided
in Section 8.

            "Excluded  Interest Expense" shall mean, for any period, the portion
of  interest  expense  of the  Borrower  and its  Subsidiaries  for such  period
representing  (i) interest  expense  incurred during such period which, had such
expense been  incurred  during the  Borrower's  fiscal year ending  December 31,
1994, would have been shown on the Borrower's GAAP financial statements for such
period as interest paid on "Total interest bearing  liabilities," other than the
portion  thereof  representing  interest  on  "Debt  from  affiliates"  and (ii)
interest  expense  incurred  during such period  attributable  to the Borrower's
Liquid Yield Option Notes.

            "Existing  Credit  Agreement" shall have the meaning provided in the
first recital paragraph of this Agreement.

            "Existing  Obligations" shall mean all amounts,  direct or indirect,
contingent  or  absolute,  of  every  type or  description  (including,  without
limitation,  principal,  interest and facility fees),  and at any time existing,
owing to the agent, the collateral agent or any other bank pursuant to the terms
of the Existing Credit Agreement.

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            "Facility Fee" shall have the meaning provided in
Section 2.01.

            "Federal  Funds  Effective  Rate"  shall  mean  for  any  period,  a
fluctuating  interest rate equal for each day during such period 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 which is a Business Day, the average of the  quotations for such day
on such  transactions  received by the Agent from three Federal Funds brokers of
recognized standing selected by the Agent.

            "Fees" shall mean all amounts payable pursuant to,
or referred to in, Section 2.01.

            "FCIC" shall mean Fremont Compensation Insurance
Co., a California corporation.

            "FFC" shall mean Fremont Financial Corporation, a
California corporation.

            "FGC" shall mean FGC Commercial Mortgage Finance,
a California corporation.

            "FIC" shall mean Fremont Indemnity  Company, a property and casualty
insurance company organized under the laws of California.

            "FIC Consolidated Surplus" shall mean, at any time, the consolidated
Policyholder Surplus of FIC and its Subsidiaries at such time.

            "FIG" shall mean Fremont Insurance Group, Inc., a
Delaware corporation.

            "FIL" shall mean Fremont Investment and Loan, a
California corporation.

            "Final Maturity Date" shall mean August 31, 2001.

            "Financial Services Non-Thrift Subsidiaries" shall
mean all Financial Services Subsidiaries other than Thrift
Subsidiaries.

            "Financial Services  Subsidiaries" shall mean (i) the Securitization
Subsidiaries,  (ii) the Thrift  Subsidiaries and (iii) all other Subsidiaries of
the Borrower, whether in existence on the Amendment Effective Date or created or

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acquired thereafter; but in any event excluding the P&C
Insurance Subsidiaries.

            "FRC" shall mean Fremont Reinsurance Co., a
California corporation.

            "GAAP" shall mean generally  accepted  accounting  principles in the
United States of America;  it being understood and agreed that determinations in
accordance with GAAP for purposes of Section 7, including  defined terms as used
therein, are subject (to the extent provided therein) to Section 11.07(a).

            "Indebtedness" of any Person shall mean,  without  duplication,  (i)
all indebtedness of such Person for borrowed money,  (ii) the deferred  purchase
price of assets or services which in accordance  with GAAP would be shown on the
liability side of the balance sheet of such Person, (iii) the face amount of all
letters  of  credit  issued  for  the  account  of  such  Person  and,   without
duplication,  all drafts drawn  thereunder,  (iv) all  Indebtedness  of a second
Person secured by any Lien on any property  owned by such first Person,  whether
or not such Indebtedness has been assumed, provided that if such Indebtedness is
not assumed, the amount of such Indebtedness shall be deemed for purposes hereof
to be the  lesser  of the  principal  amount of such  Indebtedness  and the fair
market value of the property  securing such  Indebtedness,  (v) all  Capitalized
Lease  Obligations of such Person,  (vi) all obligations of such Person to pay a
specified  purchase  price for goods or  services  whether or not  delivered  or
accepted,  i.e.,  take-or-pay and similar obligations,  (vii) all obligations of
such  Person  under  Interest  Rate  Protection   Agreements  or  Other  Hedging
Agreements,  (viii)  all  Contingent  Obligations  of such  Person  and (ix) any
obligation  of the type  referred to in any of clauses  (i)-(viii)  above of any
general  partnership  of which  such  Person  is the or a general  partner  (but
excluding  any general  partnership  the general  partners of which  include the
Borrower or any of its  Subsidiaries and Merrill Lynch & Co. and the business of
which shall be to hold and  administer  loans  acquired in connection  with loan
portfolio purchases; provided that Indebtedness shall not include trade payables
(including reinsurance payables),  daylight overdrafts,  open accounts,  accrued
expenses,  indemnities,  and insurance and reinsurance  obligations of Regulated
Insurance Companies, in each case arising in the ordinary course of business.

            "Insurance  Business" shall mean one or more aspects of the business
of selling, issuing or underwriting insurance or reinsurance.

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            "Insured Depository Subsidiary" shall mean any
Subsidiary of the Borrower that is an "insured depository
institution" within the meaning of 12 U.S.C. ss. 1813(c)(2).

            "Interest  Period"  shall mean (x) with  respect  to any  Eurodollar
Loan, the interest period applicable  thereto, as determined pursuant to Section
1.10 and (y) with respect to any Competitive  Bid Loan, the period  beginning on
the date of incurrence thereof and ending on the stated maturity thereof.

            "Interest  Rate Basis"  shall mean the  Eurodollar  Rate and/or such
other basis for  determining  an interest rate as the Borrower and the Agent may
agree upon from time to time.

            "Interest Rate  Protection  Agreement"  shall mean any interest rate
swap agreement, interest rate cap agreement, interest collar agreement, interest
rate hedging agreement or other similar agreement or arrangement.

            "Investment"  shall  mean,  for  any  Person:  (a)  the  acquisition
(whether for cash,  property,  services or  securities  or otherwise) of capital
stock,  bonds,  notes,  debentures,  partnership or other ownership interests or
other  securities  of any  other  Person  or any  agreement  to  make  any  such
acquisition (including,  without limitation, any "short sale" or any sale of any
securities at a time when such  securities are not owned by the Person  entering
into such short sale);  (b) the making of any deposit with, or advance,  loan or
other  extension  of credit to, any other  Person  (including  the  purchase  of
property  from  another  Person  subject  to  an   understanding  or  agreement,
contingent  or  otherwise,  to resell such property to such Person) and (without
duplication) the entering into of any commitment to deposit funds with,  advance
or lend funds to or otherwise  extend  credit to such  Person;  (c) the entering
into  of any  Contingent  Obligation  with  respect  to  Indebtedness  or  other
liability of any other  Person;  or (d) the entering  into by such Person of any
interest rate protection agreement.

            "Investment  Grade  Securities"  shall mean (i) any  securities  (as
defined in Section  8-102(1)(c) of the UCC as in effect in the State of New York
on the Amendment  Effective  Date) that are rated BBB- or higher by S&P, Baa3 or
higher by Moody's,  Class (2) or higher by NAIC or the equivalent of such rating
by S&P,  Moody's or NAIC, or if none of S&P,  Moody's and NAIC shall then exist,
the  equivalent  of such rating by any other  nationally  recognized  securities
rating agency and (ii) any fund investing exclusively in investments of the type
described  in clause  (i) which  fund may also hold  immaterial  amounts of cash
pending investment and/or distribution.

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            "Investors Bancor" shall mean Investors Bancor, a
California corporation.

            "Legal  Requirements"  shall mean all applicable laws, rules, orders
and  regulations  made  by  any  governmental   body  or  regulatory   authority
(including,  without limitation,  any Applicable Insurance Regulatory Authority)
having jurisdiction over the Borrower or a Subsidiary of the Borrower.

            "Liabilities to Policyholder Surplus Ratio" shall mean, at any time,
the ratio of (a) consolidated  liabilities  (determined on a consolidated  basis
without  duplication  in  accordance  with  SAP)  of FIC  and  its  consolidated
Subsidiaries at such time to (b) the  consolidated  Policyholder  Surplus of FIC
and its consolidated Subsidiaries at such time.

            "Lien"  shall  mean  any  mortgage,   pledge,   security   interest,
encumbrance,  lien or charge of any kind (including any agreement to give any of
the foregoing,  any conditional  sale or other title retention  agreement or any
lease in the nature thereof).

            "Liquid Yield Option Notes" shall mean the  Borrower's  $373,750,000
Aggregate  Principal  Amount at Maturity Liquid Yield  Option(TM) Notes due 2013
(Zero Coupon Subordinated) Effective October 4, 1993.

            "Loan" and "Loans" shall have the meaning provided
in Section 1.01(a).

            "Margin Stock" shall have the meaning provided in
Regulation U.

            "Material Discontinued Subsidiary" shall mean, at any time, (i) FRC,
(ii)  Comstock and (iii) any other  Discontinued  Subsidiary  to the extent that
such  Discontinued  Subsidiary  had  assets  (valued  at fair  market  value) of
$25,000,000 or more at the end of the then most recently ended fiscal year.

            "Moody's" shall mean Moody's Investors Service,
Inc. and its successors.

            "Moody's  Credit  Rating"  shall  mean the  rating  level  (it being
understood that a rating level shall include numerical modifiers and (+) and (-)
modifiers)  assigned by Moody's to the senior  unsecured  long-term  debt of the
Borrower.

            "NAIC"   shall   mean  the   National   Association   of   Insurance
Commissioners or any successor organization thereto.

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            "NAIC Tests" shall mean the ratios and other financial  measurements
developed by the NAIC under its  Insurance  Regulatory  Information  System,  as
initially in effect with respect to property  and casualty  insurance  companies
and as thereafter  modified,  supplemented,  replaced or eliminated from time to
time.

            "Net Premiums  Written"  shall mean,  for any period,  determined in
accordance  with SAP, the  aggregate  amount of premiums  written by the Workers
Compensation Subsidiaries during such period.

            "Net  Worth"  shall mean,  as to any Person,  the sum of its capital
stock,  capital in excess of par or stated value of shares of its capital stock,
retained  earnings  and any  other  account  which,  in  accordance  with  GAAP,
constitutes  stockholders  equity, but excluding (i) any treasury stock and (ii)
the effect, if any, of unrealized capital gains and losses.

            "Non-Consensual  Permitted  Lien"  shall  mean  Liens  permitted  by
Section 7.03(a) or (e), provided that such Liens have not specifically  attached
to the Collateral by the filing of a notice of lien or otherwise.

            "Non-Investment  Grade  Securities"  shall mean any  securities  (as
defined in Section  8-102(1)(c) of the UCC as in effect in the State of New York
on the Amendment  Effective Date) (i) that are not rated by any of S&P,  Moody's
or the NAIC or (ii) that are not Investment Grade Securities.

            "Note" and "Notes" shall have the meaning provided
in Section 1.06(a).

            "Notice of Borrowing" shall have the meaning
provided in Section 1.03.

            "Notice  of  Competitive  Bid  Borrowing"  shall  have  the  meaning
provided in Section 1.04.

            "Notice of Conversion" shall have the meaning
provided in Section 1.07.

            "Notice  Office"  shall  mean the  office of the Agent at Four Chase
Metrotech  Center,  Brooklyn,  New York 11245, or such other office as the Agent
may designate to the Borrower and the Banks from time to time.

            "Obligations" shall mean all amounts, direct or indirect, contingent
or absolute,  of every type or description,  and at any time existing,  owing to
the  Agent,  the  Collateral  Agent or any Bank  pursuant  to the  terms of this
Agreement or any other Credit Document.

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            "Other Hedging Agreement" shall mean any foreign exchange contracts,
currency swap agreements or other similar agreements or arrangements designed to
protect against the fluctuations in currency values.

            "Payment  Office"  shall  mean the  office of the Agent at One Chase
Manhattan Plaza, New York, New York 10081, or such other office as the Agent may
designate to the Borrower and the Banks from time to time.

            "PBGC"  shall  mean  the  Pension   Benefit   Guaranty   Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.

            "P&C Insurance  Subsidiaries" shall mean (i) FIG, (ii) each of FIG's
Subsidiaries (whether in existence on the Amendment Effective Date or created or
acquired  thereafter) and (iii) each other Subsidiary of the Borrower created or
acquired  after the  Amendment  Effective  Date that  engages  in  property  and
casualty insurance  operations or the activities of which are limited to holding
the stock or other securities of another  Subsidiary or Subsidiaries  engaged in
property and casualty insurance operations.

            "Percentage"  shall mean for each Bank on each date of determination
a fraction  the  numerator of which is equal to the  Commitment  of such Bank on
such date and the denominator of which is equal to the Total  Commitment on such
date,  provided that if the Percentage of any Bank is to be determined after the
Total Commitment has been terminated, then the Percentage for each Bank shall be
a fraction the numerator of which is equal to the aggregate  principal amount of
Loans of such  Bank  outstanding  on such date and the  denominator  of which is
equal to the aggregate principal amount of all Loans outstanding on such date.

            "Permitted  Acquisition  Debt"  shall mean  Indebtedness  of any P&C
Insurance  Subsidiary  acquired by the Borrower  after the  Amendment  Effective
Date,  provided  that  (i)  such  Indebtedness  was in  existence  prior to such
acquisition and was not created in connection with, or in contemplation of, such
acquisition  and (ii)  neither the  Borrower  nor any of its other  Subsidiaries
guaranties  or  is  otherwise  obligated  in  any  manner  in  respect  of  such
Indebtedness.

            "Permitted   Basket   Amount"   shall  mean,   as  of  any  date  of
determination,  an amount equal to the sum of (i)  $50,000,000  plus (ii) 50% of
any increase in the retained  earnings of the Borrower (on a consolidated  basis
determined  in  accordance  with GAAP) from June 30, 1995 through the end of the
most recently ended fiscal quarter prior to such date of determination for which
financial statements have been

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delivered  to the Banks  plus (iii) the net cash  proceeds  of any  issuance  of
common equity securities of the Borrower after the Amendment Effective Date.

            "Permitted Capital  Management  Agreement" shall mean the Memorandum
of  Understanding  between FIL and the  Federal  Deposit  Insurance  Corporation
executed on January 25, 1995. The Permitted Capital Management  Agreement is not
a "capital management agreement" within the meaning of 12 U.S.C. ss.
1831o(b)(2)(C).

            "Permitted  CIC  Acquisition   Subordinated  Note"  shall  mean  the
$25,000,000  subordinated  promissory note issued by the Borrower to The Buckeye
Union Insurance Company as partial  consideration for the acquisition by Fremont
Compensation  Insurance  Company  of all of the  capital  stock of the  Casualty
Insurance Company.

            "Permitted   Subordinated  Debt"  shall  mean  Indebtedness  of  the
Borrower expressly  subordinated to the Obligations,  which (i) shall contain no
financial maintenance covenants or cross-default provisions (it being understood
and agreed that a cross-acceleration  provision shall be permitted),  (ii) shall
have no maturities,  scheduled  repayments or sinking fund requirements prior to
one year  following  the Final  Maturity  Date and (iii) shall contain terms and
conditions  relating  to  the  interest  rate  applicable  thereto,   covenants,
defaults, remedies and subordination provisions, and shall be issued pursuant to
documentation, which shall be in form and substance satisfactory to the Required
Banks.

            "Person"  shall mean any  individual,  partnership,  joint  venture,
firm, corporation,  association,  trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.

            "Plan"  shall mean any  multiemployer  or single-  employer  plan as
defined in Section 4001 of ERISA, which is contributed to pursuant to collective
bargaining  requirements  or  maintained  by,  or at any  time  during  the five
calendar years  preceding the date of this Agreement was contributed to pursuant
to  collective  bargaining  requirements  or maintained  by, the  Borrower,  any
Subsidiary or an ERISA Affiliate.

            "Pledge Agreement" shall have the meaning provided
in Section 4.01(i).

            "Pledged Stock" shall mean all the Pledged Stock as
defined in the Pledge Agreement.

            "Policyholder Surplus" of any Person shall mean, at
any time, the consolidated policyholders' surplus (determined

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on a  consolidated  basis without  duplication  in accordance  with SAP) of such
Person and its consolidated  Subsidiaries at such time (but excluding  therefrom
the effect of any  unrealized  gains and losses from the  marketable  securities
portfolio of such Person and its consolidated Subsidiaries).

            "Prescribed   Forms"  shall  mean  such  duly  executed  form(s)  or
statement(s),  and in such number of copies,  which may,  from time to time,  be
prescribed by law and which,  pursuant to applicable provisions of (a) an income
tax treaty  between the United  States and the country of  residence of the Bank
providing the form(s) or statement(s),  (b) the Code, or (c) any applicable rule
or regulation under the Code, permit the Borrower to make payments hereunder for
the account of such Bank free of deduction or  withholding  of income or similar
taxes.

            "Prime  Lending Rate" shall mean the rate which the Agent  announces
from time to time as its prime  commercial  lending rate, the Prime Lending Rate
to change when and as such prime  commercial  lending  rate  changes.  The Prime
Lending Rate is a reference rate and does not  necessarily  represent the lowest
or best rate  actually  charged to any customer.  The Agent may make  commercial
loans or other loans at rates of interest at,  above or below the Prime  Lending
Rate.

            "Proceeds Loan" shall have the meaning provided in
Section 5.05(d).

            "Rating Agencies" shall mean each of Moody's and
S&P.

            "Reference Banks" shall mean Chase, Sanwa Bank
California and Shawmut Bank Connecticut, N.A.

            "Register" shall have the meaning provided in
Section 1.06(d).

            "Regulated  Insurance  Company"  shall  mean any  Subsidiary  of the
Borrower,  whether  now  owned or  hereafter  acquired,  that is  authorized  or
admitted to carry on or transact  Insurance  Business in any jurisdiction and is
regulated by the insurance  department or similar  regulatory  authority of such
jurisdiction.

            "Regulation D" shall mean  Regulation D of the Board of Governors of
the Federal  Reserve  System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.

            "Regulation U" shall mean Regulation U of the Board
of Governors of the Federal Reserve System as from time to

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time in effect and any successor to all or a portion thereof
establishing margin requirements.

            "Reply Date" shall have the meaning provided in
Section 1.04(b).

            "Reportable  Event" shall mean an event described in Section 4043(b)
of ERISA with respect to a Plan as to which the 30-day  notice  requirement  has
not been waived by the PBGC.

            "Required   Banks"  shall  mean  Banks  having   Commitments   which
constitute  more than 50% of the  Total  Commitment,  provided  that at any time
after the Total Commitment has been terminated,  the "Required Banks" shall mean
Banks  whose Loans and  Competitive  Bid Loans  constitute  more than 50% of the
aggregate  principal  amount of Loans and Competitive  Bid Loans  outstanding at
such time.

            "Reuters  Screen"  shall  mean,  when  used in  connection  with any
designated  page in determining  the applicable  Eurodollar Rate for an Interest
Period for a Competitive  Bid  Borrowing  that is a Spread  Borrowing  priced by
reference to the Eurodollar  Rate, the display page so designated on the Reuters
Monitor Money Rates Service (or such other page as may replace that page on that
service for the purpose of displaying comparable rates).

            "S&P" shall mean Standard & Poor's Rating Group and
its successors.

            "S&P Credit Rating" shall mean the rating level (it being understood
that a rating level shall include numerical modifiers and (+) and (-) modifiers)
assigned by S&P to the senior unsecured long-term debt of the Borrower.

            "SAP" shall mean, with respect to any Regulated  Insurance  Company,
the  accounting   procedures  and  practices  prescribed  or  permitted  by  the
Applicable  Insurance  Regulatory Authority of the state in which such Regulated
Insurance   Company  is  domiciled;   it  being   understood   and  agreed  that
determinations  in  accordance  with SAP for  purposes  of Section 7,  including
defined terms as used therein,  are subject (to the extent provided  therein) to
Section 11.07(a).

            "SEC" shall mean the Securities and Exchange
Commission or any successor thereto.

            "SEC Regulation D" shall mean Regulation D as promulgated  under the
Securities  Act of 1933,  as amended,  as the same may be in effect from time to
time.

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            "Securitization Subsidiaries" shall mean (i) FFC, (ii) each of FFC's
Subsidiaries (whether in existence on the Amendment Effective Date or created or
acquired  thereafter),  (iii) each other  Subsidiary of the Borrower  created or
acquired after the Amendment Effective Date that engages in asset securitization
operations  or the  activities  of which are  limited  to  holding  the stock or
securities of another Subsidiary or Subsidiaries engaged in asset securitization
operations and (iv) any other Financial Services  Subsidiaries which enters into
asset securitization transactions after the Amendment Effective Date.

            "Spread"  shall  mean a  percentage  per annum in excess of, or less
than, an Interest Rate Basis.

            "Spread  Borrowing"  shall mean a  Competitive  Bid  Borrowing  with
respect to which the Borrower has  requested the Banks to make  Competitive  Bid
Loans at a Spread over or under a specified Interest Rate Basis.

            "Subsidiary"   of  any  Person   shall  mean  and  include  (i)  any
corporation  more than 50% of whose stock of any class or classes  having by the
terms thereof ordinary voting power to elect a majority of the directors of such
corporation  (irrespective  of  whether or not at the time stock of any class or
classes of such  corporation  shall have or might have voting power by reason of
the happening of any  contingency)  is at the time owned by such Person directly
or indirectly through Subsidiaries and (ii) any partnership,  association, joint
venture or other  entity in which such  Person  directly or  indirectly  through
Subsidiaries  has more than a 50% equity or voting interest at the time.  Unless
otherwise expressly provided, all references herein to "Subsidiary" shall mean a
Subsidiary of the Borrower.

            "Taxes" shall have the meaning provided in Section
3.04.

            "Telerate  Page"  shall  mean,  when  used in  connection  with  any
designated page number, the display page so designated on the Dow Jones Telerate
Service (or such other page as may replace  that page on that  service,  or such
other service as may be nominated as the information  vendor, for the purpose of
displaying rates or prices comparable to the Eurodollar Rate).

            "Thrift  Subsidiaries" shall mean (i) Investors Bancor, (ii) each of
Investors Bancor's Subsidiaries (whether in existence on the Amendment Effective
Date or created or acquired thereafter,  and in any event including FIL and FGC)
and (iii) each other  Subsidiary of the Borrower  created or acquired  after the
Amendment  Effective Date that engages in thrift operations or the activities of
which are limited to

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holding the stock or securities of another Subsidiary or
Subsidiaries engaged in thrift operations.

            "Total Capitalization" shall mean, at any time, the
sum of Total Funded Indebtedness plus Consolidated Net Worth
at such time.

            "Total  Funded   Indebtedness"   shall  mean,  at  any  time,  Total
Indebtedness  at  such  time  less  any  portion  of  such  Total   Indebtedness
constituting Contingent Obligations.

            "Total Indebtedness" shall mean, at any time, all
Indebtedness of the Borrower at such time.

            "Total Commitment" shall mean the sum of the Commit-
ments of each Bank.

            "Total  Unutilized  Commitment"  shall  mean  at any  time  for  the
determination  thereof,  the Total  Commitment  less the  aggregate  outstanding
principal amount of all Loans at such time.

            "Type"  shall mean any type of Loan  determined  with respect to the
interest option applicable thereto, i.e., a Base Rate Loan or Eurodollar Loan.

            "UCC" shall mean the Uniform Commercial Code.

            "Unfunded  Current  Liability" of any Plan shall mean the amount, if
any, by which the present  value of the accrued  benefits  under such Plan as of
the close of its most  recent plan year  exceeds  the fair  market  value of the
assets allocable thereto, determined in accordance with Section 412 of the Code.

            "Wholly-Owned Subsidiary" of any Person shall mean any Subsidiary of
such Person to the extent all of the capital stock or other ownership  interests
in such Subsidiary,  other than directors' or nominees'  qualifying  shares,  is
owned directly or indirectly by such Person.

            "Workers   Compensation   Subsidiaries"  shall  mean  FCIC,  Pacific
Compensation  Insurance  Co.,  Beaver  Insurance  Company,   Casualty  Insurance
Company,  Workers'  Compensation  and  Indemnity  Corporation  and each of their
respective Subsidiaries.

            "Written"   or  "in   writing"   shall  mean  any  form  of  written
communication or a communication by means of telex, facsimile device,  telegraph
or cable.

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            SECTION 10.  The Agent.

            10.01  Appointment.  Each Bank  hereby  irrevocably  designates  and
appoints Chase as Agent of such Bank (such term to include, for purposes of this
Section 10, Chase acting as Collateral  Agent) to act as specified herein and in
the other Credit  Documents,  and each such Bank hereby  irrevocably  authorizes
Chase as the Agent for such Bank to take  such  action on its  behalf  under the
provisions of this Agreement and the other Credit Documents and to exercise such
powers and perform  such duties as are  expressly  delegated to the Agent by the
terms of this Agreement and the other Credit Documents, together with such other
powers as are  reasonably  incidental  thereto.  The Agent agrees to act as such
upon the express conditions  contained in this Section 10.  Notwithstanding  any
provision to the contrary elsewhere in this Agreement,  the Agent shall not have
any duties or  responsibilities,  except those  expressly set forth herein or in
the other Credit Documents,  or any fiduciary relationship with any Bank, and no
implied  covenants,   functions,   responsibilities,   duties,   obligations  or
liabilities  shall be read into this  Agreement or otherwise  exist  against the
Agent. The provisions of this Section 10 are solely for the benefit of the Agent
and  the  Banks,  and  the  Borrower  shall  have no  rights  as a  third  party
beneficiary  of any of the  provisions  hereof.  In performing its functions and
duties  under this  Agreement,  the Agent shall act solely as agent of the Banks
and the Agent  shall not  assume,  nor shall it be deemed to have  assumed,  any
obligation or relationship of agency or trust with or for the Borrower or any of
its Subsidiaries.

            10.02 Delegation of Duties.  The Agent may execute any of its duties
under this  Agreement  or any other  Credit  Document  by or  through  agents or
attorneys-in-fact  and shall be  entitled  to advice of counsel  concerning  all
matters  pertaining to such duties.  The Agent shall not be responsible  for the
negligence or misconduct of any agents or attorneys-in-fact  selected by it with
reasonable care except to the extent otherwise required by Section 10.03.

            10.03  Exculpatory  Provisions.  Neither  the Agent,  nor any of its
respective   officers,   directors,    employees,    representatives,    agents,
attorneys-in-fact  or  affiliates  shall be (i) liable  for any action  lawfully
taken or omitted to be taken by it or such Person  under or in  connection  with
this Agreement  (except for its or such Person's own gross negligence or willful
misconduct)  or (ii)  responsible  in any  manner  to any of the  Banks  for any
recitals,  statements,  representations or warranties made by the Borrower,  any
Subsidiary or any of their respective officers contained in this Agreement,  any
other Credit Document or in any certificate, report, statement or other document
referred to

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or provided for in, or received by the Agent under or in connection  with,  this
Agreement or any other Credit Document or for any failure of the Borrower or any
Subsidiary  or any of their  respective  officers  to  perform  its  obligations
hereunder or thereunder. The Agent shall not be under any obligation to any Bank
to ascertain or to inquire as to the  observance  or  performance  of any of the
agreements  contained in, or conditions  of, this  Agreement,  or to inspect the
properties,  books or records of the Borrower or any Subsidiary. The Agent shall
not be responsible  to any Bank for the  effectiveness,  genuineness,  validity,
enforceability,  collectibility  or  sufficiency of this Agreement or any Credit
Document or for any  representations,  warranties,  recitals or statements  made
herein or therein or made in any written or oral  statement or in any  financial
or other statements,  instruments,  reports, certificates or any other documents
in connection  herewith or therewith furnished or made by the Agent to the Banks
or by or on behalf of the  Borrower  to the Agent or any Bank or be  required to
ascertain or inquire as to the  performance  or  observance of any of the terms,
conditions,  provisions,  covenants or agreements contained herein or therein or
as to the use of the  proceeds of the Loans or  Competitive  Bid Loans or of the
existence or possible existence of any Default or Event of Default.

            10.04  Reliance by Agent.  The Agent shall be entitled to rely,  and
shall be fully protected in relying, upon any note, writing, resolution, notice,
consent, certificate,  affidavit, letter, cablegram,  telegram, facsimile, telex
or teletype message, statement, order or other document or conversation 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
(including,   without   limitation,   counsel  to  the  Borrower),   independent
accountants  and other experts  selected by the Agent.  The Agent shall be fully
justified  in failing or refusing  to take or continue to take any action  under
this Agreement or any other Credit  Document  unless it shall first receive such
advice or concurrence of the Required Banks as it deems  appropriate or it shall
first be  indemnified  to its  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 Agreement and the
other Credit  Documents in accordance with a request of the Required Banks,  (or
to the extent  specifically  provided in Section 11.11, all the Banks), and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Banks.

            10.05  Notice of Default.  The Agent shall not be
deemed to have knowledge or notice of the occurrence of any
Default or Event of Default hereunder unless the Agent has

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received  notice  from a Bank  or the  Borrower  referring  to  this  Agreement,
describing  such  Default or Event of Default and stating  that such notice is a
"notice of default".  In the event that the Agent  receives  such a notice,  the
Agent shall give prompt notice  thereof to the Banks.  The Agent shall take such
action with respect to such  Default or Event of Default as shall be  reasonably
directed by the Required Banks,  provided that, unless and until the Agent shall
have  received  such  directions,  the Agent may (but shall not be obligated to)
take such  action,  or refrain  from taking such  action,  with  respect to such
Default or Event of Default as it shall deem  advisable in the best interests of
the Banks.

            10.06  Non-Reliance  on Agent and Other Banks.  Each Bank  expressly
acknowledges  that  neither  the  Agent  nor  any  of its  respective  officers,
directors, employees, agents,  representatives,  attorneys-in-fact or affiliates
has made any  representations  or  warranties to it and that no act by the Agent
hereinafter  taken,  including  any review of the affairs of the Borrower or any
Subsidiary,  shall be deemed to constitute any representation or warranty by the
Agent to any Bank. Each Bank represents to the Agent that it has,  independently
and  without  reliance  upon the  Agent or any  other  Bank,  and  based on such
documents and information as it has deemed  appropriate,  made its own appraisal
of  and  investigation  into  the  businesses,  assets,  operations,   property,
financial and other conditions,  prospects and credit-worthiness of the Borrower
and its  Subsidiaries  and  made its own  decision  to make  its  Loans  and its
Competitive Bid Loans  hereunder and enter into this  Agreement.  Each Bank also
represents that it will,  independently  and without  reliance upon 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  analysis,  appraisals
and decisions in taking or not taking action under this  Agreement,  and to make
such  investigation  as it deems  necessary to inform itself as to the business,
assets,  operations,  property,  financial and other  conditions,  prospects and
creditworthiness  of the  Borrower  and its  Subsidiaries.  Except for  notices,
reports and other documents  expressly  required to be furnished to the Banks by
the Agent  hereunder,  the Agent  shall not have any duty or  responsibility  to
provide any Bank with any credit or other information concerning the businesses,
operations,  assets,  property,  financial  and other  conditions,  prospects or
creditworthiness  of the  Borrower  or any  Subsidiary  which  may come into the
possession of the Agent or any of its officers,  directors,  employees,  agents,
representatives, attorneys-in-fact or affiliates.

            10.07  Indemnification.  The Banks agree to indem-
nify the Agent in its capacity as such ratably according to
their respective "percentages" as used in determining the

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Required  Banks  at  such  time  from  and  against  any  and  all  liabilities,
obligations,  losses,  damages,  penalties,  actions,  judgments,  suits, costs,
reasonable  expenses or  disbursements  of any kind whatsoever  which may at any
time (including,  without  limitation,  at any time following the payment of the
Obligations)  be imposed on,  incurred  by or asserted  against the Agent in its
capacity as such in any way relating to or arising out of this  Agreement or any
other Credit Document, or any documents contemplated by or referred to herein or
the transactions  contemplated hereby or any action taken or omitted to be taken
by the Agent under or in connection  with any of the foregoing,  but only to the
extent  that  any of the  foregoing  is not paid by the  Borrower  or any of its
Subsidiaries, provided that no Bank shall be liable to the Agent for the payment
of any portion of such liabilities,  obligations,  losses,  damages,  penalties,
actions,  judgments,  suits, costs, expenses or disbursements resulting from the
gross negligence or willful misconduct of the Agent. If any indemnity  furnished
to the Agent for any purpose shall,  in the opinion of the Agent be insufficient
or become  impaired,  the Agent may call for additional  indemnity and cease, or
not commence, to do the acts indemnified against until such additional indemnity
is furnished.  The agreements in this Section 10.07 shall survive the payment of
all Obligations.

            10.08 Agent in Its Individual Capacity. The Agent and its affiliates
may make loans to,  accept  deposits  from and  generally  engage in any kind of
business  with the Borrower and its  Affiliates as though the Agent were not the
Agent hereunder.  With respect to the Loans and Competitive Bid Loans made by it
and all Obligations owing to it, the Agent shall have the same rights and powers
under this Agreement as any Bank and may exercise the same as though it were not
the  Agent and the terms  "Bank"  and  "Banks"  shall  include  the Agent in its
individual capacity.

            10.09  Resignation  of the  Agent;  Successor  Agent.  The Agent may
resign as the Agent upon 20 days' notice to the Banks.  Upon the  resignation of
the Agent,  the  Required  Banks shall  appoint from among the Banks a successor
Agent for the Banks subject to prior  approval by the Borrower,  whereupon  such
successor agent shall succeed to the rights, powers and duties of the Agent, and
the  term  "Agent"  shall  include  such  successor  agent  effective  upon  its
appointment,  and the re- signing Agent's rights, powers and duties as the Agent
shall be  terminated,  without  any other or further  act or deed on the part of
such former Agent or any of the parties to this Agreement. After the resignation
of the Agent  hereunder,  the  provisions  of this Section 10 shall inure to its
benefit  as to any  actions  taken or omitted to be taken by it while it was the
Agent under this Agreement.

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            SECTION 11.  Miscellaneous.

            11.01 Payment of Expenses,  etc. The Borrower agrees to: (i) whether
or not the transactions herein contemplated are consummated,  pay all reasonable
out-of-pocket   costs  and  expenses  of  the  Agent  in  connection   with  the
negotiation, preparation, execution and delivery of the Credit Documents and the
documents  and  instruments  referred  to therein and any  amendment,  waiver or
consent relating thereto (including, without limitation, the reasonable fees and
disbursements  of  White & Case)  and of the  Agent  and  each of the  Banks  in
connection  with the  enforcement of the Credit  Documents and the documents and
instruments referred to therein (including,  without limitation,  the reasonable
fees and disbursements of counsel for the Agent and for each of the Banks); (ii)
pay and hold each of the Banks harmless from and against any and all present and
future stamp and other similar  taxes with respect to the foregoing  matters and
save each of the Banks  harmless from and against any and all  liabilities  with
respect to or  resulting  from any delay or  omission  (other than to the extent
attributable to such Bank) to pay such taxes;  and (iii) indemnify the Agent and
each Bank, and their respective officers, directors, employees,  representatives
and  agents  from and hold each of them  harmless  against  any and all  losses,
liabilities, claims, damages or expenses incurred by any of them as a result of,
or arising out of, or in any way related to, or by reason of, any investigation,
litigation or other proceeding  (whether or not the Agent or any Bank is a party
thereto) related to the entering into and/or  performance of any Credit Document
or the use of the proceeds of any Loans or  Competitive  Bid Loans  hereunder or
the consummation of any other transactions  contemplated in any Credit Document,
including,  without limitation, the reasonable fees and disbursements of counsel
incurred  in  connection  with  any  such  investigation,  litigation  or  other
proceeding  (but  excluding  any such losses,  liabilities,  claims,  damages or
expenses  to the extent  incurred by reason of the gross  negligence  or willful
misconduct of the Person to be indemnified).

            11.02 Right of Setoff.  In  addition to any rights now or  hereafter
granted under  applicable law or otherwise,  and not by way of limitation of any
such rights,  upon the  occurrence  of an Event of Default,  each Bank is hereby
authorized  at any time or from time to time,  without  present-  ment,  demand,
protest or other notice of any kind to the Borrower or to any other Person,  any
such notice being hereby  expressly  waived,  to set off and to appropriate  and
apply any and all deposits  (general or special) and any other  Indebtedness  at
any time held or owing by such Bank (including,  without limitation, by branches
and agencies of such Bank wherever  located) to or for the credit or the account
of the Borrower against and on account of the Obligations and liabil-

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ities of the  Borrower  to such Bank  under this  Agreement  or under any of the
other  Credit  Documents,   including,  without  limitation,  all  interests  in
Obligations of the Borrower purchased by such Bank pursuant to Section 11.06(b),
and all other  claims of any nature or  description  arising out of or connected
with this Agreement or any other Credit Document, which are then due and payable
irrespective of whether or not such Bank shall have made any demand hereunder.

            11.03 Notices.  Except as otherwise  expressly  provided herein, all
notices and other  communications  provided  for  hereunder  shall be in writing
(including  telegraphic,  telex,  facsimile or cable  communication) and mailed,
telegraphed,  telexed,  telecopied,  cabled or delivered, if to the Borrower, at
the address  specified  opposite its  signature  below;  if to any Bank,  at its
address specified for such Bank on Annex II hereto; or, at such other address as
shall be  designated  by any  party in a written  notice  to the  other  parties
hereto.  All such  notices  and  communications  shall be  mailed,  telegraphed,
telexed, telecopied,  cabled or sent by overnight courier and shall be effective
when received.

            11.04 Benefit of Agreement. (a) This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective  successors and
assigns of the parties  hereto;  provided  that the  Borrower  may not assign or
transfer any of its rights or  obligations  hereunder  without the prior written
consent of the Banks.  Each Bank may at any time grant  participations in any of
its rights hereunder or under any of its Notes to another financial institution;
provided that in the case of any such  participation,  the participant shall not
have any rights under this  Agreement or any of the other Credit  Documents (the
participant's  rights against such Bank in respect of such  participation  to be
those  set  forth  in the  agreement  executed  by  such  Bank in  favor  of the
participant  relating thereto) and all amounts payable by the Borrower hereunder
shall be determined as if such Bank had not sold such participation, except that
the  participant  shall be  entitled  to receive the  additional  amounts  under
Sections 1.11, 1.12 and 3.04 to, and only to, the extent that such Bank would be
entitled to such  benefits if the  participation  had not been  entered  into or
sold;  and  provided  further that no Bank shall  transfer,  grant or assign any
participation  under  which the  participant  shall have  rights to approve  any
amendment to or waiver of this Agreement or any other Credit  Document except to
the  extent  such  amendment  or waiver  would (i)  extend  the final  scheduled
maturity of any Loan or Competitive  Bid Loan or Note in which such  participant
is  participating  or reduce the rate or extend the time of payment of  interest
thereon  (except in connection with a waiver of the  applicability  of any post-
default  increase in interest  rates) or Fees,  or reduce the  principal  amount
thereof, or increase the Commitment in which

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such  participant  is  participating  over the amount thereof then in effect (it
being  understood  that a waiver  of any  Default  or Event of  Default  or of a
mandatory  reduction in the Total Commitment or of a mandatory  prepayment shall
not  constitute a change in the terms of any  Commitment and that an increase in
any Commitment shall be permitted without the consent of any participant therein
if such participant's  participation is not increased as a result thereof), (ii)
release all or substantially all of the Collateral (except as expressly provided
in the Credit  Documents) or (iii) consent to the  assignment or transfer by the
Borrower of any of its rights and obligations  under this Agreement or any other
Credit Document except in accordance with the terms hereof and thereof.

            (b)  Notwithstanding  the  foregoing,  any Bank may  assign all or a
portion of its Commitment,  and its rights and obligations hereunder,  to one or
more  commercial  banks or other financial  institutions  (including one or more
Banks);  provided,  however,  that no Bank may effect such an assignment without
the prior  written  consent  of the  Borrower  and the  Agent,  neither of which
consents  will be  unreasonably  withheld.  No  assignment of less than all of a
Bank's  Commitment  and its rights and  obligations  hereunder  pursuant  to the
immediately preceding sentence shall, to the extent such transaction  represents
an assignment to an institution other than one or more Banks hereunder, be in an
aggregate amount less than the minimum of $10,000,000.  Each assignment shall be
of a constant,  and not a varying  percentage,  of all of the  assigning  Bank's
rights and obligations under this Agreement. If any Bank so sells or assigns all
or a part of its  Commitment  and its rights  hereunder or under the Notes,  any
reference in this Agreement or the Notes to such assigning Bank shall thereafter
refer  to such  Bank  and to the  respective  assignee  to the  extent  of their
respective  interests and the  respective  assignee shall have, to the extent of
such  assignment  (unless  otherwise  provided  therein),  the same  rights  and
benefits as it would if it were such assigning Bank. Each assignment pursuant to
this Section  11.04(b)  shall be effected by the assigning Bank and the assignee
Bank executing an Assignment and Assumption Agreement  substantially in the form
of Exhibit F (appropriately  completed). At the time of any such assignment, (i)
Annex I  shall  be  deemed  to be  amended  to  reflect  the  Commitment  of the
respective  assignee (which shall result in a direct reduction to the Commitment
of the  assigning  Bank) and of the  other  Banks,  (ii) if any such  assignment
occurs after the Amendment Effective Date, at the request of the assignor or the
assignee the Borrower will issue new Notes to the respective assignee and to the
assigning Bank in conformity with the requirements of Section 1.06 and (iii) the
Agent  shall  receive  from the  assigning  Bank  and/or  the  assignee  Bank or
financial institution at the time of each assignment the

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payment of a nonrefundable  assignment fee of $3,000. Each Bank and the Borrower
agrees to execute such documents (including,  without limitation,  amendments to
this  Agreement and the other Credit  Documents) as shall be necessary to effect
the  foregoing  at the expense of the  assignee  Bank.  Promptly  following  any
assignment pursuant to this Section 11.04(b),  the assigning Bank shall promptly
notify the Borrower and the Agent  thereof.  Nothing in this Section 11.04 shall
prevent or prohibit any Bank from pledging its Loans or Competitive Bid Loans or
Notes  hereunder to a Federal Reserve Bank in support of borrowings made by such
Bank from such Federal Reserve Bank.

            11.05 No  Waiver;  Remedies  Cumulative.  No failure or delay on the
part of the  Agent or any  Bank in  exercising  any  right,  power or  privilege
hereunder  or under any other Credit  Document and no course of dealing  between
the Borrower and the Agent or any Bank shall  operate as a waiver  thereof;  nor
shall any single or partial exercise of any right, power or privilege  hereunder
or under any other  Credit  Document  preclude  any  other or  further  exercise
thereof or the  exercise of any other  right,  power or  privilege  hereunder or
thereunder. The rights and remedies herein expressly provided are cumulative and
not  exclusive  of any  rights or  remedies  which  the Agent or any Bank  would
otherwise have. No notice to or demand on the Borrower in any case shall entitle
the  Borrower  to any other or  further  notice or  demand in  similar  or other
circumstances  or constitute a waiver of the rights of the Agent or the Banks to
any other or further action in any circumstances without notice or demand.

            11.06  Payments Pro Rata.  (a) The Agent agrees that promptly  after
its receipt of each  payment from or on behalf of the Borrower in respect of any
Obligations  of the  Borrower,  it shall  distribute  such  payment to the Banks
(other than any Bank that has  consented  in writing to waive its pro rata share
of such  payment) pro rata based upon their  respective  shares,  if any, of the
Obligations with respect to which such payment was received.

            (b) Each of the Banks agrees that,  if it should  receive any amount
hereunder  (whether by voluntary payment,  by realization upon security,  by the
exercise  of the right of setoff or  banker's  lien,  by  counterclaim  or cross
action,  by  the  enforcement  of any  right  under  the  Credit  Documents,  or
otherwise)  which is  applicable to the payment of the principal of, or interest
on, the Loans or  Competitive  Bid Loans or Fees, of a sum which with respect to
the related sum or sums received by other Banks is in a greater  proportion than
the total of such  Obligation  then owed and due to such Bank bears to the total
of such  Obligation then owed and due to all of the Banks  immediately  prior to
such receipt,  then such Bank  receiving  such excess payment shall purchase for
cash without

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recourse or warranty from the other Banks an interest in the  Obligations of the
Borrower  to such  Banks  in such  amount  as  shall  result  in a  proportional
participation  by all of the Banks in such amount,  provided  that if all or any
portion of such  excess  amount is  thereafter  recovered  from such Bank,  such
purchase  shall be rescinded  and the purchase  price  restored to the extent of
such recovery, but without interest.

            11.07 Calculations; Computations. (a) The financial statements to be
furnished to the Banks pursuant  hereto shall be made and prepared in accordance
with  GAAP or SAP,  as the  case may be,  consistently  applied  throughout  the
periods  involved  (except  as set forth in the notes  thereto  or as  otherwise
disclosed  in writing by the  Borrower to the  Banks).  In  addition,  except as
otherwise specifically provided herein, all computations  determining compliance
with Section 7, including  definitions  used therein,  shall utilize  accounting
principles  and policies in effect from time to time;  provided that if any such
accounting  principle or policy (whether GAAP or SAP or both) shall change after
the Amendment  Effective  Date, the Borrower shall give prompt notice thereof to
the Agent and each of the Banks and if within 30 days  following such notice the
Borrower,  the Agent or the Required  Banks shall elect by giving written notice
of such election to the other parties hereto,  such computations  shall not give
effect to such change unless and until this Agreement shall be amended  pursuant
to Section 11.11 to give effect to such change.

            (b) All  computations  of interest and Facility Fees hereunder shall
be made on the actual number of days elapsed over a year of 360 days.

            11.08 Governing Law;  Submission to  Jurisdiction;  Venue.  (a) THIS
AGREEMENT AND THE OTHER CREDIT  DOCUMENTS AND THE RIGHTS AND  OBLIGATIONS OF THE
PARTIES  HEREUNDER AND THEREUNDER  SHALL BE CONSTRUED IN ACCORDANCE  WITH AND BE
GOVERNED  BY THE LAW OF THE STATE OF NEW YORK.  Any legal  action or  proceeding
with respect to this  Agreement  or any other Credit  Document may be brought in
the  courts of the State of New York or of the United  States  for the  Southern
District of New York,  and, by  execution  and delivery of this  Agreement,  the
Borrower hereby  irrevocably  accepts for itself and in respect of its property,
generally and  unconditionally,  the jurisdiction of the aforesaid  courts.  The
Borrower  hereby  irrevocably  designates,  appoints and empowers CT Corporation
System,  with offices on the date hereof at 1633  Broadway,  New York,  New York
10019 as its designee,  appointee and agent to receive,  accept and  acknowledge
for and on its behalf,  and in respect of its  property,  service of any and all
legal process,  summons,  notices and documents  which may be served in any such
action or proceeding. The Agent agrees

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to use reasonable  good faith efforts to mail, by registered or certified  mail,
to the Borrower,  at its address set forth opposite its signature below,  copies
of any correspondence mailed or delivered to CT Corporation System in connection
with  the  immediately  preceding  sentence;  provided  that no  failure  of the
Borrower to receive, for any reason,  copies of such correspondence shall in any
way affect the  effectiveness  of the  delivery of any legal  process,  summons,
notice or documents  delivered to CT Corporation  System. If for any reason such
designee,  appointee  and agent shall cease to be available to act as such,  the
Borrower  agrees to designate a new  designee,  appointee  and agent in New York
City on the terms and for the  purposes of this  provision  satisfactory  to the
Agent. The Borrower further  irrevocably  consents to the service of process out
of any of the  aforementioned  courts in any such  action or  proceeding  by the
mailing of copies thereof by registered or certified mail,  postage prepaid,  to
the Borrower at its address for notices pursuant to Section 11.03,  such service
to become effective 30 days after such mailing.  Nothing herein shall affect the
right of the Agent or any Bank to serve process in any other manner permitted by
law or to commence legal  proceedings or otherwise  proceed against the Borrower
in any other jurisdiction.

            (b) The Borrower  hereby  irrevocably  waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings  arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in clause (a) above and hereby
further  irrevocably  waives  and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been brought in
an inconvenient forum.

            11.09 Counterparts.  This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts,  each
of which when so executed and delivered  shall be an original,  but all of which
shall together  constitute one and the same  instrument.  A set of  counterparts
executed by all the parties  hereto  shall be lodged with the  Borrower  and the
Agent.

            11.10 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.

            11.11  Amendment  or Waiver.  Neither this  Agreement  nor any other
Credit  Document  nor any  terms  hereof  or  thereof  may be  changed,  waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the Borrower and the Required Banks, provided that no such

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change, waiver, discharge or termination shall, without the consent of each Bank
affected thereby,  (i) extend any date fixed for any payment of principal of any
Loan or  Competitive  Bid Loan or Note or reduce  the rate or extend the time of
payment of interest thereon or Fees or reduce the principal  amount thereof,  or
increase the  Commitment of any Bank over the amount  thereof then in effect (it
being  understood  that a waiver of any  Default or Event of  Default  shall not
constitute a change in the terms of any  Commitment  of any Bank),  (ii) release
any of the Collateral  (except as expressly  provided in the Credit  Documents),
(iii)  amend,  modify or waive any  provision of this  Section,  (iv) reduce any
percentage  specified in, or otherwise modify,  the definition of Required Banks
or any provision of this Agreement  specifying the number or percentage of Banks
required  to take any  action  hereunder  or (v)  consent to the  assignment  or
transfer  by the  Borrower  of any of its  rights  and  obligations  under  this
Agreement or any other Credit Document.  No provision of Section 10 or any other
term or  provision  relating  to the rights or  obligations  of the Agent may be
amended without the consent of the Agent.

            11.12 Survival. All indemnities set forth herein including,  without
limitation,  in Section  1.11,  1.12,  3.04,  10.07 or 11.01  shall  survive the
execution  and  delivery  of this  Agreement  and the  making  of the  Loans and
Competitive  Bid Loans,  the repayment of the Obligations and the termination of
the Total Commitment.

            11.13  Domicile of Loans.  Subject to Section  11.04,  each Bank may
transfer and carry its Loans and Competitive Bid Loans at, to or for the account
of any branch  office,  subsidiary or affiliate of such Bank,  provided that the
Borrower shall not be  responsible  for costs arising under Section 1.11 or 3.04
resulting from any such transfer to the extent not otherwise  applicable to such
Bank prior to such transfer.

            11.14   Confidentiality.   Each  Bank  shall  hold  all   non-public
information  furnished by or on behalf of the Borrower in  connection  with such
Bank's evaluation of whether to become a Bank hereunder or obtained by such Bank
pursuant to the  requirements  of this  Agreement,  which has been identified as
such by the Borrower,  in accordance  with its customary  procedure for handling
confidential  information  of this nature and in accordance  with safe and sound
banking or lending  practices  and in any event may make  disclosure  reasonably
required by any bona fide actual or  contemplated  transferee or  participant in
connection with an actual or  contemplated  transfer of any Loans or Competitive
Bid  Loans  or  participation  therein  or  as  required  or  requested  by  any
governmental agency or representative thereof or pursuant to legal process or to
such Bank's attorneys or independent

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auditors  or  affiliates;   provided  that  unless  specifically  prohibited  by
applicable  law or court  order,  each Bank  shall  notify the  Borrower  of any
request or  requirement by any  governmental  agency or  representative  thereof
(other than any such request or requirement in connection with an examination of
the financial condition of such Bank by such governmental agency) or pursuant to
legal  process  for  disclosure  of any  such  non-public  information  prior to
disclosure of such information; and provided further, that in no event shall any
Bank be obligated or required to return any materials  furnished by the Borrower
or any Subsidiary of the Borrower.

            11.15  WAIVER OF JURY TRIAL.  EACH OF THE PARTIES TO THIS  AGREEMENT
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM  ARISING OUT OF OR RELATING TO THIS AGREEMENT,  THE OTHER CREDIT
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

            11.16  Existing  Notes.  Each Bank  that is a party to the  Existing
Credit  Agreement  shall,  on the  Amendment  Effective  Date or  within 30 days
thereafter,  deliver to the Borrower for  cancellation any Note (as such term is
defined in the Existing Credit  Agreement) made by the Borrower in favor of such
Bank pursuant to the Existing Credit  Agreement.  If any such Bank has failed to
deliver to the  Borrower  any such Note by the close of business of the Borrower
on such  thirtieth  day,  such Bank shall  execute and deliver to the Borrower a
letter in form and substance reasonably satisfactory to the Borrower pursuant to
which such Bank will agree to  indemnify  the Borrower  against  losses that may
arise from the failure of such Bank to deliver any such Note to the Borrower.

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            IN  WITNESS  WHEREOF,  each  of the  parties  hereto  has  caused  a
counterpart  of this  Agreement to be duly executed and delivered as of the date
first above written.

Address:

2020 Santa Monica Boulevard         FREMONT GENERAL CORPORATION
Santa Monica, CA  904004
Telephone: (310) 315-5550
Telecopy:  (310) 315-5594             By   Wayne R. Bailey
                                         --------------------
                                      Name:  Wayne R. Bailey
      Attn:  Wayne R. Bailey          Title: Vice President,
              Vice President,         Treasurer and Chief Financial
              Treasurer and           Officer
              Chief Financial
              Officer

                                    THE CHASE MANHATTAN BANK,
                                    N.A., Individually and as
                                    Agent

                                    By   Isolde G. O'Hanlon
                                      -------------------------
                                    Name:   Isolde G. O'Hanlon
                                    Title:  Managing Director

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                                DEUTSCHE BANK AG,
                                      NEW YORK AND/OR
                                      CAYMAN ISLANDS BRANCHES

                                    By   Gayma Z. Shivnarain
                                      ------------------------
                                      Name: Gayma Z. Shivnarain 
                                      Title:Assistant Vice
                                             President

                                    By  Jonathan B. P. Mendes
                                      -------------------------
                                      Name:  Jonanthan B.P. Mendes
                                      Title:  President

08/29/95 11:56am
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                                 -90-

                                    FIRST BANK NATIONAL ASSOCIATION

                                    By   Jose A. Peris
                                      --------------------------
                                      Name:  Jose A. Peris  
                                      Title: Vice President

08/29/95 11:56am
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                                 -91-

                               FIRST UNION NATIONAL BANK OF
                                 NORTH CAROLINA

                                    By   Bill A. Shirley
                                       ------------------------
                                      Name:  Bill A. Shirley
                                      Title: Vice President

08/29/95 11:56am
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                                 -92-

                                    THE INDUSTRIAL BANK OF JAPAN,
                                      LIMITED, LOS ANGELES AGENCY

                                    By   Masatake Yashiro
                                      ---------------------------
                                      Name:  Masatake Yashiro
                                      Title: General Manager

08/29/95 11:56am
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                                 -93-

                                    THE SAKURA BANK, LIMITED,
                                      LOS ANGELES AGENCY

                                    By   Ofusa Sato
                                      ------------------------------
                                      Name:  Ofusa Sato  
                                      Title: Senior Vice President 
                                             and Assistant General
                                             Manager 

08/29/95 11:56am
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                                 -94-

                                    SANWA BANK CALIFORNIA

                                    By  John C. Hyche
                                      -------------------------
                                      Name:  John C. Hyche
                                      Title:  Vice President

08/29/95 11:56am
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                                 -95-

                                    SHAWMUT BANK CONNECTICUT, N.A.

                                    By   Timothy B. Brown
                                      ------------------------
                                      Name:  Timothy B. Brown    
                                      Title: Assistant Vice President

08/29/95 11:56am
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                                 -96-

                                   UNION BANK

                                    By   Robert C. Dawson
                                      ---------------------------
                                      Name:  Robert C. Dawson
                                      Title:  Vice President 

                                    

08/29/95 11:56am
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                                 -97-

                                    WELLS FARGO BANK, N.A.

                                    By   Richard H. Palmer
                                      ---------------------------
                                      Name:  Richard H. Palmer
                                      Title: Vice President

08/29/95 11:56am
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                                 -98-

                                    THE YASUDA TRUST AND BANKING
                                      CO., LTD., LOS ANGELES AGENCY

                                    By   Nobuo Nishino
                                      ---------------------------
                                      Name:  Nobuo Nishino  
                                      Title: Joint General Manager

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                                 -99-

                                                                    ANNEX I

                     LIST OF BANKS AND COMMITMENTS

      Name of Bank                                    Commitment

The Chase Manhattan Bank, N.A ...........................   $    25,000,000.00
Deutsche Bank AG, New York Branch .......................        15,000,000.00
First Bank National Association .........................        10,000,000.00
First Union National Bank of North
  Carolina ..............................................        25,000,000.00
The Industrial Bank of Japan, Limited,
 Los Angeles Agency ....................................         15,000,000.00
The Sakura Bank, Limited ................................        12,500,000.00
Sanwa Bank California ...................................        25,000,000.00
Shawmut Bank Connecticut, N.A ...........................        25,000,000.00
Union Bank ..............................................        25,000,000.00
The Yasuda Trust and Banking Co., Ltd.,
  Los Angeles Agency ....................................        10,000,000.00
Wells Fargo Bank, N.A ...................................        12,500,000.00
                                                             -----------------
Total: ..................................................    $  200,000,000.00
                                                             =================

08/29/95 11:56am
000013RQ.WP5
                                  -1- 

Basic Info X:

Name: AMENDED AND RESTATED CREDIT AGREEMENT
Type: Credit Agreement
Date: Nov. 13, 1995
Company: Real Industry, Inc.
State: Delaware

Other info:

Date:

  • August 11 , 1994
  • December 16 , 1994
  • last Business Day of each March
  • February 28 , 1998
  • August 31 , 1998
  • February 28 , 1999
  • August 31 , 1999
  • February 29 , 2000
  • August 31 , 2000
  • February 28 , 2001 18.75 % August 31
  • July 31 , 1995
  • June 15
  • September 15
  • fiscal quarter
  • August 31 , 1995
  • Banks no later than 10 days after the later
  • March 31 , June 30 , September 30
  • August 24 , 1995
  • December 31 , 1995
  • Saturday
  • Sunday
  • August 31 , 1997
  • December 31 , 1994
  • August 31 , 2001
  • October 4 , 1993
  • June 30 , 1995
  • January 25 , 1995
  • 1633 Broadway

Organization:

  • 1.03 Notice of Borrowing of Loans
  • 1.13 Change of Lending Office
  • Sonsini , Goodrich & Rosati EXHIBIT
  • Opinion of White & Case
  • CT Corporation Consent Letter
  • Terms of Credit
  • Minimum Amount of Each Borrowing ; Maximum Number of Borrowings
  • Borrowings of Eurodollar Loans
  • Each Bidder Bank
  • Borrowing of Eurodollar Loans
  • Pro Rata Borrowings
  • Applicable Eurodollar Margin
  • Bidder Bank or Bidder Banks
  • Notice of Borrowing or Notice of Conversion
  • Notice of Competitive Bid Borrowing or Notice of Conversion
  • Voluntary Reduction of Commitments
  • Total Unutilized Commitment
  • Mandatory Reduction of Commitments
  • Place of Payment
  • Agent 's Payment Office
  • Agent's Notice Office
  • Certificate of Incorporation
  • j Financial Statements
  • California Department of Insurance
  • Corporate Power and Authority
  • respective Financial Services Subsidiary
  • Financial Condition ; Financial Statements
  • Labor Relations ; Collective Bargaining Agreements
  • National Labor Relations Board
  • Annual Financial Statements
  • respective Applicable Insurance Regulatory Authority
  • Subsidiary of Investors Bancor
  • Material Discontinued Subsidiary
  • Regulated Insurance Subsidiary
  • Actuarial Standards Board
  • b Quarterly Financial Statements
  • Chief Financial Officer
  • Workers Compensation Subsidiary
  • g Other Regulatory Statements
  • Event of Default
  • Internal Revenue Service
  • Fiscal Years ; Fiscal Quarters
  • Federal Home Loan Bank
  • Amendment Effective Date constituting guaranties of Indebtedness of the Financial Services Non-Thrift
  • Additional Indebtedness of P & C Insurance Subsidiaries
  • Interest Rate Protection Agreements or Other Hedging Agreements
  • Financial Services Non-Thrift Subsidiaries
  • Financial Services Non-Thrift Subsidiary
  • Non-Investment Grade Securities
  • Investments in P & C Insurance Subsidiaries
  • First Interstate Bank of California
  • Issuance of Stock
  • Policyholder Surplus Ratio of FIC
  • 7.13 Minimum Consolidated Net Worth
  • Interest Coverage Ratio
  • Insured Depository Subsidiary
  • CIC Acquisition Subordinated Note
  • Applicable Rating Applicable Eurodollar Period Margin Category
  • Applicable Rating Period Criteria Category A Period The S & P Credit Rating
  • Non-Assigning Rating Agency
  • Liquid Yield Option Notes
  • Federal Funds Effective Rate
  • Fremont Reinsurance Company , Ltd.
  • Board of Directors
  • Comstock Insurance Company
  • Consolidated Net Income
  • Consolidated Interest Expense
  • Excluded Interest Expense
  • Moody 's Credit Rating
  • Telerate Page 3750
  • British Bankers Association Interest Settlement Rates
  • Reuters Screen LIBO
  • Reference Bank or Banks
  • Federal Reserve Bank of New York
  • Fremont Compensation Insurance Co.
  • Fremont Financial Corporation
  • FGC Commercial Mortgage Finance
  • Fremont Indemnity Company
  • Fremont Insurance Group , Inc.
  • Fremont Reinsurance Co.
  • Merrill Lynch & Co.
  • Regulated Insurance Companies
  • Policyholder Surplus of FIC
  • Maturity Liquid Yield Option TM
  • Moody 's Investors Service , Inc.
  • National Association of Insurance Commissioners
  • Insurance Regulatory Information System
  • Workers Compensation Subsidiaries
  • Four Chase Metrotech Center
  • Pension Benefit Guaranty Corporation
  • Commitment of such Bank
  • the Total Commitment
  • P & C Insurance Subsidiary
  • Federal Deposit Insurance Corporation
  • Permitted Capital Management Agreement
  • Buckeye Union Insurance Company
  • Fremont Compensation Insurance Company
  • Final Maturity Date
  • Sanwa Bank California
  • Board of Governors of the Federal Reserve System
  • Reuters Monitor Money Rates Service
  • Standard & Poor 's Rating Group
  • Regulated Insurance Company
  • Securities and Exchange Commission
  • Financial Services Subsidiaries
  • Interest Rate Basis
  • Dow Jones Telerate Service
  • Pacific Compensation Insurance Co.
  • Beaver Insurance Company , Casualty Insurance Company
  • Delegation of Duties
  • Notice of Default
  • Its Individual Capacity
  • Bank 's Commitment
  • Southern District of New York
  • CT Corporation System
  • Santa Monica Boulevard FREMONT GENERAL
  • Chief Financial Treasurer
  • Chase Manhattan Bank
  • Deutsche Bank AG
  • First Bank National Association
  • First Union National Bank of North Carolina
  • The Industrial Bank of Japan
  • Shawmut Bank Connecticut
  • The Yasuda Trust and Banking Co.
  • Wells Fargo Bank

Location:

  • Wilson
  • Esq
  • Nevada
  • Annex VI
  • Bermuda
  • U.S.
  • Delaware
  • United States of America
  • Brooklyn
  • ERISA
  • Pro Rata
  • New York City
  • Santa Monica
  • MANHATTAN BANK
  • N.A.
  • JAPAN
  • CALIFORNIA
  • CONNECTICUT
  • Los Angeles

Money:

  • $ 100,000,000
  • $ 1.00
  • $ 0.01
  • $ 11,000,000
  • $ 300,000,000
  • $ 20,000,000
  • $ 35,000,000
  • $ 375,000,000
  • $ 225,000,000
  • $ 5,000,000
  • $ 1,000,000
  • $ 373,750,000
  • $ 50,000,000
  • $ 10,000,000
  • $ 3,000
  • $ 25,000,000.00
  • $ 200,000,000.00

Person:

  • Wilson
  • Alan W. Faigin
  • Comstock
  • Lien
  • Wayne R. Bailey
  • Isolde G. O'Hanlon
  • Gayma Z. Shivnarain
  • Jonathan B. P. Mendes
  • Jose A. Peris
  • Bill A. Shirley Title
  • Masatake Yashiro
  • Ofusa Sato
  • John C. Hyche
  • Timothy B
  • Robert C. Dawson
  • Richard H. Palmer
  • Nobuo Nishino

Time:

  • 9:45 A.M.
  • 1:00 P.M.

Percent:

  • 2 %
  • 18.75 %
  • 20 %
  • 70 %
  • 80 %
  • 25 %
  • 10 %
  • 0.000 %
  • 0.100 %
  • 0.350 %
  • 0.875 %
  • 1.300 %
  • 0.250 %
  • 0.300 %
  • 0.375 %
  • 0.450 %
  • 30 %
  • 1 %