SECURITIES AND EXCHANGE COMMISSION
                      Washington, D.C. 20549

                            FORM 10-K

            FOR ANNUAL AND TRANSITION REPORTS PURSUANT
  TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)
[ X ]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
        SECURITIES EXCHANGE ACT OF 1934
        For the fiscal year ended December 31, 1997

                                OR

[   ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
        SECURITIES EXCHANGE ACT OF 1934
        For the transition period from _________ to ____________

                 Commission file number 0-16211

                   DENTSPLY International Inc.
      (Exact name of registrant as specified in its charter)

             Delaware                            39-1434669
    (State or other jurisdiction of          (I.R.S. Employer
  incorporation or organization)            Identification No.)

    570 West College Avenue, York, Pennsylvania     17405-0872
    (Address of principal executive offices)        (Zip code)

Registrant's telephone number, including area code:  (717) 845-
7511

Securities registered pursuant to Section 12(b) of the Act:

Title of each class     Name of each exchange on which registered
- -------------------     -----------------------------------------
       None                          Not applicable

Securities registered pursuant to Section 12(g) of the Act:

             Common Stock, par value $.01 per share
                        (Title of class)

     Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes [X]    No [ ]

     Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,

                                                         1





and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

     As of February 20, 1998, the aggregate market value of
voting common stock held by non-affiliates of the registrant,
based upon the last reported sale price for the registrant's
Common Stock on the Nasdaq National Market on such date, as
reported in The Wall Street Journal, was $1,671,549,289
(calculated by excluding shares owned beneficially by directors
and executive officers as a group from total outstanding shares
solely for the purpose of this response).

     The number of shares of the registrant's Common Stock
outstanding as of the close of business on February 20, 1998 was
54,135,416.

               DOCUMENTS INCORPORATED BY REFERENCE

     Certain portions of the definitive Proxy Statement of
DENTSPLY International Inc. to be used in connection with the
1998 Annual Meeting of Stockholders (the "Proxy Statement") are
incorporated by reference into Part III of this Annual Report on
Form 10-K to the extent provided herein.  Except as specifically
incorporated by reference herein, the Proxy Statement is not to
be deemed filed as part of this Annual Report on Form 10-K.

                                                         2





                             PART I


Item 1.  Business
- -----------------
General

     DENTSPLY International Inc. ("DENTSPLY" or the "Company"), a
Delaware corporation, designs, develops, manufactures and markets
products in two principal categories: dental consumable and
laboratory products, and dental equipment.  Dental consumable and
laboratory products include dental prosthetics, endodontic
instruments and materials, impression materials, restorative
materials, crown and bridge materials, prophylaxis paste, dental
sealants, dental needles and dental anesthetics.  Dental
equipment includes dental x-ray systems, intraoral cameras,
computer imaging systems and related software, handpieces,
cutting instruments, ultrasonic scalers and polishers, and air
abrasion systems.  The Company also develops and markets practice
management software for managing the dental office and software
for maintaining a data base of information generated in the
dental operatory's clinical environment.

     In January 1997, DENTSPLY purchased the assets of DW
Industries, Inc., the leading manufacturer of disposable air-
water syringe tips.

     Also in January 1997, the Company purchased 100 percent of
the outstanding capital stock of Laboratoire SPAD, S.A. ("SPAD"),
a leading French manufacturer and distributor of dental
anesthetics and other dental products.  SPAD gave DENTSPLY entry
to the dental anesthetic market in addition to expanding
DENTSPLY's existing business in France.

     In March 1997, DENTSPLY purchased all of the capital stock
of New Image Industries, Inc. ("New Image"), a designer,
developer, manufacturer and distributor of intraoral cameras and
computer imaging systems and related software exclusively for the
dental market.

     In July 1997, the Company purchased the dental assets of
EFOS Corporation ("EFOS"), the developer and manufacturer of
DENTSPLY's dental curing lights and amalgamators.  Additionally,
EFOS serves the dental market with protective eyewear products,
replacement parts and curing light repair and service.

     Also in July 1997, the Company purchased the outstanding
capital stock of SIMFRA S.A. ("SIMFRA"), the exclusive importer
of Maillefer Instruments, S.A. ("Maillefer") in France.

     In November 1997, DENTSPLY purchased certain assets of MPL
Technologies, Inc. ("MPL"), a leading manufacturer and

                                                         3





distributor of needles and needle-related products, primarily for
the dental profession.

     In January 1998, the Company purchased from Procter & Gamble
its Blendax Professional Dental Business ("Blendax"), a
distributor doing business principally in Germany, Austria and
the United Kingdom.  The Blendax product line consists of rotary
cutting instruments, impression materials, composite filling
material and fluoride rinses and gels.

     In March 1998, DENTSPLY acquired the assets of InfoSoft,
Inc. ("InfoSoft"), a developer and marketer of full-featured,
practice management software for managing the dental office as
well as maintaining a data base of information generated in the
operatory's clinical environment.  InfoSoft is also the number
one processor of electronic dental insurance claims in the United
States.

Market Overview

     Professional Dental Products

     General.  The worldwide professional dental industry
encompasses the diagnosis, treatment and prevention of disease
and ailments of the teeth, gums and supporting bone.  DENTSPLY
believes that demand in a given geographic market for dental
procedures and products varies according to the stage of social,
economic and technical development that the market has attained.
Geographic markets for DENTSPLY's dental products can be
categorized into the three stages of development described below.

     The United States, Canada, Western Europe, the United
Kingdom, Japan, and Australia are highly developed markets that
demand the most advanced dental procedures and products and have
the highest level of expenditure on dental care. In these
markets, the focus of dental care is increasingly upon preventive
care and specialized dentistry. In addition to basic procedures
such as the excavation and filling of cavities and tooth
extraction and denture replacement, dental professionals perform
an increasing volume of preventive and cosmetic procedures,
including periodontia (the treatment of the structure supporting
the teeth), endodontia (the revitalization of teeth that would
otherwise require extraction), orthodontia (the movement and
realignment of teeth for improved function and aesthetics),
gnathology (the treatment of temporomandibular joint (TMJ)
dysfunction and occlusive modification), implantology (the
insertion of prosthetic devices to provide support for partial or
full dentures) and cosmetic dentistry. These markets require
varied and complex dental products, such as advanced cleaning and
scaling equipment and related solutions, light-cured bonding and
restorative compounds, precision-molded and customized crowns,
bridges, bone grafting materials, implants and other

                                                         4





prosthodontic devices, materials and instruments used in
endodontic procedures, and aesthetically accurate stains and
tints. These markets also utilize sophisticated diagnostic and
imaging equipment, and demand high levels of attention to
protection against infection and patient cross-contamination.

     In certain countries in Central America, South America and
the Pacific Rim, dental care is often limited to the excavation
and filling of cavities and other restorative techniques,
reflecting more modest per capita expenditures for dental care.
These markets demand diverse products such as high and low speed
handpieces, restorative compounds, finishing devices and custom
restorative devices.

     In the People's Republic of China, India, Eastern Europe,
the countries of the former Soviet Union, and other developing
countries, dental ailments are treated primarily through tooth
extraction and denture replacement. These procedures require
basic surgical instruments, artificial teeth for dentures and
bridgework, and anchoring devices such as posts.

     The Company offers products and equipment for use in markets
at each of these stages of development. The Company believes that
as each of these markets develops, demand for more technically
advanced products will increase. The Company also believes that
its recognized brand names, high quality and innovative products,
technical support services and strong international distribution
capabilities position it well to take advantage of continued
growth in all of the markets that it serves.

     United States

     The market for professional dental products in the United
States has experienced steady growth in recent years.  Statistics
published by the U.S. Department of Health and Human Services
indicate that annual United States spending on dental products
and services increased from $39.1 billion to $47.6 billion from
1993 to 1996, or 6.8% per annum.

     The Company believes that the United States market will
continue to be influenced by favorable demographic trends,
increasing coverage of dental care by private insurance and
government programs, and an intensifying focus on preventive
dental care. The percentage of the United States population over
age 65 is expected to nearly double by the year 2030, to 22%, and
this segment of the population commands a relatively high level
of discretionary income. The Company believes that as the number
of older, more affluent Americans increases, the demand for
restorative and cosmetic dental procedures will increase as these
individuals seek to retain their natural teeth and improve their
appearance.


                                                         5





     The Company also believes that the United States market will
continue to demand products which reduce the risks of infection
and patient cross-contamination. This demand reflects increasing
government regulation, professional practice guidelines and
public attention focused on preventing the transmission in the
dental office of infectious diseases such as hepatitis-B and the
virus that causes acquired immune deficiency syndrome. The
Company offers products to address the growing market for
infection control products, such as sterilizable dental
handpieces and cutting instruments, single-use prophylaxis
pastes, disposable prophy angles and air-water syringe tips, and
infection control barriers, and intends to continue to develop
and acquire products to address this market.

     DENTSPLY expects insurance coverage of dental care to play
an important role in the United States market.  It is generally
believed that approximately 40% of the United States population
is covered by some form of dental insurance, up from 35% in 1980.
While insurance coverage may have increased, the Health Care
Finance Review indicates that, in 1996, approximately 50% of
dental expenditures were paid for directly by the consumer.

Products

     DENTSPLY's two principal dental product lines are consumable
and laboratory products, and equipment. These products are
produced by the Company in the United States and internationally
and are distributed throughout the world under some of the most
well-established brand names and trademarks in the industry,
including ASH(R), CAULK(R), CAVITRON(R), CERAMCO(R), DENTSPLY(R), DETREY(R),
GENDEX(R), MIDWEST(R), R&R(R), RINN(R), TRUBYTE(R), MAILLEFER(R), PROFILE(R),
THERMAFIL(R), ACUCAM(R) and SANI-TIP(R).  Sales of the Company's
professional dental products accounted for approximately 95% of
DENTSPLY's consolidated sales for 1997, 1996 and 1995,
respectively.

     Consumable and Laboratory Products.  Consumable and
laboratory products consist of dental sundries used in dental
offices in the treatment of patients and in dental laboratories
in the preparation of dental appliances, such as crowns and
bridges.  The Company manufactures approximately 1,200 different
consumable and laboratory products marketed under more than 70
brand names. Consumable and laboratory products include:

          Resin-Based and Porcelain Artificial Teeth:  Artificial
     teeth replace natural teeth lost through deterioration,
     disease or injury.  The Company's artificial teeth are
     marketed under the TRUBYTE(R) and PORTRAIT(R) IPN(R) trade names,
     among others, and are produced by the Company in York,
     Pennsylvania, Brazil, Germany and China in some 15,000
     combinations of shapes, sizes and shades.


                                                         6





          Impression Materials:  Impression materials are used to
     make molds of teeth for fitting crowns, bridges and
     dentures.  DENTSPLY's JELTRATE(R), BLUEPRINT(TM), REPROSIL(R) and
     AQUASIL LV Smart Wetting Impression Material are designed
     to increase the rate of successful impressions without
     retakes and to set quickly to minimize patient discomfort.

          Restorative Materials:  Restorative materials are used
     in sealing, lining and filling excavated tooth cavities and
     repairing broken or damaged teeth, and include amalgams,
     bonding agents, light-cured composites and glass ionomer
     filling materials for more aesthetic restorations.
     DENTSPLY'S new SUREFIL(TM) High Density Composite Restorative
     represents the birth of an entirely new category of dental
     materials.  It is condensable, just like amalgam and offers
     true amalgam-like packability with the aesthetics of a
     composite or tooth-colored filling material.  In addition,
     its wear rates are equal to or less than an amalgam
     restoration.  The Company's new DYRACT(R) AP is the improved
     second generation of a revolutionary, patented, single
     component restorative material featuring simplicity in
     delivery combined with excellence in restorative results.
     Laboratory wear studies indicate a wear rate one half that
     of original DYRACT(R).  Also, formulated with an improved
     resin matrix, it delivers the compressive strength of a
     hybrid composite.  Due to its improved wear resistance and
     strength, DYRACT(R) AP is the first compomer indicated for all
     classes of cavities.  The Company's PRISMA(R) AP.H(R), PRISMA(R)
     TPH(R) and TPH SPECTRUM(TM) universal composite materials
     permit restorations to be performed on either the anterior
     or posterior teeth using the same material, and are rapidly
     replacing older, single-purpose composite materials.  The
     Company's ADVANCE(R) Hybrid Ionomer Cement is a resin
     modified, fluoride-releasing glass ionomer cement with
     superior adhesion to metal for crown and bridge work while
     helping to prevent secondary caries and extending the life
     of a restoration.  PRIME & BOND(R) 2.1 is the latest
     generation of a single bottle, multi-purpose dental adhesive
     and bonding agent which combines the functions of a primer
     and an adhesive in a simple-to-use single component formula.
     Its proprietary resin formulation enhances the long-term
     marginal integrity of stress-bearing restorations at both
     dentin and enamel margins.  DENTSPLY also markets the
     DISPERSALLOY(R), UNISON(R) and MEGALLOY(TM) lines of restorative
     amalgams; and DELTON(R) and DELTON(R) PLUS (with fluoride
     release) brand dental sealants.

          Crown and Bridge Porcelains and Ceramics:  These
     porcelain and ceramic products are used by dental
     laboratories in making crowns, bridges, inlays and onlays
     for restorative dental procedures, where aesthetics are
     particularly important, and to provide functional biting and

                                                         7





     chewing surfaces that appear and feel natural.  The Company
     produces specialty crown and bridge porcelain materials and
     fully automatic programmable porcelain furnaces, as well as
     castable ceramic materials, used by dental laboratories.
     Product offerings include the CERAMCO(R) line, and in Europe,
     the DETREY(R) CARAT(R) line of specialty crown and bridge
     porcelain products for use as fixed prosthetics.  FINESSE(TM)
     Porcelain from Ceramco, features superb shade matching and
     permits the dental laboratory to fire restorations with
     extraordinary aesthetics.  FINESSE(R) Porcelain restorations
     also allow dentists to adjust and repolish at chairside
     without reglazing.

          Endodontic Instruments and Materials:  These products
     are used in root canal treatment of severely damaged or
     decayed teeth.  Through its Maillefer and Tulsa Dental
     Products Inc. ("Tulsa Dental") subsidiaries, the Company has
     an extensive endodontic product offering including broaches,
     files, and other endodontic materials and instruments.  The
     SUREFLEX(R) Nickel Titanium File features superior
     flexibility and shape memory which allows the instrument to
     follow the path of the root canal.  The Company's PROFILE(R)
     SERIES 29(R) line of endodontic files offer a standard 29
     percent increase between the tip diameters of each size
     instrument for a smooth, progressive enlargement from one
     file to the next.  PROFILE(R) .04 TAPERS(R) feature non-standard
     tapers constructed from super-flexible nickel titanium for
     use in a controlled, slow-speed, high-torque rotary dental
     handpiece.  The latest endodontic technology was
     incorporated into the newly developed THERMASYSTEM(R) PLUS
     which includes THERMASEAL(R) PLUS, a patented root canal
     filling material which is fast, effective and more tissue-
     friendly and the THERMAPREP(R) PLUS Oven which cuts required
     heating time for plastic THERMAFIL(R) PLUS Obturators from up
     to seven minutes to as little as seventeen seconds.  The
     THERMASYSTEM(R) PLUS provides a three dimensional root canal
     fill in a fraction of the time it takes for traditional
     lateral condensation procedures.

          Protective Supplies:  These products are designed to
     ameliorate possible sources of patient cross-contamination
     of infectious disease, and include RITE-ANGLE(R) and NUPRO(R)
     Disposable Prophy Angles (disposable mechanical devices used
     by dentists and hygienists to clean and polish teeth), hand
     cleansers, disposable barriers, enzymatic cleansers, needle
     stick prevention devices and disposable air-water syringe
     tips.  The SANI-TIP(R) Disposable Air-Water Syringe Tip
     features a central water channel encircled by six separate
     air channels.  This innovative design, when coupled with a
     SANI-TIP(R) adaptor, produces precise separation or
     atomization of air and water while its clear cellulose-
     based plastic does not obstruct the practioner's vision and

                                                         8





     allows office staff to determine if a tip was previously
     used.

          Tooth Whitener:  DENTSPLY also offers a tooth whitening
     system.  The NUPRO(R) Gold Tooth Whitening System is a
     complete, professionally administered program.  Patients
     receive a tooth whitening system in a convenient, easy-to-
     use take home kit.  Clinical studies for this innovative
     product showed that teeth averaged eight shades whiter which
     far exceeds the American Dental Association recommendation
     which states that whiteners must change teeth by a least two
     shades.

          Other Consumable and Laboratory Products:  Other
     products produced by the Company for use in dental offices
     and laboratories include NUPRO(R) prophylaxis paste that is
     used in cleaning and polishing teeth; the VERTEX(R)
     disposable articulator used in dental laboratories to
     simulate the dynamic movement of teeth against one another;
     MICROBASE(TM), a methyl methacrylate free, high-pressure
     injection system for denture resin which eliminates
     potential problems for those sensitive to residual leaching
     of monomer and features a quicker, microwave cure cycle
     resulting in excellent fitting dentures; and pre-sterilized
     dental needles in a variety of gauges and lengths.

     Dental Equipment.  DENTSPLY's dental equipment product lines
include high and low speed handpieces, intraoral lighting
systems, dental cutting instruments, ultrasonic scalers and
polishers, x-ray systems and related support equipment and
accessories, and air abrasion systems.

          Handpieces:  Under the MIDWEST(R) brand name, DENTSPLY
     manufactures and distributes a line of high-speed and
     low-speed air-driven handpieces and intraoral lighting
     systems and distributes carbide and specialty burs.  High-
     speed handpieces are the primary instruments utilized by
     dentists for restorative, prosthodontic and aesthetic
     procedures.  Low-speed handpieces may also be used in these
     procedures and in procedures which require more control and
     higher torque, such as removal of soft decay, tooth cleaning
     and polishing, and chairside adjustment of dentures.
     Handpiece intraoral lighting systems supply light to the
     fiber optic bundles in the handpieces through tubes that
     also provide air and water to the handpiece.  Midwest's
     RDH(R) Hygienist Handpiece is a more comfortable,
     ergonomically sound and lightweight handpiece for the dental
     hygienist.  Its one piece "twist and click" connection
     avoids cumbersome sterilization protocols and provides
     faster handpiece changes.

          Dental Cutting Instruments:  The Company distributes

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     MIDWEST(R) carbide and specialty burs.  Regular carbide burs
     are the most commonly used dental cutting instruments in the
     North American market.  Carbide burs mounted in handpieces
     are used as milling tools.  While these burs are primarily
     used for cavity excavation, the variety of available shapes
     allows for alternative uses such as limited trimming and
     finishing techniques.  Specialty burs are designed to cut
     and remove metal alloy dental restorations, to produce
     smooth surfaces on composite materials, amalgams, gold,
     enamel and dentin, and for gross reduction of tooth anatomy
     in preparation for fitting crowns and normal cavity
     excavations.

          Air Abrasion Unit:  The AIRTOUCH(TM) Cavity Preparation
     System is an air-abrasion unit that delivers aluminum oxide
     particles with pressurized air to cut tooth structure.  This
     unit features directed spray control, a significantly
     improved evacuation system to safely remove the powder from
     the oral cavity and an ergonomically designed handpiece.
     The new system is monitored by a highly sophisticated
     software program which provides dentists with simple
     instructions for basic use and maintenance.  The need for
     anesthetic is absent from many procedures when using the
     AIRTOUCH(TM) Cavity Preparation System and there is a lower
     level of vibration, pressure and noise when compared with
     traditional cavity preparation methods.

          Ultrasonic Scalers and Polishers:  DENTSPLY
     manufactures and distributes the CAVITRON(R) SPS(TM) Ultrasonic
     Scaler (which uses ultrasonic waves to remove hardened tooth
     calculus which results from the interaction of plaque,
     saliva and food particles).  SPS(TM) stands for Sustained
     Performance System, a patent-pending technology which acts
     much like an automobile's cruise control that measures tip
     motion and compensates for reduction in tip motion once the
     insert tip contacts the tooth surface.  By doing this, SPS(TM)
     provides more power for improved scaling efficiency and
     permits the dentist to set the power control at a lower
     level, providing a more comfortable scaling procedure for
     the patient.  Additional product offers include the
     CAVITRON(R) JET with SPS(TM) Technology (which combines both
     ultrasonic scaling and air polishing prophylaxis in one
     multi-function unit) and the PROPHY-JET(R) 30 Air Polishing
     Prophylaxis Unit (which cleans, polishes and buffs the tooth
     surface after scaling is completed).  DENTSPLY manufactures
     a variety of inserts for use with its ultrasonic prophylaxis
     units.  The FOCUSED SPRAY(TM) Insert brings water directly to
     the instrument tip and focuses water where it is most
     needed.  The SLIMLINE(R) Ultrasonic Insert is 40 percent
     thinner than standard ultrasonic inserts and allows
     subgingival ultrasonic instrumentation at depths up to 7 mm.
     The FSI(TM) SLIMLINE(R) combines the best features of the

                                                        10





     FOCUSED SPRAY(TM) Insert and the SLIMLINE(R) Ultrasonic Insert.

                   Dental X-Ray Systems:  The Company offers a full line
     of dental x-ray equipment for intraoral, panoramic and
     cephalometric procedures.  Intraoral films provide a view of
     a particular area of tooth and jaw structure.  Panoramic x-
     rays utilize a moving x-ray tube and provide an image of the
     entire oral cavity, an image that is particularly valuable
     to oral surgeons and orthodontists.  The new ORTHORALIX(TM)
     9000 panoramic x-ray system comes with a mechanical drive
     and advanced microprocessor control which minimizes spinal
     shadow for sharp detail throughout the x-ray film.  A
     scientifically derived, software controlled motion path
     ensures proper density, contrast and sharpness on any size
     patient.  Cephalometric systems permit precise, repeatable
     positioning of the patient's skull so that images taken at
     different times can be compared.  The Company markets two
     real time, digital video x-ray systems, VISUALIX(TM) and the
     NI-DX(TM) Digital Radiography System.  These systems use a
     solid state, intraoral x-ray sensor and associated computer
     which allows the dentist to produce radiographic images
     without using film.  X-rays generated by a standard system
     strike the sensor.  The image is then displayed on a
     computer screen, where it can be enlarged, enhanced and
     manipulated.  The image may also be stored for future
     retrieval.  The extremely sensitive sensor provides
     excellent image quality with a significantly lower x-ray
     dosage compared to film.  The DENOPTIX(TM) Digital Imaging
     System is a new, patented, digital x-ray imaging product
     compatible with the installed base of both intraoral and
     panoramic units.  This system uses storage phosphor imaging
     technology to create digital x-ray images on imaging plates.
     These imaging plates are thin and flexible and are available
     in every intraoral and panoramic size.  They are reusable,
     do not require chemical processing like conventional film,
     and allow the dentist to reduce the amount of radiation to
     the patient by as much as 90%.  When placed in a laser
     scanner, the information on the imaging plate is converted
     to a digital image via a computer.  Imaging software is then
     used to enhance the image through magnification, sharpening,
     inverting, reversing, adding color or embossing for
     simulated three-dimensional depth.

          X-Ray Support Equipment:  Under the RINN(R) brand name,
     DENTSPLY manufactures and distributes x-ray film mounts,
     film holders and related equipment and accessories.  X-ray
     film mounts are used as organizing, storage and retrieval
     holders for dental x-ray films.  Film holders are film
     positioning devices used in taking dental x-ray films which
     ensure the alignment of the x-ray beam to the intraoral
     film.  Equipment and accessories include film viewers, film
     duplicators, chair-side darkrooms, patient aprons,

                                                        11





     developing chemicals and x-ray collimating devices.

          The GXP(R) Processor, which develops intraoral,
     panoramic, and cephalometric x-ray film, features a closed
     chemical recirculation system so that potentially
     environmentally hazardous solutions may be disposed of
     properly.  Film enters and exits in the front of the
     processor, thereby allowing placement of the unit flush
     against a wall to conserve space.

     The Company offers SOFTDENT(R) practice management software
through its InfoSoft division.  This fully integrated software is
used in managing both the dental "front" office as well as in
maintaining a data base of information generated in the
operatory's clinical environment.  SOFTDENT(R) is used in more than
10,000 dental offices throughout the United States.  The InfoSoft
division is also the number one processor of electronic dental
insurance claims in the United States.  A new service offered by
InfoSoft is statement preparation and mailing at a substantial
savings over what dentists can do on their own.

     DENTSPLY also supplies specialty chemical binders,
refractory particles, investment mold materials and related
products to the precision investment casting industry, which
produces metal parts of complex geometry and "near net" shapes
requiring little or no subsequent machining or finishing.

Marketing, Sales and Distribution

     The market for DENTSPLY's dental products is primarily
comprised of dentists, dental hygienists, dental assistants,
dental laboratories and dental schools.  DENTSPLY focuses its
primary marketing efforts on the dental professionals who are the
end users of its products.  DENTSPLY employs highly trained,
product-specific sales and technical staffs to provide
comprehensive marketing and service tailored to the particular
sales and technical support requirements of its customers.
DENTSPLY's marketing efforts seek to capitalize on the strength
of the Company's brand names and international infrastructure to
expand sales of new and existing products throughout the world,
including emerging dental markets in the Pacific Rim, Central and
South America and Eastern Europe.

     DENTSPLY's product-specific sales force is divided into
domestic and foreign field selling organizations, each of which
is responsible for maintaining contact with both dealers and
dental professionals.  The dental sales force includes
approximately 300 domestic representatives, approximately 450
international representatives and approximately 50 telemarketers
who support the domestic representatives.  This sales force is
further divided into product-based teams.  Each specialized sales
force tailors its sales strategy to the particular sales and

                                                        12





technical support requirements of its customers.  Sales personnel
attend over 100 dental trade shows each year where the Company's
products are exhibited to dental professionals and dealers.
Sales personnel also routinely participate with dealers to
disseminate product information and conduct product
demonstrations, seminars, study groups and lectures for dental
professionals.  In addition, DENTSPLY invests significant amounts
in advertising in national and international dental publications.

     DENTSPLY distributes its dental products primarily through
approximately 350 domestic and over 800 foreign dealers and
importers.  While the overwhelming majority of DENTSPLY's
products are distributed through dental dealers, certain highly
technical products such as the Company's CERAMCO(R) line of crown
and bridge porcelain products and Tulsa Dental's endodontic
instruments and materials are sold directly to the dental
laboratory or dentist.

     DENTSPLY also maintains nine educational facilities.  The
Company's facilities in York, Pennsylvania; Burlington, New
Jersey; Dreieich, Germany; and Weybridge, England are used for
training, product demonstrations and seminars and to promote
interest in and understanding of the use of DENTSPLY's dental
laboratory products.  The DENTSPLY Educational Center in York
provides personalized training in both fixed and removable
prosthodontic specialties.  Additional teaching facilities are
maintained in Milford, Delaware; Konstanz, Germany; Ballaigues,
Switzerland; Hong Kong; and Mexico City, Mexico for training
dental professionals in the use of consumable dental products.
The Company also offers many seminars throughout the world in
such areas as endodontics, crown and bridge porcelain and
ceramics and restoratives.

Product Development

     During 1997, 1996 and 1995, approximately $16.8 million,
$14.7 million and $12.3 million, respectively, was invested by
the Company in connection with the development of new products
and in the improvement of existing products.  DENTSPLY employs
approximately 200 scientists, engineers and technicians dedicated
to product development.  The Company believes that its product
development programs are critical in meeting market demands and
achieving future growth.  The Company also sponsors independent
clinical research projects aimed at developing, adapting and
testing new technologies for use in DENTSPLY products.  From time
to time, the Company contracts with independent consultants and
engineers to augment efforts to develop new products.

Manufacturing and Technical Expertise

     DENTSPLY believes that its manufacturing capabilities are
critical to its success.  The Company continues to automate its

                                                        13





global manufacturing operations in order to remain a low cost
producer.

     The manufacture of the Company's products requires
substantial and varied technical expertise.  Complex materials
technology and processes are necessary to manufacture the
Company's products.

     The manufacture of artificial teeth and dental composites
involves expertise in polymer chemistry.  A polymer is a compound
of high molecular weight derived through the combination of many
smaller molecules or by the condensation of many smaller
molecules through the elimination of water or alcohol.  DENTSPLY
manufactures certain lines of artificial teeth by a process that
disperses the polymeric molecules found within cross-linked
polymers, thereby improving the tooth's resistance to blushing,
whitening, crazing and disintegration.  Another line of
artificial teeth utilizes an ultra-high viscosity polypropylene
that significantly increases wear resistance.

     Visible light-cured composites utilize a single paste that
immediately polymerizes when exposed to a light source.
DENTSPLY's PRISMA(R) TPH(R) light-cured composites contain non-
radiopaque fillers of approximately .02-.08 microns in size.  The
small size of this filler increases the bonding power of the
composite.  It also permits the material to be polished in order
to more accurately replicate the color of a natural tooth.
Basic, self-cured (self-hardened) composites are formed by
combining two pastes that trigger polymerization when reacted.

     The Company manufactures extremely high quality endodontic
instruments using production equipment designed and manufactured
in-house.  In general, the equipment used is not available on the
external market.

     Dental handpiece manufacturing technology requires precision
machining of component parts to extremely tight tolerances in
order to accommodate the operating speed of the air-driven
turbine, which exceeds 350,000 r.p.m. in high speed handpieces,
and the wide range of applications for which the unit is used.
These tolerances require dimensional machining to as little as 15
millionths of an inch to produce the delicate balance necessary
for a quiet, smooth-running turbine with minimal vibration.  The
Company utilizes "computer numerically controlled" (CNC) machines
and computer-assisted design software in its handpiece
manufacturing processes.

     Production of the Company's x-ray products involves a
variety of manufacturing disciplines.  For example, the
manufacture of x-ray tubes requires expertise in high-temperature
metallurgy, sophisticated glass blowing techniques, and the
ability to evacuate molecular impurities from the x-ray tube

                                                        14





through degasification.  The Company also designs and fabricates
printed circuit boards, assembles electrical harnesses,
fabricates sheet metal, and engages in precision machining,
painting and high-tension coil winding in connection with the
manufacturing of its x-ray products.

Foreign Operations

     The Company conducts its business in over 100 foreign
countries, principally through its foreign subsidiaries which
operate 39 foreign facilities (including 13 manufacturing
operations).  DENTSPLY has a long-established presence in Canada
and in the European market, particularly in Germany, Switzerland
and England.  The Company also has a significant market presence
in Central and South America, Australia, Hong Kong, Thailand,
India, Philippines and Japan.  DENTSPLY has established a joint
venture and marketing activities in Moscow, Russia to serve the
countries of the former Soviet Union.  In 1996, a wholly-owned
subsidiary, including a manufacturing facility, was established
in the People's Republic of China.  Manufacturing operations in
India also commenced in 1996.

     For 1997, 1996 and 1995, the Company's sales outside the
United States, including export sales, accounted for
approximately 48%, 49% and 48%, respectively, of consolidated net
sales from continuing operations.  For information about the
Company's continuing operations in different geographic areas for
1997, 1996 and 1995, see Note 4 of the Notes to the Company's
Consolidated Financial Statements.  As a result of the Company's
significant international presence, DENTSPLY is subject to
fluctuations in exchange rates of various foreign currencies and
other risks associated with foreign trade.  The Company actively
manages its currency risk exposures.


Competition

     The Company conducts its operations, both domestic and
foreign, under highly competitive market conditions.  Competition
in the dental materials and equipment industries is based
primarily upon product performance, quality, safety and ease of
use, as well as price, customer service, innovation and
acceptance by professionals and technicians.  DENTSPLY believes
that its principal strengths include its well-established brand
names, its reputation for high-quality and innovative products,
its leadership in product development and manufacturing, and its
commitment to customer service and technical support.

     The size and number of the Company's competitors vary by
product line and from region to region.  There are many companies
which produce some, but not all, of the same types of products as
those produced by the Company.  Certain of DENTSPLY's competitors

                                                        15





may have greater resources than does the Company in certain of
its product offerings.

Regulation

     The Company's products are subject to regulation by, among
other governmental entities, the United States Food and Drug
Administration (the "FDA").  In general, if a dental "device" is
subject to FDA regulation, compliance with the FDA's requirements
constitutes compliance with corresponding state regulations.  In
order to ensure that dental products distributed for human use in
the United States are safe and effective, the FDA regulates the
introduction, manufacture, advertising, labeling, packaging,
marketing and distribution of, and record-keeping for, such
products.

     Dental devices of the types sold by the Company are
generally classified by the FDA into a category that renders them
subject only to general controls that apply to all medical
devices, including regulations regarding alteration, misbranding,
notification, record-keeping and good manufacturing practices.
The Company believes that it is in compliance with FDA
regulations applicable to its products and manufacturing
operations.

     All dental amalgam filling materials, including those
manufactured and sold by the Company, contain mercury.  Various
groups have alleged that dental amalgam containing mercury is
harmful to human health and have actively lobbied state and
federal lawmakers and regulators to pass laws or adopt regulatory
changes restricting the use, or requiring a warning against
alleged potential risks, of dental amalgams.  The FDA's Dental
Devices Classification Panel, the National Institutes of Health
and the United States Public Health Service have each indicated
that no direct hazard to humans from exposure to dental amalgams
has been demonstrated to them.  If the FDA were to reclassify
dental mercury and amalgam filling materials as classes of
products requiring FDA premarket approval, there can be no
assurance that the required approval would be obtained or that
the FDA would permit the continued sale of amalgam filling
materials pending its determination.

     The introduction and sale of dental products of the types
produced by the Company are also subject to government regulation
in the various foreign countries in which they are produced or
sold. Some of these regulatory requirements are more stringent
than those applicable in the United States. DENTSPLY believes
that it is in substantial compliance with the foreign regulatory
requirements that are applicable to its products and
manufacturing operations.



                                                        16





Sources and Supply of Raw Materials

     All of the raw materials used by the Company in the
manufacture of its products are purchased from various suppliers
and are available from numerous sources.  No single supplier
accounts for a significant percentage of DENTSPLY's raw material
requirements.

Trademarks and Patents

     The Company's trademark properties are important and
contribute to the Company's marketing position.  To safeguard
these properties, the Company maintains trademark registrations
in the United States and in significant international markets for
its products, and carefully monitors trademark use worldwide.
DENTSPLY owns and maintains several hundred domestic and foreign
patents.  The Company believes its patents are important to its
business, although no aspect of its business is materially
dependent on any particular patent.

Employees

     As of March 15, 1998, the Company and its subsidiaries had
approximately 5,300 employees, of whom approximately 2,900 were
engaged in manufacturing operations, approximately 1,675 were
engaged in sales and distribution, approximately 525 were engaged
in finance and administration, and approximately 200 were engaged
in research and product development activities.  Hourly workers
at the Company's Ransom & Randolph facility in Maumee, Ohio are
represented by Local No. 12 of the International Union, United
Automobile, Aerospace and Agriculture Implement Workers of
America under a collective bargaining agreement that expires on
January 31, 2000; and hourly workers at the Company's Midwest
Dental Products facility in Des Plaines, Illinois are represented
by Tool & Die Makers Local 113 of the International Association
of Machinists and Aerospace Workers under a collective bargaining
agreement that expires on May 31, 2000.  The Company believes
that its relationship with its employees is good.

FACTORS THAT MAY AFFECT FUTURE RESULTS

     The factors described below are important risk factors.  The
occurrence of any of these risks could have a material adverse
effect on the Company's business or operating results, causing
actual results to differ materially from those expressed in
forward-looking statements made by the Company or its
representatives in this report or in any other written or oral
reports or presentations.  These factors are intended to serve as
meaningful cautionary statements within the meaning of the
Private Securities Litigation Reform Act of 1995.



                                                        17





Rate of Growth
- --------------

     The Company's ability to continue to increase revenues
depends on a number of factors, including the rate of growth in
the market for dental supplies and equipment, the ability of the
Company to continue to develop innovative and cost-effective new
products, and the acceptance by dental professionals of new
products and technologies.  The demand for dental services can be
adversely affected by economic conditions, healthcare reform or
more stringent limits in expenditures by dental insurance
providers.  There is also a risk that dental professionals may
resist new products or technologies or may not be able to obtain
reimbursement from dental insurance providers for the use of new
procedures or equipment.

Acquisitions
- ------------

     The Company's growth in recent years has depended to a
significant extent on acquisitions.  The Company completed eleven
acquisitions in 1995, 1996 and 1997, the largest of which were
Maillefer Instruments S.A. in 1995 and Tulsa Dental Products LLC
in 1996.  There can be no assurance that the Company will be able
to continue to identify and complete acquisitions which will add
materially to the Company's revenues.  Among the risks that could
affect the Company's ability to complete such acquisitions are
competition for appropriate acquisition candidates and the
relatively small size of many such candidates.  Moreover, there
can be no assurance that the Company will successfully integrate
into its operations the businesses that it acquires or that any
such integration will not take longer and cost more than
anticipated.

Fluctuating Operating Results
- -----------------------------

     The Company's business is subject to quarterly variations in
operating results caused by seasonality and by business and
industry conditions, making operating results more difficult to
predict.  The timing of acquisitions, the impact of purchase
accounting adjustments and consolidations among distributors of
the Company's products may also affect the Company's operating
results in any particular period.

Currency Translation and International Business Risks
- -----------------------------------------------------

     Because approximately 40% of the Company's revenues have
been generated in currencies other than the U.S. dollar, the

                                                        18





value of the U.S. dollar in relation to those currencies affects
the Company's operating results.  In 1997, the strength of the
U.S. dollar relative to foreign currencies had a negative effect
on the Company's revenues and operating results.  If the U.S.
dollar continues to strengthen in relation to other currencies,
the Company's revenues and operating results will continue to be
adversely affected.  In addition, approximately 50% of the
Company's revenues result from sales in markets outside of the
U.S.  Europe has been an important market for the Company, and
although Asia has not historically been the source of significant
revenues, the Company has made investments in Asian markets
because it believes that long-term future growth prospects in
Asia are good.  Weakness in economic conditions in Europe could
have a material adverse effect on the Company's sales and
operating results, and continued economic turmoil in Asia could
have a material adverse effect on the Company's future rate of
growth.

Margin Improvements
- -------------------

     The Company strives to increase its margins by controlling
its costs and improving manufacturing efficiencies.  However,
there can be no assurance that the Company's efforts will
continue to be successful.  Margins can be adversely affected by
many factors, including competition, product mix and the effect
of acquisitions.

Ability to Attract and Retain Personnel
- ---------------------------------------

     The Company's success is dependent upon its management and
employees.  The loss of senior management employees or any
failure to recruit and train needed managerial, sales and
technical personnel could have a material adverse effect on the
Company.

Year 2000
- ---------

     Although the Company does not believe that the amounts it
expects to expend to complete its Year 2000 conversion project
will have a material effect on its financial position or results
of operations, there can be no assurance that all necessary
software upgrades, training, data conversion, testing and
implementation will be completed by the anticipated date of
June 30, 1999.  In addition, the Company cannot be certain that
its suppliers or customers will complete Year 2000 conversions so
as not to interrupt the Company's operations, cause unanticipated
costs or reduce sales.



                                                        19





Competition
- ------------

     The worldwide market for dental supplies and equipment is
highly competitive.  There can be no assurance that the Company
will successfully identify new product opportunities and develop
and market new products successfully, or that new products and
technologies introduced by competitors will not render the
Company's products obsolete or noncompetitive.

Antitakeover Provisions
- -----------------------

     Certain provisions of the Company's Certificate of
Incorporation and By-Laws and of Delaware law could have the
effect of making it difficult for a third party to acquire
control of the Company.  Such provisions include the division of
the Board of Directors of the Company into three classes, with
the three-year term of each class expiring each year, a provision
allowing the Board of Directors to issue preferred stock having
rights senior to those of the Common Stock and certain procedural
requirements which make it difficult for stockholders to amend
the Company's by-laws and which preclude stockholders from
calling special meetings of stockholders.  In addition, members
of the Company's management and participants in the Company's
Employee Stock Ownership Plan collectively own approximately 18%
of the outstanding Common Stock of the Company, which may
discourage a third party from attempting to acquire control of
the Company in a transaction that is opposed by the Company's
management and employees.

Item 2.  Properties
- -------------------
     As of March 15, 1998, DENTSPLY maintains manufacturing
facilities at the following locations:
                                                          Leased
Location                       Function                  or Owned
- --------                       --------                  --------
York, Pennsylvania     Manufacture and distribution of     Owned
                       artificial teeth and other dental
                       laboratory products; export of
                       dental products; corporate
                       headquarters

York, Pennsylvania     Manufacture and distribution of     Owned
                       dental equipment and preventive
                       dental products

Des Plaines, Illinois  Manufacture and assembly of dental  Leased
                       handpieces and components and
                       dental x-ray equipment


                                                        20






Franklin Park,         Manufacture and distribution of     Owned
 Illinois              needles and needle-related
                       products, primarily for the dental
                       profession

Milford, Delaware      Manufacture and distribution of     Owned
                       consumable dental products

Las Piedras,           Manufacture of crown and bridge     Owned
 Puerto Rico           materials

Elgin, Illinois        Manufacture of dental x-ray film    Owned
                       holders, film mounts and
                       accessories

Maumee, Ohio           Manufacture and distribution of     Owned
                       investment casting products

Lakewood, Colorado     Manufacture and distribution of     Leased
                       bone grafting materials and
                       Hydroxylapatite plasma-feed
                       coating materials

Commerce, California   Manufacture and distribution of     Leased
                       investment casting products

Carlsbad, California   Manufacture and distribution of     Leased
                       intraoral cameras and computer
                       imaging systems

Johnson City,          Manufacture and distribution of     Leased
 Tennessee             endodontic instruments and
                       materials

Petropolis, Brazil     Manufacture and distribution of     Owned
                       artificial teeth and consumable
                       dental products

Dreieich, Germany      Manufacture and distribution of     Owned
                       artificial teeth and other dental
                       laboratory products


Konstanz, Germany      Manufacture and distribution of     Owned
                       consumable dental products;
                       distribution of dental equipment

Milan, Italy           Manufacture and distribution of     Leased
                       dental x-ray equipment



                                                        21





Mexico City, Mexico    Manufacture and distribution of     Owned
                       dental products

Plymouth, England      Manufacture and distribution of     Leased
                       dental hand instruments

Blackpool, England     Manufacture and distribution of     Leased
                       dental materials

Ballaigues,            Manufacture and distribution of     Owned
 Switzerland           endodontic instruments

Ballaigues,            Manufacture and distribution of     Owned
 Switzerland           plastic components and packaging
                       material

Le Creux,              Manufacture and distribution of     Owned
 Switzerland           endodontic instruments

Moscow, Russia         Manufacture and distribution of     Leased
                       consumable dental products

New Delhi, India       Manufacture and distribution of     Leased
                       dental products

Tianjin, China         Manufacture and distribution of     Leased
                       dental products

     In addition, the Company maintains sales and distribution
offices at certain of its foreign and domestic manufacturing
facilities, as well as at three other United States locations and
at 20 international locations in 15 foreign countries.  Of the 23
United States and international sites used exclusively for sales
and distribution, one is owned by the Company and the remaining
22 are leased.  The Company also maintains sales offices in
various countries throughout the world.

     DENTSPLY believes that its properties and facilities are
well maintained and are generally suitable and adequate for the
purposes for which they are used.


Item 3.  Legal Proceedings
- --------------------------

     DENTSPLY and its subsidiaries are from time to time parties
to lawsuits arising out of their respective operations. The
Company believes that pending litigation to which DENTSPLY is a
party will not have a material adverse effect upon its
consolidated financial position or results of operations.

     In May 1996, DENTSPLY and its subsidiary, Tulsa Dental

                                                        22





Products Inc. ("Tulsa") filed a complaint against Tycom
Corporation et al "(Defendants") alleging patent infringement by
Tycom of certain patents owned by Tulsa covering endodontic
instruments.  Tycom filed an answer and counterclaim denying
patent infringement and alleging that DENTSPLY and Tulsa (i)
engaged in conduct which violates Section 2 of the Sherman
Antitrust Act; (ii) tortiously interfered with Defendants'
business relations; and (iii) were guilty of unfair competition.
On October 1, 1997 a settlement was reached in which Tycom
acknowledged the validity of DENTSPLY's patent and DENTSPLY
granted a license to Tycom under the patents at issue in the
litigation.

Item 4.  Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------

     Not applicable.


Executive Officers of the Registrant

     The following table sets forth certain information regarding
the executive officers of the Company as of March 15, 1998.

      Name           Age                Position
      ----           ---                --------
Leslie A. Jones       58      Chairman of the Board
John C. Miles II      56      Vice Chairman of the Board and
                              Chief Executive Officer
Gerald K. Kunkle Jr.  51      President and Chief Operating
                              Officer
W. William Weston     50      Senior Vice President
Michael R. Crane      57      Senior Vice President
Thomas L. Whiting     55      Senior Vice President
Edward D. Yates       54      Senior Vice President and Chief
                              Financial Officer
Brian M. Addison      44      Vice President, Secretary and
                              General Counsel
                                                                              

     Leslie A. Jones was appointed Chairman of the Board in May
1996.  Mr. Jones has served as a director since the June 11, 1993
merger (the "Merger") of Dentsply International Inc. ("Old
Dentsply") and GENDEX Corporation ("Gendex"), of which the Company
is the surviving corporation.  Prior to the Merger he served as a
director of Old Dentsply.  Mr. Jones has been Chairman and a
director of OBOS Inc., a manufacturer of communication devices,
since August 1993.  From 1992 until August 1993 he was a private
investor.  From January 1991 to January 1992, he was a Senior
Vice President and Special Assistant to the President of Old
Dentsply.


                                                        23





     John C. Miles II was named Vice Chairman of the Board
effective January 1, 1997.  He was named Chief Executive Officer
of the Company upon the resignation of Burton C. Borgelt from
that position on January 1, 1996. Prior to that he was President
and Chief Operating Officer and a director of the Company since
the Merger and of Old Dentsply commencing in January 1990.

     Gerald K. Kunkle Jr. was named President and Chief Operating
Officer effective January 1, 1997.  Prior thereto, Mr. Kunkle
served as President of Johnson and Johnson's Vistakon Division, a
manufacturer and marketer of contact lenses, from January 1994
and, from early 1992 until January 1994, was President of Johnson
and Johnson Orthopaedics, Inc., a manufacturer of orthopaedic
implants, fracture management products and trauma devices.

     Effective February 1, 1998, DENTSPLY implemented a new
organizational structure for its profit center locations.  The
new structure is designed to put key worldwide franchises that
have multiple locations under common senior management.

    Effective February 1, 1998, W. William Weston was named
Senior Vice President of the following profit centers: DeDent,
Dentsply France, Dentsply Italy, Dentsply United Kingdom, L.D.
Caulk, SIMFRA, SPAD and StomaDent.  From January 1, 1996 until
February 1, 1998 Mr. Weston was Senior Vice President, European
Group.  Prior to that Mr. Weston served as the Vice President and
General Manager of DENTSPLY's DeDent Operations in Europe from
October 1, 1990 to January 1, 1996.  Prior to that time he was
Pharmaceutical Director for Pfizer in Germany.

     Effective February 1, 1998, Michael R. Crane was named
Senior Vice President of the following profit centers: Ceramco,
CeraMed, Dentsply Argentina, Dentsply Brazil, Dentsply Canada,
Dentsply Mexico, DeTech, Latin American Export, MPL, North
American Group Marketing, Preventive Care, Ransom & Randolph and
Trubyte.  From January 1, 1996 until February 1, 1998, Mr. Crane
was Senior Vice President, North American Group.  Prior to that
he was Senior Vice President, Europe, Mideast, Africa and
Commonwealth of Independent States of the Company effective in
early 1995.   Prior thereto he served as Senior Vice President,
International Operations of the Company since the Merger, and in
a similar capacity with Old Dentsply commencing in November 1989.
Prior to that time, he served as Vice President Sales/Marketing
for Whaledent International, a division of IPCO Corporation.

     Effective February 1, 1998, Thomas L. Whiting was named
Senior Vice President of the following profit centers: Dentsply
Asia, Dentsply Australia, Dentsply Japan, Gendex, Maillefer,
Midwest, New Image, Tulsa Dental, Gendex Germany, and Gendex
Italy.  From early 1995 until February 1, 1998 Mr. Whiting was
Senior Vice President, Pacific Rim, Latin America and Gendex; his
responsibilities and title were expanded to encompass Tulsa

                                                        24





Dental and New Image upon the Company's acquisitions of those
businesses.  Prior to this appointment, Mr. Whiting was Vice
President and General Manager of the Company's L.D. Caulk
Division since the Merger, and prior thereto served in the same
capacity with Old Dentsply since joining Old Dentsply in 1987.
Prior to that time, Mr. Whiting held management positions with
Deseret Medical and the Parker-Davis Company.

     Edward D. Yates has been Senior Vice President and Chief
Financial Officer of the Company since the Merger and prior
thereto served in a similar capacity with Old Dentsply commencing
in March 1991. From January 1990 until March 1991, he served as
Old Dentsply's Controller.  Prior to that time, he was the
Treasurer of Old Dentsply.  Mr. Yates is a Certified Public
Accountant.

     Brian M. Addison has been Vice President, Secretary and
General Counsel of the Company since January 1, 1998.  Prior to
that he was Assistant Secretary and Corporate Counsel since
December 1994.  From August 1994 to December 1994 he was a
Partner at the Harrisburg, Pennsylvania law firm of McNees,
Wallace & Nurick.  Prior to that he was Senior Counsel at Hershey
Foods Corporation.



                                                        25





                             PART II

Item 5.  Market for Registrant's Common Equity and Related
- ----------------------------------------------------------
Stockholder Matters
- -------------------

     The information set forth under the caption "Supplemental
Stock Information" in Part IV of this Annual Report on Form 10-K
is incorporated herein by reference in response to this Item 5.

Item 6.  Selected Financial Data
- --------------------------------

     The information set forth under the caption "Selected
Financial Data" in Part IV of this Annual Report on Form 10-K is
incorporated herein by reference in response to this Item 6.

Item 7.  Management's Discussion and Analysis of Financial
- ----------------------------------------------------------
Condition and Results of Operations
- -----------------------------------

     The information set forth under the caption "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" in Part IV of this Annual Report on Form 10-K is
incorporated herein by reference in response to this Item 7.

Item 7A.  Quantitative and Qualitative Disclosure About Market
- --------------------------------------------------------------
Risk
- ----

     Not applicable.

Item 8.  Financial Statements and Supplementary Data
- ----------------------------------------------------

     The information set forth under the captions "Consolidated
Statements of Income," "Consolidated Balance Sheets,"
"Consolidated Statements of Stockholders' Equity," "Consolidated
Statements of Cash Flows," "Notes to Consolidated Financial
Statements," "Management's Financial Responsibility" and
"Independent Auditors' Report" of KPMG Peat Marwick LLP in Part
IV of this Annual Report on Form 10-K is incorporated herein by
reference in response to this Item 8.







                                                        26





Item 9.  Changes in and Disagreements with Accountants on
- ---------------------------------------------------------
Accounting and Financial Disclosure
- -----------------------------------

     Not applicable.




                                                        27





                            PART III

Item 10.  Directors and Executive Officers of the Registrant
- ------------------------------------------------------------

     The information set forth under the caption "Executive
Officers of the Registrant" in Part I of this Annual Report on
Form 10-K and the information set forth under the captions
"Election of Directors", "Section 16(a) Beneficial Ownership
Reporting compliance" and "Other Matters" in the Proxy Statement
is incorporated herein by reference in response to this Item 10.

Item 11.  Executive Compensation
- --------------------------------

     The information set forth under the caption "Executive
Compensation" in the Proxy Statement is incorporated herein by
reference in response to this Item 11.

Item 12.  Security Ownership of Certain Beneficial Owners and
- -------------------------------------------------------------
Management
- ----------

     The information set forth under the caption "Security
Ownership of Certain Beneficial Owners and Management" in the
Proxy Statement is incorporated herein by reference in response
to this Item 12.

Item 13.  Certain Relationships and Related Transactions
- --------------------------------------------------------

     The information set forth under the subcaption "Executive
Compensation--Compensation Committee Interlocks and Insider
Participation" in the Proxy Statement is incorporated herein by
reference to this Item 13.





                                                        28





                             PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on
- ----------------------------------------------------------------
Form 8-K
- --------
                                                       Sequential
     (a)  Documents filed as part of this Report        Page No.
          --------------------------------------       ----------

          1.  Supplemental Stock Information               36

          2.  Selected Financial Data                      37

          3.  Management's Discussion and Analysis
              of Financial Condition and Results of
              Operations                                   39

          4.  Financial Statements and Supplementary
              Data
              --------------------------------------
              The following consolidated financial
              statements of the Company are filed as
              part of this Annual Report on Form 10-K:

              Management's Financial Responsibility        45

              Independent Auditors' Report of
              KPMG Peat Marwick LLP                        46

              Consolidated Statements of Income
              for the years ended December 31,
              1997, 1996 and 1995                          47

              Consolidated Balance Sheets as of
              December 31, 1997 and 1996                   48

              Consolidated Statements of
              Stockholders' Equity for the years
              ended December 31, 1997, 1996 and
              1995                                         49

              Consolidated Statements of Cash
              Flows for the years ended
              December 31, 1997, 1996 and 1995             51

              Notes to Consolidated Financial
              Statements                                   55


                                                        29





                                                       Sequential
          5.  Financial Statement Schedules             Page No.
              -----------------------------            ----------
              The following financial statement
              schedule is filed as part of this
              Annual Report on Form 10-K:

              Schedule II - Valuation and qualifying       75
                     accounts

                   Financial statement schedules not
              listed above have been omitted because
              they are inapplicable, are not re-
              quired under applicable provisions of
              Regulation S-X, or the information
              that would otherwise be included in
              such schedules is contained in the
              registrant's consolidated financial
              statements or accompanying notes.




                                                        30





          6.    Exhibits.  The Exhibits listed below are filed or
                incorporated by reference as part of this Annual
                Report on Form 10-K.

                Exhibit
                Number                     Description
                -------                    -----------
                   3.1        Certificate of Incorporation (1)
                   3.2        By-Laws, as amended (1)
                   4.1        364-Day and 5-Year Competitive
                              Advance, Revolving Credit and
                              Guaranty Agreements dated as of
                              October 23, 1997 among the Company,
                              the guarantors named therein, the
                              banks named therein, the Chase
                              Manhattan Bank as Administrative
                              Agent, and ABN Amro Bank, N.V. as
                              Documentation Agent.  (Note: All
                              attachments have been omitted.
                              Copies of such attachments will be
                              furnished supplementally to the
                              Securities and Exchange Commission
                              upon request.)
                  10.1  (a)   1987 Employee Stock Option Plan
                              (4)*
                        (b)   Amendment No. 1 to the Company's
                              1987 Employee Stock Option Plan
                              (5)*
                  10.2  (a)   Letter Agreement dated June 29,
                              1990 by and between Cravey, Green &
                              Wahlen Incorporated and the Company
                              (3)*
                        (b)   Stock Purchase Warrant dated August
                              28, 1990 issued to Cravey, Green &
                              Wahlen Incorporated by the Company
                              (2)*
                        (c)   Stock Purchase Warrant Plan adopted
                              February 25, 1993 (6)
                  10.3        1992 Stock Option Plan adopted May
                              26, 1992 (7)*
                  10.4  (a)   Employee Stock Ownership Plan as
                              amended effective as of December 1,
                              1982, restated as of January 1,
                              1991 (10)*
                        (b)   Second Amendment to the DENTSPLY
                              Employee Stock Ownership Plan (13)
                  10.5  (a)   Retainer Agreement dated December
                              29, 1992 between the Company and
                              State Street Bank and Trust Company
                              ("State Street") (8)
                        (b)   Trust Agreement between the Company
                              and State Street Bank and Trust

                                                        31





                              Company dated as of August 11, 1993
                              (9)
                        (c)   Amendment to Trust Agreement
                              between the Company and State
                              Street Bank and Trust Company
                              effective August 11, 1993 (9)
                  10.6        DENTSPLY Stock Option Conversion
                              Plan approved June 23, 1993 (8)*
                  10.7        Employment Agreement dated January
                              1, 1996 between the Company and
                              Burton C. Borgelt (12)*
                  10.8  (a)   Employment Agreement dated as of
                              December 31, 1987 between the
                              Company and John C. Miles II (8)*
                        (b)   Amendment to Employment Agreement
                              between the Company and John C.
                              Miles II dated February 16, 1996,
                              effective January 1, 1996 (12)*
                  10.9        Employment Agreement dated as of
                              December 31, 1987, as amended as of
                              February 8, 1990, between the
                              Company and Leslie A. Jones (8)*
                  10.10       Employment Agreement dated as of
                              December 10, 1992 between the
                              Company and Michael R. Crane (8)*
                  10.11       Employment Agreement dated as of
                              December 10, 1992 between the
                              Company and Edward D. Yates (8)*
                  10.12       Employment Agreement dated as of
                              December 10, 1992 between the
                              Company and J. Patrick Clark (8)*
                  10.13       Employment Agreement dated January
                              1, 1996 between the Company and W.
                              William Weston (12)*
                  10.14       Employment Agreement dated January
                              1, 1996 between the Company and
                              Thomas L. Whiting (12)*
                  10.15       Employment Agreement dated October
                              11, 1996 between the Company and
                              Gerald K. Kunkle Jr. (13)*
                  10.16       1993 Stock Option Plan (1)*
                  10.17       Revolving Credit Agreement among
                              DENTSPLY International Inc., each
                              of the guarantors named therein,
                              and ABN AMRO Bank N.V., dated as of
                              September 9, 1994 (10)
                  10.18 (a)   DENTSPLY International Inc. 401(k)
                              Savings Plan Summary Plan
                              Description, as amended effective
                              January 1, 1994 (10)*
                        (b)   Fourth Amendment to the DENTSPLY
                              International 401(k) Savings Plan

                                                        32





                              effective January 1, 1996 (13)*
                  10.19       Midwest Dental Products Corporation
                              Pension Plan as amended and re-
                              stated effective January 1, 1989
                              (10)*
                  10.20       Revised Ransom & Randolph Pension
                              Plan, as amended effective as of
                              September 1, 1985, restated as of
                              January 1, 1989 (10)*
                  10.21       DENTSPLY International Inc.
                              Directors' Deferred Compensation
                              Plan effective January 1, 1997
                              (13)*
                  10.22       Asset Purchase and Sale Agreement,
                              dated January 10, 1996, between
                              Tulsa Dental Products, L.L.C. and
                              DENTSPLY International Inc. (11)
                  21.1        Subsidiaries of the Company
                  23.1        Consent of KPMG Peat Marwick LLP
                  27          Financial Data Schedule
- -------------------

 *   Management contract or compensatory plan.

(1)  Incorporated by reference to exhibit included in the
     Company's Registration Statement on Form S-8 (No. 33-71792).

(2)  Incorporated by reference to exhibit included in the
     Company's Annual Report on Form 10-K for the fiscal year
     ended March 31, 1991, File No. 0-16211.

(3)  Incorporated by reference to exhibit included in the
     Company's Registration Statement on Form S-2 (No. 33-43079).

(4)  Incorporated by reference to exhibit included in the
     Company's Registration Statement on Form S-18 (No. 33-
     15355C).

(5)  Incorporated by reference to exhibit included in the
     Company's Annual Report on Form 10-K for the fiscal year
     ended March 31, 1992, File No. 0-16211.

(6)  Incorporated by reference to exhibit included in the
     Company's Registration Statement on Form S-8 (No. 33-61780).

(7)  Incorporated by reference to exhibit included in the
     Company's Registration Statement on Form S-8 (No. 33-52616).

(8)  Incorporated by reference to exhibit included in the
     Company's Annual Report on Form 10-K for the fiscal year
     ended March 31, 1993, File No. 0-16211.


                                                        33





(9) Incorporated by reference to exhibit included in the
    Company's Annual Report on Form 10-K for the fiscal year
    ended December 31, 1993, File No. 0-16211.

(10)  Incorporated by reference to exhibit included in the
      Company's Annual Report on Form 10-K for the fiscal year
      December 31, 1994, File No. 0-16211.

(11)  Incorporated by reference to exhibit included in the
      Company's Current Report on Form 8-K dated January 10,
      1996, File No. 0-16211.

(12)  Incorporated by reference to exhibit included in the
      Company's Annual Report on Form 10-K for the fiscal year
      ended December 31, 1995, File No. 0-16211.

(13)  Incorporated by reference to exhibit included in the
      Company's Annual Report on Form 10-K for the fiscal year
      ended December 31, 1996, File No. 0-16211.


                         Loan Documents

     The Company and certain of its subsidiaries have entered
into various loan and credit agreements and issued various
promissory notes and guaranties of such notes, listed below, the
aggregate principal amount of which is less than 10% of its
assets on a consolidated basis.  The Company has not filed copies
of such documents but undertakes to provide copies thereof to the
Securities and Exchange Commission supplementally upon request.

(1)  Master Grid Note dated November 4, 1996 executed in favor of
     The Chase Manhattan Bank in connection with a line of credit
     up to $20,000,000 between the Company and The Chase
     Manhattan Bank.

(2)  Agreement dated November 4, 1996 between National
     Westminster Bank PLC and Dentsply Limited for (pound)2,500,000.

(3)  Promissory Note dated May 1, 1992 in the principal amount of
     $3,000,000 of the Company in favor of CoreStates Bank.

(4)  Credit Agreement dated August 15, 1996 between Dentsply
     Canada Limited ("DCL") and Mellon Bank Canada.

(5)  Promissory Note dated December 1, 1995 in connection with a
     line of credit up to $20,000,000 between the Company and
     Mellon Bank.

(6)  Form of "comfort letters" to various foreign commercial
     lending institutions having a lending relationship with one
     or more of the Company's international subsidiaries.

                                                        34





(7)  Unsecured Note dated July 8, 1993 between the Company and
     Harris Trust and Savings Bank in the principal amount of
     $1,750,000.


     (b)          Reports on Form 8-K
          -------------------

               The Company did not file any Reports on Form 8-K
          during the quarter ended December 31, 1997.


                                                    * * * * * *




                                                        35





Supplemental Stock Information
- ------------------------------

     The Common Stock of the Company is traded on the Nasdaq
National Market under the symbol "XRAY".  The following table
sets forth high and low sale prices of the Company's common stock
for the periods indicated as reported on the Nasdaq National
Market (after giving effect to the two-for-one stock split
effective on October 29, 1997):

                        Market Range of Common Stock       Cash
                        ----------------------------     Dividend
1997                        High         Low             Declared
- ----                      --------     --------          --------
First Quarter             $27-1/2      $23-3/8            $.04625
Second Quarter             26-3/16      22-5/16            .04625
Third Quarter              28-15/16     24-5/16            .05125
Fourth Quarter             31-3/4       26-1/8             .05125

1996
- ----
First Quarter             $20-3/8      $18-3/4            $.04125
Second Quarter             22-3/8       20                 .04125
Third Quarter              22-1/4       18-5/8             .04125
Fourth Quarter             24-1/2       20-7/8             .04625

1995
- ----
First Quarter             $18-1/8      $15-1/2            $.03750
Second Quarter             18-7/16      17-1/8             .03750
Third Quarter              20-1/8       16-3/8             .03750
Fourth Quarter             20-1/8       16-15/16           .04125




     The Company estimates, based on information supplied by its
transfer agent, that there are approximately 15,725 holders of
common stock, including 498 holders of record.

                                                        36


DENTSPLY INTERNATIONAL INC. AND SUBSIDIARIES SELECTED FINANCIAL DATA Year Ended December 31, ----------------------------------------------------------------------------- 1997 1996 1995 1994 1993 ------------ ------------ ------------ ------------ ------------ Statement of Income Data: (in thousands, except per share amounts) Net sales $ 720,760 $ 656,557 $ 572,028 $ 524,758 $ 503,820 Cost of products sold 352,034 331,887 291,176 267,034 257,707 ------------ ------------ ------------ ------------ ------------ Gross profit 368,726 324,670 280,852 257,724 246,113 Selling, general and administrative expenses 236,270 205,206 180,117 160,324 172,147 ------------ ------------ ------------ ------------ ------------ Operating income from continuing operations before discretionary ESOP contributions 132,456 119,464 100,735 97,400 73,966 Discretionary ESOP contributions --- --- --- --- 4,361 Interest expense 12,660 11,095 9,144 7,999 20,752 Interest income (1,654) (1,024) (1,265) (1,527) (370) Other (income) expense, net (556) (1,567) 2,839 (734) (2,119) ------------ ------------ ------------ ------------ ------------ Income from continuing operations before income taxes 122,006 110,960 90,017 91,662 51,342 Provision for income taxes 47,452 43,738 36,054 37,518 26,197 ------------ ------------ ------------ ------------ ------------ Income from continuing operations 74,554 67,222 53,963 54,144 25,145 ------------ ------------ ------------ ------------ ------------ Discontinued operations: Income from the operation of discontinued Medical business (net of income taxes of $.6 million in 1994 and $1.6 million in 1993) --- --- --- 1,311 2,925 Gain on disposal of Medical business, including provision of $.5 million for operating losses during phase-out period (net of income taxes of $5.5 million) --- --- --- 6,543 --- ------------ ------------ ------------ ------------ ------------ Income from discontinued operations --- --- --- 7,854 2,925 ------------ ------------ ------------ ------------ ------------ Income before extraordinary item 74,554 67,222 53,963(1) 61,998 28,070(1) Extraordinary loss related to early extinguishment of debt (net of income tax benefit of $6.3 million) --- --- --- --- 14,018 ------------ ------------ ------------ ------------ ------------ Net income $ 74,554 $ 67,222 $ 53,963(1) $ 61,998 $ 14,052(1) ============ ============ ============ ============ ============
37
Year Ended December 31, ----------------------------------------------------------------------------- 1997 1996 1995 1994 1993 Basic Earnings per Common Share: ------------ ------------ ------------ ------------ ------------ - -------------------------------- (in thousands, except per share amounts) Income from continuing operations $ 1.38 $ 1.25 $ 1.00 $ .98 $ .51 Income from the operation of discontinued Medical business --- --- --- .02 .06 Gain on disposal of Medical business --- --- --- .12 --- ------------ ------------ ------------ ------------ ------------ Income before extraordinary item 1.38 1.25 1.00 1.12 .57 Extraordinary item --- --- --- (.28) ------------ ------------ ------------ ------------ ------------ Net income $ 1.38 $ 1.25 $ 1.00 $ 1.12 $ .29 ============ ============ ============ ============ ============ Diluted Earnings per Common Share: - ---------------------------------- Income from continuing operations $ 1.37 $ 1.25 $ .99 $ .97 $ .50 Income from the operation of discontinued Medical business --- --- --- .02 .06 Gain on disposal of Medical business --- --- --- .12 --- ------------ ------------ ------------ ------------ ------------ Income before extraordinary item 1.37 1.25 .99 1.11 .56 Extraordinary item --- --- --- --- (.28) ------------ ------------ ------------ ------------ ------------ Net income $ 1.37 $ 1.25 $ .99 $ 1.11 $ .28 ============ ============ ============ ============ ============ Cash Dividends Declared per Common Share $ .195 $ .17 $ .1538 $ .075 $ --- Weighted average common shares outstanding: Basic 53,937 53,840 54,024 55,552 49,196 Diluted 54,229 53,994 54,255 56,094 49,796 Balance Sheet Data (at end of period): Working capital $ 107,678 $ 113,547 $ 122,706(2) $ 92,206(2) $ 82,779(2) Total assets 774,376 667,662 582,383(2) 466,930(2) 466,787(2) Total long-term debt 105,505 75,109 68,675 12,789 95,356 Stockholders' equity 423,933 365,590 315,922 299,337 236,397 Other Data: Depreciation and amortization $ 32,405 $ 28,108 $ 21,488 $ 18,133(3) $ 17,951(3) Capital expenditures 27,660 20,801(3) 17,421(3) 12,504(3) 9,212(3) (1) Includes certain unusual or non-recurring charges of approximately $3.1 million (approximately $1.8 million after tax) in 1995 and $21.8 million (approximately $16.5 million after tax) in 1993. The effect of these unusual or non-recurring charges on operating income from continuing operations before discretionary ESOP contributions was approximately $17.9 million during the year ended December 31, 1993. (2) Excludes net assets of discontinued operations. (3) Excludes discontinued operations.
38 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Any statements released by the Company that are forward-looking, including without limitation, statements containing the words "plans", "anticipates", "believes", "expects", or words of similar import constitute forward-looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements involve risks and uncertainties which may affect the Company's business and prospects, including economic, competitive, governmental, technological and other factors discussed in the Company's filings with the Securities and Exchange Commission. Results of Operations, 1997 Compared to 1996 - -------------------------------------------- Net sales increased $64.2 million, or 9.8% from $656.6 million in 1996 to $720.8 million in 1997. About one half of this increase was due to strong growth in the United States from a moderate increase in base business and incremental sales from the acquisition of New Image Industries, Inc. ("New Image") and the dental assets of DW Industries, Inc. ("DW"), EFOS Corporation ("EFOS") and MPL Technologies, Inc ("MPL"). The growth in the United States was partially offset by the adverse impact of the termination of the Implant Distribution Agreement between Core-Vent Corporation and DENTSPLY in the first quarter of 1997. In Europe, strong growth in base business plus incremental sales from the acquisition of Laboratoire SPAD, S.A. ("SPAD") and SIMFRA S.A. ("SIMFRA") was adversely impacted by the translation effect of the strong U.S dollar. Sales growth in the Pacific Rim and Latin America remained strong. Gross profit increased $44.1 million, or 13.6% due primarily to higher net sales. As a percentage of net sales, gross profit increased from 49.5% in 1996 to 51.2% in 1997. The percentage improved in 1997 due to better operating performance in manufacturing facilities in both the United States and Europe and a favorable mix of higher margin products in each major geographic region. In 1996, purchase price accounting for the acquisitions of Maillefer Instruments S.A. ("Maillefer"), Tulsa Dental Products LLC ("Tulsa Dental") and CeraMed Dental, LLC ("CeraMed") had an adverse impact on the gross profit percentage. Selling, general and administrative ("SG&A") expenses increased $31.1 million, or 15.1%. As a percentage of net sales, expenses increased from 31.3% in 1996 to 32.8% in 1997. This increase was mainly due to the high ratio of expenses to sales for certain direct selling businesses acquired in 1997 which typically have a high ratio of SG&A expenses to sales; increased amortization from 1997 acquisitions; expansion of the endodontic sales force and start-up of the group practices business unit in the United States; continued emphasis on upgrading the information systems in the United States and Europe; increased spending for the new China subsidiary in the Pacific Rim; increased research and development expenses; and costs associated 39 with certain legal proceedings. The increase in interest expense of $1.6 million was due to acquisition debt, largely offset by cash generated from operations. Other income was $.6 million in 1997 compared to $1.6 million in 1996. The variance was primarily due to a legal settlement of $1.2 million in the Company's favor in 1996. Income before income taxes increased $11.0 million or 10.0% from $111.0 million in 1996 to $122.0 million in 1997. Net income in 1997 was $74.6 million, compared with $67.2 million reported in 1996, an increase of 10.9%. Basic earnings per common share (after giving effect to the two- for-one stock split effective on October 29, 1997) of $1.38 for 1997 increased $.13 or 10.4% from $1.25 in 1996. Diluted earnings per common share of $1.37 for 1997 increased $.12, or 9.6% from $1.25 in 1996. Results of Operations, 1996 Compared to 1995 - -------------------------------------------- Net sales increased $84.6 million, or 14.8% from $572.0 million in 1995 to $656.6 million in 1996. About one half of this increase was due to the inclusion of a full year of the operations of Maillefer in 1996 versus a partial year in 1995, when Maillefer was acquired, and the 1996 acquisitions of the dental operations of Tulsa Dental and CeraMed. The remainder was due to strong growth in the Pacific Rim and Latin America and modest growth in both the United States and Europe. Gross profit increased $43.8 million, or 15.6% due primarily to higher net sales. Gross profit as a percentage of net sales was 49.5% in 1996 compared to 49.1% in 1995. The improvement in the gross margin percentage was due to a combination of high margin products from acquisitions, cost reductions, and increased margin obtained from replacing distributors with DENTSPLY affiliates in certain foreign locations. Improvements in the gross profit percentage were partially offset by the adverse impact of acquisition accounting for Maillefer, Tulsa Dental, and CeraMed. SG&A expenses increased $25.1 million, or 13.9%. As a percentage of net sales, expenses decreased from 31.5% in 1995 to 31.3% in 1996. This decrease was primarily due to lower spending levels compared to sales in Europe, Pacific Rim, and Latin America. The percentage to net sales improvement was partially offset by increased amortization from 1996 acquisitions, expenses associated with upgrading management information systems in the United States and Europe, continued emphasis on end user pull through marketing strategy, and research and development. The $2.2 million increase in net interest expense was primarily due to acquisition debt, partially offset by cash generated from operations. Other income was $1.6 million in 1996, compared to other 40 expense of $2.8 million in 1995. Other income in 1996 was primarily due to a legal settlement of $1.2 million in the Company's favor in the first quarter, while the Company took a one-time charge of $3.1 million the second quarter of 1995 to cover the costs of closing down its executive offices in Illinois and consolidating its executive operations in York, Pennsylvania. Income before income taxes increased $21.0 million, or 23.3% from $90.0 million in 1995 to $111.0 million in 1996. Without the one-time charge of $3.1 million in 1995 to cover the costs of closing the Company's executive offices in Illinois, income before income taxes increased $17.9 million, or 19.2%. Net income increased $13.2 million to $67.2 million in 1996 from $54.0 million in 1995, an increase of 24.6%. Without the one-time after-tax charge of $1.8 million in 1995 to cover the costs of closing the Company's executive offices in Illinois, net income increased $11.4 million, or 20.4%. Basic earnings per common share of $1.25 for 1996 increased $.25, or 25.0% from $1.00 in 1995. Without the one-time after-tax charge of $1.8 million in 1995 to cover the costs of closing the Company's executive offices in Illinois, basic earnings per common share increased $.22, or 21.4% over 1995. Diluted earnings per common share of $1.25 for 1996 increased $.26, or 26.3% from $.99 in 1995. Without the one-time after-tax charge, diluted earnings per common share increased $.22, or 21.4% over 1995. Foreign Currency - ---------------- Since approximately 40% of the Company's revenues have been generated in currencies other than the U.S. dollar, the value of the U.S. dollar in relation to those currencies affects the results of operations of the Company. The impact of currency fluctuations in any given period can be favorable or unfavorable. The impact of foreign currency fluctuations of European currencies on operating income is partially offset by sales in the U.S. of products sourced from plants and third party suppliers located overseas, principally in Germany and Switzerland. The Company carefully considers the impact of currency fluctuations in its business decisions. Liquidity and Capital Resources - ------------------------------- In January 1997, the Company purchased the assets of DW for $16.3 million and all of the capital stock of SPAD for approximately $36.0 million in cash and a deferred payment of $3.5 million, which was paid in January 1998. In March 1997 the Company purchased all of the capital stock of New Image for approximately $11.0 million. In July 1997 the Company purchased the dental assets of EFOS for approximately $15.0 million and all of the capital stock of SIMFRA for about $5.5 million. In November 1997, the Company purchased certain assets of MPL for approximately $4.4 million in cash and a deferred payment of $.4 41 million. These cash transactions were funded from the Company's $175 million Bank Revolving Loan Facility and short-term bank borrowings. In October 1997, the Company entered into new revolving credit agreements (the "Revolving Credit Agreements") for a $175 million five year facility and a $125 million 364-day facility. The Revolving Credit Agreements replaced the 1993 $175 million Bank Revolving Loan Facility and the $60 million bank term loan. The five year facility matures in October 2002 but may be extended, subject to certain conditions, until October 2004. The 364-day facility terminates in October 1998 but contains a one year term-out provision and may be extended, subject to certain conditions, for additional periods of 364 days. The Revolving Credit Agreements are unsecured and contain various financial and other covenants. Under the Bank Multicurrency Revolving Credit Facility, the Company is able to borrow up to $25 million for foreign working capital purposes on an unsecured basis through December 23, 1999. In addition, the Company has unused lines of credit for short-term financing of $54.0 million at December 31, 1997. Investment activities for 1997 included capital expenditures of $27.7 million. During 1997 the Company repurchased forty thousand shares of its common stock for $.9 million, in accordance with the share repurchase program authorized by the Board of Directors in December 1996. This authorization to repurchase shares expired on December 31, 1997. In December 1997, the Board of Directors authorized the repurchase of up to .5 million additional shares of common stock on the open market or in negotiated transactions. The timing and amounts of any additional purchases will depend upon many factors, including market conditions and the Company's business and financial condition. At December 31, 1997, the Company's current ratio was 1.6 with working capital of $107.7 million. This compares with a current ratio of 1.8 and working capital of $113.5 million at December 31, 1996. The Company expects to be able to finance its cash requirements, including capital expenditures, stock repurchases, debt service and acquisitions from funds generated from operations and amounts available under the Revolving Credit Agreements. Cash flows from operating activities increased to $94.3 million in 1997 from $83.2 million in 1996 primarily due to higher net income. Implant Business - ---------------- In March 1997, the American Arbitration Association's Commercial Arbitration Tribunal ordered a judgment in favor of the Company terminating, effective March 19, 1997, the Implant Distribution Agreement between Core-Vent Corporation and DENTSPLY's Implant Division. The sales, distribution and administrative functions acquired by the Company in 1991 under the Implant Distribution 42 Agreement, along with certain assets of the implant business, have been transferred back to Core-Vent Corporation. The noncancelable purchase commitment related to the Implant Distribution Agreement has been terminated. Net sales and a loss before income taxes for the implant business were $11.2 million and $3.8 million, respectively, in 1997 compared to net sales of $27.9 million and a loss before income taxes of $3.0 million in 1996. Comprehensive Income - -------------------- In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 130 ("SFAS 130"), Reporting Comprehensive Income. SFAS 130 establishes standards for reporting and display of comprehensive income and its components in a full set of general purpose financial statements. It does not require a specific format for that financial statement but requires that an enterprise display an amount representing total comprehensive income for the period in that financial statement. SFAS 130 is effective for both interim and annual periods beginning after December 15, 1997. Comparative financial statements provided for earlier periods are required to be reclassified to reflect the provisions of this Statement. It is anticipated that the translation adjustment currently reported in Stockholder's Equity will be presented as a component of comprehensive income. Losses of $12.4 million in 1997 and $7.5 million in 1996 and gains of $3.0 million in 1995 from translation of foreign operations to U.S. dollars have been included in Stockholder's Equity and recorded as cumulative translation adjustments. Segment Reporting - ----------------- In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 131 ("SFAS 131"), Disclosures about Segments of an Enterprise and Related Information. SFAS 131 establishes standards for the way public business enterprises are to report information about operating segments in annual financial statements and requires those enterprises to report selected information about operating segments in interim financial reports issued to shareholders. It also establishes standards for related disclosures about products and services, geographic areas and major customers. SFAS 131 is effective for financial statements for periods beginning after December 15, 1997. In the initial year of application, comparative information for earlier years is to be restated, unless it is impracticable to do so. SFAS 131 need not be applied to interim financial statements in the initial year of its application, but comparative information for interim periods in the initial year of application shall be reported in financial statements for interim periods in the second year of application. Since DENTSPLY operates in a single segment, it is anticipated that SFAS 131 will not require any additional segment disclosures to be presented by the Company. 43 Year 2000 - --------- The Company has conducted a comprehensive review of its computer systems to identify the systems that are affected by the "Year 2000" issue. In 1995, the Company commenced a year 2000 conversion project for all of its locations to address necessary software upgrades, training, data conversion, testing and implementation. The Company will incur internal staff costs as well as consulting and other expenses to complete the project by the anticipated date. The Company does not expect the amounts required to be expensed during the project to have a material effect on its financial position or results of operations. Impact of Inflation - ------------------- The Company has generally offset the impact of inflation on wages and the cost of purchased materials by reducing operating costs and increasing selling prices to the extent permitted by market conditions. 44 Management's Financial Responsibility The management of DENTSPLY International Inc. is responsible for the contents of the consolidated financial statements. The consolidated financial statements were prepared in conformity with generally accepted accounting principles applied on a consistent basis and were based in part on reasonable estimates, giving due consideration to materiality. Financial information appearing elsewhere in this Annual Report is consistent with that in the consolidated financial statements. The Company maintains a system of internal accounting controls which, in the opinion of management, provides reasonable assurance as to the integrity and reliability of the financial records and the protection of assets. The internal accounting control system is supported by written policies and procedures and its effectiveness is monitored. Management operates the Company in compliance with its written Code of Business Conduct. The Audit Committee of the Board of Directors is composed entirely of outside directors who meet periodically with our independent auditors, KPMG Peat Marwick LLP to review the scope and results of their audit effort. The Audit Committee reviews with management and the independent auditors the financial controls and reporting practices and generally monitors the accounting affairs of the Company. Also, the Audit Committee recommends to the Board of Directors and management the appointment of the independent auditors. John C. Miles II Gerald K. Kunkle Edward D. Yates Vice Chairman and President and Chief Senior Vice President and Chief Executive Officer Operating Officer Chief Financial Officer 45 Independent Auditors' Report The Board of Directors and Stockholders DENTSPLY International Inc. We have audited the consolidated financial statements of DENTSPLY International Inc. and subsidiaries as listed in the accompanying index on page 29. In connectin with our audits of the consolidated financial statements, we also have audited the financial statement schedule as listed in the accompanying index on page 30. These consolidated financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of DENTSPLY International Inc. and subsidiaries as of December 31, 1997 and 1996, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 1997, in conformity with generally accepted accounting principles. Also in our opinion, the related financial statement schedule when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein. KPMG PEAT MARWICK LLP Philadelphia, Pennsylvania January 22, 1998 46 DENTSPLY International Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF INCOME Year Ended December 31, -------------------------------- 1997 1996 1995 -------------------------------- (in thousands, except per share amounts) Net sales $720,760 $656,557 $572,028 Cost of products sold 352,034 331,887 291,176 -------- -------- -------- Gross profit 368,726 324,670 280,852 Selling, general and administrative expenses 236,270 205,206 180,117 -------- -------- -------- Operating income 132,456 119,464 100,735 Other income and expenses: Interest expense 12,660 11,095 9,144 Interest income (1,654) (1,024) (1,265) Other (income) expense, net (556) (1,567) 2,839 -------- -------- -------- Income before income taxes 122,006 110,960 90,017 Provision for income taxes 47,452 43,738 36,054 -------- -------- -------- Net income $ 74,554 $ 67,222 $ 53,963 ======== ======== ======== Earnings per common share-basic $ 1.38 $ 1.25 $ 1.00 -diluted $ 1.37 $ 1.25 $ .99 Cash dividends declared per common share $ .195 $ .17 $ .1538 Weighted average common shares outstanding-basic 53,937 53,840 54,024 -diluted 54,229 53,994 54,255 The accompanying Notes are an integral part of these Financial Statements. 47 DENTSPLY International Inc. and Subsidiaries CONSOLIDATED BALANCE SHEETS December 31, ------------------- 1997 1996 Assets ------------------- Current assets: (in thousands) Cash and cash equivalents $ 9,848 $ 5,619 Accounts and notes receivable - trade, net 114,366 101,977 Inventories 124,748 125,398 Prepaid expenses and other current assets 28,065 23,752 -------- -------- Total Current Assets 277,027 256,746 Property, plant and equipment, net 147,130 141,458 Other noncurrent assets, net 13,314 13,259 Identifiable intangible assets, net 103,513 59,787 Costs in excess of fair value of net assets acquired, net 233,392 196,412 -------- -------- Total Assets $774,376 $667,662 ======== ======== Liabilities and Stockholders' Equity Current liabilities: Notes payable and current portion of long-term debt $ 24,005 $ 26,711 Accounts payable 38,942 33,720 Accrued liabilities 71,563 52,504 Income taxes payable 34,839 30,264 -------- -------- Total Current Liabilities 169,349 143,199 Long-term debt 105,505 75,109 Other liabilities 43,954 49,467 Deferred income taxes 27,647 30,000 -------- -------- Total Liabilities 346,455 297,775 -------- -------- Minority interests in consolidated subsidiaries 3,988 4,297 -------- -------- Commitments and contingencies Stockholders' equity: Preferred stock, $.01 par value; .25 million shares authorized; no shares issued --- --- Common stock, $.01 par value; 100 million shares authorized; 54.2 million shares and 27.1 million pre-split shares issued at December 31, 1997 and 1996, respectively 542 271 Capital in excess of par value 150,738 150,031 Retained earnings 301,058 237,300 Cumulative translation adjustment (16,720) (4,278) Employee stock ownership plan reserve (9,497) (11,016) Treasury stock, at cost, .1 million and .4 million shares at December 31, 1997 and 1996, respectively (2,188) (6,718) -------- -------- Total Stockholders' Equity 423,933 365,590 -------- -------- Total Liabilities and Stockholders' Equity $774,376 $667,662 ======== ======== The accompanying Notes are an integral part of these Financial Statements. 48
DENTSPLY International Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY Capital in Cumulative Employee Stock Total Common Excess of Retained Translation Ownership Treasury Stockholders' Stock Par Value Earnings Adjustment Plan Reserve Stock Equity ---------- ------------ ----------- ----------- -------------- ---------- ------------- (in thousands) Balance at December 31, 1994 $ 278 $182,087 $133,531 $ 198 $(14,055) $ (2,702) $299,337 Exercise of stock options and warrants 2 (4,850) - - - 9,100 4,252 Tax benefit related to stock options and warrants exercised - 4,781 - - - - 4,781 Repurchase of 2.7 million shares of common stock - - - - - (42,703) (42,703) Cash dividends declared, $.1538 per common share - - (8,263) - - - (8,263) Cancellation of 1.8 million shares of treasury stock (9) (32,019) - - - 32,028 - Translation adjustment - - - 3,036 - - 3,036 Net change in ESOP reserve - - - - 1,519 - 1,519 Net income - - 53,963 - - - 53,963 ------- -------- -------- ------- -------- -------- -------- Balance at December 31, 1995 271 149,999 179,231 3,234 (12,536) (4,277) 315,922 Exercise of stock options and warrants - (146) - - - 1,384 1,238 Tax benefit related to stock options and warrants exercised - 218 - - - - 218 Compensatory stock options lapsed - (40) - - - - (40) Repurchase of .2 million shares of common stock - - - - - (3,825) (3,825) Cash dividends declared, $.17 per common share - - (9,153) - - - (9,153) Translation adjustment - - - (7,512) - - (7,512) Net change in ESOP reserve - - - - 1,520 - 1,520 Net income - - 67,222 - - - 67,222 ------- -------- -------- ------- -------- -------- -------- Balance at December 31, 1996 $ 271 $150,031 $237,300 $(4,278) $(11,016) $ (6,718) $365,590 The accompanying Notes are an integral part of these Financial Statements.
49
DENTSPLY International Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY Capital in Cumulative Employee Stock Total Common Excess of Retained Translation Ownership Treasury Stockholders' Stock Par Value Earnings Adjustment Plan Reserve Stock Equity ---------- ------------ ----------- ----------- -------------- ---------- ------------- (in thousands) Balance at December 31, 1996 271 150,031 237,300 (4,278) (11,016) (6,718) 365,590 Exercise of stock options and warrants - (133) - - - 5,458 5,325 Tax benefit related to stock options and warrants exercised - 840 - - - - 840 Repurchase of forty thousand shares of common stock - - - - - (928) (928) Cash dividends declared, $.195 per common share - - (10,525) - - - (10,525) Two-for-one stock split effected in the form of a stock dividend 271 - (271) - - - - Translation adjustment - - - (12,442) - - (12,442) Net change in ESOP reserve - - - - 1,519 - 1,519 Net income - - 74,554 - - - 74,554 ------- -------- -------- -------- -------- -------- -------- Balance at December 31, 1997 $ 542 $150,738 $301,058 $(16,720) $ (9,497) $ (2,188) $423,933 ======= ======== ======== ======== ======== ======== ======== The accompanying Notes are an integral part of these Financial Statements.
50
DENTSPLY International Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, ---------------------------------- 1997 1996 1995 -------- -------- -------- Cash flows from operating activities: (in thousands) Net income $ 74,554 $ 67,222 $ 53,963 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 15,341 14,799 12,130 Amortization 17,064 13,309 9,358 Deferred income taxes (1,828) (3,008) (1,692) Other non-cash transactions 263 289 668 Loss on disposal of property, plant and equipment 559 367 1,027 Changes in operating assets and liabilities, net of effects from acquisitions and divestitures of businesses and effects of exchange: Accounts and notes receivable-trade, net (13,080) (6,777) (1,893) Inventories 1,694 256 (8,233) Prepaid expenses and other current assets (305) (4,574) (775) Other noncurrent assets, net (82) 497 225 Accounts payable (1,795) 472 2,372 Accrued liabilities (483) 945 (51) Income taxes payable 4,250 1,467 (2,971) Other liabilities (1,864) (2,075) 3,388 -------- -------- -------- Net cash provided by operating activities 94,288 83,189 67,516 -------- -------- -------- The accompanying Notes are an integral part of these Financial Statements.
51
DENTSPLY International Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, ---------------------------------- 1997 1996 1995 -------- -------- -------- Cash flows from investing activities: (in thousands) Proceeds from disposal of Medical business --- 7,500 3,260 Proceeds from sale of property, plant and equipment, net 1,257 351 2,443 Capital expenditures (27,660) (20,804) (17,633) Expenditures for identifiable intangible assets (3,382) (3,000) (60) Acquisitions of businesses, net of cash acquired (78,822) (82,181) (73,407) Other direct costs of acquisition and divestiture activities (2,395) (259) (512) Other, net (155) (355) --- -------- -------- -------- Net cash used in investing activities (111,157) (98,748) (85,909) -------- -------- -------- The accompanying Notes are an integral part of these Financial Statements.
52
DENTSPLY International Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, ---------------------------------- 1997 1996 1995 -------- -------- -------- Cash flows from financing activities: (in thousands) Proceeds from sale of common stock, including tax benefit of stock options exercised 6,165 1,456 9,034 Cash paid for treasury stock (928) (3,825) (42,703) Cash dividends paid (10,238) (8,893) (8,123) Increase (decrease) in bank overdrafts 886 (2,357) 1,580 Proceeds from long-term borrowings, net of deferred financing costs 218,449 87,499 123,635 Payments on long-term borrowings (184,524) (67,490) (70,915) Increase (decrease) in short-term borrowings (7,605) 11,382 (28) Decrease in employee stock ownership plan reserve 1,519 1,520 1,519 -------- -------- -------- Net cash provided by financing activities 23,724 19,292 13,999 -------- -------- -------- Effect of exchange rate changes on cash and cash equivalents (2,626) (2,088) 1,090 -------- -------- -------- Net increase (decrease) in cash and cash equivalents 4,229 1,645 (3,304) Cash and cash equivalents at beginning of period 5,619 3,974 7,278 -------- -------- -------- Cash and cash equivalents at end of period $ 9,848 $ 5,619 $ 3,974 ======== ======== ======== The accompanying Notes are an integral part of these Financial Statements.
53
DENTSPLY International Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, ---------------------------------- 1997 1996 1995 Supplemental disclosures of cash flow -------- -------- -------- information: (in thousands) Interest paid $ 9,024 $ 7,484 $ 6,243 Income taxes paid 43,840 43,879 35,573 Supplemental disclosures of non-cash transactions: Note receivable for fixed assets associated with arbitration ruling terminating the Implant Distribution Agreement 389 --- --- Assumption of debt in connection with acquisitions 4,310 --- --- The Company assumed liabilities in conjunction with the following acquisitions:
Fair Value Cash Paid for of Assets Assets or Liabilities Date Acquired Acquired Capital Stock Assumed ------------- ---------- ------------- ----------- (in thousands) MPL Technologies, Inc. November 1997 $ 5,452 $ 4,425 $ 1,027 EFOS Corporation July 1997 15,032 14,988 44 SIMFRA S.A. July 1997 8,431 5,464 2,967 New Image Industries Inc. March 1997 35,643 10,957 24,686 DW Industries, Inc. January 1997 18,956 16,253 2,703 Laboratoire SPAD, S.A. January 1997 47,054 35,992 11,062 CeraMed Dental, LLC August 1996 5,000 5,000 0 Tulsa Dental Products LLC January 1996 78,662 75,114 3,548 Dunvale Corporation August 1995 1,982 1,839 143 Maillefer Instruments, S.A. June 1995 97,188 65,798 31,390 KV33 Corporation March 1995 14,329 11,450 2,879 The accompanying Notes are an integral part of these Financial Statements.
54 DENTSPLY International Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES - ---------------------------------------- Description of Business - ----------------------- DENTSPLY (the "Company") designs, develops, manufactures and markets a broad range of products for the dental market. The Company believes that it is the world's leading manufacturer and distributor of dental prosthetics, endodontic instruments and materials, impression materials, prophylaxis paste, dental sealants, ultrasonic scalers, and crown and bridge materials; the leading United States manufacturer and distributor of dental x-ray equipment, dental handpieces, intraoral cameras, dental operatory software systems, dental x-ray film holders, film mounts and bone substitute/grafting materials; and a leading United States distributor of dental cutting instruments. The Company distributes its dental products in over 100 countries under some of the most well-established brand names in the industry. DENTSPLY is committed to the development of innovative, high quality, cost-effective new products for the dental market. Principles of Consolidation - --------------------------- The consolidated financial statements include the accounts of the Company and all majority-owned subsidiaries. Intercompany accounts and transactions are eliminated. Minority interests in net income of consolidated subsidiaries are not material and are included in other (income) expense, net. Use of Estimates - ---------------- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Cash and Cash Equivalents - ------------------------- The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Accounts and Notes Receivable-Trade - ----------------------------------- The Company sells dental equipment and supplies primarily through a worldwide network of distributors, although certain product lines are sold directly to the end user. Revenue is recognized when products are shipped. For customers on credit terms, the Company performs ongoing credit evaluation of those customers' financial condition and generally does not require collateral from them. Accounts and notes receivable-trade are stated net of an allowance for doubtful accounts of $4.6 million and $2.5 million at December 31, 1997 and 1996, respectively. 55 Inventories - ----------- Inventories are stated at the lower of cost or market. At December 31, 1997 and 1996, the cost of $14.9 million, or 12% and $10.0 million, or 8%, respectively, of inventories was determined by the last-in, first-out (LIFO) method. The cost of other inventories was determined by the first-in, first- out (FIFO) or average cost method. Property, Plant and Equipment - ----------------------------- Property, plant and equipment are stated at cost, net of accumulated depreciation. Except for leasehold improvements, depreciation for financial reporting purposes is computed by the straight-line method over the following estimated useful lives: buildings - generally 40 years and machinery and equipment - 4 to 15 years. The cost of leasehold improvements is amortized over the shorter of the estimated useful life or the term of the lease. For income tax purposes, depreciation is computed using various methods. Identifiable Intangible Assets - ------------------------------ Identifiable intangible assets include patents, trademarks, non-compete covenants, licensing agreements and product manufacturing rights which are amortized on a straight-line basis over their estimated useful lives, ranging from 5 to 40 years. Identifiable intangible assets are stated net of accumulated amortization of $36.9 million and $28.9 million at December 31, 1997 and 1996, respectively. Identifiable intangible assets are reviewed for impairment whenever events or circumstances provide evidence that suggest that the carrying amount of the asset may not be recoverable. Impairment is determined by using identifiable undiscounted cash flows. Costs in Excess of Fair Value of Net Assets Acquired - ---------------------------------------------------- The excess of costs of acquired companies and product lines over the fair value of net assets acquired (goodwill) is being amortized on a straight-line basis over 25 to 40 years. Costs in excess of the fair value of net assets acquired are stated net of accumulated amortization of $34.0 million and $26.1 million at December 31, 1997 and 1996, respectively. Costs in excess of fair value of net assets acquired are reviewed for impairment whenever events or circumstances provide evidence that suggest that the carrying amount of the asset may not be recoverable. Impairment is determined by using identifiable undiscounted cash flows. Fair Value of Financial Instruments - ----------------------------------- The fair value of financial instruments is determined by reference to various market data and other valuation techniques as appropriate. The fair values of financial instruments approximate their recorded values. Derivatives - ----------- The Company's only involvement with derivative financial instruments is forward contracts to hedge certain assets and liabilities denominated in foreign currencies. 56 Foreign Exchange Risk Management - -------------------------------- The Company routinely enters into forward foreign exchange contracts to selectively hedge assets and liabilities denominated in foreign currencies. Market value gains and losses are recognized in income currently and the resulting gains or losses offset foreign exchange gains or losses recognized on the foreign currency assets and liabilities hedged. Determination of hedge activity is based upon market conditions, the magnitude of the foreign currency assets and liabilities and perceived risks. As of December 31, 1997, the Company had contracts outstanding for the purchase of 29.7 million Swiss francs (approximately $20.7 million) and 13.7 million French francs (approximately $2.3 million), and the sale of $1.4 million Australian dollars (approximately $.9 million). As of December 31, 1996, the Company had contracts outstanding for the purchase of 21.4 million Swiss francs (approximately $16.2 million). These foreign exchange contracts generally have maturities of less than six months and counterparties to the transactions are typically large international financial institutions. Foreign Currency Translation - ---------------------------- The functional currency for foreign operations, except for those in highly inflationary economies, has been determined to be the local currency. Assets and liabilities of foreign subsidiaries are translated at exchange rates on the balance sheet date; revenue and expenses are translated at the average year-to-date rates of exchange. The effects of these translation adjustments are reported in a separate component of stockholders' equity. Exchange gains and losses arising from transactions denominated in a currency other than the functional currency of the entity involved and translation adjustments in countries with highly inflationary economies are included in income. Exchange gains of $.3 million in 1997 and $.2 million in 1995 and losses of $.3 million in 1996 are included in other (income) expense, net. Research and Development Costs - ------------------------------ Research and development costs are charged to expense as incurred and are included in selling, general and administrative expenses. Research and development costs amounted to approximately $16.8 million, $14.7 million and $12.3 million for 1997, 1996 and 1995, respectively. Stock Based Compensation - ------------------------ In October 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation ("SFAS 123"). SFAS 123 presents companies with the alternative of retaining the current accounting for stock based compensation under APB Opinion No. 25 ("APB 25") or adopting a new accounting method based on the estimated fair value of equity instruments granted during the year. The Company applies APB 25 in accounting for its stock options (see Note 10 - Stockholders' Equity). 57 NOTE 2 - EARNINGS PER COMMON SHARE - ---------------------------------- On September 18, 1997 the Company's Board of Directors authorized a two- for-one stock split effected in the form of a 100% stock dividend distributed on October 29, 1997 to shareholders of record on October 14, 1997. All share and per share data included in the accompanying financial statements, except as noted, have been restated to reflect the stock split. In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, Earnings per Share ("SFAS 128"). This Statement simplifies the standards for computing earnings per share ("EPS") and makes them comparable to international EPS standards. It replaces the presentation of primary EPS with a presentation of basic EPS and requires dual presentation of basic and diluted EPS on the face of the income statement of all entities with complex capital structures. SFAS 128 also requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. As required, the Company adopted SFAS 128 in the fourth quarter of 1997; accordingly, all per share amounts have been restated to reflect basic and diluted EPS. Income Shares Per Share (Numerator) (Denominator) Amount ----------- ------------- --------- (in thousands, except per share amounts) Year Ended December 31, 1997 Basic EPS $ 74,554 53,937 $1.38 Incremental shares from assumed exercise of dilutive options and warrants - 292 -------- ------ Diluted EPS $ 74,554 54,229 $1.37 ======== ====== Year Ended December 31, 1996 Basic EPS $ 67,222 53,840 $1.25 Incremental shares from assumed exercise of dilutive options and warrants - 154 -------- ------ Diluted EPS $ 67,222 53,994 $1.25 ======== ====== Year Ended December 31, 1995 Basic EPS $ 53,963 54,024 $1.00 Incremental shares from assumed exercise of dilutive options and warrants - 231 -------- ------ Diluted EPS $ 53,963 54,255 $.99 ======== ====== 58 NOTE 3 - BUSINESS ACQUISITIONS - ------------------------------ In November 1997, the Company purchased certain assets of MPL Technologies, Inc. ("MPL"), a wholly-owned subsidiary of SoloPak Pharmaceuticals, for $4.4 million in cash and a deferred payment of $.4 million. Located in Franklin Park, Illinois, MPL is a leading manufacturer and distributor of needles and needle-related products, primarily for the dental profession. In July 1997, the Company purchased the dental assets of EFOS Corporation ("EFOS") for Canadian $20.7 million in a cash transaction valued at approximately $15.0 million. EFOS, located in Toronto, Canada, is the developer and manufacturer of DENTSPLY's dental curing lights and amalgamators. Additionally, EFOS serves the dental market with protective eyewear products, replacement parts and curing light repair and service. Also in July 1997, the Company purchased the outstanding capital stock of SIMFRA S.A. ("SIMFRA") for FF32.1 million in a cash transaction valued at approximately $5.5 million and assumption of $1.4 million of debt. Located in Paris, SIMFRA is the exclusive importer of Maillefer Instruments, S.A. in France. In March 1997, the Company purchased all of the capital stock of New Image Industries, Inc. ("New Image") for $2.00 per share or approximately $11.0 million pursuant to a tender offer and assumption of $2.9 million of debt. New Image designs, develops, manufactures, and distributes intraoral cameras and computer imaging systems and related software exclusively for the dental market, and is located in Carlsbad, California. In January 1997, the Company purchased the assets of DW Industries, Inc. ("DW") in a cash transaction valued at approximately $16.3 million and an earn- out based on future sales growth of the business. Located in Las Vegas, Nevada, DW is the leading manufacturer of disposable air-water syringe tips for use in clinical dental office procedures. Also in January 1997, the Company purchased all of the outstanding capital stock of Laboratoire SPAD, S.A. ("SPAD") for FF199.5 million or $36.0 million in cash and a deferred payment of FF 21.5 million or $3.5 million which was paid in January 1998. SPAD, a subsidiary of GROUP MONOT, S.A., is a leading French manufacturer and distributor of dental anesthetic and other dental products. The 1997 acquisitions were accounted for under the purchase method of accounting; accordingly, the results of their operations are included in the accompanying financial statements since the respective dates of the acquisitions. The purchase prices plus direct acquisition costs have been allocated on the basis of preliminary estimates of the fair values of assets acquired and liabilities assumed. The excess of acquisition cost over net assets acquired of $4.2 million for DW, $33.5 million for SPAD, $6.5 million for New Image, $3.8 million for SIMFRA, and $.1 million for MPL is being amortized over 25 years. Since the fair value of net assets acquired from EFOS exceeded the purchase price by approximately $.6 million, the values otherwise assignable to noncurrent assets acquired have been reduced by a proportionate part of the excess. These acquisitions, individually and in the aggregate, did not have a material impact on the Company's 1997 results; accordingly, pro forma information has been omitted. 59 In August 1996, the Company paid $5 million for a 51% interest in CeraMed Dental, LLC ("CeraMed") and the right to acquire the remaining 49% interest at a later date. CeraMed, located in Lakewood, Colorado, is the leading US manufacturer and distributor of bone grafting materials and HA plasma-feed coating materials to dental markets. In January 1996, the Company purchased certain assets of Tulsa Dental Products LLC ("Tulsa Dental") in a cash transaction valued at $75.1 million and an earn-out based on future operating performance of the business. Based in Tulsa, Oklahoma, Tulsa Dental is a manufacturer and distributor of endodontic instruments and materials. In August 1995, the Company purchased the assets of Dunvale Corporation ("Dunvale") in a cash transaction valued at $1.8 million. In June 1995, the Company purchased approximately 96% of the outstanding capital stock of Maillefer Instruments, S.A. ("Maillefer") in a cash transaction valued at approximately $65.8 million. An additional 3.9% of Maillefer stock was purchased in June 1996 for cash of approximately $2.3 million. Based in Switzerland, Maillefer is a manufacturer and distributor of principally endodontic instruments. In March 1995, the Company purchased all of the outstanding capital stock of KV33 Corporation ("KV33") in a cash transaction valued at $11.5 million. The 1996 and 1995 acquisitions were also accounted for under the purchase method of accounting; accordingly, the results of their operations are included in the accompanying financial statements since the respective dates of the acquisitions. The purchase prices plus direct acquisition costs have been allocated on the basis of the fair values of assets acquired. The excess of acquisition cost over net assets acquired of $.9 million for CeraMed, $53.7 million for Tulsa Dental, $1.5 million for Dunvale, and $10.2 million for KV33 is being amortized over 25 years. Since the fair value of net assets acquired from Maillefer exceeded the purchase price by approximately $16.7 million, the values otherwise assignable to noncurrent assets acquired have been reduced by a proportionate part of the excess. In January 1998, the Company purchased the assets of Blendax Professional Dental Business ("Blendax") from Procter & Gamble for $7 million. Blendax is a distributor doing business principally in Germany, Austria and the United Kingdom. The Blendax product line consists of rotary cutting instruments, impression materials, composite filling material, and fluoride rinses and gels. In March 1998, the Company purchased the assets of InfoSoft in a cash transaction valued at approximately $8.5 million. Headquartered in White Marsh, Maryland, the primary business of InfoSoft is the development and sale of full-featured, practice-management software. InfoSoft is also the number one processor of electronic dental insurance claims in America. NOTE 4 - INDUSTRY SEGMENT AND GEOGRAPHIC INFORMATION - ---------------------------------------------------- The Company's operations are conducted primarily in one industry segment as a designer, manufacturer and distributor of dental equipment and supplies. The Company's operations are structured to achieve consolidated objectives. As a result, significant interdependencies exist among the 60 Company's operations in different geographic areas. Intercompany sales of manufacturing materials between areas are at prices which, in general, provide a reasonable profit after coverage of all manufacturing costs. Intercompany sales of finished goods are at prices intended to provide a reasonable profit for purchasing locations after coverage of marketing and general and administrative costs. Operating income (loss) from operations consists of net sales less related costs, direct operating expenses and intercompany royalties allocated from Corporate for use of patents and trademarks owned by the Company. Assets by geographic area are those used in the operations in the geographic area. 61
The following table sets forth information about the Company's operations in different geographic areas for 1997, 1996, and 1995: United 1997 States Europe Other Corporate Eliminations Total - ---- -------- -------- -------- --------- ------------ -------- Net sales: (in thousands) Customers $402,743 $217,962 $100,055 $ --- $ --- $720,760 Intercompany 63,048 27,309 4,961 --- (95,318) --- -------- -------- -------- -------- -------- -------- Total net sales 465,791 245,271 105,016 --- (95,318) 720,760 Operating income (loss) 99,361 40,889 6,096 (12,975) (915) 132,456 Assets 561,419 303,076 55,281 380,979 (526,379) 774,376 1996 - ---- Net sales: Customers $364,221 $198,601 $ 93,735 $ --- $ --- $656,557 Intercompany 52,755 27,028 4,832 --- (84,615) --- -------- -------- -------- -------- -------- -------- Total net sales 416,976 225,629 98,567 --- (84,615) 656,557 Operating income (loss) 91,617 33,685 3,669 (8,975) (532) 119,464 Assets 411,655 259,826 48,079 218,314 (270,212) 667,662 1995 - ---- Net sales: Customers $322,929 $174,139 $ 74,960 $ --- $ --- $572,028 Intercompany 46,613 13,680 4,822 --- (65,115) --- -------- -------- -------- -------- -------- -------- Total net sales 369,542 187,819 79,782 --- (65,115) 572,028 Operating income (loss) 84,914 26,015 434 (9,302) (1,326) 100,735 Assets 319,429 258,723 43,631 128,823 (168,223) 582,383 Third party export sales from the United States are less than ten percent of consolidated net sales. One customer accounted for 12% of consolidated net sales in 1997. No customer accounted for 10% or more of consolidated net sales in 1996 and 1995.
62 NOTE 5 - INVENTORIES - -------------------- Inventories consist of the following: December 31, -------------------- 1997 1996 -------- -------- (in thousands) Finished goods $ 63,987 $ 73,650 Work-in-process 24,844 23,936 Raw materials and supplies 35,917 27,812 -------- -------- $124,748 $125,398 ======== ======== Pre-tax income was $.4 million, $.3 million, and $.2 million lower in 1997, 1996,and 1995, respectively as a result of using the LIFO method as compared to using the FIFO method. If the FIFO method had been used to determine the cost of LIFO inventories, the amounts at which net inventories are stated would be lower than reported at December 31, 1997 and 1996 by $1.3 million and $1.7 million, respectively. NOTE 6 - PROPERTY, PLANT AND EQUIPMENT - -------------------------------------- Property, plant and equipment consist of the following: December 31, -------------------- 1997 1996 -------- -------- Assets, at cost: (in thousands) Land $ 15,045 $ 17,222 Buildings and improvements 68,009 68,185 Machinery and equipment 117,243 103,887 Construction in progress 11,856 8,505 -------- -------- 212,153 197,799 Less: Accumulated depreciation 65,023 56,341 -------- -------- $147,130 $141,458 ======== ======== NOTE 7 - ACCRUED LIABILITIES - ---------------------------- Accrued liabilities consist of the following: December 31, -------------------- 1997 1996 -------- -------- Payroll, commissions, bonuses (in thousands) and other cash compensation $ 16,554 $ 10,739 Employee benefits 6,803 6,710 Other 48,206 35,055 -------- -------- $ 71,563 $ 52,504 ======== ======== 63 NOTE 8 - FINANCING ARRANGEMENTS - ------------------------------- Short-Term Borrowings - --------------------- Short-term bank borrowings amounted to $23.4 million and $26.3 million at December 31, 1997 and 1996, respectively. Unused lines of credit for short- term financing at December 31, 1997 and 1996 were $54.0 million and $63.5 million, respectively. Substantially all unused lines of credit have no major restrictions and are renewable annually. Interest is charged on borrowings under these lines of credit at various rates, generally under prime or equivalent money rates. Long-Term Borrowings - -------------------- December 31, -------------------- 1997 1996 -------- -------- (in thousands) $175.0 million bank revolving loan facility maturing October 2002, Swiss Francs 45.4 million, Pounds Sterling 6.5 million, and $50.0 million outstanding at December 31, 1997, bearing interest at a weighted average of 2.1% for Swiss Francs borrowings, 7.7% for Pounds Sterling borrowings, and 6.0% for dollar borrowings $ 91,737 $ --- $175.0 million bank revolving loan facility maturing December 1999 --- 10,000 $60.0 million bank term loan maturing December 1999 --- 55,636 $25.0 million bank multicurrency revolving credit facility maturing December 1999, various currencies outstanding at December 31, 1997, bearing interest at a weighted average of 8.1% 12,981 8,577 Other borrowings, various currencies and rates 1,370 1,318 -------- -------- 106,088 75,531 Less: Current portion (included in notes payable and current portion of long-term debt) 583 422 -------- -------- $105,505 $ 75,109 ======== ======== In October 1997, the Company entered into new revolving credit agreements (the "Revolving Credit Agreements") for a $175.0 million five-year facility and a $125.0 million 364-day facility. The Revolving Credit Agreements replaced the $175.0 million facility maturing in 1999 and the $60.0 million bank term loan. The Revolving Credit Agreements contain certain affirmative and negative covenants as to the operations and financial condition of the Company, the most 64 restrictive of which pertain to asset dispositions, maintenance of certain levels of net worth, and prescribed ratios of indebtedness to total capital and operating income plus depreciation and amortization to interest expense. The Company pays a facility fee of .10 percent annually on the amount of the commitment under the $175.0 five-year facility and .08 percent annually under the 364-day facility. Interest rates on amounts borrowed under the facility will depend on the maturity of the borrowing, the currency borrowed, the interest rate option selected, and, in the event of a LIBOR borrowing, the ratio of interest expense to operating income. The bank multicurrency revolving credit facility contains affirmative and negative covenants as to the operations and financial condition of the Company, which are substantially equivalent to those in the Revolving Credit Agreements. The Company pays a facility fee of .10 percent annually on the entire amount of the bank multicurrency revolving credit facility commitment. NOTE 9 - OTHER LIABILITIES - -------------------------- Other liabilities consist of the following: December 31, -------------------- 1997 1996 -------- -------- (in thousands) Pension $ 29,357 $ 30,870 Medical and other postretirement benefits 10,307 10,299 Other 4,290 8,298 -------- -------- $ 43,954 $ 49,467 ======== ======== NOTE 10 - STOCKHOLDERS' EQUITY - ------------------------------ All amounts have been restated to reflect the stock split in 1997. In December 1997, 1996, and 1995, the Board of Directors authorized the repurchase of up to .5 million, 5.4 million, and 5.6 million shares, respectively, of common stock on the open market or in negotiated transactions. Each of these authorizations to repurchase shares expires on December 31 of the following year. The Company repurchased forty thousand shares for $.9 million, .2 million shares for $3.8 million and 2.7 million shares for $42.7 million in 1997, 1996 and 1995, respectively. A former Chairman of the Board holds options to purchase 30,000 shares of common stock at an exercise price of $22.25, which was equal to the market price on the date of grant. The options are exercisable at any time through January 2004. The Company issued 360,000 stock purchase warrants in August 1990 in connection with an acquisition to the principals of an investment banking firm, one of whom is a former director of the Company. The warrants are exercisable at any time through August 28, 2000, at an exercise price of $3.06 per share (market price at date issued). During 1997, 16,000 of the warrants were exercised and 52,000 remain outstanding at December 31, 1997. The Company has three stock option plans (1987 Plan, 1992 Plan, and 1993 Plan). Under the 1987 and 1992 Plans, a committee appointed by the Board of 65 Directors granted to key employees and directors of the Company options to purchase shares of common stock at an exercise price determined by such committee, but not less than the fair market value of the common stock on the date of grant. Options expire ten years and one month or ten years and one day after date of grant under the 1987 Plan and 1992 Plan, respectively. The 1993 Plan enables the Company to grant "incentive stock options" ("ISOs") within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended, to key employees of the Company, and stock options which do not constitute ISOs ("NSOs") to key employees and non-employee directors of the Company. Each non-employee director receives automatic and non-discretionary NSOs to purchase 6,000 shares of common stock on the date he or she becomes a non-employee director and an additional 6,000 shares on the third anniversary of the date the non-employee director was last granted an option. Grants of options to key employees are solely discretionary. ISOs and NSOs generally expire ten years from date of grant and become exercisable over a period of three years after the date of grant at the rate of one-third per year, except that they become immediately exercisable upon death, disability or retirement. The committee may shorten or lengthen the exercise schedule for any or all options granted to key employees. The exercise price of ISOs and NSOs is generally equal to the fair market value on the date of grant. ISOs granted to an individual who possesses more than 10% of the combined voting power of all classes of stock of the Company have an exercise price of 110% of fair market value and expire five years from the date of grant. The number of shares available for options under the 1993 Plan is adjusted annually to equal 5% of the outstanding common shares of the Company on each January 1. All options granted to date under the 1993 Plan have been NSOs. Options granted under any of the three Plans may be exercised only while the grantee is employed by the Company or is a member of the Board of Directors or within defined periods after termination. The following is a summary of the status of the Plans as of December 31, 1997, 1996, and 1995 and changes during the years ending on those dates: ----Outstanding---- ----Exercisable---- Weighted Weighted Available Average Average for Exercise Exercise Grant Shares Price Shares Price Shares --------- -------- --------- -------- --------- December 31, 1994 1,349,284 $15.81 571,484 $ 7.42 2,649,028 Authorized --- 5,950 Granted 894,600 18.34 (894,600) Exercised (377,762) 5.18 --- Expired/Canceled (134,000) 22.00 134,000 --------- --------- December 31, 1995 1,732,122 18.96 393,126 16.74 1,894,378 Authorized --- (80,612) Granted 363,600 22.66 (363,600) Exercised (71,878) 16.71 --- Expired/Canceled (105,856) 20.38 102,334 --------- --------- 66 December 31, 1996 1,917,988 19.66 805,848 18.64 1,552,500 Authorized --- (5,586) Granted 489,300 28.00 (489,300) Exercised (288,235) 18.26 --- Expired/Canceled (82,456) 19.60 82,456 --------- --------- December 31, 1997 2,036,597 21.87 1,090,921 19.71 1,140,070 ========= The following table summarizes information about stock options outstanding under the Plans at December 31, 1997: -------Options Outstanding-------- -Options Exercisable- Weighted Number Average Number Outstanding Remaining Weighted Exercisable Weighted At Contractual Average At Average Range of December 31, Life Exercise December 31, Exercise Exercise Prices 1997 (in years) Price 1997 Price - --------------- ----------- ----------- -------- ----------- -------- $ 2.60 - $11.60 60,000 3.7 $ 7.31 60,000 $ 7.31 14.50 - 17.40 91,532 6.8 17.21 62,398 17.17 17.41 - 20.30 689,566 7.5 18.77 470,371 18.82 20.31 - 23.20 479,266 6.5 22.08 420,204 22.19 23.21 - 26.10 326,133 8.9 23.65 77,948 23.38 26.11 - 29.00 390,100 9.9 28.91 --- --- --------- --------- 2,036,597 7.8 $21.87 1,090,921 $19.71 ========= ========= The per share weighted-average fair value of stock options granted during 1997, 1996 and 1995 was $10.43, $8.65 and $6.81, respectively, on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions: 1997-expected dividend yield 0.8%, risk-free interest rate 6.0%, expected volatility 26%, and an expected life of 6.5 years; 1996-expected dividend yield 0.8%, risk-free interest rate 6.4%, expected volatility 26%, and an expected life of 6.5 years; and 1995-expected dividend yield 0.8%, risk-free interest rate 5.9%, expected volatility 26%, and an expected life of 6.5 years. The Company applies APB 25 in accounting for the Plans and, accordingly, no compensation cost has been recognized for stock options in the financial statements. Had the Company determined compensation cost based on the fair value of stock options at the grant date under SFAS 123, the Company's net income would have been reduced as indicated below: Year Ended December 31, 1997 1996 1995 -------- -------- -------- (in thousands, except per share amounts) Net income As reported $ 74,554 $ 67,222 $ 53,963 Pro forma under SFAS 123 72,851 66,109 53,774 Basic earnings per common share As reported 1.38 1.25 1.00 Pro forma under SFAS 123 1.35 1.23 1.00 Diluted earnings per common share As reported 1.37 1.25 1.00 Pro forma under SFAS 123 1.34 1.22 .99 67 Pro forma net income reflects only options granted since January 1995. Therefore, the full impact of calculating compensation cost for stock options under SFAS 123 is not reflected in the pro forma net income amounts presented above because compensation cost is reflected over the options' vesting period of 3 years and compensation cost for options granted prior to January 1, 1995 is not considered. NOTE 11 - INCOME TAXES - ---------------------- The components of income before income taxes are as follows: Year Ended December 31, -------------------------------- 1997 1996 1995 -------- -------- -------- (in thousands) United States $ 77,398 $ 77,619 $ 66,403 Foreign 44,608 33,341 23,614 -------- -------- -------- $122,006 $110,960 $ 90,017 ======== ======== ======== The components of the provision for income taxes are as follows: Year Ended December 31, -------------------------------- 1997 1996 1995 -------- -------- -------- Current: (in thousands) U.S. federal $ 27,407 $ 26,715 $ 21,526 U.S. state 4,350 4,401 4,112 Foreign 17,523 15,630 11,627 -------- -------- -------- Total 49,280 46,746 37,265 -------- -------- -------- Deferred: U.S. federal (1,671) (886) (994) U.S. state (191) (139) (170) Foreign 34 (1,983) (47) -------- -------- -------- Total (1,828) (3,008) (1,211) -------- -------- -------- $ 47,452 $ 43,738 $ 36,054 ======== ======== ======== 68 The provision for income taxes is reconciled to income before income taxes as follows: Year Ended December 31, -------------------------------- 1997 1996 1995 -------- -------- -------- Statutory federal income tax rate 35.0% 35.0% 35.0% Effect of: State income taxes, net of federal benefit 2.3 2.3 3.0 Nondeductible amortization of goodwill 1.3 1.2 1.5 Foreign losses with no tax benefit 1.2 .9 1.4 Other (.9) --- (.8) -------- -------- -------- 38.9% 39.4% 40.1% ======== ======== ======== The tax effect of temporary differences giving rise to deferred tax assets and liabilities are as follows: December 31, 1997 December 31, 1996 ----------------------- ----------------------- Current Noncurrent Current Noncurrent Asset Asset Asset Asset (Liability) (Liability) (Liability) (Liability) ----------- ----------- ----------- ----------- (in thousands) Employee benefit accruals $ 952 $ 5,185 $ 879 $ 5,056 Product warranty accruals 1,016 --- 1,166 --- Facility relocation accruals 425 1,040 2,084 702 Insurance premium accruals 2,515 --- 2,090 --- Differences in financial reporting and tax basis for: Inventory 851 --- (2,010) --- Property, plant and equipment --- (24,043) --- (26,249) Identifiable intangible assets --- (10,126) --- (9,855) Other 2,685 697 2,344 541 Foreign tax credit carryforwards --- --- --- 413 Tax loss carryforwards in foreign jurisdictions --- 6,520 --- 5,987 Valuation allowance for foreign tax credit and tax loss carryforwards --- (6,520) --- (6,400) -------- -------- -------- -------- $ 8,444 $(27,247) $ 6,553 $(29,805) ======== ======== ======== ======== 69 Current and non-current deferred tax assets and liabilities are included in the following balance sheet captions: December 31, -------------------- 1997 1996 -------- -------- (in thousands) Prepaid expenses and other current assets $ 11,096 $ 8,571 Income taxes payable (2,652) (2,018) Other noncurrent assets, net 400 195 Deferred income taxes (27,647) (30,000) The provision for income taxes was reduced due to utilization of tax loss carryforwards by $151,000 in 1996. Certain foreign subsidiaries of the Company have tax loss carryforwards of $17.2 million at December 31, 1997, of which $11.1 million expire through 2005 and $6.1 million may be carried forward indefinitely. The tax benefit of these tax loss carryforwards has been offset by a valuation allowance. Income taxes have not been provided on $52.6 million of undistributed earnings of foreign subsidiaries, which will continue to be reinvested. If remitted as dividends, these earnings could become subject to additional tax. It is not practicable to estimate the amount of additional tax that might be payable; however, the Company believes that U.S. foreign tax credits would largely eliminate any U.S. tax payable. NOTE 12 - BENEFIT PLANS - ----------------------- Substantially all of the employees of the Company and its subsidiaries are covered by government or Company-sponsored pension plans. Total pension costs for Company-sponsored defined benefit, defined contribution and employee stock ownership plans amounted to $7.1 million in 1997, $7.8 million in 1996 and $7.5 million in 1995. The DENTSPLY Employee Stock Ownership Plan ("ESOP") covers substantially all the U.S. non-union employees of DENTSPLY. Contributions to the ESOP for 1997, 1996 and 1995 were $2.1 million, $2.0 million and $1.7 million, respectively. In addition, interest expense incurred on ESOP loans and participant notes approximated $.2 million for 1995. Interest for 1997 and 1996 was paid directly from income of the ESOP Trust. The Company makes annual contributions to the ESOP of not less than the amounts required to service ESOP debt. In connection with the refinancing of ESOP debt in March 1994, the Company will also make additional cash contributions totaling at least $3.0 million over the next six years. Dividends received by the ESOP on allocated shares are passed through to Plan participants. Most ESOP shares were initially pledged as collateral for its debt. As the debt is repaid, shares are released from collateral and allocated to active employees, based on the proportion of debt service paid in the year. At December 31, 1997, the ESOP held 8.4 million shares, of which 7.1 million shares were allocated to Plan participants and 1.3 million shares were unallocated and pledged as collateral for ESOP debt. Unallocated shares held by the ESOP were acquired prior to December 31, 1992 and are accounted for in accordance with Statement of Position 76-3. Accordingly, all shares held by the ESOP are considered outstanding and are included in the earnings per common share computations. The Employee Stock Ownership Plan reserve consists of a loan receivable from the ESOP bearing interest at 3.06%, payable in equal quarterly 70 installments through March 31, 2004. The Company maintains pension plans for its employees in Germany and Switzerland. These plans provide benefits based upon age, years of service and remuneration. The German plans are unfunded book reserve plans. The pension provision for the German and Swiss plans included the following components: Year Ended December 31, -------------------------------- 1997 1996 1995 -------- -------- -------- (in thousands) Service cost $ 1,995 $ 2,464 $ 1,935 Interest cost on projected benefit obligations 2,622 3,171 2,839 Net investment return on plan assets (1,317) (1,296) (251) Net amortization and deferral (651) (412) 296 -------- -------- -------- $ 2,649 $ 3,927 $ 4,819 ======== ======== ======== The funded status and amounts recognized in the consolidated balance sheets for these retirement plans were as follows: December 31, 1997 December 31, 1996 ------------------------ ------------------------ Assets Accumulated Assets Accumulated Exceeded Benefits Exceeded Benefits Accumulated Exceeded Accumulated Exceeded Benefits Assets Benefits Assets ----------- ----------- ----------- ----------- Actuarial present value of: (in thousands) Vested benefit obligations $ 18,635 $ 23,688 $ 18,551 $ 24,204 ======== ======== ======== ======== Accumulated benefit obligations $ 18,635 $ 25,181 $ 18,551 $ 26,123 ======== ======== ======== ======== Actuarial present value of projected benefit obligations $ 19,566 $ 28,089 $ 19,213 $ 28,579 Plan assets at fair value 27,508 --- 25,557 --- -------- -------- -------- -------- Plan assets less (greater) than projected benefit obligations (7,942) 28,089 (6,344) 28,579 Unrecognized obligation --- (1,314) --- (1,640) Unrecognized net gain 5,674 1,506 3,675 4,616 -------- -------- -------- -------- (Prepaid pension expense) pension liability $ (2,268) $ 28,281 $ (2,669) $ 31,555 ======== ======== ======== ======== The projected benefit obligations for these plans were determined using 71 discount rates of 7.0 percent as of December 31, 1997 and 7.5 percent as of December 31, 1996 in Germany and 4.5 percent as of December 31, 1997 and 1996 in Switzerland. The assumed long-term rate of return on Swiss plan assets for 1997 was 5.0 percent. The weighted average rate of increase used for future compensation levels was 3.0 percent for 1997 and 5.0 percent for 1996 and 1995 in Germany and 3.0 percent for 1997, 1996 and 1995 in Switzerland. The Company sponsors an unfunded defined benefit postretirement medical plan that covers certain U.S. based non-union employees. This postretirement healthcare plan is contributory, with retiree contributions adjusted annually to limit the Company's contribution to $21 per month per retiree for most participants who retired after June 1, 1985. The Company also sponsors unfunded non-contributory postretirement medical plans for a limited number of union employees and their spouses and retirees of a discontinued operation. The following table sets forth the combined status of the plans: December 31, -------------------- 1997 1996 -------- -------- Accumulated postretirement benefit (in thousands) obligation: Retirees $ 5,839 $ 8,270 Fully eligible active plan participants 283 464 Other active plan participants 813 1,496 -------- -------- Accumulated postretirement benefit obligation at end of period 6,935 10,230 Unrecognized gain 3,372 69 -------- -------- Net postretirement benefit liability $ 10,307 $ 10,299 ======== ======== Year Ended December 31, -------------------------------- 1997 1996 1995 -------- -------- -------- Net periodic postretirement benefit (in thousands) cost for the period included the following components: Service cost - benefits attributed to service during the period $ 159 $ 188 $ 188 Interest cost on accumulated postretirement benefit obligation 605 764 804 Net amortization and deferral (130) --- --- -------- -------- -------- Net periodic postretirement benefit cost $ 634 $ 952 $ 992 ======== ======== ======== 72 For measurement purposes, the annual rate of increase in the per capita cost of covered healthcare benefits assumed for 1997 and thereafter was 7% in 1997 and 10% in 1996 and 1995. The healthcare cost trend rate assumption has a significant effect on the amounts reported. To illustrate, increasing the assumed healthcare cost trend rates by one percentage point in each year would increase the accumulated postretirement benefit obligation at December 31, 1997 by $.6 million and the aggregate of the service and interest cost components of net periodic postretirement benefit cost by $.1 million for the year then ended. The weighted average discount rate used in determining the accumulated postretirement benefit obligation was 7.25% for 1997 and 8% for 1996. NOTE 13 - COMMITMENTS AND CONTINGENCIES - --------------------------------------- The Company leases automobiles and certain office, warehouse, machinery and equipment and manufacturing facilities under noncancelable operating leases. These leases generally require the Company to pay insurance, property taxes and other expenses related to the leased property. Total rental expense for all operating leases was $8.8 million for 1997, $9.2 million for 1996 and $8.8 million for 1995. Rental commitments, principally for real estate (exclusive of taxes, insurance and maintenance), automobiles and office equipment amount to: $7.2 million for 1998, $6.1 million for 1999, $3.9 million for 2000, $1.7 million for 2001, $1.2 million for 2002, and $8.9 million thereafter (net of sublease rentals of $1.0 million in 1998, $.2 million in 1999, $.2 million in 2000, $.2 million in 2001, $.1 million in 2002, and $.5 million thereafter). In March 1997, the American Arbitration Association's Commercial Arbitration Tribunal ordered a judgment in favor of the Company terminating, effective March 19, 1997, the Implant Distribution Agreement between Core-Vent Corporation and DENTSPLY's Implant Division. The sales, distribution and administrative functions acquired by the Company in 1991 under the Implant Distribution Agreement, along with certain assets of the implant business, have been transferred back to Core-Vent Corporation. The noncancelable purchase commitment related to the Implant Distribution Agreement has been terminated. The Company has no material noncancelable purchase commitments. The Company has employment agreements with its executive officers and certain other management employees. These agreements generally provide for salary continuation for a specified number of months under certain circumstances. If all of the employees under contract were to be terminated by the Company without cause (as defined) the Company's liability would be approximately $6.1 million at December 31, 1997. The Company is from time to time a party to lawsuits arising out of its operations. The Company believes that pending litigation to which it is a party will not have a material adverse effect upon its consolidated financial position or results of operations. 73 NOTE 14 - UNUSUAL OR NON-RECURRING ITEMS - ---------------------------------------- During 1995, the Company recorded certain unusual or non-recurring charges which impacted the comparison with other periods. These unusual or non- recurring charges, on an after-tax basis, consisted of $1.4 million of costs associated with consolidation of all executive functions in York, Pennsylvania and a loss of $.4 million on the sale of the corporate aircraft. The impact of these expenses on basic earnings per common share was $.035 in 1995. NOTE 15 - QUARTERLY FINANCIAL INFORMATION (UNAUDITED) - ----------------------------------------------------- First Second Third Fourth Quarter Quarter Quarter Quarter -------- -------- -------- -------- 1997 (in thousands, except per share amounts) - ---- Net sales $172,359 $178,307 $172,674 $197,420 Gross profit 88,050 90,771 87,802 102,103 Operating income 28,055 32,519 29,888 41,994 Net income 16,924 17,843 16,256 23,531 Earnings per common share-basic .31 .33 .30 .44 Earnings per common share-diluted .31 .33 .30 .43 Cash dividends declared per common share .04625 .04625 .05125 .05125 1996 - ---- Net sales $155,910 $165,029 $155,327 $180,291 Gross profit 76,928 81,640 74,472 91,630 Operating income 26,901 31,228 24,699 36,636 Net income 14,987 17,770 13,873 20,592 Earnings per common share-basic .28 .33 .26 .39 Earnings per common share-diluted .28 .33 .26 .38 Cash dividends declared per common share .04125 .04125 .04125 .04625 74
Schedule II DENTSPLY INTERNATIONAL INC. VALUATION AND QUALIFYING ACCOUNTS FOR THE THREE YEARS ENDED DECEMBER 31, 1997 Additions -------------------------- Charged Balance at (Credited) Charged to Write-offs Balance Beginning To Costs Other Net of Translation at End Description of Period And Expenses Accounts Recoveries Adjustment of Period - ----------- ---------- ------------ ----------- ---------- ----------- ---------- (in thousands) Allowance for doubtful accounts: For Year Ended December 31, 1995 $1,677 $ 515 $ 209 (a) $ (213) $ 66 $ 2,254 1996 2,254 498 20 (b) (224) (73) 2,475 1997 2,475 590 2,496 (c) (746) (178) 4,637 Allowance for trade discounts: For Year Ended December 31, 1995 506 2,446 - (2,220) 5 737 1996 737 2,693 - (2,920) (3) 507 1997 507 2,904 - (1,214) (71) 2,126 Inventory valuation reserves: For Year Ended December 31, 1995 5,622 908 15,608 (d) (1,869) 459 20,728 1996 20,728 (569) 167 (b) (1,380) (2,128) 16,818 1997 16,818 (2,178) 2,282 (e) (1,679) (1,169) 14,075 - ------------------ (a) Maillefer acquisition. (b) Tulsa acquisition. (c) Includes $2,498 from acquisitions of MPL, New Image, SIMFRA and SPAD. (d) Includes $15,531 from Maillefer acquisition. (e) Includes $2,128 from acquisitions of MPL, New Image, SIMFRA and SPAD.
75 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. DENTSPLY INTERNATIONAL INC. By:/s/ John C. Miles II ----------------------- John C. Miles II Vice Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. /s/ Leslie A. Jones Chairman of the Board March 27, 1998 - ------------------------- and a Director Leslie A. Jones /s/ John C. Miles II Vice Chairman of the March 27, 1998 - ------------------------- Board and Chief Executive John C. Miles II Officer and a Director (Principal Executive Officer) /s/ Gerald K. Kunkle President and Chief March 27, 1998 - ------------------------- Operating Officer Gerald K. Kunkle /s/ Edward D. Yates Senior Vice President March 27, 1998 - ------------------------- and Chief Financial Edward D. Yates Officer (Principal Financial and Accounting Officer) /s/ Burton C. Borgelt Director March 27, 1998 - ------------------------- Burton C. Borgelt /s/ Douglas K. Chapman Director March 27, 1998 - ------------------------- Douglas K. Chapman Michael J. Coleman Director March 27, 1998 - ------------------------- Michael J. Coleman 76 /s/ Arthur A. Dugoni Director March 27, 1998 - ------------------------- Arthur A. Dugoni, D.D.S., M.S.D. /s/ C. Frederick Fetterolf Director March 27, 1998 - -------------------------- C. Frederick Fetterolf /s/ Edgar H. Schollmaier Director March 27, 1998 - ------------------------- Edgar H. Schollmaier /s/ W. Keith Smith Director March 27, 1998 - ------------------------- W. Keith Smith 77 EXHIBIT INDEX Sequential Exhibit No. Description Page No. - ----------- ----------- ---------- 3.1 Certificate of Incorporation (1) 3.2 By-Laws, as amended (1) 4.1 364-Day and 5-Year Competitive Advance, 81 Revolving Credit and Guaranty Agreements dated as of October 23, 1997 among the Company, the guarantors named therein, the Chase Manhattan Bank as Administrative Agent, and ABN Amro Bank, N.V. as Documentation Agent. (Note: All attachments have been omitted. Copies of such attachments Will be furnished supplementally to the Securites and Exchange Commission upon request.) 10.1 (a) 1987 Employee Stock Option Plan (4) (b) Amendment No. 1 to the Company's (5) 1987 Employee Stock Option Plan 10.2 (a) Letter Agreement dated June 29, (3) 1990 by and between Cravey, Green & Wahlen Incorporated and the Company (b) Stock Purchase Warrant dated August (2) 28, 1990 issued to Cravey, Green & Wahlen Incorporated by the Company (c) Stock Purchase Warrant Plan adopted (6) February 25, 1993 10.3 1992 Stock Option Plan adopted May (7) 26, 1992 10.4 (a) Employee Stock Ownership Plan as (10) amended effective as of December 1, 1982, restated as of January 1, 1991 (b) Second Amendment to the DENTSPLY (13) Employee Stock Ownership Plan 10.5 (a) Retainer Agreement dated December (8) 29, 1992 between the Company and State Street Bank and Trust Company ("State Street") (b) Trust Agreement between the Company (9) and State Street Bank and Trust Company dated as of August 11, 1993 (c) Amendment to Trust Agreement (9) between the Company and State Street Bank and Trust Company effective August 11, 1993 10.6 DENTSPLY Stock Option Conversion (8) Plan approved June 23, 1993 10.7 Employment Agreement dated January (12) 1, 1996 between the Company and Burton C. Borgelt 10.8 (a) Employment Agreement dated as of (8) December 31, 1987 between the Company and John C. Miles II 78 (b) Amendment to Employment Agreement (12) between the Company and John C. Miles II dated February 16, 1996, effective January 1, 1996 10.9 Employment Agreement dated as of (8) December 31, 1987, as amended as of February 8, 1990, between the Company and Leslie A. Jones 10.10 Employment Agreement dated as of (8) December 10, 1992 between the Company and Michael R. Crane 10.11 Employment Agreement dated as of (8) December 10, 1992 between the Company and Edward D. Yates 10.12 Employment Agreement dated as of (8) December 10, 1992 between the Company and J. Patrick Clark 10.13 Employment Agreement dated January (12) 1, 1996 between the Company and W. William Weston 10.14 Employment Agreement dated January (12) 1, 1996 between the Company and Thomas L. Whiting 10.15 Employment Agreement dated October (13) 11, 1996 between the Company and Gerald K. Kunkle Jr. 10.16 1993 Stock Option Plan (1) 10.17 Revolving Credit Agreement among (10) DENTSPLY International Inc., each of the guarantors named therein, and ABN AMRO Bank N.V., dated as of September 9, 1994 10.18 (a) DENTSPLY International Inc. 401(k) (10) Savings Plan Summary Plan Description, as amended effective January 1, 1994 (b) Fourth Amendment to the DENTSPLY (13) International 401(k) Savings Plan 10.19 Midwest Dental Products Corporation (10) Pension Plan as amended and re- stated effective January 1, 1989 10.20 Revised Ransom & Randolph Pension (10) Plan, as amended effective as of September 1, 1985, restated as of January 1, 1989 10.21 DENTSPLY International Inc. (13) Directors' Deferred Compensation Plan effective January 1, 1997 10.22 Asset Purchase and Sale Agreement, (11) dated January 10, 1996, between Tulsa Dental Products, L.L.C. and DENTSPLY International Inc. 21.1 Subsidiaries of the Company 250 23.1 Consent of KPMG Peat Marwick LLP 252 27 Financial Data Schedule 253 - -------------- 79 (1) Incorporated by reference to exhibit included in the Company's Registration Statement on Form S-8 (No. 33-71792). (2) Incorporated by reference to exhibit included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1991, File No. 0-16211. (3) Incorporated by reference to exhibit included in the Company's Registration Statement on Form S-2 (No. 33-43079). (4) Incorporated by reference to exhibit included in the Company's Registration Statement on Form S-18 (No. 33- 15355C). (5) Incorporated by reference to exhibit included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1992, File No. 0-16211. (6) Incorporated by reference to exhibit included in the Company's Registration Statement on Form S-8 (No. 33-61780). (7) Incorporated by reference to exhibit included in the Company's Registration Statement on Form S-8 (No. 33-52616). (8) Incorporated by reference to exhibit included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1993, File No. 0-16211. (9) Incorporated by reference to exhibit included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1993, File No. 0-16211. (10) Incorporated by reference to exhibit included in the Company's Annual Report on Form 10-K for the fiscal year December 31, 1994, File No. 0-16211. (11) Incorporated by reference to exhibit included in the Company's Current Report on Form 8-K dated January 10, 1996, File No. 0-16211. (12) Incorporated by reference to exhibit included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1995, File No. 0-16211. (13) Incorporated by reference to exhibit included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31,1996, File No. 0-16211. 80
                                              CONFORMED COPY
                                                  FACILITY A
                                                     364-DAY
============================================================

            COMPETITIVE ADVANCE, REVOLVING CREDIT
                    AND GUARANTY AGREEMENT


                         dated as of


                       October 23, 1997


                            among


         DENTSPLY INTERNATIONAL INC., as Borrower,

              THE GUARANTORS NAMED HEREIN,

                THE BANKS NAMED HEREIN,

     THE CHASE MANHATTAN BANK, as Administrative Agent,

                              and

         ABN AMRO BANK N.V., as Documentation Agent

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                                                                 81



                      TABLE OF CONTENTS

                                                        Page
                                                        ----
                   INTRODUCTORY STATEMENT

                         ARTICLE I

Definitions. . . . . . . . . . . . . . . . . . . . . .     2

                         ARTICLE II

                           Loans
                           -----

SECTION 2.01.  Commitments . . . . . . . . . . . . . .    19
SECTION 2.02.  Loans . . . . . . . . . . . . . . . . .    19
SECTION 2.03.  Use of Proceeds . . . . . . . . . . . .    21
SECTION 2.04.  Competitive Bid Procedure . . . . . . .    21
SECTION 2.05.  Revolving Credit Borrowing
                    Procedure. . . . . . . . . . . . .    24
SECTION 2.06.  Refinancings. . . . . . . . . . . . . .    25
SECTION 2.07.  Fees. . . . . . . . . . . . . . . . . .    26
SECTION 2.08.  Notes; Repayment of Loans . . . . . . .    27
SECTION 2.09.  Interest on Loans . . . . . . . . . . .    28
SECTION 2.10.  Interest on Overdue Amounts . . . . . .    29
SECTION 2.11.  Alternate Rate of Interest. . . . . . .    29
SECTION 2.12.  Termination, Reduction, Increase and
                    Extension of Commitments . . . . .    30
SECTION 2.13.  Prepayment of Loans . . . . . . . . . .    33
SECTION 2.14.  Eurodollar Reserve Costs. . . . . . . .    34
SECTION 2.15.  Reserve Requirements; Change
                    in Circumstances . . . . . . . . .    34
SECTION 2.16.  Change in Legality. . . . . . . . . . .    36
SECTION 2.17.  Indemnity . . . . . . . . . . . . . . .    37
SECTION 2.18.  Pro Rata Treatment. . . . . . . . . . .    38
SECTION 2.19.  Right of Setoff . . . . . . . . . . . .    39
SECTION 2.20.  Sharing of Setoffs. . . . . . . . . . .    39
SECTION 2.21.  Payments. . . . . . . . . . . . . . . .    40
SECTION 2.22.  United States Withholding . . . . . . .    40
SECTION 2.23.  Participations; Assignments . . . . . .    42

                        ARTICLE III

               Representations and Warranties
               ------------------------------

SECTION 3.01.  Organization; Corporate Powers. . . . .    47
SECTION 3.02.  Authorization . . . . . . . . . . . . .    47
SECTION 3.03.  Enforceability. . . . . . . . . . . . .    48
SECTION 3.04.  Governmental Approvals. . . . . . . . .    48
SECTION 3.05.  Financial Statements and Condition. . .    48
SECTION 3.06.  No Material Adverse Change. . . . . . .    50

                                                                 82





SECTION 3.07.  Title to Properties . . . . . . . . . .    50
SECTION 3.08.  Litigation. . . . . . . . . . . . . . .    50
SECTION 3.09.  Tax Returns . . . . . . . . . . . . . .    51
SECTION 3.10.  Agreements. . . . . . . . . . . . . . .    51
SECTION 3.11.  Employee Benefit Plans. . . . . . . . .    52
SECTION 3.12.  Investment Company Act; Public
                    Utility Holding Company Act;
                    Federal Power Act. . . . . . . . .    53
SECTION 3.13.  Federal Reserve Regulations . . . . . .    53
SECTION 3.14.  Defaults; Compliance with Laws. . . . .    53
SECTION 3.15.  Use of Proceeds . . . . . . . . . . . .    54
SECTION 3.16.  Affiliated Companies. . . . . . . . . .    54
SECTION 3.17.  Environmental Liabilities . . . . . . .    54
SECTION 3.18.  Disclosure. . . . . . . . . . . . . . .    55
SECTION 3.19.  Insurance . . . . . . . . . . . . . . .    56

                         ARTICLE IV

                   Conditions of Lending
                   ---------------------

SECTION 4.01.  All Borrowings. . . . . . . . . . . . .    56
SECTION 4.02.  Closing Date. . . . . . . . . . . . . .    57

                         ARTICLE V

                   Affirmative Covenants
                   ---------------------

SECTION 5.01.  Corporate Existence . . . . . . . . . .    59
SECTION 5.02.  Maintenance of Property . . . . . . . .    60
SECTION 5.03.  Insurance . . . . . . . . . . . . . . .    60
SECTION 5.04.  Obligations and Taxes . . . . . . . . .    60
SECTION 5.05.  Financial Statements; Reports, etc. . .    61
SECTION 5.06.  Defaults and Other Notices. . . . . . .    63
SECTION 5.07.  ERISA . . . . . . . . . . . . . . . . .    63
SECTION 5.08.  Access to Premises and Records. . . . .    64
SECTION 5.09.  Compliance with Laws, etc.. . . . . . .    64
SECTION 5.10.  Security Interests. . . . . . . . . . .    65
SECTION 5.11.  Subsidiary Guarantors . . . . . . . . .    65
SECTION 5.12.  Environmental Laws. . . . . . . . . . .    65
SECTION 5.13.  Existing Credit Agreements. . . . . . .    66

                         ARTICLE VI

                     Negative Covenants
                     ------------------

SECTION 6.01.  Liens . . . . . . . . . . . . . . . . .    67
SECTION 6.02.  Indebtedness. . . . . . . . . . . . . .    69
SECTION 6.03.  Mergers, Consolidations, Sales
                    of Assets and Acquisitions . . . .    69
SECTION 6.04.  Change of Business. . . . . . . . . . .    70

                                                                 83





SECTION 6.05.  Transactions with Affiliates. . . . . .    71
SECTION 6.06.  Sale and Leaseback. . . . . . . . . . .    71
SECTION 6.07.  Dividends by Subsidiaries . . . . . . .    72
SECTION 6.08.  Amendments to Certain Documents . . . .    72
SECTION 6.09.  Minimum Consolidated Net Worth. . . . .    72
SECTION 6.10.  Interest Coverage . . . . . . . . . . .    72
SECTION 6.11.  Debt Ratio. . . . . . . . . . . . . . .    72
SECTION 6.12.  Fiscal Year . . . . . . . . . . . . . .    72

                        ARTICLE VII

                     Events of Default
                     -----------------

                        ARTICLE VIII

                         Guarantee
                         ---------

SECTION 8.01.  Guarantee . . . . . . . . . . . . . . .    77
SECTION 8.02.  No Impairment of Guaranty . . . . . . .    78
SECTION 8.03.  Continuation and
                    Reinstatement, etc.. . . . . . . .    78
SECTION 8.04.  Payment, etc. . . . . . . . . . . . . .    78
SECTION 8.05.  Benefit to Guarantors . . . . . . . . .    79

                         ARTICLE IX

                    Administrative Agent
                    --------------------

SECTION 9.01.  Appointment of Administrative
                    Agent. . . . . . . . . . . . . . .    79
SECTION 9.02.  Exculpation . . . . . . . . . . . . . .    80
SECTION 9.03.  Consultation with Counsel . . . . . . .    80
SECTION 9.04.  The Administrative Agent,
                    Individually . . . . . . . . . . .    81
SECTION 9.05.  Reimbursement and Indemnification . . .    81
SECTION 9.06.  Resignation . . . . . . . . . . . . . .    81

                         ARTICLE X

                       Miscellaneous
                       -------------

SECTION 10.01.  Notices. . . . . . . . . . . . . . . .    82
SECTION 10.02.  No Waivers; Amendments . . . . . . . .    82
SECTION 10.03.  Applicable Law; Submission
                    to Jurisdiction; Service
                    of Process; Waiver of
                    Jury Trial . . . . . . . . . . . .    83
SECTION 10.04.  Expenses; Documentary Taxes. . . . . .    84
SECTION 10.05.  Indemnity. . . . . . . . . . . . . . .    85

                                                                 84





SECTION 10.06.  Successors and Assigns . . . . . . . .    85
SECTION 10.07.  Survival of Agreements,
                    Representations and
                    Warranties, etc. . . . . . . . . .    86
SECTION 10.08.  Severability . . . . . . . . . . . . .    86
SECTION 10.09.  Cover Page and Section Headings. . . .    86
SECTION 10.10.  Counterparts . . . . . . . . . . . . .    86
SECTION 10.11.  Confidentiality. . . . . . . . . . . .    86


                                                                 85





                                              Contents, p. 5
Exhibits
- --------

A-1     Form of Competitive Bid Request
A-2     Form of Notice of Competitive Bid Request
A-3     Form of Competitive Bid
A-4     Form of Competitive Bid Accept/Reject Letter
A-5     Form of Revolving Credit Borrowing Request

B-1     Form of Competitive Note
B-2     Form of Revolving Credit Note

C       Form of Contribution Agreement

D-1     Form of Opinion of Morgan, Lewis & Bockius
D-2     Form of Opinion of J. Patrick Clark, Esq.

E       Form of Assignment and Acceptance


Schedules
- ---------
1.01    Guarantors
2.01    Commitments
2.02    Scheduled Loans
3.16    Affiliates
3.17    Environmental Liabilities
4.02    Consents
6.01    Liens





                                                                 86





                    364-DAY COMPETITIVE ADVANCE, REVOLVING
               CREDIT AND GUARANTY AGREEMENT dated as of
               October 23, 1997, among DENTSPLY
               INTERNATIONAL INC., a Delaware corporation
               (the "Borrower"), the Guarantors named
               herein, the Banks named herein (individually
               a "Bank" and collectively the "Banks"), and
               THE CHASE MANHATTAN BANK, as Administrative
               Agent for the Banks (the "Administrative
               Agent"), and ABN AMRO BANK N.V., as
               Documentation Agent for the Banks (the
               "Documentation Agent").


                   INTRODUCTORY STATEMENT

          All terms not otherwise defined herein are as defined in Article
I hereof.

          The Borrower has requested that the Banks extend credit to the
Borrower in order to enable the Borrower to borrow on a standby revolving
credit basis a principal amount not in excess of $125,000,000 at any time
outstanding.

          The Borrower has also requested that the Banks provide a
procedure pursuant to which the Borrower may invite the Banks to bid on an
uncommitted basis on short-term borrowings by the Borrower.

          The proceeds of all such borrowings are to be used (a) to
refinance outstanding Indebtedness of the Borrower under the Borrower's
Existing Credit Agreements and (b) for general working capital and
corporate purposes, including acquisitions in the health care products
industry.

          To provide assurance for the repayment of the Loans and all
related interest, fees, charges, expenses, reimbursement obligations and
other amounts payable with respect thereto, the Guarantors will guarantee
the Obligations pursuant to Article VIII hereof.

          Accordingly, the Borrower, the Guarantors, the Banks and the
Administrative Agent agree as follows:


                         ARTICLE I

                        Definitions
                        -----------

          As used in this Agreement, the following words and terms shall
have the meanings specified below:

          "ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
          "ABR Loan" shall mean any Revolving Credit Loan bearing interest

                                                                 87





at a rate determined by reference to the Alternate Base Rate in accordance
with the provisions of Article II.

          "Administrative Agent" shall mean The Chase Manhattan Bank, in
its capacity as agent for the Banks hereunder and not in its individual
capacity as a Bank, or such successor Administrative Agent as may be
appointed pursuant to Section 9.06.

          "Affiliate" shall mean, with respect to the person in question,
(a) any person (including any member of the immediate family of any such
natural person) which (i) directly or indirectly beneficially owns or
controls 10% or more of the total voting power of shares of capital stock
having the right to vote for directors under ordinary circumstances (if
such person is a corporation), (ii) is a general partner (if such person is
a partnership) or (iii) is otherwise empowered, by contract, voting trust
or otherwise, to direct the business or affairs of such person, (b) any
person controlling, controlled by or under common control with any such
person (within the meaning of Rule 405 under the Securities Act of 1933),
and (c) any director, general partner or executive officer of any such
person.

          "Agreement" shall mean the $125,000,000, 364-Day Competitive
Advance, Revolving Credit and Guaranty Agreement dated as of October 23,
1997, among DENTSPLY International Inc., as Borrower, the Guarantors named
therein, the Banks named therein, The Chase Manhattan Bank, as
Administrative Agent, and ABN Amro Bank N.V., as Documentation Agent, as
the same may be amended, modified or supplemented from time to time.

          "Alternate Base Rate" shall mean for any day, a rate per annum
(rounded upwards, if not already a whole multiple of 1/16 of 1%, to the
next higher 1/16 of 1%) equal to the greatest of (a) the Prime Rate in
effect on such day, (b) the Base CD Rate in effect on such day plus 1% and
(c) the Federal Funds Effective Rate in effect for such day plus 1/2 of 1%.
For purposes hereof, the term "Prime Rate" shall mean the rate per annum
announced by The Chase Manhattan Bank from time to time as its prime rate
in effect at its principal office in The City of New York; each change in
the Prime Rate shall be effective on the date such change is announced as
effective.  "Base CD Rate" shall mean the sum of (x) the product of (i) the
Average Weekly Three-Month Secondary CD Rate and (ii) Statutory Reserves
plus (y) the Assessment Rate.  "Average Weekly Three-Month Secondary CD
Rate" shall mean the secondary market rate ("Secondary CD Rate") for
three-month certificates of deposit (secondary market) of major United
States money market banks for the most recent weekly period ending Friday
reported in the Federal Reserve Statistical release entitled "Weekly
Summary of Lending and Credit Measures (Averages of daily figures)" or any
successor publication released during the week for which the Secondary CD
Rate is being determined.  The Secondary CD Rate so reported shall be in
effect, for the purpose of this definition, for each day of the week during
which the release date of such publication occurs.  If such publication or
a substitute containing the foregoing rate information is not published by
the Federal Reserve Board for any week, such average rate shall be
determined by the Administrative Agent on the first Business Day of the
week succeeding such week for which such rate information is not published

                                                                 88





on the basis of bids quoted to the Administrative Agent by three New York
City negotiable certificate of deposit dealers of recognized standing for
secondary market morning offerings of negotiable certificates of deposit of
major United States money market banks with maturities of three months.
Any change in the Alternate Base Rate due to a change in the Average Weekly
Three-Month Secondary CD Rate shall be effective on the effective date of
such change in the Average Weekly Three-Month Secondary CD Rate.  "Federal
Funds Effective Rate" shall mean, for any period, a fluctuating interest
rate per annum 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 on the succeeding 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 the day of such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.  Any change in the Alternate Base Rate
due to a change in the Federal Funds Effective Rate shall be effective on
the effective date of such change in the Federal Funds Effective Rate.  If
for any reason the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is unable
to ascertain both the Base CD Rate and the Federal Funds Effective Rate for
any reason, including the inability or failure of the Administrative Agent
to obtain sufficient bids or publications in accordance with the terms
hereof, the Alternate Base Rate shall be the Prime Rate until the
circumstances giving rise to such inability no longer exist.

          "Applicable Commitment Percentage" means, with respect to any
Bank, the percentage of the total Commitments represented by such Bank's
Commitment.  If the Commitments have terminated or expired, the Applicable
Commitment Percentages shall be determined based upon the Commitments most
recently in effect, giving effect to any assignments.

          "Applicable Percentage" shall mean .1700% per annum.

          "Assessment Rate" shall mean for any date the annual rate
(rounded upwards, if not already a whole multiple of 1/100 of 1%, to the
next higher 1/100 of 1%) most recently estimated by the Administrative
Agent as the then current net annual assessment rate that will be employed
in determining amounts payable by the Administrative Agent to the Federal
Deposit Insurance Corporation ("FDIC") (or any successor) for insurance by
the FDIC (or such successor) of time deposits made in dollars at its
domestic offices.

          "Assignment and Acceptance" shall mean an agreement in the form
of Exhibit E hereto entered into pursuant to Section 2.23, executed by the
assignor, assignee and other parties as contemplated thereby.

          "Bank" and "Banks" shall mean the financial institutions listed
on Schedule 2.01 and any assignee of a Bank pursuant to Section 2.23(b) or
(c).

          "Board" shall mean the Board of Governors of the Federal Reserve
System of the United States.

                                                                 89





          "Borrowing" shall mean a group of Loans of a single Interest Rate
Type made by the Banks (or in the case of a Competitive Borrowing, by the
Bank or Banks whose Competitive Bids have been accepted pursuant to Section
2.04) on a single date and as to which a single Interest Period is in
effect.

          "Business Day" shall mean any day not a Saturday, Sunday or legal
holiday in the State of New York or the Commonwealth of Pennsylvania on
which banks and the Federal Reserve Bank of New York are open for business
in New York City; provided, however, that when used in connection with a
LIBOR Loan the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.

          "Capitalized Lease Obligations" shall mean any obligation of a
Person as lessee of any property (real, personal or mixed), which, in
accordance with generally accepted accounting principles, is or should be
accounted for as a capital lease on the balance sheet of such Person.

          "Closing Date" shall mean the date of the first Borrowing under
the Facility B Credit Agreement.

          "Code" shall mean the Internal Revenue Code of 1986, as the same
shall be amended from time to time.

          "Commitment" shall mean, with respect to each Bank, the
commitment of such Bank hereunder as initially set forth on Schedule 2.01
as such Bank's Commitment may be permanently terminated, reduced, increased
or extended from time to time pursuant to Section 2.12.  Subject to Section
2.12, the Commitments shall automatically and permanently terminate on the
Termination Date.

          "Competitive Bid" shall mean an offer by a Bank to make a
Competitive Loan pursuant to Section 2.04.

          "Competitive Bid Accept/Reject Letter" shall mean a notification
made by the Borrower pursuant to Section 2.04(d) in the form of Exhibit
A-4.

          "Competitive Bid Rate" shall mean, as to any Competitive Bid made
by a Bank pursuant to Section 2.04(b), (a) in the case of a LIBOR Loan, the
Margin and (b) in the case of a Fixed Rate Loan, the fixed rate of interest
offered by the Bank making such Competitive Bid.

          "Competitive Bid Request" shall mean a request made pursuant to
Section 2.04 in the form of Exhibit A-1.

          "Competitive Borrowing" shall mean a borrowing consisting of a
Competitive Loan or concurrent Competitive Loans from the Bank or Banks
whose Competitive Bids for such Borrowing have been accepted by the
Borrower under the bidding procedure described in Section 2.04.

          "Competitive Loan" shall mean a Loan from a Bank to the Borrower

                                                                 90





pursuant to the bidding procedure described in Section 2.04.  Each
Competitive Loan shall be a LIBOR Competitive Loan or a Fixed Rate Loan.

          "Competitive Note" shall mean a promissory note of the Borrower
in the form of Exhibit B-1 executed and delivered as provided in Section
2.08.

          "Consolidated" shall mean, as applied to any financial or
accounting term, such term determined on a consolidated basis in accordance
with generally accepted accounting principles (except as otherwise required
herein) for the Borrower and each Subsidiary which is a Consolidated
Subsidiary of the Borrower.

          "Consolidated EBITDA" shall mean for any period "Income from
operations" as set forth in the DENTSPLY International Inc. Consolidated
Statements of Income, plus depreciation and amortization (to the extent
previously deducted), determined in accordance with generally accepted
accounting principles and in a manner consistent with the accounting
principles used to prepare the audited DENTSPLY International Inc.
Consolidated Statements of Income for the year ended December 31, 1996, and
delivered to the Administrative Agent; provided that there shall be
excluded:

          (a)  the income (or loss) from operations of any
     person, accrued prior to the date it becomes a
     Subsidiary or is merged into or consolidated with the
     person whose income is being determined or a subsidiary
     of such person; and

          (b) the income (or loss) from operations of any
     person (other than a Subsidiary) in which the person
     whose operating income is being determined or any
     subsidiary of such person has an ownership interest,
     except to the extent that any such income has actually
     been received by such person in the form of cash
     dividends or similar distributions.

          "Consolidated Interest Coverage Ratio" shall mean, in respect of
any fiscal period of the Borrower, (a) Consolidated EBITDA divided by (b)
Consolidated Interest Expense.

          "Consolidated Interest Expense" shall mean, for any fiscal period
of the Borrower, without duplication of expense among fiscal periods (a)
the aggregate amount determined on a Consolidated basis of (i) all interest
on Indebtedness of the Borrower and its Consolidated Subsidiaries accrued
during such period, (ii) all rentals imputed as interest accrued under
Capitalized Lease Obligations during such period by such person and (iii)
all amortization of discount and expense relating to Indebtedness of the
Borrower and its Consolidated Subsidiaries which amortization was accounted
for during such period, (b) adjusted downward for capital gains and upward
for capital losses on maturing U.S. Treasury obligations and (c) adjusted
downward for interest income (to the extent not previously excluded), as
determined in accordance with generally accepted accounting principles.

                                                                 91





          "Consolidated Net Income" shall mean the net income (or net loss)
of the Borrower and its Consolidated Subsidiaries for the period in
question (taken as a whole), as determined in accordance with generally
accepted accounting principles; provided that there shall be excluded:

          (a) the net income (or net loss) of any person,
     accrued prior to the date it becomes a Subsidiary or is
     merged into or consolidated with the person whose net
     income is being determined or a subsidiary of such
     person; and

          (b) the net income (or net loss) of any person
     (other than a Subsidiary) in which the person whose net
     income is being determined or any subsidiary of such
     person has an ownership interest, except to the extent
     that any such income has actually been received by such
     person in the form of cash dividends or similar
     distributions.

          "Consolidated Net Worth" shall mean, as at any date of
determination, the sum of the capital stock (less treasury stock) and
additional paid-in capital plus retained earnings (or minus accumulated
deficit) of the Borrower and its Consolidated Subsidiaries on a
Consolidated basis.

          "Consolidated Subsidiary" means, in the case of the Borrower at
any date, any Subsidiary or other entity the accounts of which are
Consolidated with those of the Borrower in the Consolidated financial
statements of the Borrower as of such date.

          "Consolidated Total Capitalization" shall mean the sum of (a)
Consolidated Total Indebtedness and (b) Consolidated Net Worth.

          "Consolidated Total Indebtedness" shall mean the Consolidated
Indebtedness of the Borrower and its Consolidated Subsidiaries.

          "Contribution Agreement" shall mean a Contribution Agreement
among the Borrower and the Guarantors substantially in the form of Exhibit
C hereto.

          "Debt Ratio" shall mean the ratio of Consolidated Total
Indebtedness to Consolidated Total Capitalization.

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

          "Des Plaines Lease" shall mean the Amended and Restated Sale and
Leaseback Agreement, dated as of August 1, 1991 between McDonough Partners
I as Buyer and Midwest Dental Products Corporation, as Seller.

          "dollars" and the symbol "$" shall mean the lawful currency of
the United States of America.

                                                                 92





          "Effective Date" shall mean the date on which the conditions to
borrowing set forth in Sections 4.01 and 4.02 are first satisfied.

          "Environmental Laws" shall mean all statutes, ordinances, orders,
rules and regulations relating to environmental matters, including those
relating to fines, orders, injunctions, penalties, damages, contribution,
cost recovery compensation, losses or injuries resulting from the release
or threatened release of Hazardous Materials and to the generation, use,
storage, transportation, or disposal of Hazardous Materials or in any
manner applicable to the Borrower or any of the Subsidiaries or any of
their respective properties, including the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. ss. 9601 et seq.), the
Hazardous Material Transportation Act (49 U.S.C. ss. 1801 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. ss. 6901 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. ss. 1251 et seq.), the Clean
Air Act (42 U.S.C. ss. 7401 et seq.), the Toxic Substances Control Act (15
U.S.C. ss. 2601 et seq.), the Occupational Safety and Health Act (29 U.S.C. ss.
651 et seq.) and the Emergency Planning and Community Right-to-Know Act (42
U.S.C. ss. 11001 et seq.), each as amended or supplemented, and any analogous
current or future Federal, state or local statutes and regulations
promulgated pursuant thereto.

          "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as the same may from time to time be amended.

          "ERISA Affiliate" shall mean with respect to the Borrower, any
trade or business (whether or not incorporated) which is a member of a
group of which the Borrower is a member and which is under common control
within the meaning of Section 414 of the Code.

          "ESOP" shall mean the DENTSPLY Employee Stock Ownership Plan
effective as of December 1, 1982 and restated as of January 1, 1991.

          "Event of Default" shall mean any of the events described in
clauses (a) through (m) of Article VII.

          "Execution Date" shall mean the date of this Agreement.

          "Existing Credit Agreements" shall mean the Existing Revolving
Credit Agreement and the Existing Term Loan Agreement.

          "Existing Revolving Credit Agreement" shall mean the $175,000,000
Competitive Advance, Revolving Credit and Guaranty Agreement dated as of
November 15, 1993, as amended, among the Borrower, the guarantors and banks
party thereto and The Chase Manhattan Bank, as Agent.

          "Existing Term Loan Agreement" shall mean the $60,000,000
Multicurrency Term Loan Agreement dated as of May 12, 1995 among the
Borrower, the banks party hereto and ABN Amro Bank N.V., as Agent.

          "Facility B Credit Agreement" shall mean the $175,000,000, 5-Year
Competitive Advance, Revolving Credit and Guaranty Agreement dated as of
the date hereof among the Borrower, the guarantors, the banks party

                                                                 93





thereto, ABN Amro Bank N.V. as documentation agent and The Chase Manhattan
Bank as administrative agent, as amended, modified or supplemented from
time to time.

          "Facility Fee" shall have the meaning given such term in Section
2.07 hereof.

          "Facility Fee Percentage" shall mean .0800% per annum.


          "Financial Officer" of any person shall mean its Senior Vice
President-Chief Financial Officer, Treasurer or Controller.

          "Fixed Rate Borrowing" shall mean a Borrowing comprised of Fixed
Rate Loans.

          "Fixed Rate Loan" shall mean any Competitive Loan bearing
interest at a fixed percentage rate per annum (expressed in the form of a
decimal to no more than four decimal places) specified by the Bank making
such Loan in its Competitive Bid.

          "Fundamental Documents" shall mean this Agreement, the
Contribution Agreement, the Competitive Notes and the Revolving Credit
Notes.

          "Governmental Authority" shall mean any Federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, or any court, in each case whether of the United States or
foreign.

          "Guarantors" shall mean all Material Subsidiaries which are
incorporated in the United States, all of which are listed on Schedule
1.01, and any other Subsidiaries of the Borrower which become Guarantors
pursuant to Section 5.11.

          "Guaranty", "Guaranteed" or to "Guarantee" as applied to any
obligation shall mean and include (a) a guaranty (other than by endorsement
of negotiable instruments for collection in the ordinary course of
business), directly or indirectly, in a manner, of any part (to the extent
of such part) or all of such obligation and (b) an agreement, direct or
indirect, contingent or otherwise, and whether or not constituting a
guaranty, the intention or practical effect of which is to assure the
payment or performance (or payment of damages or compensation in the event
of nonperformance) of any part (to the extent of such part) or all of such
obligation whether by (i) the purchase of securities or obligations, (ii)
the purchase, sale or lease (as lessee or lessor) of property or the
purchase or sale of services primarily for the purpose of enabling the
obligor with respect to such obligation to make any payment or performance
(or payment of damages or compensation in the event of nonperformance) of
or on account of any part or all of such obligation, or to assure the owner
of such obligation against loss, (iii) the supplying of funds to or in any
other manner investing in the obligor or any other person with respect to
or on account of such obligation, (iv) repayment of amounts drawn down by

                                                                 94





beneficiaries of letters of credit or arising out of the import of goods or
(v) the indemnifying or holding harmless, in any way, of a person against
any part (to the extent of such part) or all of such person's obligation
under a Guaranty except for hold harmless agreements with vendors with
respect to product liability and warranties to customers.

          "Hazardous Materials" shall mean any hazardous substances or
wastes as such terms are defined in any applicable Environmental Law,
including (a) oil, petroleum and any by-product thereof and (b) asbestos
and asbestos-containing material.

          "Indebtedness" shall mean, with respect to any person (a) all
obligations of such person for borrowed money, (b) all obligations of such
person evidenced by bonds, debentures, notes or other similar instruments,
(c) all obligations of such person upon which interest charges are
customarily paid, except for debt obligations related to foreign accounts
receivable sold to certain banks, (d) all obligations of such person for
the deferred purchase price of property or services (except (i) accounts
payable to suppliers incurred in the ordinary course of business and paid
within one year, (ii) non-interest-bearing notes payable to suppliers
incurred in the ordinary course of business and having a maturity date not
later than one year after the date of issuance thereof, and (iii) payroll
and other accruals arising in the ordinary course of business), (e) all
obligations of such person under conditional sale or other title retention
agreements relating to property purchased by such person, (f) all
Capitalized Lease Obligations, including obligations arising from sale and
leaseback transactions which are required to be accounted for as
Capitalized Lease Obligations, (g) all Indebtedness of any third party
which is secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) property or
assets of the person in question (the amount of such Indebtedness taken
into account for the purposes of this clause (g) not to exceed the book
value of such property or assets), (h) all Guarantees of such person, and
(i) all obligations of such person in respect of interest rate protection
agreements, foreign currency exchange agreements, or other interest or
exchange rate hedging transactions (the amount of such Indebtedness for
purposes of this clause (i) to be the termination value of such agreement
or arrangement); provided, however, that there shall be excluded from this
definition (x) Indebtedness between the Borrower and any Subsidiary and (y)
Indebtedness between Subsidiaries; provided further, however, that any
Indebtedness owed to a Subsidiary remaining outstanding after that
Subsidiary ceases to be a Subsidiary shall be included as Indebtedness
hereunder.

          "Interest Payment Date" shall mean, with respect to any Loan, the
last day of the Interest Period applicable thereto and, in the case of a
LIBOR Loan with an Interest Period of more than three months' duration or a
Fixed Rate Loan with an Interest Period of more than 90 days' duration,
each day that would have been an Interest Payment Date had successive
Interest Periods of three months' duration or 90 days' duration, as the
case may be, been applicable to such Loan, and, in addition, the date of
any refinancing or conversion of such Loan with or to a Loan of a different
Interest Rate Type.

                                                                 95





          "Interest Period" shall mean (a) as to any LIBOR Borrowing, the
period commencing on the date of such Borrowing or on the last day of the
immediately preceding Interest Period applicable to such Borrowing, as the
case may be, and ending on the numerically corresponding day (or, if there
is no numerically corresponding day, on the last day) in the calendar month
that is 1, 2, 3 or 6 months thereafter, as the Borrower may elect, (b) as
to any ABR Borrowing, the period commencing on the date of such Borrowing
and ending on the earliest of (i) the next succeeding March 31, June 30,
September 30 or December 31, (ii) the Maturity Date and (iii) the date such
Borrowing is refinanced with a Borrowing of a different Interest Rate Type
in accordance with Section 2.06 or prepaid in accordance with Section 2.13
and (c) as to any Fixed Rate Borrowing, the period commencing on the date
of such Borrowing and ending on the date specified in the Competitive Bids
in which the offer to make the Fixed Rate Loans comprising such Borrowing
were extended, which shall not be earlier than 7 days after the date of
such Borrowing or later than 360 days after the date of such Borrowing;
provided, however, that if any Interest Period would end on a day other
than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless, in the case of LIBOR Loans only, such next
succeeding Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day.
Interest shall accrue from and including the first day of an Interest
Period to but excluding the last day of such Interest Period.

          "Interest Rate Type", when used in respect of any Loan or
Borrowing, shall refer to the Rate by reference to which interest on such
Loan or on the Loans comprising such Borrowing is determined.  For purposes
hereof, "Rate" shall mean LIBOR, the Alternate Base Rate or the Fixed Rate,
as applicable.

          "LIBOR" shall mean, with respect to any LIBOR Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the next 1/16th of 1%) equal to the rate at which dollar deposits
approximately equal in principal amount to (a) in the case of a Revolving
Credit Borrowing, the Administrative Agent's portion of such LIBOR
Borrowing and (b) in the case of a Competitive Borrowing, a principal
amount that would have been the Administrative Agent's portion of such
Competitive Borrowing had such Competitive Borrowing been a Revolving
Credit Borrowing, and for a maturity comparable to such Interest Period are
offered to the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of
such Interest Period.

          "LIBOR Borrowing" shall mean a Borrowing comprised of LIBOR
Loans.

          "LIBOR Competitive Loan" shall mean any Competitive Loan bearing
interest at a rate determined by reference to LIBOR in accordance with the
provisions of Article II.

          "LIBOR Loan" shall mean any LIBOR Competitive Loan or LIBOR
Revolving Credit Loan.

                                                                 96





          "LIBOR Revolving Credit Loan" shall mean any Revolving Credit
Loan bearing interest at a rate determined by reference to LIBOR in
accordance with the provisions of Article II.

          "Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind whatsoever (including any
conditional sale or other title retention agreement, any lease in the
nature thereof, and the filing or agreement to give any financing statement
under the Uniform Commercial Code of any jurisdiction other than a
financing statement filed or given as a precautionary measure in respect of
a lease which is not required to be accounted for as a Capitalized Lease
Obligation and which does not otherwise secure an obligation that
constitutes Indebtedness).

          "Loan" shall mean a Competitive Loan or a Revolving Credit Loan,
whether made as a LIBOR Loan, an ABR Loan or a Fixed Rate Loan, as
permitted hereby.

          "Margin" shall mean, as to any LIBOR Competitive Loan, the margin
(expressed as a percentage rate per annum in the form of a decimal to four
decimal places) to be added to or subtracted from LIBOR in order to
determine the interest rate applicable to such Loan, as specified in the
Competitive Bid relating to such Loan.

          "Material Subsidiary" shall mean any Subsidiary (i) the
consolidated net income of which for the most recent fiscal year of the
Borrower for which audited financial statements have been delivered
pursuant to Section 5.05 were greater than or equal to 5% of Consolidated
Net Income for such fiscal year, (ii) the consolidated tangible assets of
which as of the last day of the Borrower's most recently ended fiscal year
were greater than or equal to 5% of the Borrower's consolidated tangible
assets as of such date or (iii) the net worth of which as of the last day
of the Borrower's most recently ended fiscal year was greater than or equal
to 5% of Consolidated Net Worth as of such date; provided that, if at any
time the aggregate amount of the consolidated net income, consolidated
tangible assets or consolidated net worth of all Subsidiaries incorporated
in the United States that are not Material Subsidiaries exceeds 15% of
consolidated net income for any such fiscal year, 15% of the Borrower's
consolidated tangible assets as of the end of any such fiscal year or 15%
of Consolidated Net Worth for any such fiscal year, the Borrower (or, in
the event the Borrower has failed to do so within 10 days, the
Administrative Agent) shall designate as "Material Subsidiaries"
Subsidiaries incorporated in the United States sufficient to eliminate such
excess, and such designated Subsidiaries incorporated in the United States
shall for all purposes of this Agreement constitute Material Subsidiaries.

          "Maturity Date" shall mean the date that is one year after the
Termination Date.

          "Multiemployer Plan" shall mean a multiemployer plan as defined
in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate
of the Borrower is making or accruing an obligation to make contributions,
or has within any of the preceding five plan years made or accrued an

                                                                 97





obligation to make contributions.

          "Notes" shall mean the Competitive Notes and the Revolving Credit
Notes.

          "Obligations" shall mean the obligation of the Borrower to make
due and punctual payment of principal of and interest on the Loans, the
Facility Fee and all other monetary obligations of the Borrower to the
Administrative Agent or any Bank under this Agreement, the Notes or the
Fundamental Documents.

          "PBGC" shall mean the Pension Benefit Guaranty Corporation
referred to and defined in ERISA.

          "person" or "Person" shall mean any natural person, corporation,
trust, association, company, partnership, joint venture or government, or
any agency or political subdivision thereof.

          "Plan" shall mean any employee plan (other than a Multiemployer
Plan) which is subject to the provisions of Title IV of ERISA and which is
maintained for employees of the Borrower or any ERISA Affiliate of the
Borrower.

          "Pro Forma Basis" shall mean, in connection with an acquisition
or disposition by or merger involving the Borrower or any Subsidiary, a
computation of compliance with the requirements of this Agreement for the
immediately preceding four full fiscal quarters or other relevant period
assuming that such acquisition, disposition or merger had occurred at the
beginning of such period.  Such computation shall take into account the
relevant financial information with respect to the acquired, disposed of,
or merged entity for such period and shall assume that any Indebtedness
incurred in connection with such acquisition, disposition or merger had
been incurred at the beginning of such period; provided, however, in order
to avoid double-counting, it is acknowledged that if the Borrower or any
Subsidiary incurs Indebtedness in connection with such a transaction and
repays Indebtedness of the acquired, disposed of or merged entity, the
Indebtedness so repaid shall not be included as Indebtedness of such entity
for such period.

          "Reduction Date" shall have the meaning given in Section 2.12(c)
hereof.

          "Register" shall be as defined in Section 2.23(e).

          "Regulation D" shall mean Regulation D of the Board, as the same
is from time to time in effect, and all official rulings and
interpretations thereunder or thereof.

          "Regulation G" shall mean Regulation G of the Board, as the same
is from time to time in effect, and all official rulings and
interpretations thereunder or thereof.

          "Regulation T" shall mean Regulation T of the Board, as the same

                                                                 98





is from time to time in effect, and all official rulings and
interpretations thereunder or thereof.

          "Regulation U" shall mean Regulation U of the Board, as the same
is from time to time in effect, and all official rulings and
interpretations thereunder or thereof.

          "Regulation X" shall mean Regulation X of the Board, as the same
is from time to time in effect, and all official rulings and
interpretations thereunder or thereof.

          "Reportable Event" shall mean any reportable event as defined in
Section 4043(c) of ERISA or the regulations issued thereunder.

          "Required Banks" shall mean at any time Banks holding (i) at
least 51% of the Commitments and (ii) at least 51% of the principal amount
of Loans then outstanding; provided that in order to terminate the
Commitments or declare the Notes to be forthwith due and payable pursuant
to Article VII hereof, "Required Banks" shall mean Banks holding at least
51% of the aggregate principal amount then outstanding of Loans.

          "Revolving Credit Borrowing" shall mean a Borrowing consisting of
simultaneous Revolving Credit Loans from each of the Banks.

          "Revolving Credit Borrowing Request" shall mean a request made
pursuant to Section 2.05 in the form of Exhibit A-5.

          "Revolving Credit Loans" shall mean the revolving loans made by
the Banks to the Borrower pursuant to Section 2.05.  Each Revolving Credit
Loan shall be a LIBOR Revolving Credit Loan or an ABR Loan.

          "Revolving Credit Note" shall mean a promissory note of the
Borrower in the form of Exhibit B-2, executed and delivered as provided in
Section 2.08.

          "Senior Officer" shall mean the Chairman, Vice Chairman,
President and Senior Vice Presidents of the Borrower.

          "Statutory Reserves" shall mean (a) with respect to the Base CD
Rate (as such term is used in the definition of "Alternate Base Rate"), a
fraction (expressed as a decimal), the numerator of which is the number one
and the denominator of which is the number one minus the aggregate rates
expressed as a decimal of (A) basic and supplemental reserve requirements
in effect on the date of effectiveness of the Average Weekly Three-Month
Secondary CD Rate (as such term is defined in the definition of "Alternate
Base Rate") under Regulation D of the Board applicable to three-month
certificates of deposit in units of $100,000 or more issued by a "member
bank" located in a "reserve city" (as such terms are used in Regulation D),
plus (B) marginal reserve requirements in effect on such date of
effectiveness under Regulation D applicable to time deposits of a "member
bank" and (b) with respect to LIBOR, shall mean a fraction (expressed as a
decimal) the numerator of which is the number one and the denominator of
which is one minus the aggregate of the maximum reserve requirements

                                                                 99





(including any marginal, special, emergency or supplemental reserves)
established by the Board or any other banking authority to which a Bank is
subject for Eurocurrency Liabilities (as defined in Regulation D).  Such
reserve percentages shall include those imposed under Regulation D.  LIBOR
Loans shall be deemed to constitute Eurocurrency Liabilities and as such
shall be deemed to be subject to such reserve requirements without benefit
of or credit for proration, exceptions or offsets which may be available
from time to time to any Bank under Regulation D.  Statutory Reserves shall
be adjusted automatically on and as of the effective date of any change in
any reserve percentage.

          "subsidiary" shall mean, with respect to any person, any
corporation, association or other business entity of which more than 50% of
the securities or other ownership interests having ordinary voting power
is, at the time of which any determination is being made, owned or
controlled by such person or one or more subsidiaries of such person.

          "Subsidiary" shall mean a subsidiary of the Borrower.

          "Termination Date" shall mean October 22, 1998 or such other
Termination Date then in effect pursuant to Section 2.12(e).

          "Term-Out Applicable Percentage" shall mean on any date, with
respect to (a) the Facility Fee or (b) any Loans comprising any LIBOR
Revolving Credit Borrowing, the applicable percentage set forth in the
table below based upon the Consolidated Interest Coverage Ratio of the
Borrower for the four fiscal quarters immediately preceding such date
treated as a single accounting period (determined in accordance with
Section 2.09(e)):

  FACILITY FEE/LIBOR BORROWING APPLICABLE PERCENTAGE TABLE

  If the Applicable       Applicable         Applicable
Consolidated Interest     Percentage         Percentage
  Coverage Ratio is:     Facility Fee      LIBOR Borrowing
- ------------------------------------------------------------

Greater than or
equal to 12.0:1.0           .1000%            .1500%

Less than 12.0:1.0
but greater than
or equal to 7.5:1.0         .1250%            .1750%

Less than 7.5:1.0
but greater than
or equal to 5.5:1.0         .1500%             .2500%

Less than 5.5:1.0
but greater than
or equal to 4.0:1.0         .1750%             .3250%

Less than 4.0:1.0           .2000%             .4250%

                                                                100





          "Total Commitment" shall mean the aggregate amount of the Banks'
Commitments, as in effect at such time.

          "Withdrawal Liability" shall mean liability to a Multiemployer
Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan, as such terms are defined in Part I of Subtitle E of
Title IV of ERISA.

          All accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting principles and
practices consistent in all material respects (except for changes with
which the Borrower's independent auditors concur) with those applied in the
preparation of the financial statements referred to in Section 3.05(a) (and
references herein to generally accepted accounting principles shall mean
generally accepted accounting principles as so applied) and all financial
data submitted pursuant to this Agreement shall be prepared in accordance
with such principles and practices, except as otherwise expressed herein.
The definitions in this Article I shall apply equally to both the singular
and plural forms of the terms defined.  Whenever the context may require,
any pronoun shall include the corresponding masculine, feminine and neuter
forms.  The words "include", "includes" and "including" as used in this
Agreement and any Exhibit or Schedule hereto shall be deemed in each case
to be followed by the phrase "without limitation".


                         ARTICLE II

                           Loans
                           -----

          SECTION 2.01.  Commitments.  (a)  Subject to the terms and
conditions hereof and relying upon the representations and warranties
herein set forth, each Bank agrees, severally and not jointly, to make
Revolving Credit Loans to the Borrower, at any time and from time to time
on and after the Effective Date and until the earlier of the Termination
Date or the termination of the Commitment of such Bank, in an aggregate
principal amount at any time outstanding not to exceed such Bank's
Commitment minus (i) the amount by which the Competitive Loans outstanding
at such time shall be deemed to have used such Commitment pursuant to
Section 2.18, and (ii) the amount which is the product of (y) the aggregate
principal amounts due under any loans outstanding under the Existing Credit
Agreements and listed on Schedule 2.02 (the "Scheduled Loans") and (z) such
Bank's Applicable Commitment Percentage, subject, however, to the
conditions that (a) at no time shall (i) the sum of (A) the outstanding
aggregate principal amount of all Revolving Credit Loans made by all Banks
plus (B) the outstanding aggregate principal amount of all Competitive
Loans made by all Banks exceed (ii) the Total Commitment and (b) at all
times (except as expressly contemplated by the last sentence of Section
2.12(d)) the outstanding aggregate principal amount of all Revolving Credit
Loans made by each Bank shall equal the product of (i) such Bank's
Applicable Commitment Percentage and (ii) the outstanding aggregate
principal amount of all Revolving Credit Loans made pursuant to Section
2.05.

                                                                101





          (b)  Within the foregoing limits, the Borrower may borrow, pay or
repay and reborrow hereunder, on and after the Effective Date and prior to
the Termination Date, upon the terms and subject to the conditions and
limitations set forth herein.

          SECTION 2.02.  Loans.  (a)  Each Revolving Credit Loan shall be
made as part of a Borrowing consisting of Loans made by the Banks ratably
in accordance with their Commitments; provided, however, that the failure
of any Bank to make any Revolving Credit Loan shall not in itself relieve
any other Bank of its obligation to lend hereunder (it being understood,
however, that no Bank shall be responsible for the failure of any other
Bank to make any Loan required to be made by such other Bank).  Each
Competitive Loan shall be made in accordance with the procedures set forth
in Section 2.04.  The Revolving Credit Loans or Competitive Loans
comprising any Borrowing shall be (i) in the case of Competitive Loans, in
an aggregate principal amount that is an integral multiple of $1,000,000
and not less than $5,000,000 and (ii) in the case of Revolving Credit
Loans, in an aggregate principal amount that is an integral multiple of
$1,000,000 and, in the case of LIBOR Loans, not less than $5,000,000 (or an
aggregate principal amount equal to the remaining balance of the available
Commitments).

          (b)  Each Competitive Borrowing shall be comprised entirely of
LIBOR Competitive Loans or Fixed Rate Loans, and each Revolving Credit
Borrowing shall be comprised entirely of LIBOR Revolving Credit Loans, or
ABR Loans, as the Borrower may request pursuant to Section 2.04 or 2.05, as
applicable.  Each Bank may at its option make any LIBOR Loan by causing any
domestic or foreign branch or Affiliate of such Bank to make such Loan;
provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this
Agreement and the applicable Note.  Borrowings of more than one Interest
Rate Type may be outstanding at the same time; provided, however, that the
Borrower shall not be entitled to request any Borrowing that, if made,
would result in an aggregate of more than 12 separate Revolving Credit
Loans of any one Bank being outstanding hereunder at any one time.  For
purposes of the calculation required by the immediately preceding sentence,
LIBOR Revolving Credit Loans having different Interest Periods, regardless
of whether they commence on the same date, shall be considered separate
Loans and all Loans of a single Interest Rate Type made on a single date
shall be considered a single Loan if such Loans have a common Interest
Period.

          (c)  Subject to Section 2.06, each Bank shall make each Loan to
be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds to the Administrative Agent in New York, New
York, not later than 12:00 noon, New York City time, and the Administrative
Agent shall by 3:00 p.m., New York City time, credit the amounts so
received to the general deposit account of the Borrower with the
Administrative Agent or, if a Borrowing shall not occur on such date
because any condition precedent herein specified shall not have been met,
return the amounts so received to the respective Banks as soon as
practicable.  Competitive Loans shall be made by the Bank or Banks whose
Competitive Bids therefor are accepted pursuant to Section 2.04 in the

                                                                102





amounts so accepted and Revolving Credit Loans shall be made by the Banks
pro rata in accordance with Section 2.18.  Unless the Administrative Agent
shall have received notice from a Bank prior to the date of any Borrowing,
the Administrative Agent may assume that such Bank has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with this paragraph (c) and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date
a corresponding amount.  If and to the extent that such Bank shall not have
made such portion available to the Administrative Agent, such Bank and the
Borrower severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each
day from the date such amount is made available to the Borrower until the
date such amount is repaid to the Administrative Agent at (i) in the case
of the Borrower, the interest rate applicable at the time to the Loans
comprising such Borrowing and (ii) in the case of such Bank, the Federal
Funds Effective Rate.  If such Bank shall repay to the Administrative Agent
such corresponding amount, such amount shall constitute such Bank's Loan as
part of such Borrowing for purposes of this Agreement.

          (d)  Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request any Borrowing if the Interest
Period requested with respect thereto would end after the Maturity Date.

          SECTION2.03.  Use of Proceeds.  The proceeds of the Loans shall
be used to refinance outstanding Indebtedness of the Borrower under the
Existing Credit Agreements and for general working capital and corporate
purposes, including acquisitions in the health care products industry.

          SECTION 2.04.  Competitive Bid Procedure.  (a)  In order to
request Competitive Bids, the Borrower shall hand
deliver or telecopy to the Administrative Agent a duly completed
Competitive Bid Request in the form of Exhibit A-1, to be received by the
Administrative Agent (i) in the case of a LIBOR Competitive Borrowing, not
later than 10:00 a.m., New York City time, four Business Days before a
proposed Competitive Borrowing and (ii) in the case of a Fixed Rate
Borrowing, not later than 10:00 a.m., New York City time, one Business Day
before a proposed Competitive Borrowing.  No ABR Loan shall be requested
in, or made pursuant to, a Competitive Bid Request.  A Competitive Bid
Request that does not conform substantially to the format of Exhibit A-1
may be rejected in the Administrative Agent's sole discretion, and the
Administrative Agent shall promptly notify the Borrower of such rejection
by telecopier.  Such request shall in each case refer to this Agreement and
specify (i) whether the Borrowing then being requested is to be a LIBOR
Borrowing or a Fixed Rate Borrowing, (ii) the date of such Borrowing (which
shall be a Business Day) and the aggregate principal amount thereof, which
shall be in a minimum principal amount of $5,000,000 and in an integral
multiple of $1,000,000, and (iii) the Interest Period with respect thereto
(which may not end after the Maturity Date).  Promptly after its receipt of
a Competitive Bid Request that is not rejected as aforesaid, the
Administrative Agent shall invite by telecopier (in the form set forth in
Exhibit A-2) the Banks to bid, on the terms and subject to the conditions
of this Agreement, to make Competitive Loans pursuant to the Competitive
Bid Request.

                                                                103





          (b)  Each Bank may, in its sole discretion, make one or more
Competitive Bids to the Borrower responsive to a Competitive Bid Request.
Each Competitive Bid by a Bank must be received by the Administrative Agent
via telecopier, in the form of Exhibit A-3, (i) in the case of a LIBOR
Competitive Borrowing, not later than 9:30 a.m., New York City time, three
Business Days before a proposed Competitive Borrowing and (ii) in the case
of a Fixed Rate Borrowing, not later than 9:30 a.m., New York City time, on
the day of a proposed Competitive Borrowing.  Multiple bids will be
accepted by the Administrative Agent.  Competitive Bids that do not conform
substantially to the format of Exhibit A-3 may be rejected by the
Administrative Agent after conferring with, and upon the instruction of,
the Borrower, and the Administrative Agent shall notify the Bank making
such nonconforming bid of such rejection as soon as practicable.  Each
Competitive Bid shall refer to this Agreement and specify (i) the principal
amount (which shall be in a minimum principal amount of $5,000,000 and in
an integral multiple of $1,000,000 and which may equal the entire principal
amount of the Competitive Borrowing requested by the Borrower) of the
Competitive Loan or Loans that the Bank is willing to make to the Borrower,
(ii) the Competitive
Bid Rate or Rates at which the Bank is prepared to make
the Competitive Loan or Loans and (iii) the Interest Period and the last
day thereof.  If any Bank shall elect not to make a Competitive Bid, such
Bank shall so notify the Administrative Agent via telecopier (i) in the
case of LIBOR Competitive Loans, not later than 9:30 a.m., New York City
time, three Business Days before a proposed Competitive Borrowing and (ii)
in the case of Fixed Rate Loans, not later than 9:30 a.m., New York City
time, on the day of a proposed Competitive Borrowing; provided, however,
that failure by any Bank to give such notice shall not cause such Bank to
be obligated to make any Competitive Loan as part of such Competitive
Borrowing.  A Competitive Bid submitted by a Bank pursuant to this
paragraph (b) shall be irrevocable.

          (c)  The Administrative Agent shall promptly notify the Borrower
by telecopier of all the Competitive Bids made, the Competitive Bid Rate
and the principal amount of each Competitive Loan in respect of which a
Competitive Bid was made and the identity of the Bank that made each bid.
The Administrative Agent shall send a copy of all Competitive Bids to the
Borrower for its records as soon as practicable after completion of the
bidding process set forth in this Section2.04.

          (d)  The Borrower may in its sole and absolute discretion,
subject only to the provisions of this paragraph (d), accept or reject any
Competitive Bid referred to in paragraph (b) above.  The Borrower shall
notify the Administrative Agent by telephone, confirmed by telecopier in
the form of a Competitive Bid Accept/Reject Letter in the form of Exhibit
A-4, whether and to what extent it has decided to accept or reject any of
or all the bids referred to in paragraph (b) above, (i) in the case of a
LIBOR Competitive Borrowing, not later than 10:30 a.m., New York City time,
three Business Days before a proposed Competitive Borrowing and (ii) in the
case of a Fixed Rate Borrowing, not later than 10:30 a.m., New York City
time, on the day of a proposed Competitive Borrowing; provided, however,
that (A) the failure by the Borrower to give such notice shall be deemed to
be a rejection of all the bids referred to in paragraph (b) above, (B) the

                                                                104





Borrower shall not accept a bid made at a particular Competitive Bid Rate
if the Borrower has decided to reject a bid made at a lower Competitive Bid
Rate, (C) the aggregate amount of the Competitive Bids accepted by the
Borrower shall not exceed the principal amount specified in the Competitive
Bid Request, (D) if the Borrower shall accept a bid or bids made at a
particular Competitive Bid Rate but the amount of such bid or bids shall
cause the total amount of bids to be accepted by the Borrower to exceed the
amount specified in the Competitive Bid Request, then the Borrower shall
accept a portion of such bid or bids in an amount equal to the amount
specified in the Competitive Bid Request less the amount of all other
Competitive Bids accepted at lower Competitive Bid Rates with respect to
such Competitive Bid Request (it being understood that acceptance, in the
case of multiple bids at such Competitive Bid Rate, shall be made pro rata
in accordance with the amount of each such bid at such Competitive Bid
Rate) and (E) except pursuant to clause (D) above, no bid shall be accepted
for a Competitive Loan unless such Competitive Loan is in a minimum
principal amount of $5,000,000 and an integral multiple of $1,000,000;
provided further, however, that if a Competitive Loan must be in an amount
less than $5,000,000 because of the provisions of clause (D) above, such
Competitive Loan may be in a minimum principal amount of $1,000,000 or any
integral multiple thereof, and in calculating the pro rata allocation of
acceptances of portions of multiple bids at a particular Competitive Bid
Rate pursuant to clause (D) the amounts shall be rounded to integral
multiples of $1,000,000 in a manner that shall be in the discretion of the
Borrower.  A notice given by the Borrower pursuant to this paragraph (d)
shall be irrevocable.

          (e)  The Administrative Agent shall promptly notify each bidding
Bank whether its Competitive Bid has been accepted (and if so, in what
amount and at what Competitive Bid Rate) by telecopy sent by the
Administrative Agent, and each successful bidder will thereupon become
bound, subject to the other applicable conditions hereof, to make the
Competitive Loan in respect of which its bid has been accepted.

          (f)  A Competitive Bid Request shall not be made within four
Business Days after the date of any previous Competitive Bid Request.

          (g)  If the Administrative Agent shall elect to submit a
Competitive Bid in its capacity as a Bank, it shall submit such bid
directly to the Borrower one quarter of an hour earlier than the latest
time at which the other Banks are required to submit their bids to the
Administrative Agent pursuant to paragraph (b) above.

          (h)  All notices required by this Section 2.04 shall be given in
accordance with Section 10.01.

          (i)  Notwithstanding any other provisions of this Agreement, the
Borrower shall not be entitled to request any Competitive Borrowing if the
Interest Period requested with respect thereto would end after the Maturity
Date.

          SECTION 2.05.  Revolving Credit Borrowing Procedure.  (a) In
order to effect a Revolving Credit Borrowing, the Borrower shall hand

                                                                105





deliver or telecopy to the Administrative Agent a Borrowing notice in the
form of Exhibit A-5 (a) in the case of a LIBOR Revolving Credit Borrowing,
not later than 12:00 noon, New York City time, three Business Days before a
proposed Borrowing, and (b) in the case of an ABR Borrowing, not later than
10:00 a.m., New York City time, on the day of a proposed Borrowing.  No
Fixed Rate Loan shall be requested or made pursuant to a Revolving Credit
Borrowing Request.  Such notice shall be irrevocable and shall in each case
specify (a) whether the Borrowing then being requested is to be a LIBOR
Revolving Credit Borrowing or an ABR Borrowing, (b) the date of such
Revolving Credit Borrowing (which shall be a Business Day) and the amount
thereof and (c) if such Borrowing is to be a LIBOR Revolving Credit
Borrowing, the Interest Period with respect thereto (which may not end
after the Maturity Date).  If no election as to the Interest Rate Type of
Revolving Credit Borrowing is specified in any such notice, then the
requested Revolving Credit Borrowing shall be an ABR Borrowing.  If no
Interest Period with respect to any LIBOR Revolving Credit Borrowing is
specified in any such notice, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.  If the Borrower shall
not have given notice in accordance with this Section 2.05 of its election
to refinance a Revolving Credit Borrowing prior to the end of the Interest
Period in effect for such Borrowing, then the Borrower shall (unless such
Borrowing is repaid at the end of such Interest Period) be deemed to have
given notice of an election to refinance such Borrowing with an ABR
Borrowing.  The Administrative Agent shall promptly advise the Banks of any
notice given pursuant to this Section 2.05 and of each Bank's portion of
the requested Borrowing.

          (b)   In the event that any LIBOR Revolving Credit Borrowing
remains outstanding which has an Interest Period ending on any date after
the Termination Date, the Borrower shall elect a new Interest Period for
each such Borrowing in accordance with the procedures set forth in Section
2.05(a) above as if such Borrowing were a new Borrowing; provided that (i)
in no event may any Interest Period so selected end on a date after the
Maturity Date, and (ii) if the Borrower shall fail to give notice of a new
Interest Period for such a Revolving Credit Borrowing prior to the end of
the Interest Period in effect for such Borrowing, then the Borrower shall
be deemed to have given notice of an election to refinance such Borrowing
with an ABR Borrowing (unless such Borrowing is repaid at the end of such
Interest Period).

          SECTION 2.06.  Refinancings.  The Borrower may refinance all or
any part of any Borrowing with a Borrowing of the same or a different
Interest Rate Type made pursuant to Section 2.04 or Section 2.05, subject
to the conditions and limitations set forth herein and elsewhere in this
Agreement, including refinancings of Competitive Borrowings with Revolving
Credit Borrowings and Revolving Credit Borrowings with Competitive
Borrowings.  Any Borrowing or part thereof so refinanced shall be deemed to
be repaid in accordance with Section 2.08 with the proceeds of a new
Borrowing hereunder and the proceeds of the new Borrowing, to the extent
they do not exceed the principal amount of the Borrowing being refinanced,
shall not be paid by the Banks to the Administrative Agent or by the
Administrative Agent to the Borrower pursuant to Section 2.02(c); provided,
however, that (a) if the principal amount extended by a Bank in a

                                                                106





refinancing is greater than the principal amount extended by such Bank in
the Borrowing being refinanced, then such Bank shall pay such difference to
the Administrative Agent for distribution to the Banks described in clause
(b) below, (b) if the principal amount extended by a Bank in the Borrowing
being refinanced is greater than the principal amount being extended by
such Bank in the refinancing, the Administrative Agent shall return the
difference to such Bank out of amounts received pursuant to clause (a)
above, (c) to the extent any Bank fails to pay the Administrative Agent
amounts due from it pursuant to clause (a) above, any Loan or portion
thereof being refinanced with such amounts shall not be deemed repaid in
accordance with Section 2.08 and, to the extent of such failure, the
Borrower shall pay such amount to the Administrative Agent as required by
Section 2.08, and (d) to the extent the Borrower fails to pay to the
Administrative Agent any amounts due in accordance with Section 2.08 as a
result of the failure of a Bank to pay the Administrative Agent any amounts
due as described in clause (c) above, the portion of any refinanced Loan
deemed not repaid shall be deemed to be outstanding solely to the Bank
which has failed to pay the Administrative Agent amounts due from it
pursuant to clause (a) above to the full extent of such Bank's portion of
such Loan.

          SECTION 2.07.  Fees.  (a)  The Borrower agrees to pay to each
Bank, through the Administrative Agent, on each March 31, June 30,
September 30 and December 31 and on the Maturity Date or any earlier date
on which the Commitment of such Bank shall have been terminated and the
outstanding Loans of such Bank repaid in full, a facility fee (a "Facility
Fee") on the Commitment of such Bank, whether used or unused, and, after
the Commitment of such Bank shall have been terminated, on the outstanding
principal amount of such Bank's Loans, during the quarter ending on the
date such payment is due (or shorter period commencing with the date hereof
or ending with the Maturity Date or any earlier date on which the
Commitments shall have been terminated and the outstanding Loans of such
Bank repaid in full), at a rate per annum equal to (i) from the date hereof
through the Termination Date, the Facility Fee Percentage, and (ii)
thereafter, the Term-Out Applicable Percentage from time to time in effect
(as determined in accordance with Section 2.09(e)).  All Facility Fees
shall be computed on the basis of the actual number of days elapsed in a
year of 360 days.  The Facility Fee due to each Bank shall commence to
accrue on the Closing Date and shall cease to accrue on the Maturity Date
or any earlier date on which the Commitment of such Bank shall have been
terminated and the outstanding Loans of such Bank repaid in full.

          (b)  The Borrower agrees to pay the Administrative Agent, for its
own account, the fees provided for in the letter agreement, dated September
17, 1997, between the Borrower and the Administrative Agent.

          (c)  All fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for distribution, if and as
appropriate, among the Banks.  Once paid, none of the fees shall be
refundable under any circumstances.

          SECTION 2.08.  Notes; Repayment of Loans.  The Competitive Loans
made by each Bank shall be evidenced by a single Competitive Note duly

                                                                107





executed on behalf of the Borrower, dated the Closing Date, in
substantially the form attached hereto as Exhibit B-1 with the blanks
appropriately filled, payable to the order of such Bank in a principal
amount equal to the Total Commitment.  The Revolving Credit Loans made by
each Bank shall be evidenced by a single Revolving Credit Note duly
executed on behalf of the Borrower, dated the Closing Date, in
substantially the form attached hereto as Exhibit B-2 with the blanks
appropriately filled, payable to the order of such Bank in a principal
amount equal to the Commitment of such Bank.  The outstanding principal
balance of each Competitive Loan or Revolving Credit Loan, as evidenced by
the relevant Note, shall be payable (a) in the case of a Competitive Loan,
on the last day of the Interest Period applicable to such Competitive Loan
and on the Maturity Date and (b) in the case of a Revolving Credit Loan, on
the Maturity Date.  Each Competitive Note and each Revolving Credit Note
shall bear interest from the date thereof on the outstanding principal
balance thereof as set forth in Section 2.09.  Each Bank shall, and is
hereby authorized by the Borrower to, endorse on the schedule to the
relevant Note held by such Bank (or on a continuation of such schedule
attached to each such Note and made a part thereof), or otherwise to record
in such Bank's internal records, an appropriate notation evidencing the
date and amount of each Competitive Loan or Revolving Credit Loan, as
applicable, of such Bank, each payment or prepayment of principal of any
Competitive Loan or Revolving Credit Loan, as applicable, and the other
information provided on such schedule; provided, however, that the failure
of any Bank to make such a notation or any error therein shall not in any
manner affect the obligation of the Borrower to repay the Competitive Loans
or Revolving Credit Loans, as applicable, made by such Bank in accordance
with the terms of the relevant Note.

          SECTION 2.09.  Interest on Loans.  (a)  Subject to the provisions
of Sections 2.10 and 2.11, the Loans comprising each LIBOR Borrowing shall
bear interest (computed on the basis of the actual number of days elapsed
over a year of 360 days) at a rate per annum equal to (i) in the case of
each LIBOR Revolving Credit Loan, LIBOR for the Interest Period in effect
for such Borrowing plus the Applicable Percentage and (ii) in the case of
each LIBOR Competitive Loan, LIBOR for the Interest Period in effect for
such Borrowing plus the Margin offered by the Bank making such Loan and
accepted by the Borrower pursuant to Section 2.04; provided, however, that
subject to the provisions of Sections 2.10 and 2.11, all LIBOR Revolving
Credit Loans which shall remain outstanding after the Termination Date
shall bear interest (computed on the basis of the actual number of days
elapsed over a year of 360 days) at all times after the Termination Date at
a rate per annum equal to LIBOR for the Interest Period in effect for such
Borrowing plus the Term-Out Applicable Percentage.

          (b)  Subject to the provisions of Section 2.10, the Loans
comprising each ABR Borrowing shall bear interest (computed on the basis of
the actual number of days elapsed over a year of 365 or 366 days, as the
case may be, when determined by reference to the Prime Rate and over a year
of 360 days at all other times) at a rate per annum equal to the Alternate
Base Rate.

          (c)  Subject to the provisions of Section 2.10, each Fixed Rate

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Loan shall bear interest at a rate per annum (computed on the basis of the
actual number of days elapsed over a year of 360 days) equal to the fixed
rate of interest offered by the Bank making such Loan and accepted by the
Borrower pursuant to Section 2.04.

          (d)  Interest on each Loan shall be payable on each Interest
Payment Date applicable to such Loan.  The LIBOR or the Alternate Base Rate
for each Interest Period or day within an Interest Period shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.

          (e)  The Term-Out Applicable Percentage shall be determined based
on the Consolidated Interest Coverage Ratio at the end of the most recent
fiscal quarter for which financial statements have been delivered under
Section 5.05 and based on the period of four fiscal quarters then ended
treated as a single accounting period.

          SECTION 2.10.  Interest on Overdue Amounts.  If the Borrower
shall default in the payment of the principal of or interest on any Loan or
any other amount becoming due hereunder, the Borrower shall on demand from
time to time pay interest, to the extent permitted by law, on such
defaulted amount up to (but not including) the date of actual payment
(after as well as before judgment) at a rate per annum computed on the
basis of the actual number of days elapsed over a year of 365 or 366 days,
as applicable, in the case of amounts bearing interest determined by
reference to the Prime Rate (and a year of 360 days in all other cases)
equal to (a) in the case of any Loan, the rate applicable to such Loan
under Section 2.09 plus 2% per annum and (b) in the case of any other
amount, the rate that would at the time be applicable to an ABR Loan under
Section 2.09 plus 2% per annum.

          SECTION 2.11.  Alternate Rate of Interest.  In the event, and on
each occasion, that on the day two Business Days prior to the commencement
of any Interest Period for a LIBOR Borrowing, the Administrative Agent
shall have determined that dollar deposits in the amount of the requested
principal amount of such LIBOR Borrowing are not generally available in the
London interbank market, or that the rate at which such dollar deposits are
being offered will not adequately and fairly reflect the cost to any Bank
of making or maintaining such LIBOR Loans during such Interest Period, or
that reasonable means do not exist for ascertaining the LIBOR Rate, the
Administrative Agent shall, as soon as practicable thereafter, give written
or telecopier notice of such determination to the Borrower and the Banks.
In the event of any such determination, until the Administrative Agent
shall have determined that circumstances giving rise to such notice no
longer exist, (a) any request by the Borrower for a LIBOR Competitive
Borrowing pursuant to Section 2.04 shall be of no force and effect and
shall be denied by the Administrative Agent and (b) any request by the
Borrower for a LIBOR Revolving Credit Borrowing pursuant to Section 2.05
shall be deemed to be a request for an ABR Loan.  Each determination by the
Administrative Agent hereunder shall be conclusive absent manifest error;
provided, however, that if a determination is made that dollar deposits in
the amount of the requested principal amount of such LIBOR Borrowing are
not generally available in the London interbank market, or that the rate at

                                                                109





which such dollar deposits are being offered will not adequately and fairly
reflect the cost to any Bank of making or maintaining such LIBOR Loans
during such Interest Period, or that reasonable means do not exist for
ascertaining the LIBOR Rate, the Administrative Agent shall promptly notify
the Borrower of such determination in writing and the Borrower may, by
notice to the Administrative Agent given within 24 hours of receipt of such
notice, withdraw the request for the LIBOR Competitive Borrowing or the
LIBOR Revolving Credit Borrowing, as applicable.

          SECTION 2.12.  Termination, Reduction, Increase and Extension of
Commitments.  (a)  The Commitments shall be automatically terminated on the
earlier of (a) the Termination Date or (b) 30 days after the date hereof if
the Closing Date has not occurred.

          (b)  Subject to Section 2.13(b), upon at least three Business
Days' prior irrevocable written or telecopy notice to the Administrative
Agent, the Borrower may at any time in whole permanently terminate, or from
time to time in part permanently reduce, the Total Commitment; provided,
however, that (i) each partial reduction of the Total Commitment shall be
in an integral multiple of $1,000,000 and in a minimum principal amount of
$10,000,000 and (ii) the Borrower shall not be entitled to make any such
termination or reduction that would reduce the Total Commitment to an
amount less than the aggregate outstanding principal amount of the
Competitive Loans.

          (c)  Each reduction in the Total Commitment hereunder shall be
made ratably among the Banks in accordance with their respective
Commitments.  The Borrower shall pay to the Administrative Agent for the
account of the Banks on the date of each termination or reduction (in the
case of a reduction, the "Reduction Date"), the Facility Fees on the amount
of the Commitments so terminated or reduced accrued to the date of such
termination or reduction.

          (d)  The Borrower may from time to time, and notwithstanding any
prior reductions in the Total Commitment by the Borrower, by notice to the
Administrative Agent (which shall promptly deliver a copy to each of the
Banks), request that the Total Commitment be increased by an amount that is
not less than $25,000,000 and will not result in the Total Commitment under
this Agreement and the Facility B Credit Agreement exceeding $350,000,000
in the aggregate.  Each such notice shall set forth the requested amount of
the increase in the Total Commitment and the date on which such increase is
to become effective (which shall be not fewer than 20 days after the date
of such notice), and shall offer each Bank the opportunity to increase its
Commitment by its ratable share, based on the amounts of the Banks'
Commitments, of the requested increase in the Total Commitment.  Each Bank
shall, by notice to the Borrower and the Administrative Agent given not
more than 15 Business Days after the date of the Borrower's notice, either
agree to increase its Commitment by all or a portion of the offered amount
or decline to increase its Commitment (and any Bank that does not deliver
such a notice within such period of 15 Business Days shall be deemed to
have declined to increase its Commitment); provided, however, that no Bank
may agree to increase its Commitment hereunder unless it shall have agreed
to ratably increase its Commitment under the Facility B Credit Agreement

                                                                110





(if the Facility B Credit Agreement is then in effect).  In the event that,
on the 15th Business Day after the Borrower shall have delivered a notice
pursuant to the first sentence of this paragraph, the Banks shall have
agreed pursuant to the preceding sentence to increase their Commitments by
an aggregate amount less than the increase in the Total Commitment
requested by the Borrower, the Borrower shall have the right to arrange for
one or more banks or other financial institutions (any such bank or other
financial institution being called an "Augmenting Bank"), which may include
any Bank, to extend Commitments or increase their existing Commitments in
an aggregate amount equal to all or part of the unsubscribed amount;
provided that each Augmenting Bank, if not already a Bank hereunder, shall
be subject to the approval of the Borrower and the Administrative Agent
(which approval shall not be unreasonably withheld) and shall execute all
such documentation as the Administrative Agent shall specify to evidence
its status as a Bank hereunder.  If (and only if) Banks (including
Augmenting Banks) shall have agreed to increase their Commitments or to
extend new Commitments in an aggregate amount not less than $25,000,000,
such increases and such new Commitments shall become effective on the date
specified in the notice delivered by the Borrower pursuant to the first
sentence of this paragraph, and shall be deemed added to the Commitments
set forth in Schedule 2.01 hereof.  Notwithstanding the foregoing, no
increase in the Total Commitment (or in the Commitment of any Bank) shall
become effective under this paragraph unless, on the date of such increase,
(i) the conditions set forth in paragraphs (b) and (c) of Section 4.01
shall be satisfied (with all references in such paragraphs to a Borrowing
being deemed to be references to such increase) and the Administrative
Agent shall have received a certificate to that effect dated such date and
executed by a Financial Officer of the Borrower and (ii) on the effective
date of such increase the Total Commitment under and as defined in the
Facility B Credit Agreement shall be proportionately increased (if the
Facility B Credit Agreement is then in effect) in accordance with the terms
of such Agreement.  Following any increase in the Commitment of any of the
Banks pursuant to this paragraph, any Revolving Credit Loans outstanding
prior to the effectiveness of such increase shall continue outstanding
until the ends of the respective interest periods applicable thereto, and
shall then be repaid or refinanced with new Revolving Credit Loans made
pursuant to Sections 2.01 and 2.05.

          (e)  (i)  The Borrower may, by notice to the Administrative Agent
(which shall promptly deliver a copy to each of the Banks) not less than 30
days and not more than 60 days prior to the Termination Date (the
"Anniversary Date"), request that the Banks extend the Termination Date for
an additional 364 days from the Termination Date then in effect hereunder
(the "Existing Termination Date").  Each Bank shall, by notice to the
Borrower and the Administrative Agent given not more than 15 Business Days
after the date of the Borrower's notice, advise the Borrower whether or not
such Bank agrees to such extension (and any Bank that does not advise the
Borrower on or before the 15th Business Day after the date of the
Borrower's notice shall be deemed to have advised the Borrower that it will
not agree to such extension).

          (ii)  The Borrower shall have the right on or before the
Anniversary Date to require any Bank which shall have advised or been

                                                                111





deemed to advise the Borrower that it will not agree to an extension of the
Termination Date (each a "Non-Extending Bank") to transfer without recourse
(in accordance with and subject to the restrictions contained in Section
2.23, except that the $3,500 processing fee set forth in Section
2.23(b)(iii) shall be paid by the Borrower) all its interests, rights and
obligations under this Agreement to one or more other banks or other
financial institutions (any such bank or other financial institution being
called a "Substitute Bank"), which may include any Bank; provided that (a)
such Substitute Bank, if not already a Bank hereunder, shall be subject to
the approval of the Borrower and the Administrative Agent (which approval
shall not be unreasonably withheld) and shall execute all such
documentation as the Administrative Agent shall specify to evidence its
status as a Bank hereunder, (b) such assignment shall become effective as
of the Anniversary Date and (c) the Borrower shall pay to such Non-
Extending Bank in immediately available funds on the effective date of such
assignment the principal of and interest accrued to the date of payment on
the Loans made by it hereunder and all other amounts accrued for its
account or owed to it hereunder.

          (iii) If (and only if) Banks (including Substitute Banks) holding
Commitments that represent at least 662/3% of the Total Commitment shall
have agreed to extend the Existing Termination Date (the "Continuing
Banks"), then, (a) the Termination Date shall be extended to the date that
is 364 days after the Existing Termination Date, and (b) the Commitment of
each Non-Extending Bank (subject to any transfer and assignment pursuant to
paragraph (ii) above) shall terminate (but such Bank shall continue to be
entitled to the benefits of Sections 2.15, 2.17, 2.22 and 9.05), and all
Loans of such Non-Extending Bank shall become due and payable, together
with all interest accrued thereon and all other amounts owed to such Bank
hereunder, on the Existing Termination Date.

          Notwithstanding the foregoing, no extension of the Termination
Date shall be effective with respect to any Bank unless, on and as of the
Anniversary Date, the conditions set forth in paragraphs (b) and (c) of
Section 4.01 shall be satisfied (with all references in such paragraphs to
a Borrowing being deemed to be references to such extension) and the
Administrative Agent shall have received a certificate to that effect,
dated the Anniversary Date, and executed by a Financial Officer of the
Borrower.

          SECTION 2.13.  Prepayment of Loans.  (a)  Prior to the Maturity
Date the Borrower shall have the right at any time to prepay any Revolving
Credit Borrowing, or, with the consent of the particular Bank or Banks to
receive the prepayment, any Competitive Borrowing (which consent may be
withheld in such Bank's or Banks' sole discretion), in whole or in part,
subject to the requirements of Section 2.17 and 2.18 but otherwise without
premium or penalty, upon prior written or telecopy notice to the
Administrative Agent before 12:00 noon, New York City time, at least one
Business Day prior to such prepayment in the case of an ABR Loan and at
least three Business Days prior to such prepayment in the case of a LIBOR
Loan or Fixed Rate Loan; provided, however, that each such partial
prepayment shall be in an integral multiple of $1,000,000 and in a minimum
aggregate principal amount of $5,000,000.

                                                                112





          (b)  On the date of any termination or reduction of the Total
Commitment pursuant to Section 2.12, the Borrower shall pay or prepay so
much of the Revolving Credit Loans as shall be necessary in order that the
aggregate principal amount of the Competitive and Revolving Credit Loans
outstanding will not exceed such Total Commitment following such
termination or reduction.  Subject to the foregoing, any such payment or
prepayment shall be applied to such Borrowing or Borrowings as the Borrower
shall select.  All prepayments under this Section 2.13(b) shall be subject
to Sections 2.17 and 2.18.

          (c)  On any date when the aggregate outstanding Loans (after
giving effect to any Borrowings effected on such date) exceed the Total
Commitment minus any amounts due under any outstanding Scheduled Loans, the
Borrower shall make a mandatory prepayment of the Revolving Credit Loans in
such amount as may be necessary to eliminate such excess.  Any prepayments
required by this paragraph shall be applied to outstanding ABR Loans up to
the full amount thereof before they are applied to outstanding LIBOR
Revolving Credit Loans.
          (d)  Each notice of prepayment shall specify the specific
Borrowing, the prepayment date and the aggregate principal amount of each
Borrowing to be prepaid, shall be irrevocable and shall commit the Borrower
to prepay such Borrowing by the amount stated therein.  All prepayments
under this Section 2.13 shall be accompanied by accrued interest on the
principal amount being prepaid to the date of prepayment.

          SECTION 2.14.  Eurodollar Reserve Costs.  The Borrower shall pay
to the Administrative Agent for the account of each Bank, so long as such
Bank shall be required under regulations of the Board to maintain reserves
with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (as defined in Regulation D), additional interest
on the unpaid principal amount of each LIBOR Loan made to the Borrower by
such Bank, from the date of such Loan until such Loan is paid in full, at
an interest rate per annum equal at all times during the Interest Period
for such Loan to the remainder obtained by subtracting (i) LIBOR for such
Interest Period from (ii) the rate obtained by multiplying LIBOR as
referred to in clause (i) above by the Statutory Reserves of such Bank for
such Interest Period.  Such additional interest shall be determined by such
Bank and notified to the Borrower (with a copy to the Administrative Agent)
not later than five Business Days before the next Interest Payment Date for
such Loan, and such additional interest so notified to the Borrower by any
Bank shall be payable to the Administrative Agent for the account of such
Bank on each Interest Payment Date for such Loan.

          SECTION 2.15.  Reserve Requirements; Change in Circumstances.
(a)  Notwithstanding any other provision herein, if after the date of this
Agreement any change in applicable law or regulation or in the
interpretation or administration thereof by any Governmental Authority
charged with the interpretation or administration thereof (whether or not
having the force of law) (i) shall subject any Bank to, or increase the net
amount of, any tax, levy, impost, duty, charge, fee, deduction or
withholding with respect to any LIBOR Loan or Fixed Rate Loan, or shall
change the basis of taxation of payments to any Bank of the principal of or
interest on any LIBOR Loan or Fixed Rate Loan made by such Bank or any

                                                                113





other fees or amounts payable hereunder (other than (x) taxes imposed on
the overall net income of such Bank by the jurisdiction in which such Bank
has its principal office or by any political subdivision or taxing
authority therein (or any tax which is enacted or adopted by such
jurisdiction, political subdivision or taxing authority as a direct
substitute for any such taxes) or (y) any tax, assessment, or other
governmental charge that would not have been imposed but for the failure of
any Bank to comply with any certification, information, documentation or
other reporting requirement), (ii) shall impose, modify or deem applicable
any reserve, special deposit or similar requirement (other than
requirements as to which the Borrower is obligated to make payments
pursuant to Section 2.14) against assets of, deposits with or for the
account of, or credit extended by, such Bank, or (iii) shall impose on such
Bank or the London interbank market any other condition affecting this
Agreement or any LIBOR Loan or Fixed Rate Loan made by such Bank, and the
result of any of the foregoing shall be to increase the cost to such Bank
of making or maintaining any LIBOR Loan or Fixed Rate Loan or to reduce the
amount of any sum received or receivable by such Bank hereunder (whether of
principal, interest or otherwise) in respect thereof by an amount deemed in
good faith by such Bank to be material, then the Borrower shall pay such
additional amount or amounts as will compensate such Bank for such increase
or reduction to such Bank upon demand by such Bank.

          (b)  If, after the date of this Agreement, any Bank shall have
determined in good faith that the applicability of any law, rule,
regulation or guideline adopted after the date hereof pursuant to or
arising out of the July 1988 report of the Basle Committee on Lending
Regulations and Supervisory Practices entitled "International Convergence
of Capital Measurement and Capital Standards", or the adoption after the
date hereof of any applicable law, rule, regulation or guideline regarding
capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or any lending office of
such Bank) with any request or directive 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 capital or on the capital of the Bank's
holding company, if any, as a consequence of its obligations hereunder to a
level below that which such Bank (or holding company) could have achieved
but for such adoption, change or compliance (taking into consideration such
Bank's policies or the policies of its holding company, as the case may be,
with respect to capital adequacy) by an amount deemed by such Bank to be
material, then, from time to time, the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank for such
reduction upon demand by such Bank.

          (c)  A certificate of a Bank setting forth in reasonable detail
(i) such amount or amounts as shall be necessary to compensate such Bank
(or participating banks or other entities pursuant to Section 2.23) as
specified in paragraph (a) or (b) above, as the case may be, and (ii) the
calculation of such amount or amounts under clause (c)(i), shall be
delivered to the Borrower and shall be conclusive absent manifest error.

                                                                114





The Borrower shall pay such Bank the amount shown as due on any such
certificate within 30 days after its receipt of the same.

          (d)  Failure on the part of any Bank to demand compensation for
any increased costs or reduction in amounts received or receivable or
reduction in return on capital with respect to any Interest Period shall
not constitute a waiver of such Bank's rights to demand compensation for
any increased costs or reduction in amounts received or receivable or
reduction in return on capital with respect to such Interest Period or any
other Interest Period.  The protection of this Section 2.15 shall be
available to each Bank regardless of any possible contention of invalidity
or inapplicability of the law, regulation or condition which shall have
been imposed.

          SECTION 2.16.  Change in Legality.  (a)  Notwithstanding anything
to the contrary herein contained, if any change in any law or regulation or
in the interpretation thereof by any Governmental Authority charged with
the administration or interpretation thereof shall make it unlawful for any
Bank to make or maintain any LIBOR Loan or to give effect to its
obligations to make LIBOR Loans as contemplated hereby, then, by written
notice to the Borrower and to the Administrative Agent, such Bank may:

          (i) declare that LIBOR Loans will not thereafter
     be made by such Bank hereunder, whereupon such Bank
     shall not submit a Competitive Bid in response to a
     request for LIBOR Competitive Loans and the Borrower
     shall be prohibited from requesting LIBOR Revolving
     Credit Loans from such Bank hereunder unless such
     declaration is subsequently withdrawn; and

          (ii) require that all outstanding LIBOR Loans made
     by it be converted to ABR Loans, in which event (A) all
     such LIBOR Loans shall be automatically converted to
     ABR Loans as of the effective date of such notice as
     provided in Section 2.16(b) and (B) all payments and
     prepayments of principal which would otherwise have
     been applied to repay the converted LIBOR Loans shall
     instead be applied to repay the ABR Loans resulting
     from the conversion of such LIBOR Loans.

          (b)  For purposes of this Section 2.16, a notice to the Borrower
by any Bank pursuant to Section 2.16(a) shall be effective on the date of
receipt thereof by the Borrower.

          (c)  Notwithstanding the foregoing, if the affected Bank can
continue to offer LIBOR Loans by transferring LIBOR Loans to another
existing lending office of such Bank, such Bank agrees to so transfer the
LIBOR Loans unless doing so would, in its good faith judgment, subject it
to any expense or liability or be otherwise disadvantageous to it.
          SECTION 2.17.  Indemnity.  The Borrower shall indemnify each Bank
against any loss or reasonable expense which such Bank may sustain or incur
as a consequence of (v) any failure by the Borrower to fulfill on the date
of any Borrowing hereunder the applicable conditions set forth in Article

                                                                115





IV, (w) any failure by the Borrower to borrow hereunder after a notice of
Borrowing pursuant to Article II has been given, (x) any payment,
prepayment or conversion of a LIBOR Loan or Fixed Rate Loan required by any
other provision of this Agreement or otherwise made on a date other than
the last day of the applicable Interest Period, (y) any default in the
payment or prepayment of the principal amount of any Loan or any part
thereof or interest accrued thereon, as and when due and payable (at the
due date thereof, by notice of prepayment or otherwise), or (z) the
occurrence of any Event of Default, including, but not limited to, any loss
or reasonable expense sustained or incurred or to be sustained or incurred
in liquidating or employing deposits from third parties acquired to effect
or maintain such Loan or any part thereof as a LIBOR Loan or a Fixed Rate
Loan.  Such loss or reasonable expense shall include an amount equal to the
excess, if any, as reasonably determined by each Bank of (i) its cost of
obtaining the funds for the Loan being paid, prepaid or converted or not
borrowed (based on LIBOR or, in the case of a Fixed Rate Loan, the fixed
rate of interest applicable thereto) for the period from the date of such
payment, prepayment or conversion or failure to borrow to the last day of
the Interest Period for such Loan (or, in the case of a failure to borrow,
the Interest Period for the Loan which would have commenced on the date of
such failure to borrow) over (ii) the amount of interest (as reasonably
determined by such Bank) that would be realized by such Bank in
re-employing the funds so paid, prepaid or converted or not borrowed for
such period or Interest Period, as the case may be.  A certificate of each
Bank setting forth any amount or amounts which such Bank is entitled to
receive pursuant to this Section 2.17 shall be delivered to the Borrower
and shall be conclusive, if made in good faith, absent manifest error.  The
Borrower shall pay each Bank the amount shown as due on any certificate
containing no manifest error within 30 days after its receipt of the same.

          SECTION 2.18.  Pro Rata Treatment.  Except as permitted under
Sections 2.14, 2.15(c), 2.16 and 2.17 with respect to interest, (I) each
Revolving Credit Borrowing, each payment or prepayment of principal of any
Revolving Credit Borrowing, each payment of interest on the Revolving
Credit Loans, each payment of the Facility Fees, each reduction of the
Commitments and each refinancing of any Borrowing with, conversion of any
Borrowing to or continuation of any Borrowing as a Revolving Credit
Borrowing of any Interest Rate Type shall be allocated pro rata among the
Banks in accordance with their respective Commitments (or, if such
Commitments shall have expired or been terminated, in accordance with the
respective principal amount of their outstanding Revolving Credit Loans).
Each payment of principal of any Competitive Borrowing shall be allocated
pro rata among the Banks participating in such Borrowing in accordance with
the respective principal amounts of their outstanding Competitive Loans
comprising such Borrowing.  Each payment of interest on any Competitive
Borrowing shall be allocated pro rata among the Banks participating in such
Borrowing in accordance with the respective amounts of accrued and unpaid
interest on their outstanding Competitive Loans comprising such Borrowing.
For purposes of determining the available Commitments of the Banks at any
time, each outstanding Competitive Borrowing shall be deemed to have
utilized the Commitments of the Banks (including those Banks that shall not
have made Loans as part of such Competitive Borrowing) pro rata in
accordance with such respective Commitments.  Each Bank agrees that in

                                                                116





computing such Bank's portion of any Borrowing to be made hereunder, the
Administrative Agent may, in its discretion, round each Bank's percentage
of such Borrowing computed in accordance with Section 2.01, to the next
higher or lower whole dollar amount.

          SECTION 2.19.  Right of Setoff.  If any Event of Default shall
have occurred and be continuing and any Bank shall have requested the
Administrative Agent to declare the Notes immediately due and payable
pursuant to Article VII, each Bank is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Bank to or for the credit or the account of the Borrower against any of and
all the Obligations now or hereafter existing under this Agreement and the
Notes held by such Bank, irrespective of whether or not such Bank shall
have made any demand under this Agreement or such Notes and although such
obligations may be unmatured.  Each Bank agrees promptly to notify the
Borrower after any such setoff and application made by such Bank, but the
failure to give such notice shall not affect the validity of such setoff
and application.  The rights of each Bank under this Section 2.19 are in
addition to other rights and remedies (including other rights of setoff)
which such Bank may have.

          SECTION 2.20.  Sharing of Setoffs.  Each Bank agrees that if it
shall, through the exercise of a right of banker's lien, setoff or
counterclaim against the Borrower including, but not limited to, a secured
claim under Section 506 of Title 11 of the United States Code or other
security or interest arising from, or in lieu of, such secured claim,
received by such Bank under any applicable bankruptcy, insolvency or other
similar law or otherwise, obtain payment (voluntary or involuntary) in
respect of any Revolving Credit Note held by it (it being understood that
each Bank shall be permitted to exercise any such right with respect to any
obligation of the Borrower to it other than the Revolving Credit Notes
prior to the exercise of such right with respect to any Revolving Credit
Note) as a result of which the unpaid principal portion of all the
Revolving Credit Notes held by it shall be proportionately less than the
unpaid principal portion of all the Revolving Credit Notes held by any
other Bank, it shall be deemed to have simultaneously purchased from such
other Bank a participation in each Revolving Credit Note held by such other
Bank, so that the aggregate unpaid principal amount of each Revolving
Credit Note and participations in each Revolving Credit Note held by each
Bank shall be in the same proportion to the aggregate unpaid principal
amount of all the Revolving Credit Notes then outstanding as the principal
amount of all the Revolving Credit Notes held by it prior to such exercise
of banker's lien, setoff or counterclaim was to the principal amount of all
Revolving Credit Notes outstanding prior to such exercise of banker's lien,
setoff or counterclaim; provided, however, that if any such purchase or
purchases or adjustments shall be made pursuant to this Section 2.20 and
the payment recovered by a Bank giving rise thereto shall thereafter be
recovered from such Bank, such purchase or purchases or adjustments shall
be rescinded to the extent of such recovery and the purchase price or
prices or adjustments paid by such Bank restored to such Bank without
interest.  The Borrower expressly consents to the foregoing arrangements

                                                                117





and agrees that any Bank holding a participation in a Revolving Credit Note
deemed to have been so purchased may exercise any and all rights of
banker's lien, setoff or counterclaim to the extent of the participation so
purchased in such Revolving Credit Note with respect to any and all moneys
owing by the Borrower as fully as if such Bank had made a Loan directly to
the Borrower in the amount of the participation.

          SECTION 2.21.  Payments.  The Borrower shall make each payment
hereunder and under any instrument delivered hereunder not later than 12:00
noon, New York City time, on the day when due in lawful money of the United
States (in freely transferable dollars) to the Administrative Agent at its
offices at 270 Park Avenue, New York, New York 10017, for the account of
the Banks, in Federal or other immediately available funds.  Any payment
received after such time on any day shall be deemed to be received on the
next Business Day.  The Administrative Agent shall remit each Bank's
portion of the Borrower's payment to such Bank promptly after receipt
thereof.  Except as set forth in the definition of "Interest Period" as
applied to LIBOR Loans, if any payment to be made hereunder or under any
Note becomes due and payable on a day other than a Business Day, such
payment may be made on the next succeeding Business Day and such extension
of time shall in such case be included in computing interest, if any, in
connection with such payment.

          SECTION 2.22.  United States Withholding.  (a)  Prior to the date
of the initial Loans hereunder, and from time to time thereafter if
requested by the Borrower or the Administrative Agent or required because,
as a result of a change in law or a change in circumstances or otherwise, a
previously delivered form or statement becomes incomplete or incorrect in
any material respect, each Bank organized under the laws of a jurisdiction
outside the United States shall provide, if legally able to do so and if
applicable, the Administrative Agent and the Borrower with complete,
accurate and duly executed forms or other statements prescribed by the
Internal Revenue Service of the United States certifying such Bank's
exemption from, or entitlement to a reduced rate of, United States
withholding taxes (including backup withholding taxes) with respect to all
payments to be made to such Bank hereunder and under the Notes.

          (b)  The Borrower and the Administrative Agent shall be entitled
to deduct and withhold any and all present or future taxes or withholdings,
and all liabilities with respect thereto, from payments hereunder or under
the Notes, if and to the extent that the Borrower or the Administrative
Agent in good faith determines that such deduction or withholding is
required by the law of the United States, including, without limitation,
any applicable treaty of the United States.  In the event the Borrower or
the Administrative Agent shall so determine that deduction or withholding
of taxes is required, it shall advise the affected Bank as to the basis of
such determination prior to actually deducting and withholding such taxes.
In the event the Borrower or the Administrative Agent shall so deduct or
withhold taxes from amounts payable hereunder, it (i) shall timely pay to
or deposit with the appropriate taxing authority in a timely manner the
full amount of taxes it has deducted or withheld, (ii) shall promptly
provide to the Banks written evidence of payment of such taxes to, or the
deposit thereof with, the appropriate taxing authority and a statement

                                                                118





setting forth the amount of taxes deducted or withheld, the applicable
rate, and any other information or documentation reasonably requested by
the Banks from whom the taxes were deducted or withheld, and (iii) shall
forward to such Banks any payment or deposit of the deducted or withheld
taxes as may be issued from time to time by the appropriate taxing
authority.  Unless the Borrower and the Administrative Agent have received
forms or other documents reasonably satisfactory to them indicating that
payments hereunder or under the Notes are not subject to United States
withholding tax or are subject to such tax at a rate reduced by an
applicable tax treaty, the Borrower or the Administrative Agent may
withhold taxes from such payments at the applicable statutory rate in the
case of payments to or for any Bank organized under the laws of a
jurisdiction outside the United States.

          (c)  Each Bank agrees (i) that as between it and the Borrower or
the Administrative Agent, it shall be the Person to deduct and withhold
taxes, and to the extent required by law it shall deduct and withhold
taxes, on amounts that such Bank may remit to any other Person(s) by reason
of any undisclosed transfer or assignment of an interest in this Agreement
to such other Person(s) pursuant to Section 2.23 and (ii) to indemnify the
Borrower and the Administrative Agent and any officers, directors, agents,
or employees of the Borrower or the Administrative Agent against and to
hold them harmless from any tax, interest, additions to tax, penalties,
reasonable counsel and accountants' fees, disbursements or payments arising
from the assertion by any appropriate taxing authority of any claim against
them relating to a failure to withhold taxes as required by law with
respect to amounts described in clause (i) of this paragraph (c).

          (d)  Each assignee of a Bank's interest in this Agreement in
conformity with Section 2.23 shall be bound by this Section 2.22, so that
such assignee will have all of the obligations and provide all of the forms
and statements and all indemnities, representations and warranties required
to be given under this Section 2.22.

          (e)  In the event that any withholding or similar taxes shall
become payable as a result of any change in any statute, treaty, ruling,
judicial decision, determination or regulation, or other change in law
(other than a change in the rate of taxes imposed on the overall net income
of any Bank) occurring after the Initial Date in respect of any sum payable
hereunder or under any other Fundamental Document to any Bank or the
Administrative Agent or as a result of any payment being made by a
Guarantor organized in or subject to any taxing jurisdiction outside the
United States (i) the sum payable by the Borrower shall be increased as may
be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.22)
such Bank or the Administrative Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions and (iii) the Borrower
shall pay the full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law.  For purposes of this
Section 2.22, the term "Initial Date" shall mean (i) in the case of the
Administrative Agent, the date hereof, (ii) in the case of each Bank as of
the date hereof, the date hereof and (iii) in the case of any other Bank,

                                                                119





the date of the Assignment and Acceptance pursuant to which it became a
Bank.

          SECTION 2.23.  Participations; Assignments.  (a)  Each Bank may
without the consent of the Borrower sell participations to one or more
banks or other entities in all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Commitment and the
Loans owing to it and the Notes held by it); provided,  however, that (i)
such Bank's obligations under this Agreement shall remain unchanged, (ii)
such Bank shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) the participating banks or other
entities shall be entitled to the cost protection provisions contained in
Section 2.15 and Section 2.17 but shall not be entitled to receive pursuant
to such provisions an amount larger than its share of the amount to which
the Bank granting such participation would have been entitled and (iv) the
Borrower, the Administrative Agent and the other Banks shall continue to
deal solely and directly with such Bank in connection with such Bank's
rights and obligations under this Agreement; provided further that each
Bank shall retain the sole right and responsibility vis-a-vis the Borrower
to enforce the obligations of the Borrower relating to the Loans and shall
retain all voting rights, including the right to approve any amendment,
modification or waiver of any provision of this Agreement other than
amendments, modifications or waivers with respect to any Facility Fees, the
amount of principal or the rate of interest payable on, or the maturity of,
the Loans as applicable to the participating banks or other entities (as to
which such participating banks or other entities shall be afforded the
right to vote).

          (b)  Each of the Banks may but only with the prior written
consent of the Borrower, which consent shall not be unreasonably withheld,
and (unless the assignee is a bank or trust company with a combined capital
and surplus of at least $100,000,000) with the written consent of the
Administrative Agent, which consent shall not be unreasonably withheld,
assign to one or more banks or other entities all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitment and the same portion of the Revolving Credit
Loans at the time owing to it and the Revolving Credit Note held by it);
provided, however, that (i) each such assignment shall be of a constant,
and not a varying, percentage of the assigning Bank's rights and
obligations under this Agreement, and (ii) the amount of the Commitment of
the assigning Bank subject to each such assignment (determined as of the
date the Assignment and Acceptance with respect to such assignment is
delivered to the Bank) shall be either the entire Commitment of such Bank
or a portion thereof in a principal amount of $10,000,000 or a larger
integral multiple of $1,000,000, and (iii) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register (as defined below), an Assignment
and Acceptance, together with any Note or Notes subject to such assignment
and a processing and recordation fee of $3,500.  Upon such execution,
delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be
not earlier than five Business Days after the date of acceptance and
recording by the Administrative Agent, (x) the assignee thereunder shall be

                                                                120





a party hereto and, to the extent provided in such Assignment and
Acceptance, have the rights and obligations of a Bank hereunder and under
the other Fundamental Documents and (y) the assigning Bank thereunder
shall, to the extent provided in such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of the
assigning Bank's rights and obligations under this Agreement, such
assigning Bank shall cease to be a party hereto).  Notwithstanding the
foregoing, any Bank assigning its rights and obligations under this
Agreement may retain any Competitive Loans made by it outstanding at such
time, and in such case shall retain its rights hereunder in respect of any
Loans so retained until such Loans have been repaid in full in accordance
with this Agreement.

          (c)  Notwithstanding the other provisions of this Section 2.23,
each Bank may at any time assign all or a portion of its interests, rights
and obligations under this Agreement (including, without limitation, all or
a portion of its Commitment and the same portion of the Loans at any time
owing to it and the Notes held by it) to (i) any Affiliate of such Bank
described in clause (b) of the definition of Affiliate or (ii) any other
Bank hereunder.

          (d)  By executing and delivering an Assignment and Acceptance,
the assigning Bank thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows:  (i) other
than the representation and warranty that it is the legal and beneficial
owner of the interest being assigned thereby free and clear of any adverse
claim, the assigning Bank makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Fundamental Documents or any other instrument or document
furnished pursuant hereto or thereto; (ii) such Bank assignor makes no
representation or warranty and assumes no responsibility with respect to
the financial condition of the Borrower or any of the Subsidiaries or any
other obligor under the Fundamental Documents or the performance or
observance by the Borrower (on behalf of itself or the Subsidiaries) or any
of the Guarantors or any other obligor under the Fundamental Documents of
any of their respective obligations under the Fundamental Documents or any
other instrument or document furnished pursuant hereto or thereto; (iii)
such assignee confirms that it has received a copy of this Agreement,
together with copies of the most recent financial statements delivered
pursuant to Sections 5.05(a) and 5.05(b) (or if none of such financial
statements shall have then been delivered, then copies of the financial
statements referred to in Section 3.05 hereof) and such other documents and
information as it has deemed appropriate to make its own credit analysis
and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the assigning Bank,
the Administrative Agent or any other person that has become a Bank and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such assignee appoints and authorizes the
Administrative Agent to take such action on its behalf as the

                                                                121





Administrative Agent deems appropriate and to exercise such powers under
the Fundamental Documents as are delegated to the Administrative Agent by
the terms thereof, together with such powers as are reasonably incidental
thereto; and (vi) such assignee agrees that it will perform in accordance
with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Bank.

          (e)  The Administrative Agent shall maintain at its address at
which notices are to be given to it pursuant to Section 10.01 a copy of
each Assignment and Acceptance and a register for the recordation of the
names and addresses of the Banks and the Commitments of, and principal
amount of the Loans owing to, each Bank from time to time (the "Register").
The entries in the Register shall be conclusive, in the absence of manifest
error, and the Borrower, the Administrative Agent and the Banks may treat
each person whose name is recorded in the Register as a Bank hereunder for
all purposes of the Fundamental Documents.  The Register shall be available
for inspection by the Borrower or any Bank at any reasonable time and from
time to time upon reasonable prior notice.

          (f)  Upon its receipt of an Assignment and Acceptance executed by
an assigning Bank and an assignee together with any Notes subject to such
assignment and evidence of the Borrower's written consent to such
assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in the form of Exhibit E hereto, (i)
accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt written notice
thereof to the Borrower.  Within five Business Days after receipt of the
notice, the Borrower, at its own expense, shall execute and deliver to the
Bank, in exchange for the surrendered Notes, as applicable (x) a new
Competitive Note to the order of such assignee in an amount equal to the
Total Commitment and a new Revolving Credit Note to the order of such
assignee in an amount equal to the portion of the Commitment assumed by it
pursuant to such Assignment and Acceptance and, (y) a new Revolving Credit
Note to the order of the assigning Bank in an amount equal to the
Commitment retained by it hereunder.  Such new Revolving Credit Notes shall
be in an aggregate principal amount equal to the aggregate principal amount
of such assumed Commitment and retained Commitment, such new Notes shall be
dated the date of the surrendered Notes and shall otherwise be in
substantially the forms of Exhibits B-1 and B-2 hereto, as the case may be.
In addition, the Borrower will promptly, at its own expense, execute such
amendments to the Fundamental Documents to which it is a party and such
additional documents and cause the Guarantors to execute amendments to the
Fundamental Documents to which it is a party, and take such other actions
as the Administrative Agent or the assignee Bank may reasonably request in
order to confirm that such assignee Bank is entitled to the full benefit of
the guarantees contemplated hereby to the extent of such assignment.

          (g)  Notwithstanding any other provision herein, any Bank may, in
connection with any assignment or participation or proposed assignment or
participation pursuant to this Section 2.23, disclose to the assignee or
participant or proposed assignee or participant, any information relating
to the Borrower or any of the Subsidiaries furnished to such Bank or the
Administrative Agent by or on behalf of the Borrower; provided that prior

                                                                122





to any such disclosure, each such assignee or participant or proposed
assignee or participant shall agree in writing to preserve the
confidentiality of any confidential information relating to the Borrower or
any of their Subsidiaries received from such Bank on the terms of Section
10.11.

          (h)  Any Bank may at any time pledge or assign all or any portion
of its rights under this Agreement and the Notes to a Federal Reserve Bank.


                        ARTICLE III

               Representations and Warranties
               ------------------------------

          The Borrower represents and warrants to the Banks that:

          SECTION 3.01.  Organization; Corporate Powers.  (a)  Each of the
Borrower and the Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization; (b) each of the Borrower, and the Subsidiaries (i) has the
corporate power and authority to own its property and to carry on its
business as now conducted and (ii) is qualified to do business in every
jurisdiction where such qualification is necessary except where the failure
so to qualify would not have a materially adverse effect on the condition,
financial or otherwise, of the Borrower or of the Borrower and its
Consolidated Subsidiaries taken as a whole; (c) each of the Borrower and
the Guarantors has the corporate power to execute, deliver and perform its
obligations under the Fundamental Documents to which it is a party and the
Borrower has the corporate power to borrow hereunder and to execute and
deliver the Notes; and (d) each of the Guarantors has the corporate power
and authority to guarantee the Obligations as contemplated by Article VIII
hereof.

         SECTION 3.02.  Authorization.  The execution, delivery and
performance of this Agreement and the other Fundamental Documents to which
the Borrower or any of the Guarantors is or is to be a party, by each such
party; in the case of the Borrower, the Borrowings hereunder and the
execution and delivery of the Notes; and in the case of each Guarantor, the
guaranty of the Obligations as contemplated in Article VIII (a) have been
duly authorized by all requisite corporate action on the part of the
Borrower and each Guarantor; and (b) will not (i) violate (A) any law, rule
or regulation of the United States or any state or political subdivision
thereof, the certificate of incorporation or By-laws of the Borrower or any
of the Consolidated Subsidiaries, (B) any applicable order of any court or
other agency of government or (c) any indenture, any agreement for borrowed
money, any bond, note or other similar instrument or any other material
agreement or contract to which the Borrower or any of the Consolidated
Subsidiaries is a party or by which the Borrower or any of the Consolidated
Subsidiaries or any of their respective properties are bound, (ii) be in
conflict with, result in a breach of or constitute (with notice or lapse of
time or both) a default under any such indenture, agreement, bond, note,
instrument or other material agreement or contract or (iii) result in the

                                                                123





creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any property or assets of the Borrower or any of the
Consolidated Subsidiaries except that, in the case of all the above, for
any such violations, conflicts, breaches, defaults, liens, charges or
encumbrances which would not have a material adverse effect on the Borrower
and its Consolidated Subsidiaries taken as a whole or adversely affect the
rights or interests of the Banks.

          SECTION 3.03.  Enforceability.  This Agreement and each other
Fundamental Document to which the Borrower or any of the Guarantors is a
party, is a legal, valid and binding obligation of each such party thereto,
and is enforceable against each such party thereto in accordance with its
terms, except as the enforceability thereof may be limited by the effect of
any applicable bankruptcy, insolvency or similar laws affecting creditors'
rights generally and by general principles of equity.

          SECTION 3.04.  Governmental Approvals.  No action, consent or
approval of, or registration or filing with, or any other action by any
Governmental Authority is required in connection with the execution,
delivery and performance by the Borrower and any of the Guarantors of this
Agreement or of any other Fundamental Document to which it is a party, the
Borrowings hereunder, the guarantee by the Guarantors of the Obligations
under Article VIII or the execution and delivery of the Notes.
          SECTION 3.05.  Financial Statements and Condition.  (a)  The
Borrower has heretofore furnished to each of the Banks audited Consolidated
balance sheets of the Borrower and its Consolidated Subsidiaries as of
December 31, 1996 and unaudited condensed Consolidated balance sheets of
the Borrower and its Consolidated Subsidiaries as of June 30, 1997 and the
related audited (or, in the case of the fiscal period ended June 30, 1997,
unaudited condensed) Consolidated statements of income, Consolidated
statements of stockholders' equity and Consolidated statements of cash
flows for each of the fiscal periods then ended, together with related
notes and supplemental information.  The audited consolidated balance
sheet, statement of income, statement of stockholders' equity and statement
of cash flows are referred to herein as the "Audited Financial Statements."
The unaudited condensed consolidated balance sheet, statement of income,
statement of stockholders' equity and statement of cash flows are referred
to herein as the "Unaudited Financial Statements."  The Audited Financial
Statements and the notes thereto were prepared in accordance with generally
accepted accounting principles consistently applied, and present fairly the
Consolidated financial position and results of operations and cash flows of
the Borrower and its Consolidated Subsidiaries as of the dates and for the
periods indicated, and such balance sheets and related notes show all known
direct liabilities and all known contingent liabilities of a material
nature of the Borrower and its Consolidated Subsidiaries as of such dates
which are required to be included in such financial statements and the
notes thereto in accordance with generally accepted accounting principles.
The Unaudited Financial Statements reflect all adjustments (consisting only
of normal accounting adjustments) which in the opinion of management of the
Borrower are necessary for a fair presentation of the financial position,
results of operations and cash flows of the Borrower for the period
presented.


                                                                124





          (b)  The Borrower has delivered to each of the Banks pro forma
consolidated financial forecasts for the years 1997-1999, consisting of an
income statement, balance sheet, and statement of cash flows together with
a statement of the underlying assumptions.  Such pro forma financial
statements are based on good faith estimates and assumptions believed to be
reasonable by senior management of the Borrower as of the Execution Date.

          (c)  None of the Borrower or any Guarantor (each, a "Credit
Party") is entering into the arrangements contemplated hereby and by the
other Fundamental Documents or intends to make any transfer or incur any
obligations hereunder or thereunder, with actual intent to hinder, delay or
defraud either present or future creditors.  On and as of the date of the
initial Borrowing hereunder on a Pro Forma Basis after giving effect to all
Indebtedness (including the Loans hereunder and the Indebtedness incurred
by each Credit Party in connection therewith) (w) each Credit Party expects
the cash available to such Credit Party and its Subsidiaries on a
Consolidated basis, after taking into account all other anticipated uses of
the cash of such Credit Party (including the payments on or in respect of
debt referred to in clause (y) of this Section 3.05(c)), will be sufficient
to satisfy all final judgments for money damages which have been docketed
against such Credit Party and such Subsidiaries or which such Credit Party
believes may be rendered against such Credit Party and such Subsidiaries in
any action in which such Credit Party is a defendant on the Closing Date
(taking into account the reasonably anticipated maximum amount of any such
judgment and such Credit Party's belief as to the earliest time at which
such judgment might be entered); (x) the sum of the present fair saleable
value of the assets of each Credit Party and its Subsidiaries on a
Consolidated basis will exceed the probable liability of such Credit Party
and such Subsidiaries on their debts (including their obligations under the
Guaranty); (y) no Credit Party and its Subsidiaries on a Consolidated basis
will have incurred or intends to incur, or believes that it will incur,
debts beyond its ability to pay such debts as such debts mature (taking
into account the timing and amounts of cash to be received by such Credit
Party and such Subsidiaries from any source, and amounts to be payable on
or in respect of debts of such Credit Party and such Subsidiaries and the
amounts referred to in clause (w)); and (z) each Credit Party and its
Subsidiaries on a Consolidated basis have sufficient capital with which to
conduct their present and proposed business and the property of such Credit
Party and such Subsidiaries does not constitute unreasonably small capital
with which to conduct their present or proposed business.  For purposes of
this Section 3.05, "debt" means any liability on a claim, and "claim" means
(i) right to payment whether or not such right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed
(other than those being disputed in good faith), 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 is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured.  For purposes of this Section 3.05, "present fair
saleable value" means the amount that may be realized if any person's
assets are sold as an entirety with reasonable promptness in an
arm's-length transaction under conditions for the sale of comparable
business enterprises obtaining at the time of determination.

                                                                125





          SECTION 3.06.  No Material Adverse Change.  There has been no
material adverse change in the business, assets, condition (financial or
otherwise) or results of operations of the Borrower and its Consolidated
Subsidiaries taken as a whole since December 31, 1996 except as previously
disclosed in writing to the Banks prior to the Execution Date.
          SECTION 3.07.  Title to Properties.  All assets of the Borrower
and the Subsidiaries are free and clear of Liens, except such as are
permitted by Section 6.01.

          SECTION 3.08.  Litigation.  There are no actions, suits or
proceedings (whether or not purportedly on behalf of the Borrower or any of
the Subsidiaries), pending or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of the Subsidiaries at law or in
equity or before or by any Federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic
or foreign, which involve any of the transactions herein contemplated, or
which have a reasonable likelihood of being determined adversely and if
determined adversely to the Borrower or any of the Subsidiaries, would
result in a material adverse change in the business, operations, prospects,
properties, assets or condition (financial or otherwise) of the Borrower
and its Consolidated Subsidiaries taken as a whole and neither the Borrower
nor any of the Subsidiaries is in default with respect to any judgment,
writ, injunction, decree, rule or regulation of any court or Federal,
state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, which default would
have a materially adverse effect on the Borrower and its Consolidated
Subsidiaries taken as a whole or have an adverse effect on the Borrower's
or the Guarantors' ability to comply with this Agreement or any other
Fundamental Document.

          SECTION 3.09.  Tax Returns.  The Borrower and each of the
Subsidiaries have timely filed or caused to be filed all Federal, state and
local tax returns which, to the knowledge of the Borrower or such
Subsidiary after due inquiry, are required to be filed and have paid or
caused to be paid all taxes required to be paid with respect to such
returns or any assessment received by it or by any of them to the extent
that such taxes have become due, except taxes the validity of which are
being contested in good faith by appropriate actions or proceedings and
with respect to which the Borrower or such Subsidiary, as the case may be,
shall have made such reserve, or other adequate provision, if any, as shall
be required by generally accepted accounting principles, and except for the
filing of such returns as to which the failure to file will not, either
individually or in the aggregate, have a material adverse effect on the
Borrower and its Consolidated Subsidiaries taken as a whole, or have an
adverse effect on the Borrower's or the Guarantors' ability to comply with
this Agreement or any other Fundamental Document.

          SECTION 3.10.  Agreements.  (a)  None of the Borrower nor any of
the Subsidiaries is subject to any charter or other corporate restriction
materially and adversely affecting its business, properties, assets,
operations or condition (financial or otherwise) or a party to any
agreement or instrument materially and adversely affecting the business,
properties, assets, operations or condition (financial or otherwise) of the

                                                                126





Borrower and its Consolidated Subsidiaries taken as a whole.  None of the
Borrower or any of the Subsidiaries is in default in the performance,
observance or fulfillment of any agreement or instrument for borrowed money
by which it is bound, or any other agreement or instrument by which it is
bound which individually or in the aggregate materially and adversely
affects the business, properties, assets, operations or condition
(financial or otherwise) of the Borrower and its Consolidated Subsidiaries
taken as a whole.

          (b)  The Administrative Agent has been provided at or prior to
the Execution Date (i) copies of all credit agreements, indentures and
other agreements related to Indebtedness for borrowed money of the Borrower
or any of the Subsidiaries in an amount greater than $10,000,000 and, to
the extent requested by the Administrative Agent, copies of any other
credit agreements, indentures and other agreements related to Indebtedness
for borrowed money of the Borrower or any of the Subsidiaries and (ii)
access to (and copies of, to the extent requested) any other contracts or
purchase agreements (including collective bargaining agreements) which are
material to the Borrower or the Subsidiaries.

          SECTION 3.11.  Employee Benefit Plans.  (a)  The Borrower and
each of its ERISA Affiliates is in compliance in all material respects with
the applicable provisions of ERISA and the Code and the regulations and
published interpretations thereunder.  No Reportable Event has occurred
with respect to any Plan (other than Plans which have been terminated and
as to which the Borrower and its ERISA Affiliates do not have any
significant remaining obligations or liabilities in connection therewith)
as to which the Borrower or any of its ERISA Affiliates was required to
file a report with the PBGC, and the present value of all benefit
liabilities under each Plan maintained by the Borrower or any of its ERISA
Affiliates (based on those assumptions used to fund such Plan) did not, as
of the last annual valuation date applicable thereto, exceed by a material
amount the value of the assets of such Plan.  No plan has incurred an
"accumulated funding deficiency" within the meaning of Section 412(a) or
sought or obtained a waiver under Section 412(d)(1) or an extension of time
under Section 412(e) of the Code.  No suit, action or other litigation or
investigation or a claim (excluding claims for benefits incurred in the
ordinary course of Plan activities) has been threatened or brought against
or with respect to any Plan.  To the best of the knowledge of the Borrower
and each of its ERISA Affiliates (i) no payment required to be made under
any Plan would be nondeductible under Section 280G of the Code, and (ii) in
the case of each Plan intended to qualify under Section 401(a) of the Code,
all amendments required by the Tax Reform Act of 1986 and subsequent
legislation for the continuing qualification of such Plan have been
approved and adopted.

          (b)  None of the Borrower or any of its ERISA Affiliates has
incurred any Withdrawal Liability that materially adversely affects the
financial condition of the Borrower and its Consolidated Subsidiaries taken
as a whole.  None of the Borrower or any of its ERISA Affiliates has
received any notification that any Multiemployer Plan is in reorganization
or has been terminated, within the meaning of Title IV of ERISA, and no
Multiemployer Plan is reasonably expected to be in reorganization or to be

                                                                127





terminated, where such reorganization has resulted or can reasonably be
expected to result in an increase in the contributions required to be made
to such Plan that would materially and adversely affect the financial
condition of the Borrower and its Consolidated Subsidiaries taken as a
whole.

          SECTION 3.12.  Investment Company Act; Public Utility Holding
Company Act; Federal Power Act.  None of the Borrower or the Subsidiaries
is or will during the term of this Agreement be (i) an "investment company"
as the term is defined in the Investment Company Act of 1940, as amended,
(ii) subject to regulation under the Investment Company Act of 1940, as
amended, (iii) a "holding company" as that term is defined in the Public
Utility Holding Company Act of 1935 or (iv) subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act or any
foreign, Federal or local statute or regulation limiting its ability to
incur indebtedness for money borrowed or guarantee such indebtedness as
contemplated hereby.

          SECTION 3.13.  Federal Reserve Regulations.  Subject to Section
4.01(d), none of the Borrower or any of the Subsidiaries is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any margin stock
(within the meaning of Regulation U).  No part of the proceeds of the Loans
hereunder will be used, whether directly or indirectly, and whether
immediately, incidentally or ultimately, for any purpose that violates, or
is inconsistent with, the provisions of Regulations G, T, U or X.  If
requested by any Bank, the Borrower will furnish to such Bank a statement,
in conformity with the regulations, on Federal Reserve Form U-1 referred to
in said Regulation U.

          SECTION 3.14.  Defaults; Compliance with Laws.  None of the
Borrower or any of the Subsidiaries is in default under this Agreement or
otherwise in default under any other agreements with respect to borrowed
money in an aggregate outstanding principal amount of $10,000,000 or more.
The Borrower and each of the Subsidiaries has conducted its business and
affairs so as to comply in all respects material to the Borrower and its
Consolidated Subsidiaries taken as a whole with all applicable Federal,
state and local laws and regulations.

          SECTION 3.15.  Use of Proceeds.  Proceeds of the Loans will be
used for the purposes referred to in Section 2.03.

          SECTION 3.16.  Affiliated Companies.  Set forth on Schedule 3.16
hereto is a complete and accurate list of all of the Subsidiaries of the
Borrower and other persons in which the Borrower or a Subsidiary holds
voting stock or a similar interest (other than companies as to which the
Borrower or a Subsidiary, as applicable, owns, directly or indirectly, less
than 5% of the outstanding voting stock), showing as of the Closing Date as
to Subsidiaries (i) the jurisdiction of its incorporation, (ii) the number
of shares of each class of capital stock authorized, (iii) the number of
such shares outstanding, (iv) the percentage of such shares held directly
or indirectly by the Borrower or a Subsidiary, as applicable, and (v) the
number of such shares covered by outstanding options, warrants, or rights

                                                                128





held directly or indirectly by the Borrower or a Subsidiary, as applicable.
Except as set forth on Schedule 3.16, all of the outstanding capital stock
of all of such Subsidiaries has been validly issued, is fully paid and
nonassessable and is owned as set forth in Schedule 3.16 (directly or
indirectly) by the Borrower or a Subsidiary, except for shares required to
be owned by other persons under applicable foreign law (which shares do not
exceed, for any such Subsidiary, 5% of the total outstanding shares of such
Subsidiary), free and clear of all Liens and any options, warrants and
other similar rights except as contemplated by the Existing Credit
Agreements.

          SECTION 3.17.  Environmental Liabilities.  (a)  Except as set
forth on Schedule 3.17 hereof, the Borrower and the Consolidated
Subsidiaries have not used, stored, treated, transported, manufactured,
refined, handled, produced or disposed of any Hazardous Materials on,
under, at, from, or in any way affecting any of their properties or assets,
or otherwise, in any manner which at the time of the action in question
violated any Environmental Law governing the use, storage, treatment,
transportation, manufacture, refinement, handling, production or disposal
of Hazardous Materials and to the best of the Borrower's knowledge, but
without independent inquiry, no prior owner of such property or asset or
any tenant, subtenant, prior tenant or prior subtenant thereof has used
Hazardous Materials on, from or affecting such property or asset, or
otherwise, in any manner which at the time of the action in question
violated any Environmental Law governing the use, storage, treatment,
transportation, manufacture, refinement, handling, production or disposal
of Hazardous Materials, except in each instance such violations as in the
aggregate would not have a material adverse effect upon the Borrower and
the Consolidated Subsidiaries taken as a whole.
          (b)  Except as set forth on Schedule 3.17, the Borrower and its
Consolidated Subsidiaries do not have any obligations or liabilities,
matured or not matured, absolute or contingent, assessed or unassessed,
which such would reasonably be expected to have a materially adverse effect
on the business or financial condition of the Borrower and its Consolidated
Subsidiaries taken as a whole and, except as set forth in Schedule 3.17, no
claims have been made against the Borrower or any of its Consolidated
Subsidiaries during the past five years and no presently outstanding
citations or notices have been issued against the Borrower or its
Consolidated Subsidiaries, where such would reasonably be expected to have
a materially adverse effect on the business or financial condition of the
Borrower and its Consolidated Subsidiaries taken as a whole, which in
either case have been or are imposed by reason of or based upon any
provision of any Environmental Laws, including, without limitation, any
such obligations or liabilities relating to or arising out of or
attributable, in whole or in part, to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
any Hazardous Materials by the Borrower or the Consolidated Subsidiaries,
in their respective capacities as such, or any of their respective
employees, agents, representatives or predecessors in interest in
connection with or in any way arising from or relating to the Borrower, the
Consolidated Subsidiaries or any of their respective properties, or
relating to or arising from or attributable, in whole or in part, to the
manufacture, processing, distribution, use, treatment, storage, disposal,

                                                                129





transport or handling of any such substance, by any other Person at or on
or under any of the real properties owned or used by the Borrower, the
Consolidated Subsidiaries or any other location where such would have a
materially adverse effect on the business or financial condition of the
Borrower and its Consolidated Subsidiaries taken as whole.

          SECTION 3.18.  Disclosure.  Neither this Agreement nor any
agreement, document, certificate or written statement furnished to any Bank
or to the Administrative Agent for the benefit of the Banks by or on behalf
of the Borrower or any of the Subsidiaries in connection with the
transactions contemplated hereby, at the time it was furnished contained
any untrue statement of a material fact or omitted to state a material
fact, under the circumstances under which it was made, necessary in order
to make the statements contained herein or therein not misleading provided
that no representation or warranty other than that set forth in Section
3.05(b) is made with respect to the pro forma consolidated financial
forecasts of the Borrower for the years 1997-1999.  At the date hereof,
there is no fact known to the Borrower which materially and adversely
affects, or in the future is reasonably expected to materially and
adversely affect, the business, assets or financial condition, of the
Borrower and its Consolidated Subsidiaries taken as a whole (other than
facts or conditions affecting the economy generally).

          SECTION 3.19.  Insurance.   As of the date of this Agreement, all
insurance maintained by the Borrower and its Subsidiaries on their
insurable properties and all other insurance maintained by them is in full
force and effect and all premiums required to have been paid have been duly
paid.


                         ARTICLE IV

                    Conditions of Lending
                    ---------------------

          SECTION 4.01.  All Borrowings.  The obligations of each of the
Banks to make Loans hereunder on the date of each Borrowing hereunder,
including each refinancing of any Loan with a new Loan as contemplated by
Section 2.06, shall be subject to the following conditions precedent:

          (a)  Notice.  The Administrative Agent shall have received a
notice of such Borrowing as required by Section 2.04 or 2.05, as
applicable.

          (b)  Representations and Warranties.  The representations and
warranties set forth in Article III (except, in the case of a refinancing
of a Borrowing with another Borrowing that does not increase the aggregate
principal amount of the Loans of any Bank outstanding, the representations
contained in Sections 3.06 and 3.08) shall be true and correct in all
material respects on and as of the date of such Borrowing with the same
effect as if made on and as of such date, except to the extent that such
representations and warranties expressly relate to an earlier date.


                                                                130





          (c)  No Default.  The Borrower and each of the Guarantors shall
be and the Borrower shall have caused each of the Subsidiaries to be in
compliance with all of the terms and provisions set forth herein or in any
other Fundamental Document on its part to be observed or performed, and
immediately after such Borrowing no Event of Default or event which upon
notice or lapse of time or both would constitute an Event of Default shall
have occurred and be continuing.

          (d)  Margin Requirements.  If the proceeds of any Loans are to be
used, directly or indirectly, to purchase or carry any margin stock or to
extend credit or refund indebtedness incurred for such purpose, the
Borrower shall furnish to the Administrative Agent an opinion of counsel
reasonably satisfactory to the Administrative Agent to the effect set forth
in paragraph 7 of Exhibit D-1 to this Agreement.

          (e)  Additional Documents.  The Banks shall have received from
the Borrower on the date of each Borrowing such documents and information
as they may reasonably request relating to the satisfaction of such
conditions.

Each Borrowing hereunder shall be deemed to be a representation and
warranty by the Borrower on the date of such Borrowing as to the matters
specified in paragraphs (b) and (c) of this Section 4.01.

          SECTION 4.02. Closing Date.  The obligations of the Banks to make
Loans hereunder are subject to the following additional conditions
precedent:

          (a)  Closing Date.  The Closing Date shall have occurred on or
before the 30th day following the Execution Date.

          (b)  Notes.  On the Closing Date, each Bank shall have received a
duly executed Competitive Note and Revolving Credit Note complying with the
provisions of Section 2.08.

          (c)  Opinions of Counsel.  On the Closing Date each Bank shall
have received the favorable written opinions of Morgan, Lewis & Bockius
LLP, special counsel for the Borrower and the Guarantors and of J. Patrick
Clark, Esq., Secretary and General Counsel of the Borrower, dated the
Closing Date, addressed to each Bank and satisfactory to Cravath, Swaine &
Moore, counsel to the Administrative Agent, substantially in the forms of
Exhibits D-1 and D-2, respectively.

          (d)   Corporate Documents.  On or before the Closing Date, each
Bank shall have received (I) a copy of the Certificate of Incorporation, as
amended, of each of the Borrower and each Guarantor, certified as of a
recent date by the Secretary of State of the state of incorporation of such
person; (ii) a certificate of such Secretary of State, dated as of a recent
date, as to the good standing of, and payment of taxes by, the Borrower and
each Guarantor, as applicable, and as to the charter documents of the
Borrower and each Guarantor, as applicable, on file in the office of each
such Secretary of State; (iii) a certificate of the Secretary of each of
the Borrower and each Guarantor, each dated the Closing Date and certifying

                                                                131





(A) that attached thereto is a true and complete copy of the By-laws of the
Borrower or such Guarantor, as applicable, as in effect on the date of such
certification, (B) that attached thereto is a true and complete copy of
resolutions adopted by the Board of Directors of the Borrower or such
Guarantor, authorizing the execution, delivery and performance of the
Fundamental Documents to which it is a party, (c) that the Certificate of
Incorporation of the Borrower or such Guarantor, as applicable, has not
been amended since the date of the last amendment thereto indicated on the
applicable certificate of the Secretary of State furnished pursuant to
clause (ii) above and (D) as to the incumbency and specimen signature of
each officer of the Borrower or such Guarantor, as applicable, executing
the Fundamental Documents to which it is a party, or any other document
delivered in connection herewith or therewith, as the case may be, (each
such certificate to contain a certification by another officer of the
Borrower or such Guarantor, as applicable, as to the incumbency and
signature of the officer signing the certificate referred to in this clause
(iii)); and (iv) such other documents as any Bank or counsel for the
Administrative Agent may reasonably request.

          (e)  Required Consents and Approvals.  Except as noted on
Schedule 4.02, all required consents and approvals shall have been obtained
with respect to the transactions contemplated hereby from all Governmental
Authorities with jurisdiction over the business and activities of the
Borrower and the Subsidiaries.

          (f)  Federal Reserve Regulations.  The Administrative Agent shall
be satisfied that the provisions of Regulations G, T, U and X of the Board
will not be violated by the transactions contemplated hereby.

          (g)   Contribution Agreement.  The Administrative Agent shall
have received the Contribution Agreement, duly executed by the Borrower and
each Guarantor.

          (h)  Fees and Expenses.  All accrued but unpaid Facility Fees and
fees due to the Administrative Agent, all as contemplated by Section 2.07,
and all amounts referred to in Section 10.04 then due, shall have been or
shall be simultaneously paid in full.

          (i)  Existing Indebtedness.  Concurrently with the transactions
contemplated hereby, on the Closing Date the Existing Revolving Credit
Agreement shall have been modified to provide for the reduction of the
Commitments of the Banks thereunder (as defined therein) to an amount not
greater than the amount of the Scheduled Loans outstanding thereunder at
such time and further reduction thereof by the amount of any payment or
prepayment of principal of such Scheduled Loans.

          (j)  Officer's Certificate.  The Banks shall have received a
certificate of a Financial Officer dated the Closing Date certifying
compliance with Section 4.01(b) and (c) hereof.

          (k)  Other Documents.  The Administrative Agent shall have
received such other documents as the Administrative Agent may reasonably
require.

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                         ARTICLE V

                   Affirmative Covenants
                   ---------------------

          The Borrower covenants and agrees with each Bank that, so long as
this Agreement shall remain in effect or the principal of or interest on
any Note or any other expenses or amounts payable hereunder shall be unpaid
or the Commitments are in effect, unless the Required Banks otherwise
consent in writing, it will, and it will cause each of its Subsidiaries to:

          SECTION 5.01.  Corporate Existence.  Do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its
corporate existence, material rights, licenses, permits and franchises;
provided that nothing in this Section 5.01 shall prevent the abandonment or
termination of the corporate existence, rights or franchises of any
Subsidiary or the Borrower if such abandonment or termination would not
have a material adverse effect upon the business, assets, liabilities,
financial condition, results of operations or business prospects 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
Fundamental Document.

          SECTION 5.02.  Maintenance of Property.  At all times maintain
and preserve all property used or useful in working order and condition,
and from time to time make, or cause to be made, all needful and proper
repairs, renewals and replacements thereto, so that the business carried on
in connection therewith may be properly conducted at all times, except to
the extent that the failure to do so would not have a material adverse
effect upon the business, assets, liabilities, financial condition, results
of operations or prospects of the Borrower and its Subsidiaries taken as a
whole or on the ability of the Borrower or any Guarantor to perform its
obligations hereunder or under any other Fundamental Document.

         SECTION 5.03.  Insurance.  (a)  Keep its insurable properties
adequately insured at all times; (b) maintain such other insurance, to such
extent and against such risks, including fire and other risks insured
against by extended coverage, as is customary with companies in the same or
similar businesses; (c) maintain in full force and effect public liability
insurance against claims for personal injury or death or property damage
occurring upon, in, about or in connection with the use of any properties
owned, occupied or controlled by the Borrower or any Subsidiary, as the
case may be, in such amount as the Borrower or such Subsidiary, as the case
may be, shall reasonably deem necessary; and (d) maintain such other
insurance as may be required by law.  The Borrower and the Subsidiaries may
self-insure to the extent customary with companies in the same or similar
businesses.

          SECTION 5.04.  Obligations and Taxes.  Pay all its indebtedness
and obligations promptly and in accordance with their terms except to the

                                                                133





extent that the failure to do so would not have a material adverse effect
upon the business, assets, liabilities, financial condition, results of
operations or prospects of the Borrower and its Subsidiaries taken as a
whole or on the ability of the Borrower or any Guarantor to perform its
obligations hereunder or under any other Fundamental Document and pay and
discharge promptly all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or in respect of its
property (and use its best efforts to do so), prior to the time penalties
would attach thereto, as well as all lawful claims for labor, materials and
supplies or otherwise which, if unpaid, might become a Lien or charge upon
such properties or any part thereof; provided, however, that none of the
Borrower or any of the Subsidiaries shall be required to pay and discharge
or to cause to be paid and discharged any such tax, assessment, charge,
levy or claim so long as the validity or amount thereof shall be contested
in good faith by appropriate actions or proceedings and the Borrower or
such Subsidiary, as the case may be, shall have made such reserve, or other
adequate provision, if any, as shall be required by generally accepted
accounting principles with respect to any such tax, assessment, charge,
levy or claim so contested.

          SECTION 5.05.  Financial Statements; Reports, etc.  Furnish to
the Banks:

          (a)  As soon as available, but in any event within 90 days after
the end of each fiscal year of the Borrower, the Consolidated balance sheet
as of the end of such fiscal year of the Borrower and its Consolidated
Subsidiaries, the related Consolidated statements of income and the
Consolidated statements of cash flows for the year then ended of the
Borrower and its Consolidated Subsidiaries, the foregoing Consolidated
financial statements to be (x) examined by, and to carry the report
reasonably acceptable to the Banks of KPMG Peat Marwick or other
independent public accountants of similar nationally recognized standing
reasonably acceptable to the Banks, and to be in the form of the financial
statements included in the Borrower's annual report on Form 10K filed with
the Securities and Exchange Commission for the fiscal year ended December
31, 1996, and (y) accompanied by a certificate of said accountants stating
that in making the examination necessary for expressing their opinion on
such statements they have obtained no knowledge, of a financial or
accounting nature, of any violation of any of the terms or provisions of
this Agreement or any other Fundamental Document, or of the occurrence of
any condition or event which, with notice or lapse of time or both, would
constitute an Event of Default, or, if such accountants shall have obtained
knowledge of any such violation, condition or event, they shall specify in
such certificate all such violations, conditions and events, and the nature
thereof, it being understood that said accountants shall not be liable to
anyone for failure to obtain such knowledge.  All such Consolidated
financial statements shall be compiled in reasonable detail in accordance
with generally accepted accounting principles applied on a consistent basis
throughout the periods reflected therein, except as stated therein, and
fairly present the financial position and results of operations and cash
flows of the Borrower and its Consolidated Subsidiaries for the respective
periods indicated.


                                                                134





          (b)  As soon as available, but in any event within 60 days after
the end of each of the first three fiscal quarters of each fiscal year, an
unaudited Consolidated condensed balance sheet, and the related unaudited
Consolidated condensed statements of income for such quarter and for the
then elapsed portion of the fiscal year, and the Consolidated condensed
statements of cash flows of the Borrower and its Consolidated Subsidiaries
for the then-elapsed portion of the fiscal year, the foregoing Consolidated
condensed financial statements to be in reasonable detail (comparable to
the Consolidated condensed financial statements for the quarter ended June
30, 1997 heretofore delivered to the Banks) and stating (with respect to
the unaudited Consolidated condensed statements of income and cash flows)
in comparative form the figures as at the end of and for the comparable
periods of the preceding fiscal year and to be certified by a Financial
Officer of the Borrower in his capacity as such as being to the best of his
knowledge and belief correct and complete and as presenting fairly the
consolidated financial position and results of operations of the Borrower
and its Consolidated Subsidiaries in accordance with generally accepted
accounting principles (other than the omission of the notes to the
financial statements required by generally accepted accounting principles)
applied on a basis consistent with previous fiscal years, in each case
subject to normal year-end adjustments.

          (c)  Concurrently with (a) and (b) above, a certificate of a
Financial Officer of the Borrower, certifying in his capacity as such (i)
that to the best of his knowledge and belief no Event of Default, or event
which with notice or lapse of time or both would constitute such an Event
of Default or event has occurred, and, if so, specifying the nature and
extent thereof and specifying any corrective action taken or proposed to be
taken with respect thereto, (ii) that to the best of his knowledge and
belief the Borrower is in compliance with the covenants set forth in
Sections 6.09, 6.10 and 6.11, (iii) setting forth in reasonable detail
calculations demonstrating compliance with Sections 6.01(x), 6.02,
6.04(iii), and 6.06(c), and (iv) setting forth the calculation in
reasonable detail of the Consolidated Interest Coverage Ratio as at the end
of such fiscal quarter and for the period of four fiscal quarters then
ended treated as a single accounting period, and any change in pricing
anticipated to become effective pursuant to such notice.

          (d)  Promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent or made
available generally by the Borrower to its public security holders, of all
regular and periodic reports and all registration statements and
prospectuses, if any, filed by the Borrower with any securities exchange or
with the Securities and Exchange Commission, or any comparable foreign
bodies, and of all press releases and other statements made available
generally by any of them to the public concerning material developments in
the business of the Borrower.

          (e)  Promptly, from time to time, such other information
regarding the financial condition and business operations of the Borrower
and its Consolidated Subsidiaries as any Bank may reasonably request (with
a copy of any such written information provided to the Administrative
Agent).

                                                                135





          SECTION 5.06.  Defaults and Other Notices.  Give the
Administrative Agent prompt (but in any event not later than five Business
Days after an officer of the Borrower shall become aware of the occurrence
of such event) written notice of the following:

          (a) any Event of Default and any event which with
     notice or lapse of time or both would constitute an
     Event of Default; and

          (b) any development (other than those specified
     above as to which the Administrative Agent has received
     due notice) which has resulted in, or which the
     Borrower reasonably believes will result in, a material
     adverse change in the business, assets, liabilities or
     financial condition of the Borrower and its
     Consolidated Subsidiaries taken as a whole or the
     ability of the Borrower to perform its obligations
     hereunder.

          SECTION 5.07.  ERISA.  (a)  Comply in all material respects with
the applicable provisions of ERISA and the Code and (b) furnish to the
Administrative Agent (I) as soon as possible, and in any event within 30
days after any officer of the Borrower or any of its ERISA Affiliates knows
or has reason to know that any Reportable Event with respect to any Plan
has occurred that alone or together with any other Reportable Event with
respect to the same or another Plan could reasonably be expected to result
in liability of the Company to the PBGC in an aggregate amount exceeding
$5,000,000, a statement of a Financial Officer setting forth details as to
such Reportable Event and the action that the Borrower proposes to take
with respect thereto, together with a copy of the notice of such Reportable
Event, if any, given to the PBGC, (ii) promptly after receipt thereof, a
copy of any notice the Borrower or any of its ERISA Affiliates may receive
from the PBGC relating to the intention of the PBGC to terminate any Plan
or Plans or to appoint a trustee to administer any such Plan, (iii) within
10 days after a filing with the PBGC pursuant to Section 412(n) of the Code
of a notice of failure to make a required installment or other payment with
respect to a Plan, a statement of a Financial Officer setting forth details
as to such failure and the action that the Borrower proposes to take with
respect thereto, together with a copy of such notice given to the PBGC and
(iv) promptly and in any event within 30 days after receipt thereof by the
Borrower or any of its ERISA Affiliates from the sponsor of a Multiemployer
Plan, a copy of each notice received by the Borrower or any ERISA Affiliate
of the Borrower concerning (A) the imposition of Withdrawal Liability by a
Multiemployer Plan in an amount exceeding $5,000,000 or (B) a determination
that a Multiemployer Plan is, or is expected to be, terminated or in
reorganization, both within the meaning of Title IV of ERISA, and which, in
each case, is expected to result in an increase in annual contributions of
the Borrower or any of its ERISA Affiliates to such Multiemployer Plan in
an amount exceeding $5,000,000.

          SECTION 5.08.  Access to Premises and Records.  Maintain the
financial records of the Borrower and its Consolidated Subsidiaries in
accordance with generally accepted accounting principles and permit

                                                                136





representatives of the Banks to have access, at all reasonable times upon
reasonable notice, to the Borrower and any of its Subsidiaries and their
properties and to make such excerpts from such financial books and records
as such representatives reasonably request and to discuss the business,
operations, properties and financial and other condition of the Borrower
and such Subsidiaries with officers and employees of the Borrower and such
Subsidiaries and the independent certified public accountants of the
Borrower; provided that no Bank shall purchase, sell or otherwise acquire
or dispose of any interest in a security of the Borrower in the public
markets on the basis of any material nonpublic information so obtained.

          SECTION 5.09.  Compliance with Laws, etc.  The Borrower and its
Subsidiaries shall comply in all material respects with the requirements of
all applicable laws, rules, regulations and orders of any Governmental
Authority, except to the extent that the failure to do so would not have a
material adverse effect upon the business, assets, liabilities, financial
condition, results of operations or prospects of the Borrower and its
Subsidiaries taken as a whole or on the ability of the Borrower or any
Guarantor to perform its obligations hereunder or under any other
Fundamental Document.  If any authorization or approval or other action by,
or notice to or filing with, any Governmental Authority is required for the
performance by the Borrower of this Agreement or any other Fundamental
Document, the Borrower will promptly obtain such approval or make such
notice or filing and shall provide satisfactory evidence thereof to the
Administrative Agent.

          SECTION 5.10.  Security Interests.  If any property of the
Borrower or any of its Subsidiaries, whether now owned or hereafter
acquired, is subjected to any Lien not permitted by Section 6.01, the
Borrower will make, or will cause to be made, effective provision whereby
the Obligations shall be secured equally and ratably with all other
obligations secured by such Lien, and, if such provision is not made, an
equitable lien, so equally and ratably securing the Obligations, shall
exist on such property to the full extent permitted under applicable law;
it being understood that the Borrower's compliance with the provisions of
this Section 5.10 shall not, in any way, constitute a cure by the Borrower
or a waiver by the Banks of the Borrower's failure to perform or observe
any of the covenants or agreements in Section 6.01.

          SECTION 5.11.  Subsidiary Guarantors.  Promptly upon any person
incorporated in the United States becoming a Subsidiary that is a Material
Subsidiary, or upon any Subsidiary incorporated in the United States
becoming a Material Subsidiary, the Borrower agrees that it or the other
direct owner of such Subsidiary shall cause such Subsidiary to sign such an
instrument substantially in the form of Exhibit C hereto, under which such
Subsidiary shall become a party to the Contribution Agreement as a
Guarantor and assume all obligations of a Guarantor under the Credit
Agreement, all in a manner satisfactory to the Administrative Agent and its
counsel; provided, however, the Borrower shall be permitted at any time to
cause any of its Subsidiaries not then subject to this Section 5.11 to
become a party to this Agreement and the Contribution Agreement in
accordance with the requirements hereof.


                                                                137





         SECTION 5.12.  Environmental Laws.  (a)  Promptly notify the
Administrative Agent upon any Senior Officer of the Borrower becoming aware
of any violation or noncompliance with, or liability under any
Environmental Laws which, when taken together with all other pending
violations would reasonably be expected to be materially adverse to the
Borrower and the Consolidated Subsidiaries taken as a whole, and promptly
furnish to the Administrative Agent all notices of any nature which the
Borrower or any Consolidated Subsidiaries may receive from any Governmental
Authority or other Person with respect to any violation, or potential
violation or noncompliance with, or liability or potential liability under
any Environmental Laws which, in any case or when taken together with all
such other notices, would reasonably be expected to have a material adverse
effect on the Borrower and the Consolidated Subsidiaries taken as a whole.

          (b)  Comply with and use reasonable efforts to ensure compliance
by all tenants and subtenants with all Environmental Laws, and obtain and
comply in all material respects with and maintain and use reasonable
efforts to ensure that all tenants and subtenants obtain and comply in all
material respects with and maintain any and all licenses, approvals,
registrations or permits required by Environmental Laws.

          (c)  Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under all
Environmental Laws and promptly comply in all material respects with all
lawful orders and directives of all Governmental Authorities.

          (d)  Defend, indemnify and hold harmless the Administrative Agent
and the Banks, and their respective employees, agents, officers and
directors, from and against any claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature, known or unknown, contingent or otherwise, arising out of, or in
any way related to the violation of or noncompliance with any Environmental
Laws, or any orders, requirements or demands of Governmental Authorities
related thereto, including, without limitation, reasonable attorney and
consultant fees, investigation and laboratory fees, court costs and
litigation expenses, but excluding therefrom all claims, demands,
penalties, fines, liabilities, settlements, damages, costs and expenses
arising out of or resulting from (i) the gross negligence or wilful
misconduct of such indemnified party or (ii) any acts or omissions of any
indemnified party occurring after such indemnified party is in possession
of, or controls the operation of, any property or asset.

          SECTION 5.13.  Existing Credit Agreements.  Repay each Scheduled
Loan in full at the end of the Interest Period applicable thereto, and
terminate the Existing Revolving Credit Agreement at such time as all
Scheduled Loans outstanding thereunder have been paid.


                         ARTICLE VI

                     Negative Covenants
                     ------------------


                                                                138





          The Borrower covenants and agrees with the Banks that, so long as
this Agreement shall remain in effect or the principal of or interest on
any Note or any other expenses or amount payable hereunder shall be unpaid
or the Commitments are in effect, unless the Required Banks otherwise
consent in writing, it will not, and it will not cause or permit any of its
Subsidiaries, directly or indirectly, to:

          SECTION 6.01.  Liens.  Incur, create or permit to exist any Lien
on (or sale and leaseback transaction with respect to) any property, assets
or stock owned or hereafter acquired by the Borrower or any of its
Subsidiaries, other than:

          (i) Liens for taxes, assessments or governmental
     charges or levies not yet delinquent or thereafter
     payable without penalty for nonpayment or (if
     foreclosure, distraint, sale or other similar
     proceedings shall not have been commenced) being
     contested in good faith and by appropriate actions or
     proceedings promptly initiated and diligently
     conducted, if such reserve or other appropriate
     provision, if any, as shall be required by generally
     accepted accounting principles shall have been made
     therefor;

          (ii) Liens of carriers, warehousemen, mechanics
     and materialmen incurred in the ordinary course of
     business for sums not yet due or being contested in
     good faith and by appropriate actions or proceedings
     promptly initiated and diligently conducted, if such
     reserve or other appropriate provision, if any, as
     shall be required by generally accepted accounting
     principles shall have been made therefor;

          (iii) Liens incurred or deposits made in the
     ordinary course of business, in connection with
     workers' compensation, unemployment insurance and other
     social security, or to secure the performance of bids,
     tenders, leases, contracts (other than the repayment of
     borrowed money), statutory obligations, surety, customs
     and appeal bonds;

          (iv) zoning restrictions, easements, licenses,
     reservations, provisions, covenants, conditions,\
     waivers, restrictions on the use of real property or
     minor irregularities of title to real property (and
     with respect to leasehold encumbrances or interests,
     mortgages, obligations, liens and other encumbrances
     incurred, created, assumed or permitted to exist and
     arising by, through or under or asserted by a landlord
     or owner of the leased property, with or without
     consent of the lessee), none of which materially
     impairs the use of any parcel of real property material
     to the operation of the business of the owner thereof

                                                                139





     or the value of such property for the purpose of such
     business;

          (v) Liens securing purchase money Indebtedness of
     the Borrower and its Subsidiaries; provided that (A)
     such Liens shall not encumber any property other than
     the property acquired, (B) the Indebtedness secured
     thereby does not exceed the purchase price of such
     property, and (C) such transaction does not otherwise
     violate this Agreement;

          (vi) Liens upon assets of a corporation existing
     at the time such corporation is merged into or
     consolidated with the Borrower or a Subsidiary or at
     the time of its acquisition by the Borrower or a
     Subsidiary or its becoming a Subsidiary; provided that
     such Lien does not spread to any other asset at any
     time owned by the Borrower or any Subsidiary;

          (vii) Liens in existence on the date hereof which
     are listed in Schedule 6.01 (which Schedule includes
     all such Liens (other than Liens of the types described
     in paragraphs (i) through (v) above) securing
     obligations in excess of $500,000);

          (viii) Liens arising out of the renewal or
     refunding of any Indebtedness of the Borrower and its
     Subsidiaries secured by Liens permitted by the
     foregoing; provided that the aggregate principal amount
     of such Indebtedness is not increased and is not
     secured by additional assets and the Indebtedness
     secured by the Lien is permitted under this Agreement;

          (ix) Liens in connection with attachments,
     judgments or awards as to which an appeal or other
     appropriate proceedings for contest or review are
     promptly commenced and diligently pursued in good faith
     (and as to which foreclosure and other enforcement
     proceedings shall not have been commenced (unless fully
     bonded or otherwise effectively stayed)); and

          (x) other Liens on assets with an aggregate book
     value for all such assets subject to Liens, which when
     added to the aggregate book value of assets subject to
     Sale and Leaseback Transactions permitted under
     Section 6.06(c), do not at the time in effect exceed
     the lesser of (a) $40,000,000 and (b) 10% of
     Consolidated Net Worth.

          SECTION 6.02.  Indebtedness.  Permit any of the foreign
Subsidiaries or any domestic Subsidiaries which are not Guarantors
hereunder to incur, create, assume, become or be liable in any manner with
respect to, or permit any of such Subsidiaries to permit or suffer to

                                                                140





exist, any Indebtedness, unless after giving effect to such Indebtedness
the total Indebtedness of all such Subsidiaries is no greater than the
lesser of (a) $60,000,000 and (b) 15% of Consolidated Net Worth; provided,
however, this Section 6.02 shall not apply to any Subsidiary which becomes
a Guarantor hereunder in accordance with Section 5.11 hereof.

          SECTION 6.03.  Mergers, Consolidations, Sales of Assets and
Acquisitions.  Neither the Borrower nor any Subsidiary (in one transaction
or series of transactions) will wind up, liquidate or dissolve its affairs,
or enter into any transaction of merger or consolidation, or sell or
otherwise dispose of all or any part of its property or assets, except:

          (a) mergers between the Borrower and a Subsidiary
     or between Subsidiaries;

          (b) sales of inventory, marketable securities,
     receivables owed to a foreign subsidiary and
     receivables of the Borrower or any Subsidiary from
     export sales, in each case in the ordinary course of
     business;

          (c) sales permitted pursuant to Section 6.06;

          (d) subject to Section 6.03(e) below, any merger
     (other than as described in (a) above), consolidation,
     dissolution or liquidation; provided, however, that (I)
     immediately prior to and on a Pro Forma Basis after
     giving effect to such transaction no Default or Event
     of Default has occurred or is continuing, (ii) if such
     transaction involves a Person other than the Borrower
     and its Subsidiaries, the Administrative Agent shall
     promptly receive a certificate of a Financial Officer
     of the Borrower confirming that such transaction
     complies with the requirements set forth in this
     section and (iii) if such transaction involves the
     Borrower, the Borrower is the surviving entity;

          (e) a disposition of less than substantially all
     of the assets of the Borrower and its Subsidiaries,
     taken as a whole, (i) for consideration which
     represents fair market value (as reasonably determined
     in good faith by the Borrower's Board of Directors) or,
     at a price determined by the Board of Directors of the
     Borrower to be in the best interests of the Borrower
     under circumstances where the Board deems a sale on
     terms other than fair market value to be in the best
     interest of the Borrower, (ii) immediately prior to and
     on a Pro Forma Basis after giving effect thereto, no
     Event of Default or Default shall have occurred and be
     continuing and (iii) if the transaction involves
     consideration of $20,000,000 or more, the
     Administrative Agent shall promptly receive a
     certificate of a Financial Officer of the Borrower

                                                                141





     confirming that such transaction complies with the
     requirements set forth in this section; and

          (f) acquisitions of an interest in any business
     from any Person (whether pursuant to a merger, an
     acquisition of stock, assets, a business unit or
     otherwise); provided that (i) immediately prior to and
     on a Pro Forma Basis after giving effect thereto, no
     Event of Default or Default shall have occurred and be
     continuing and (ii) if the transaction involves
     consideration equal to or in excess of $10,000,000, the
     Administrative Agent shall promptly receive a
     certificate of a Financial Officer of the Borrower
     confirming that such transaction complies with the
     requirements set forth in this section.

          SECTION 6.04.  Change of Business.  Engage in any business
activities other than those related or incidental to its present business
activities, namely, the manufacture and wholesale distribution of (i)
dental supplies and equipment, (ii) medical/industrial supplies and
equipment and (iii) other healthcare products; provided that (x) the
business activities, described in clause (iii) shall not at any time
represent more than 20% of the Consolidated Net Income of the Borrower and
the Subsidiaries as of the end of the then most recently completed fiscal
year of the Borrower, and (y) the assets of the business activities
described in clause (iii) shall not at any time represent more than 20% of
the Consolidated assets of the Borrower and the Subsidiaries.

          SECTION 6.05.  Transactions with Affiliates.  Enter into any
transactions with or provide any employee benefits to any Affiliate of the
Borrower or any Subsidiary except (a) in the ordinary course of business
and upon fair and reasonable terms no less favorable than the Borrower or
the Subsidiary concerned could, in the good faith judgment of senior
management of the Borrower, obtain or could become entitled to in an arm's-
length transaction with a person or entity which was not an Affiliate of
the Borrower or such Subsidiary, (b) transactions involving the Borrower
and one or more Subsidiaries exclusively, (c) transactions involving two or
more Subsidiaries exclusively, (d) transactions with the ESOP or other
similar foreign employee stock ownership plans of Subsidiaries of the
Borrower which do not materially and adversely affect the interests of the
Administrative Agent or the Banks under the Fundamental Documents, and (e)
transactions otherwise expressly permitted hereunder.

          SECTION 6.06.  Sale and Leaseback.  Enter into any arrangement,
directly or indirectly, with any person whereby it shall sell or transfer
any property, whether real or personal, and used or useful in its business,
whether now owned or hereafter acquired, if the Borrower or any of its
Subsidiaries at the time of such sale or disposition intends to lease or
otherwise acquire the right to use or possess (except by purchase) such
property or like property for a substantially similar purpose (a "Sale and
Leaseback Transaction") except:

          (a) the Des Plaines Lease;

                                                                142





          (b) for any such Sale and Leaseback Transaction in
     which the property is sold by the Borrower to a
     Subsidiary or by a Subsidiary to the Borrower or
     another Subsidiary; or

          (c) the Borrower or any Subsidiary may enter into
     any Sale and Leaseback Transaction if (i) at the time
     of such Sale and Leaseback Transaction no Default or
     Event of Default shall have occurred and be continuing,
     (ii) the proceeds from the sale of the subject property
     shall be equal to not less than 80% of its fair market
     value (as reasonably determined by the Borrower's Board
     of Directors) and (iii) after giving effect to such
     Sale and Leaseback Transaction, the aggregate book
     value of all assets of the Borrower and the
     Subsidiaries subject to Sale and Leaseback Transactions
     when added to the aggregate book value of assets
     subject to Liens permitted under Section 6.01(a) and
     excluding those described in paragraphs (a) and (b)
     above, shall not at any time exceed the lesser of
     (a) $40,000,000 and (b) 10% of Consolidated Net Worth.

          SECTION 6.07.  Dividends by Subsidiaries.  Create, incur, assume
or permit to exist any agreement or instrument which has the effect of
restricting or prohibiting the power, authority or legal right of such
Subsidiary to declare or pay any dividend or other distribution other than,
prior to the Closing Date, the Existing Credit Agreements.

          SECTION 6.08.  Amendments to Certain Documents.  Amend, modify or
otherwise change (a) any covenant or event of default in any material
indenture or other material agreement or material instrument relating to
any Indebtedness or (b) any of its constitutive documents, in either case
in any manner materially adverse to the interests of the Administrative
Agent or the Banks under the Fundamental Documents.

          SECTION 6.09.  Minimum Consolidated Net Worth.  Permit
Consolidated Net Worth at any time to be less than (x) $300,000,000 plus
(y) 25% of aggregate Consolidated Net Income for each full fiscal quarter
for which such Consolidated Net Income is positive that shall have been
completed during the period from the Closing Date to the date of
determination.

          SECTION 6.10.  Interest Coverage.  Permit the Consolidated
Interest Coverage Ratio at the end of any fiscal quarter to be less than
3.5 to 1.0 for the period of the four consecutive fiscal quarters then
ended treated as a single accounting period.

          SECTION 6.11.  Debt Ratio.  Permit the Debt Ratio at any time to
be greater than .5 to 1.0.

          SECTION 6.12.  Fiscal Year.  Change its fiscal year or modify or
change accounting treatments or reporting practices except as otherwise
permitted or required by generally accepted accounting principles.

                                                                143






                         ARTICLE VII

                      Events of Default
                      -----------------

          In the case of the happening of any of the following events
(hereinafter called "Events of Default"):

          (a) any representation or warranty made by the
     Borrower or any of the Guarantors in connection with
     this Agreement or any other Fundamental Document or
     with the execution and delivery of the Notes or the
     borrowings hereunder or any statement or representation
     made in any report, certificate, financial statement or
     other instrument furnished by the Borrower or any of
     the Guarantors to the Banks or the Administrative Agent
     pursuant to this Agreement or any other Fundamental
     Document shall prove to have been false or misleading
     in any material respect when made or delivered;

          (b) default shall be made in the payment of the
     principal of or interest on any Note or of any fees or
     other amounts payable by the Borrower hereunder, when
     and as the same shall become due and payable, whether
     at the due date thereof or at a date fixed for
     prepayment thereof or by acceleration thereof or
     otherwise, and, in the case of interest, such default
     shall continue unremedied for five Business Days;

          (c) default shall be made with respect to the
     payment of any amount due under any agreement or other
     evidence of Indebtedness for borrowed money (other than
     the Notes) of the Borrower or any of the Subsidiaries
     in an aggregate outstanding principal amount of
     $10,000,000 or more; or any other default shall be made
     with respect to any such Indebtedness and such
     Indebtedness shall have been accelerated so that any
     payment in respect of such Indebtedness shall be or
     become due prior to its maturity or scheduled due date;

          (d) default shall be made in the due observance or
     performance of any covenant, condition or agreement on
     the part of the Borrower on its own behalf or on behalf
     of any of the Subsidiaries or any of the Guarantors
     contained in Article VI or Article VIII hereof;
     provided that in the case of a default under
     Section 6.01, resulting solely from incurrence of a
     prohibited obligation by a Subsidiary without the
     approval or knowledge of any officer of the Borrower,
     such default shall continue unremedied for 30 days;
          (e) the guarantee under Article VIII hereof shall
     (i) not remain in full force and effect, be declared

                                                                144





     null and void or shall not be enforceable against the
     Guarantors in accordance with its terms and such
     guarantee shall not be reinstated to full force and
     effect and enforceability against the Guarantors in
     accordance with its terms within 30 days or (ii) be
     disaffirmed or repudiated by the Borrower or any such
     Guarantor;

          (f) default shall be made in the due observance or
     performance of any other covenant, condition or
     agreement to be observed or performed by the Borrower
     on its own behalf or on behalf of any of the
     Subsidiaries or any of the Guarantors pursuant to the
     terms hereof or of any other Fundamental Document and
     such default shall continue unremedied for a period
     equal to the sum of 30 days after such failure shall
     have first occurred plus an additional three Business
     Days after any officer of the Borrower shall become
     aware of such failure, but in no event shall such
     period extend for more than 30 days after any officer
     of the Borrower shall become aware of such failure;

          (g) the Borrower or any Material Subsidiary shall
     (i) voluntarily commence any proceeding or file any
     petition seeking relief under Title 11 of the United
     States Code or any other Federal or state bankruptcy,
     insolvency or similar law, (ii) consent to the
     institution of, or fail to controvert in a timely and
     appropriate manner, any such proceeding or the filing
     of any such petition, (iii) apply for or consent to the
     appointment of a receiver, trustee, custodian,
     sequestrator or similar official for the Borrower or
     any such Material Subsidiary or for a substantial part
     of its property, (iv) file an answer admitting the
     material allegations of a petition filed against it in
     any such proceeding, (v) make a general assignment for
     the benefit of creditors, (vi) become unable, admit in
     writing its inability or fail generally to pay its
     debts as they become due or (vii) take corporate action
     for the purpose of effecting any of the foregoing;

          (h) an involuntary proceeding shall be commenced
      or an involuntary petition shall be filed in a court
      of competent jurisdiction seeking (i) relief in
      respect of the Borrower or any Material Subsidiary, or
      of a substantial part of its property, under Title 11
      of the United States Code or any other Federal or
      state bankruptcy, insolvency or similar law, (ii) the
      appointment of a receiver, trustee, custodian,
      sequestrator or similar official for the Borrower or
      such Material Subsidiary or for a substantial part of
      its property or (iii) the winding-up or liquidation of
      the Borrower or such Material Subsidiary; and such

                                                                145





      proceeding or petition shall continue undismissed for
      60 days or an order or decree approving or ordering
      any of the foregoing shall continue unstayed and in
      effect for 30 days;

          (i) a final judgment for the payment of money
     (which alone, or when aggregated with all other such
     unpaid judgments to the extent not fully covered by
     insurance from financially sound and reputable insurers
     against the Borrower and its Subsidiaries at such time,
     is for $10,000,000 or more) shall be rendered against
     the Borrower or any of the Subsidiaries and the same
     shall remain undischarged for a period of 60 days or
     any action is taken by the judgment creditor to levy
     thereon;

          (j) a Reportable Event or Reportable Events, or a
     failure to make a required payment (within the meaning
     of Section 412(n)(1)(A) of the Code) shall have
     occurred with respect to any Plan or Plans that
     reasonably could be expected to result in liability of
     the Borrower to the PBGC or to a Plan in an aggregate
     amount exceeding $10,000,000 and, within 30 days after
     the reporting of any such Reportable Event to the
     Administrative Agent or after the receipt by the
     Administrative Agent of the statement required pursuant
     to Section 5.07(b)(iii) hereof, the Administrative
     Agent shall have notified the Borrower in writing that
     (i) the Required Banks have made a determination that,
     on the basis of such Reportable Event or Reportable
     Events or the receipt of such statement, there are
     reasonable grounds (A) for the termination of such Plan
     or Plans by PBGC, (B) for the appointment by the
     appropriate United States District Court of a trustee
     to administer such Plan or Plans or (C) for the
     imposition of a Lien in favor of a Plan and (ii) as a
     result thereof an Event of Default exists hereunder; or
     a trustee shall be appointed by a United States
     District Court to administer any such Plan or Plans; or
     the PBGC shall institute proceedings to terminate any
     Plan or Plans;

          (k) (i) the Borrower or any of its ERISA
     Affiliates shall have been notified by the sponsor of a
     Multiemployer Plan that it has incurred Withdrawal
     Liability to such Multiemployer Plan, (ii) the Borrower
     or any such ERISA Affiliate does not have reasonable
     grounds for contesting such Withdrawal Liability and is
     not in fact contesting such Withdrawal Liability in a
     timely and appropriate manner, and (iii) the amount of
     such Withdrawal Liability specified in such notice,
     when aggregated with all other amounts required to be
     paid to Multiemployer Plans in connection with

                                                                146





     Withdrawal Liabilities (determined as of the date or
     dates of such notification), exceeds $10,000,000 or
     requires payments exceeding $10,000,000 in any year;

          (l) the Borrower or any of its ERISA Affiliates
     shall have been notified by the sponsor of a
     Multiemployer Plan that such Multiemployer Plan is in
     reorganization or is being terminated, within the
     meaning of Title IV of ERISA, if solely as a result of
     such reorganization or termination the aggregate annual
     contributions of the Borrower and its ERISA Affiliates
     to all Multiemployer Plans that are then in
     reorganization or have been or are being terminated
     have been or will be increased over the amounts
     required to be contributed to such Multiemployer Plans
     for their most recently completed plan years by an
     amount exceeding $10,000,000 in any year;

          (m) (i) a person or two or more persons acting in
     concert (excluding the ESOP and any other person who
     holds 5% or more of the outstanding shares of voting
     stock of the Borrower as of the Closing Date) shall
     acquire beneficial ownership (within the meaning of
     Rule 13d-3 of the Securities and Exchange Commission
     under the Securities Exchange Act of 1934) of more than
     50% of the outstanding shares of voting stock of the
     Borrower, or (ii) the individuals who, as of such
     Closing Date, are members of the Board of Directors of
     the Borrower (the "Incumbent Board") shall cease to
     constitute at least a majority of the Board of
     Directors of the Borrower; provided, however, that if
     the election, or nomination for election of any new
     director was approved by a vote of at least a majority
     of the Incumbent Board or any nominating committee
     thereof, such new director shall, for purposes hereof,
     be considered as a member of the Incumbent Board; and
     then, and in every such event and at any time
     thereafter during the continuance of such event, the
     Administrative Agent may (unless, in the case of each
     Event of Default other than that specified in paragraph
     (b) above, the Required Banks shall have waived such
     Event of Default in writing, and, in the case of an
     Event of Default specified in paragraph (b) above, each
     of the Banks shall have waived such Event of Default in
     writing), and, upon direction of the Required Banks,
     will by written notice to the Borrower, take any of the
     following actions, at the same or different times:
     (i) terminate the Commitments and (ii) declare the
     Notes to be forthwith due and payable, whereupon the
     Notes and all other fees and amounts owing hereunder
     shall become forthwith due and payable, both as to
     principal and interest, without presentment, demand,
     protest or any other notice of any kind, all of which

                                                                147





     are hereby expressly waived, anything contained herein
     or in the Notes to the contrary notwithstanding.
     Notwithstanding the foregoing, if an Event of Default
     specified in paragraph (g) or (h) above occurs with
     respect to the Borrower or a Guarantor, the Notes shall
     become immediately due and payable, both as to
     principal and interest, without any action by the
     Administrative Agent and without presentment, demand,
     protest or any other notice of any kind, all of which
     are hereby expressly waived, anything contained herein
     or in the Notes to the contrary notwithstanding.


                        ARTICLE VIII

                         Guarantee
                         ---------

          SECTION 8.01.  Guarantee.  (a)  Each Guarantor hereby, jointly
and severally, unconditionally and irrevocably guarantees to the Banks and
the Administrative Agent the due and punctual payment by and performance of
the Obligations (including interest accruing on and after the filing of any
petition in bankruptcy or reorganization of the applicable obligor whether
or not post-filing interest is allowed in such proceeding) by the Borrower.

          (b)  Each Guarantor waives notice of acceptance of this guarantee
and also waives presentation to, demand of payment from and protest to the
Borrower of any of the Obligations, as well as notice of protest for
nonpayment and all other formalities.  The obligations of each Guarantor
hereunder shall not be affected by (i) the failure of the Administrative
Agent or the Banks to assert any claim or demand or to enforce any right or
remedy against the Borrower under this Agreement or otherwise; (ii) any
extension or renewal of any of the Obligations; (iii) any rescission,
waiver, amendment or modification of any of the terms or provisions of this
Agreement or any other agreement or instrument; (iv) the taking or release
of any security held by the Banks or the Administrative Agent for the
performance of any of the Obligations; (v) the failure of the
Administrative Agent or the Banks to exercise any right or remedy against
the Borrower or any other guarantor of the Obligations; (vi) any stay in
bankruptcy or insolvency proceedings of the Borrower or any other Person;
or (vii) the release or substitution of any other Guarantor.

          (c)  Each Guarantor agrees that this guarantee constitutes a
guarantee of payment when due and not of collection and waives any right to
require that any resort be had by the Banks or the Administrative Agent to
any security held for payment of the Obligations or to any balance of any
deposit account or credit on the books of the Banks or the Administrative
Agent in favor of the Borrower or any other person.

          SECTION 8.02.  No Impairment of Guaranty.  The obligations of
each Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to

                                                                148





any defense, setoff, counterclaim, recoupment or termination whatsoever by
reason of the invalidity, illegality or unenforceability of the Obligations
or otherwise.  Without limiting the generality of the foregoing, the
obligations of each Guarantor hereunder shall not be discharged or impaired
or otherwise affected by the failure of the Banks or the Administrative
Agent to assert any claim or demand or to enforce any remedy under this
Agreement or any other agreement or instrument, by any waiver or
modification of any thereof by the Banks or the Administrative Agent, by
any default, failure or delay, wilful or otherwise, in the performance of
the Obligations or by any other act or omission or delay to do any other
act which might in any manner or to any extent vary the risk of any
Guarantor or which would otherwise operate as a discharge of a guarantor as
a matter of law.

          SECTION 8.03.  Continuation and Reinstatement, etc.  Each
Guarantor further agrees that this guarantee shall continue to be effective
or be reinstated, as the case may be, if at any time any payment on any
Obligation is rescinded or must otherwise be restored by the Banks upon the
bankruptcy or reorganization of the Borrower or otherwise.

          SECTION 8.04.  Payment, etc.  (a)  In furtherance of the
foregoing and not in limitation of any other right which the Banks or the
Administrative Agent may have at law or in equity against any Guarantor by
virtue hereof, upon the failure of the Borrower to pay or perform any
Obligation when and as the same shall become due, whether at Termination,
by acceleration, after notice of prepayment or otherwise, each Guarantor
hereby promises to and will, upon receipt of written demand by the Banks or
the Administrative Agent, forthwith pay, or cause to be paid, in cash, to
the Administrative Agent, an amount equal to the sum of (i) the unpaid
principal amount of such Obligations, (ii) accrued and unpaid interest on
such Obligations and (iii) all other unpaid Obligations of the Borrower to
the Administrative Agent and the Banks.

          (b)  Each Guarantor agrees that to the fullest extent permitted
by applicable law, all rights against the Borrower arising as a result of
any payment by any Guarantor under this guarantee by way of right of
subrogation or otherwise shall in all respects be junior and subordinate in
right of payment to the prior indefeasible payment in full of all the
Obligations to the Administrative Agent for the benefit of the Banks.  If
after the Borrower has failed to pay any Obligation when due, any amount
shall be paid to any Guarantor for the account of the Borrower, such amount
shall be held in trust for the benefit of the Administrative Agent and
shall forthwith be paid to the Administrative Agent on behalf of the Banks
to be credited and applied to the Obligations when due and payable.

          (c)  Each Guarantor waives notice of and hereby consents to any
agreements or arrangements whatsoever by the Banks or the Administrative
Agent with the Borrower, or anyone else, including agreements and
arrangements for payment, extension, subordination, composition,
arrangement, discharge or release of the whole or any part of the
Obligations, or for the discharge or surrender of any or all security, or
for compromise, whether by way of acceptance of part payment or otherwise,
and the same shall in no way impair such Guarantor's liability hereunder.

                                                                149





Nothing shall discharge or satisfy the liability of any Guarantor hereunder
except the full performance and payment of the Obligations.

          SECTION 8.05.  Benefit to Guarantors.  Each Guarantor
acknowledges that it has realized a direct economic benefit as a result of
the refinancing of the loans outstanding under the Existing Credit
Agreements of the Borrower and the availability to it of the proceeds of
Loans that have been or may in the future be made hereunder.


                         ARTICLE IX

                    Administrative Agent
                    --------------------

          SECTION 9.01.  Appointment of Administrative Agent.  In order to
expedite the various transactions contemplated by this Agreement, The Chase
Manhattan Bank is hereby appointed to act as Administrative Agent on behalf
of the Banks.  Each Bank irrevocably authorizes and directs the
Administrative Agent to take such action on behalf of such Bank under the
terms and provisions of this Agreement and to exercise such powers
hereunder as are specifically delegated to or required of the
Administrative Agent by the terms and provisions hereof, together with such
powers as are reasonably incidental thereto.

          SECTION 9.02.  Exculpation.  Neither the Administrative Agent nor
the Documentation Agent, nor any of their directors, officers, employees or
agents shall be liable as such for any action taken or omitted by any of
them hereunder except for its or his own gross negligence or wilful
misconduct, or be responsible for any statement, warranty or representation
herein, or be required to ascertain or to make any inquiry concerning the
performance or observance by the Borrower or the Guarantors of any of the
terms, conditions, covenants or agreements of this Agreement.  Neither the
Administrative Agent nor the Documentation Agent shall be responsible to
the Banks for the due execution, genuineness, validity, enforceability or
effectiveness of this Agreement or any other Fundamental Document, the
Notes or any other instrument to which reference is made herein.  The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes hereof until written notice of transfer shall have
been filed with it.  The Administrative Agent shall promptly notify the
Borrower of any such notice received by such Administrative Agent.  The
Administrative Agent shall in all cases be fully protected in acting, or
refraining from acting, in accordance with written instructions signed by
the Banks, and, except as otherwise specifically provided herein, such
instructions and any action taken or failure to act pursuant thereto shall
be binding on all of the Banks.  The Administrative Agent shall, in the
absence of knowledge to the contrary, be entitled to rely on any paper or
document believed by it to be genuine and correct and to have been signed
or sent by the proper person or persons.  Neither the Administrative Agent
nor any of its directors, officers, employees or agents shall have any
responsibility to the Borrower on account of the failure or delay in
performance or breach by any Bank of any of its obligations hereunder or to
any Bank on account of the failure or delay in performance or breach by any

                                                                150





other Bank, or the Borrower, of any of their respective obligations
hereunder or in connection herewith.

          SECTION 9.03.  Consultation with Counsel.  The Administrative
Agent may execute any and all duties hereunder by or through agents or
employees and shall be entitled to advice of legal counsel selected by it
with respect to all matters arising hereunder and shall not be liable for
any action taken or suffered in good faith by it in accordance with the
advice of such counsel.

          SECTION 9.04.  The Administrative Agent, Individually.  With
respect to the Loans made by it and the Notes issued to it, the
Administrative Agent in its individual capacity and not as Administrative
Agent shall have the same rights and powers hereunder and under any other
agreement as any other Bank and may exercise the same as though it were not
the Administrative Agent, and the Administrative Agent and its affiliates
may accept deposits from, lend money to and generally engage in any kind of
business with the Borrower or any of the Subsidiaries or other Affiliate of
the Borrower or any such Subsidiary as if it were not the Administrative
Agent.

          SECTION 9.05.  Reimbursement and Indemnification.  Each Bank
agrees (i) to reimburse the Administrative Agent in the amount of such
Bank's proportionate share of any expenses incurred for the benefit of the
Banks, including counsel fees and compensation of agents and employees paid
for services rendered on behalf of the Banks, not reimbursed by the
Borrower, and (ii) to indemnify and hold harmless the Administrative Agent
and any of its directors, officers, employees or agents, on demand, in the
amount of its proportionate share, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by or asserted against it or any of them
in any way relating to or arising out of this Agreement, or under the other
Fundamental Documents or any action taken or omitted by it or any of them
under this Agreement or under the other Fundamental Documents, to the
extent not reimbursed by the Borrower; provided, however, that no Bank
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the gross negligence or wilful misconduct of
the Administrative Agent or any of its directors, officers, employees or
agents.

          SECTION 9.06.  Resignation.  Subject to the appointment and
acceptance of a successor Administrative Agent as provided below, the
Administrative Agent may resign at any time by notifying the Banks and the
Borrower.  Upon any such resignation, and with the consent of the Borrower
(which shall be deemed to be granted if an Event of Default shall have
occurred and be continuing), the Required Banks shall have the right to
appoint a successor Administrative Agent.  If no successor Administrative
Agent shall have been so appointed by such Banks and shall have accepted
such appointment within 30 days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent
may, on behalf of the Banks, appoint a successor Administrative Agent

                                                                151





having a combined capital and surplus of at least $300,000,000.  Upon the
acceptance of any appointment as Administrative Agent hereunder by a
successor bank, such successor shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring
Administrative Agent and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder and under any other
documents executed in connection herewith.  After the Administrative
Agent's resignation hereunder, the provisions of this Article IX shall
continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Administrative Agent.


                         ARTICLE X

                       Miscellaneous
                       -------------

          SECTION 10.01.  Notices.  Notices and other communications
provided for herein shall be in writing and shall be delivered or mailed
(or in the case of telegraphic communication, if by telegram, delivered to
the telegraph company and, if by telex, telecopy, graphic scanning or other
telegraphic communications equipment, delivered by such equipment)
addressed, if to the Borrower at 570 West College Avenue, York,
Pennsylvania 17405, to the attention of J. Patrick Clark, Secretary, if to
the Administrative Agent, to it at 1 Chase Manhattan Plaza, 8th Floor, New
York, New York 10081 to the attention of Sandra Miklave and to it at 9
Thomas Moore Street, Trinity Towers, LONDON E19YT to the attention of
Steven Clarke, with a copy to Dawn Lee Lum, at The Chase Manhattan Bank,
270 Park Avenue, New York, New York  10017, and if to a Bank, to it at its
address set forth on the signature pages of this Agreement.  All notices
and other communications given to any party hereto in accordance with the
provisions of this Agreement shall be effective when received.

          SECTION 10.02.  No Waivers; Amendments.  No failure or delay of
the Administrative Agent or any Bank in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any
other or further exercise thereof or the exercise of any other right or
power.  The rights and remedies of the Administrative Agent and the Banks
hereunder are cumulative and not exclusive of any rights or remedies which
the Administrative Agent or any such Bank would otherwise have.  No notice
or demand on the Borrower shall entitle the Borrower to any other or
further notice or demand in similar or other circumstances; provided that
the foregoing shall not limit the right of the Borrower to any notice
expressly provided for herein.  No modification, amendment or waiver of any
provision of this Agreement or any of the Notes nor consent to any
departure of the Borrower therefrom shall in any event be effective unless
the same shall be in writing and signed by the Required Banks and then such
waiver or consent shall be effective only in the specific instance and for
the purpose for which given.  Any such modification, amendment, waiver or
consent, so given, shall be effective to bind all the Banks; provided, that
no such modification, amendment, waiver or consent may be made which will

                                                                152





(i) reduce or increase the amount or alter the term of any Commitment of
any Bank hereunder without the written consent of such Bank; (ii) extend
the time for payment of principal of or interest on any Note, or reduce the
principal amount or change the method of calculation provided for herein
for determining the rate of interest on any Note, without the written
consent of the holder of such Note; (iii) vary the amount or time for
payment of fees payable to any Bank hereunder without the written consent
of such Bank; (iv) change the definition of Required Banks set forth in
Article I, or amend this Section 10.02 or Section 2.18 without the written
consent of all the Banks; or (v) give any Note preference over any other
Note in payment of principal or interest.

          SECTION 10.03.  Applicable Law; Submission to Jurisdiction;
Service of Process; Waiver of Jury Trial.  (a)  This Agreement and the
Notes shall be construed in accordance with and governed by the laws of the
State of New York applicable to agreements made and to be performed wholly
in the State of New York.

          (b)  Each of the Borrower and each Guarantor hereby irrevocably
submits itself to the jurisdiction of the Supreme Court of the State of New
York, New York County, and to the jurisdiction of the United States
District Court for the Southern District of New York, for the purpose of
any suit, action or other proceeding arising out of or relating to this
Agreement, any other Fundamental Document or any related document or any of
the transactions contemplated hereby or thereby, and hereby waives, and
agrees not to assert, by way of motion, as a defense, or otherwise, in any
suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of the above-named courts for any reason whatsoever, that
such suit, action or proceeding is brought in an inconvenient forum or that
the venue of such suit, action or proceeding is improper or that this
Agreement or any other Fundamental Documents or, to the full extent
permitted by applicable law, any subject matter of any thereof may not be
enforced in or by such courts.  Neither this paragraph (b) nor paragraph
(c) below shall restrict the Administrative Agent or any Bank from bringing
suit or instituting other judicial proceedings against the Borrower or any
Guarantor or any of their assets in any court or jurisdiction not referred
to herein or therein.

          (c)  Each party to this Agreement irrevocably consents to service
of process in the manner provided for notice in Section 10.01.  Nothing in
this Agreement will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.

          (d)  EXCEPT AS PROHIBITED BY LAW, EACH PARTY HERETO HEREBY WAIVES
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT, ANY OTHER FUNDAMENTAL DOCUMENT AND ANY OF THE OTHER DOCUMENTS OR
TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN.

          (e)  Except as prohibited by law, each party hereto hereby waives
any right it may have to claim or recover in any litigation referred to in
paragraph (d) of this Section 10.03 any special, exemplary, punitive,
indirect (including loss of profits) or consequential damages or any

                                                                153





damages other than, or in addition to, actual damages; provided that if a
party hereto shall obtain a final, nonappealable judgment that another
party shall have intentionally and knowingly breached its obligations under
this Agreement with an intention of injuring the claimant party, the
claimant party may then seek consequential damages from such breaching
party for its losses suffered as a result of such intentional breach.

          (f)  Each party hereto (i) certifies that neither any
representative, agent nor attorney of any Bank has represented, expressly
or otherwise, that such Bank would not, in the event of litigation, seek to
enforce the foregoing waivers and (ii) acknowledges that it has been
induced to enter into this Agreement by, among other things, the mutual
waivers and certifications herein.

          SECTION 10.04.  Expenses; Documentary Taxes.  The Borrower agrees
to pay all reasonable out-of-pocket expenses (i) incurred by the
Administrative Agent in connection with the preparation, execution and
delivery, waiver or modification and administration of this Agreement, any
other Fundamental Document or any related documents or in connection with
the performance of due diligence by the Administrative Agent or the
syndication of the Loans (whether or not the transactions hereby
contemplated shall be consummated), and (ii) incurred by the Administrative
Agent in connection with the making of the Loans hereunder, or incurred by
the Administrative Agent or the Banks in connection with the enforcement of
this Agreement or the Loans made or the Notes issued hereunder or any other
Fundamental Documents and with respect to any action which may be
instituted by any person against the Banks or the Administrative Agent in
respect of the foregoing (but not with respect to any act of gross
negligence or wilful misconduct of the Administrative Agent or any Bank),
or as a result of any transaction, action or nonaction arising from the
foregoing, including, but not limited to, the fees and disbursements of
Cravath, Swaine & Moore, counsel to the Administrative Agent.  The Borrower
agrees that it shall indemnify the Banks and the Administrative Agent from
and hold them harmless against any documentary taxes, assessments or
charges made by any Governmental Authority by reason of the execution and
delivery of this Agreement, the Fundamental Documents or any of the Notes.
The obligations of the Borrower under this Section 10.04 shall survive the
termination of this Agreement and the Commitments and/or the payment of the
Notes.

          SECTION 10.05.  Indemnity.  Further, by the execution hereof, the
Borrower agrees to indemnify and hold harmless the Administrative Agent and
the Banks and their directors, officers, employees and agents (each an
"Indemnified Party") from and against any and all expenses, including
reasonable fees and disbursements of counsel, losses, claims, damages and
liabilities arising out of any claim, litigation, investigation or
proceeding (whether or not the Administrative Agent or any Bank is a party
thereto) relating to the financing contemplated hereby and transactions
related thereto, but excluding therefrom all expenses, losses, claims,
damages, and liabilities arising out of or resulting from the gross
negligence or wilful misconduct of any Indemnified Party.  The obligations
of the Borrower under this Section 10.05 shall survive the termination of
this Agreement and the Commitments and/or payments of the Loans.

                                                                154





          SECTION 10.06.  Successors and Assigns.  This Agreement shall be
binding upon and inure to the benefit of the Borrower, the Guarantors, the
Administrative Agent, the Documentation Agent and the Banks and their
respective successors and assigns.  Neither the Borrower nor the Guarantors
may assign or transfer any of their rights or obligations hereunder without
the written consent of the Required Banks.

          SECTION 10.07.  Survival of Agreements, Representations and
Warranties, etc.  All warranties, representations and covenants made by the
Borrower or the Guarantors herein or in any certificate or other instrument
delivered by it or on its behalf in connection with this Agreement shall be
considered to have been relied upon by the Banks and shall survive the
making of the Loans herein contemplated and the issuance and delivery to
the Banks of the Notes regardless of any investigation made by the Banks or
on their behalf and shall continue in full force and effect so long as any
amount due or to become due hereunder is outstanding and unpaid and so long
as the Commitments have not been terminated.  All statements in any such
certificate or other instrument shall constitute representations and
warranties by the Borrower hereunder.

          SECTION 10.08.  Severability.  In case any one or more of the
provisions contained in this Agreement or the Notes should be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby.  The parties shall
endeavor in good faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

          SECTION 10.09.  Cover Page and Section Headings.  The cover page
and section headings used herein are for convenience of reference only, are
not part of this Agreement and are not to affect the construction of or be
taken into consideration in interpreting this Agreement.

          SECTION 10.10.  Counterparts.  This Agreement may be signed in
any number of counterparts with the effect as if the signatures thereto
were upon the same instrument.  This Agreement shall become effective when
copies hereof which, when taken together, bear the signatures of each of
the parties hereto shall have been received by the Administrative Agent.

          SECTION 10.11.  Confidentiality.  Each Bank agrees (which
agreement shall survive the termination of this Agreement) that financial
information, information from the Borrower's books and records, information
concerning the Borrower's trade secrets and patents and any other
information received from the Borrower hereunder and designated in writing
as confidential shall be treated as confidential by such Bank, and each
Bank agrees to use its best efforts to ensure that such information is not
published, disclosed or otherwise divulged to anyone other than employees
or officers of such Bank and its counsel and agents with a need to know
such information and who have been informed of the confidentiality
hereunder (as reasonably determined by such Bank); provided that it is
understood that the foregoing shall not apply to:

                                                                155





          (i) disclosure made with the prior written
     authorization of the Borrower;

          (ii) disclosure of information(other than that
     received from the Borrower prior to or under this
     Agreement) already known by, or in the possession of
     such Bank without restrictions on the disclosure
     thereof at the time such information is supplied to
     such Bank by the Borrower hereunder;

          (iii) disclosure of information which is required
     by applicable law or to a governmental agency having
     supervisory authority over any party hereto;

          (iv) disclosure of information in connection with
     any suit, action or proceeding in connection with the
     enforcement of rights hereunder or in connection with
     the transactions contemplated hereby;

          (v) disclosure to any bank (or other financial
     institution) which may acquire a participation or other
     interest in the Loans or rights of any Bank hereunder;
     provided that such bank (or other financial
     institution) agrees to maintain any such information to
     be received in accordance with the provisions of this
     Section 10.11;

          (vi) disclosure by any party hereto to any other
     party hereto or their counsel or agents with a need to
     know such information (as reasonably determined by such
     party);

          (vii) disclosure by any party hereto to any
     entity, or to any subsidiary of such an entity, which
     owns, directly or indirectly, more than 50% of the
     voting stock of such party, or to any subsidiary of
     such an entity; or

          (viii) disclosure of information that prior to
     such disclosure has been public knowledge through no
     violation of this Agreement.


     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and
year first above written.


                         DENTSPLY INTERNATIONAL INC.,



                           By /s/ Edward D. Yates

                                                                156





                             --------------------------
                             Name:  Edward D. Yates
                             Title: Sr. Vice President/CFO


                         CERAMCO INC.,



                           By /s/ Edward D. Yates
                             --------------------------
                             Name:  Edward D. Yates
                             Title: Senior Vice President


                         CERAMCO MANUFACTURING CO.,



                           By /s/ Edward D. Yates
                             --------------------------
                             Name:  Edward D. Yates
                             Title: Senior Vice President


                         EUREKA X-RAY TUBE CORP.,



                           By /s/ Edward D. Yates
                             --------------------------
                             Name:  Edward D. Yates
                             Title: Vice President


                         MIDWEST DENTAL PRODUCTS
                         CORPORATION,



                           By /s/ Edward D. Yates
                             --------------------------
                             Name:  Edward D. Yates
                             Title: Vice President







                         NEW IMAGE INDUSTRIES, INC.


                                                                157






                           By /s/ Edward D. Yates
                             --------------------------
                             Name:  Edward D. Yates
                             Title: Sr. Vice President/CFO


                         RANSOM & RANDOLPH COMPANY,



                           By /s/ Edward D. Yates
                             --------------------------
                             Name:  Edward D. Yates
                             Title: Sr. Vice President/CFO


                         TULSA DENTAL PRODUCTS INC.,



                           By /s/ Edward D. Yates
                             --------------------------
                             Name:  Edward D. Yates
                             Title: Vice President



                                                                158





                         DENTSPLY RESEARCH & DEVELOPMENT
                         CORP.,



                           By /s/ Paul D. Hammesfahr
                             --------------------------
                             Name:  Paul D. Hammesfahr
                             Title: V.P. & Secretary







                                                                159





                         THE CHASE MANHATTAN BANK,
                         individually and as
                         Administrative Agent,



                         By /s/ Dawn Lee Lum
                           --------------------------
                           Name:  Dawn Lee Lum
                           Title: Vice President

                           Address: 270 Park Avenue
                                    48th Floor
                                    New York, NY 10017

                         Telecopier No.: 212-270-3279


                         ABN AMRO BANK N.V., individually
                         and as Documentation Agent,



                         By /s/ Roy D. Hasbrook
                           --------------------------
                           Name:  Roy D. Hasbrook
                           Title: Group Vice President and
                                  Director


                         By /s/ Gregory D. Amroso
                           --------------------------
                           Name:  Gregory D. Amroso
                           Title: Vice President

                           Address: One PPG Place,
                                    Suite 2950
                                    Pittsburgh, PA 15222

                         Telecopier No.: 412-566-2266


                         MELLON BANK N.A.,



                         By /s/ Gil Mateer
                           --------------------------
                           Name:  Gil Mateer
                           Title: Vice President

                           Address: 1735 Market St.,
                                    7th Floor

                                                                160





                                    Philadelphia, PA 19103

                         Telecopier No.: 215-553-4899
                         THE FIRST NATIONAL BANK OF
                          MARYLAND,



                         By /s/ Theodore K. Oswald
                           --------------------------
                           Name:  Theodore K. Oswald
                           Title: Vice President

                           Address: 96 S. George St.
                                    Box 1867
                                    York, PA 17405

                         Telecopier No.: 717-771-4914


                         HARRIS TRUST AND SAVINGS BANK,



                         By /s/ Jeffrey C. Nicholson
                           --------------------------
                           Name:  Jeffrey C. Nicholson
                           Title: Vice President

                           Address: 111 West Monroe-10W
                                    Chicago, IL 60690

                         Telecopier No.: 312-461-5225


                         CORESTATES BANK, N.A.,



                         By /s/ John J. Massaro
                           --------------------------
                           Name:  John J. Massaro
                           Title: Assistant Vice President

                           Address: 600 Penn St.
                                    Reading, PA 19603

                         Telecopier No.: 610-655-1514




                                                                161





                         BANK OF TOKYO-MITSUBISHI
                         TRUST COMPANY,



                         By /s/ Mark R. Marron
                           --------------------------
                           Name:  Mark R. Marron
                           Title: Vice President

                           Address: 1251 Avenue of the
                                    Americas
                                    New York, NY 10116

                         Telecopier No.: 212-782-6440


                         MARINE MIDLAND BANK,



                         By /s/ William M. Holland
                           --------------------------
                           Name:  William M. Holland
                           Title: Vice President

                           Address: 140 Broadway, 4th Floor
                                    New York, NY 10005-1196

                         Telecopier No.: 212-658-5109


                         ISTITUTO BANCARIO SAN PAOLO DI
                         TORINO SpA,



                         By /s/ Luca Sacchi
                           --------------------------
                           Name:  Luca Sacchi
                           Title: Assistant Vice President


                         By /s/ Ettore Viazzo
                           --------------------------
                           Name:  Ettore Viazzo
                           Title: Assistant Vice President

                           Address: 245 Park Avenue
                                    New York, NY 10167

                           Telecopier No.: 212-599-5303


                                                                162





                                              CONFORMED COPY
                                                  FACILITY B
                                                      5-YEAR

============================================================

            COMPETITIVE ADVANCE, REVOLVING CREDIT
                   AND GUARANTY AGREEMENT


                        dated as of


                      October 23, 1997


                           among


          DENTSPLY INTERNATIONAL INC., as Borrower,

                THE GUARANTORS NAMED HEREIN,

                   THE BANKS NAMED HEREIN,

      THE CHASE MANHATTAN BANK, as Administrative Agent

                            and

          ABN AMRO BANK N.V., as Documentation Agent






                                                                163






                      TABLE OF CONTENTS


                                                        Page
                                                        ----
                         ARTICLE I

                        Definitions
                        -----------

SECTION 1.01.  Definitions. . . . . . . . . . . . . . .    2
SECTION 1.02.  Accounting Terms and Determinations. . .   20
SECTION 1.03.  Exchange Rates . . . . . . . . . . . . .   20

                               ARTICLE II

                                  Loans

SECTION 2.01.  Commitments. . . . . . . . . . . . . . .  21
SECTION 2.02.  Loans. . . . . . . . . . . . . . . . . .  21
SECTION 2.03.  Use of Proceeds. . . . . . . . . . . . .  24
SECTION 2.04.  Competitive Bid Procedure. . . . . . . .  24
SECTION 2.05.  Revolving Credit Borrowing
                Procedure . . . . . . . . . . . . . . .  27
SECTION 2.06.  Letters of Credit. . . . . . . . . . . .  27
SECTION 2.07.  Refinancings . . . . . . . . . . . . . .  33
SECTION 2.08.  Fees . . . . . . . . . . . . . . . . . .  34
SECTION 2.09.  Notes; Repayment of Loans. . . . . . . .  35
SECTION 2.10.  Interest on Loans. . . . . . . . . . . .  36
SECTION 2.11.  Interest on Overdue Amounts. . . . . . .  37
SECTION 2.12.  Alternate Rate of Interest . . . . . . .  37
SECTION 2.13.  Termination, Reduction, Increase
                and Extension of Commitments. . . . . .  38
SECTION 2.14.  Prepayment of Loans. . . . . . . . . . .  41
SECTION 2.15.  Eurodollar Reserve Costs . . . . . . . .  42
SECTION 2.16.  Reserve Requirements; Change
                in Circumstances. . . . . . . . . . . .  42
SECTION 2.17.  Change in Legality . . . . . . . . . . .  44
SECTION 2.18.  Indemnity. . . . . . . . . . . . . . . .  45
SECTION 2.19.  Pro Rata Treatment . . . . . . . . . . .  46
SECTION 2.20.  Right of Setoff. . . . . . . . . . . . .  47
SECTION 2.21.  Sharing of Setoffs . . . . . . . . . . .  47
SECTION 2.22.  Payments . . . . . . . . . . . . . . . .  48
SECTION 2.23.  United States Withholding. . . . . . . .  49
SECTION 2.24.  Participations; Assignments. . . . . . .  51


                               ARTICLE III

                     Representations and Warranties

SECTION 3.01.  Organization; Corporate Powers . . . . .  55
SECTION 3.02.  Authorization. . . . . . . . . . . . . .  55
SECTION 3.03.  Enforceability . . . . . . . . . . . . .  56
SECTION 3.04.  Governmental Approvals . . . . . . . . .  56
SECTION 3.05.  Financial Statements and Condition . . .  56

                                                                164





SECTION 3.06.  No Material Adverse Change . . . . . . .  58
SECTION 3.07.  Title to Properties. . . . . . . . . . .  58
SECTION 3.08.  Litigation . . . . . . . . . . . . . . .  58
SECTION 3.09.  Tax Returns. . . . . . . . . . . . . . .  59
SECTION 3.10.  Agreements . . . . . . . . . . . . . . .  59
SECTION 3.11.  Employee Benefit Plans . . . . . . . . .  60
SECTION 3.12.  Investment Company Act; Public
                Utility Holding Company Act;
                Federal Power Act . . . . . . . . . . .  61
SECTION 3.13.  Federal Reserve Regulations. . . . . . .  61
SECTION 3.14.  Defaults; Compliance with Laws . . . . .  61
SECTION 3.15.  Use of Proceeds. . . . . . . . . . . . .  62
SECTION 3.16.  Affiliated Companies . . . . . . . . . .  62
SECTION 3.17.  Environmental Liabilities. . . . . . . .  62
SECTION 3.18.  Disclosure . . . . . . . . . . . . . . .  63
SECTION 3.19.  Insurance. . . . . . . . . . . . . . . .  64


                               ARTICLE IV

                          Conditions of Lending

SECTION 4.01.  All Borrowings . . . . . . . . . . . . .  64
SECTION 4.02.  Closing Date . . . . . . . . . . . . . .  65


                                ARTICLE V

                          Affirmative Covenants

SECTION 5.01.  Corporate Existence. . . . . . . . . . .  67
SECTION 5.02.  Maintenance of Property. . . . . . . . .  68
SECTION 5.03.  Insurance. . . . . . . . . . . . . . . .  68
SECTION 5.04.  Obligations and Taxes. . . . . . . . . .  68
SECTION 5.05.  Financial Statements; Reports, etc.. . .  69
SECTION 5.06.  Defaults and Other Notices . . . . . . .  71
SECTION 5.07.  ERISA. . . . . . . . . . . . . . . . . .  71
SECTION 5.08.  Access to Premises and Records . . . . .  72
SECTION 5.09.  Compliance with Laws, etc. . . . . . . .  72
SECTION 5.10.  Security Interests . . . . . . . . . . .  73
SECTION 5.11.  Subsidiary Guarantors. . . . . . . . . .  73
SECTION 5.12.  Environmental Laws . . . . . . . . . . .  73
SECTION 5.13.  Existing Credit Agreements . . . . . . .  74


                               ARTICLE VI

                           Negative Covenants

SECTION 6.01.  Liens. . . . . . . . . . . . . . . . . .  75
SECTION 6.02.  Indebtedness . . . . . . . . . . . . . .  77
SECTION 6.03.  Mergers, Consolidations, Sales
                of Assets and Acquisitions. . . . . . .  77
SECTION 6.04.  Change of Business . . . . . . . . . . .  78
SECTION 6.05.  Transactions with Affiliates . . . . . .  78
SECTION 6.06.  Sale and Leaseback . . . . . . . . . . .  79
SECTION 6.07.  Dividends by Subsidiaries. . . . . . . .  79

                                                                165





SECTION 6.08.  Amendments to Certain Documents. . . . .  80
SECTION 6.09.  Minimum Consolidated Net Worth . . . . .  80
SECTION 6.10.  Interest Coverage. . . . . . . . . . . .  80
SECTION 6.11.  Debt Ratio . . . . . . . . . . . . . . .  80
SECTION 6.12.  Fiscal Year. . . . . . . . . . . . . . .  80


                               ARTICLE VII

                            Events of Default


                              ARTICLE VIII

                                Guarantee

SECTION 8.01.  Guarantee. . . . . . . . . . . . . . . .  85
SECTION 8.02.  No Impairment of Guaranty. . . . . . . .  85
SECTION 8.03.  Continuation and Reinstatement, etc. . .  86
SECTION 8.04.  Payment, etc . . . . . . . . . . . . . .  86
SECTION 8.05.  Benefit to Guarantors. . . . . . . . . .  87


                               ARTICLE IX

                          Administrative Agent

SECTION 9.01.  Appointment of Administrative Agent. . .  87
SECTION 9.02.  Exculpation. . . . . . . . . . . . . . .  87
SECTION 9.03.  Consultation with Counsel. . . . . . . .  88
SECTION 9.04.  The Administrative Agent, Individually .  88
SECTION 9.05.  Reimbursement and Indemnification. . . .  89
SECTION 9.06.  Resignation. . . . . . . . . . . . . . .  89


                                ARTICLE X

                              Miscellaneous

SECTION 10.01.  Notices . . . . . . . . . . . . . . . .  90
SECTION 10.02.  No Waivers; Amendments. . . . . . . . .  90
SECTION 10.03.  Applicable Law; Submission
                 to Jurisdiction; Service of
                 Process; Waiver of Jury Trial. . . . .  91
SECTION 10.04.  Expenses; Documentary Taxes . . . . . .  92
SECTION 10.05.  Indemnity . . . . . . . . . . . . . . .  93
SECTION 10.06.  Successors and Assigns. . . . . . . . .  93

SECTION 10.07.  Survival of Agreements,
                 Representations and Warranties, etc. .  93
SECTION 10.08.  Severability. . . . . . . . . . . . . .  94
SECTION 10.09.  Cover Page and Section Headings . . . .  94
SECTION 10.10.  Counterparts. . . . . . . . . . . . . .  94
SECTION 10.11.  Confidentiality . . . . . . . . . . . .  94
SECTION 10.12.  Conversion of Currencies. . . . . . . .  95
SECTION 10.13.  European Monetary Union . . . . . . . .  96


                                                                166







                                                                167





Contents, p. 6


Exhibits

  A-1            Form of Competitive Bid Request
  A-2            Form of Notice of Competitive Bid Request
  A-3            Form of Competitive Bid
  A-4            Form of Competitive Bid Accept/Reject Letter
  A-5            Form of Revolving Credit Borrowing Request

  B-1            Form of Competitive Note
  B-2            Form of Revolving Credit Note

  C              Form of Contribution Agreement

  D-1            Form of Opinion of Morgan, Lewis & Bockius
  D-2            Form of Opinion of J. Patrick Clark, Esq.

  E              Form of Assignment and Acceptance


Schedules

  1.01           Guarantors
  2.01           Commitments
  2.02           Scheduled Loans
  3.16           Affiliates
  3.17           Environmental Liabilities
  4.02           Consents
  6.01           Liens







                                                                168





                         5-YEAR COMPETITIVE ADVANCE, REVOLVING
                  CREDIT AND GUARANTY AGREEMENT dated as of
                  October 23, 1997, among DENTSPLY
                  INTERNATIONAL INC., a Delaware corporation
                  (the "Borrower"), the Guarantors named
                  herein, the Banks named herein (individually
                  a "Bank" and collectively the "Banks"), THE
                  CHASE MANHATTAN BANK, as Administrative Agent
                  for the Banks (the "Administrative Agent"),
                  and ABN AMRO BANK N.V., as Documentation
                  Agent for the Banks (the "Documentation
                  Agent").


                         INTRODUCTORY STATEMENT

            All terms not otherwise defined herein are defined
in Article I hereof.

            The Borrower has requested that the Banks extend
credit to the Borrower in order to enable the Borrower to
borrow on a standby revolving credit basis (a) principal
amount not in excess of $175,000,000 at any time outstanding
and (b) to obtain Letters of Credit.

            The Borrower has also requested that the Banks
provide a procedure pursuant to which the Borrower may
invite the Banks to bid on an uncommitted basis on
short-term borrowings by the Borrower.

            The proceeds of all such borrowings and all
Letters of Credit are to be used (a) to refinance
outstanding Indebtedness of the Borrower under the
Borrower's Existing Credit Agreements and (b) for general
working capital and corporate purposes, including
acquisitions in the health care products industry.

            To provide assurance for the repayment of the
Loans and all related interest, fees, charges, expenses,
reimbursement obligations and other amounts payable with
respect thereto, the Guarantors will guarantee the
Obligations pursuant to Article VIII hereof.

            Accordingly, the Borrower, the Guarantors, the
Banks and the Administrative Agent agree as follows:


                                ARTICLE I

                               Definitions

            SECTION 1.01.  Definitions.  As used in this
Agreement, the following words and terms shall have the
meanings specified below:

            "ABR Borrowing" shall mean a Borrowing comprised
of ABR Loans.

                                                                169





            "ABR Loan" shall mean any Revolving Credit Loan
bearing interest at a rate determined by reference to the
Alternate Base Rate in accordance with the provisions of
Article II.

            "Affiliate" shall mean, with respect to the person
in question, (a) any person (including any member of the
immediate family of any such natural person) which (i)
directly or indirectly beneficially owns or controls 10% or
more of the total voting power of shares of capital stock
having the right to vote for directors under ordinary
circumstances (if such person is a corporation), (ii) is a
general partner (if such person is a partnership) or
(iii)is otherwise empowered, by contract, voting trust or
otherwise, to direct the business or affairs of such person,
(b) any person controlling, controlled by or under common
control with any such person (within the meaning of Rulea405
under the Securities Act of 1933), and (c) any director,
general partner or executive officer of any such person.

            "Administrative Agent" shall mean The Chase
Manhattan Bank, in its capacity as agent for the Banks
hereunder and not in its individual capacity as a Bank, or
such successor Administrative Agent as may be appointed
pursuant to Section 9.06.

            "Agreement" shall mean the $175,000,000, 5-Year
Competitive Advance, Revolving Credit and Guaranty Agreement
dated as of October 23, 1997, among DENTSPLY International
Inc., as Borrower, the Guarantors named therein, the Banks
named therein, The Chase Manhattan Bank, as Administrative
Agent, and ABN Amro Bank N.V., as Documentation Agent, as
the same may be amended, modified or supplemented from time
to time.

            "Alternate Base Rate" shall mean for any day, a
rate per annum (rounded upwards, if not already a whole
multiple of 1/16 of 1%, to the next higher 1/16 of 1%) equal
to the greatest of (a) the Prime Rate in effect on such day,
(b) the Base CD Rate in effect on such day plus 1% and
(c) the Federal Funds Effective Rate in effect for such day
plus 1/2 of 1%.  For purposes hereof, the term "Prime Rate"
shall mean the rate per annum announced by The Chase
Manhattan Bank from time to time as its prime rate in effect
at its principal office in The City of New York; each change
in the Prime Rate shall be effective on the date such change
is announced as effective.  "Base CD Rate" shall mean the
sum of (x) the product of (i) the Average Weekly Three-Month
Secondary CD Rate and (ii) Statutory Reserves plus (y) the
Assessment Rate.  "Average Weekly Three-Month Secondary CD
Rate" shall mean the secondary market rate ("Secondary CD
Rate") for three-month certificates of deposit (secondary
market) of major United States money market banks for the
most recent weekly period ending Friday reported in the
Federal Reserve Statistical release entitled "Weekly Summary
of Lending and Credit Measures (Averages of daily figures)"
or any successor publication released during the week for

                                                                170





which the Secondary CD Rate is being determined.  The
Secondary CD Rate so reported shall be in effect, for the
purpose of this definition, for each day of the week during
which the release date of such publication occurs.  If such
publication or a substitute containing the foregoing rate
information is not published by the Federal Reserve Board
for any week, such average rate shall be determined by the
Administrative Agent on the first Business Day of the week
succeeding such week for which such rate information is not
published on the basis of bids quoted to the Administrative
Agent by three New York City negotiable certificate of
deposit dealers of recognized standing for secondary market
morning offerings of negotiable certificates of deposit of
major United States money market banks with maturities of
three months.  Any change in the Alternate Base Rate due to
a change in the Average Weekly Three-Month Secondary CD Rate
shall be effective on the effective date of such change in
the Average Weekly Three-Month Secondary CD Rate.  "Federal
Funds Effective Rate" shall mean, for any period, a
fluctuating interest rate per annum 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 on the succeeding 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 the day of such transactions received
by the Administrative Agent from three Federal funds brokers
of recognized standing selected by it.  Any change in the
Alternate Base Rate due to a change in the Federal Funds
Effective Rate shall be effective on the effective date of
such change in the Federal Funds Effective Rate.  If for any
reason the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error)
that it is unable to ascertain both the Base CD Rate and the
Federal Funds Effective Rate for any reason, including the
inability or failure of the Administrative Agent to obtain
sufficient bids or publications in accordance with the terms
hereof, the Alternate Base Rate shall be the Prime Rate
until the circumstances giving rise to such inability no
longer exist.

            "Alternate Currency" means British Pounds
Sterling, Swiss Francs, Deutsche Marks and any other
currency requested by the Borrower and approved by each Bank
that is freely tradeable and exchangeable into Dollars in
the London market and for which an Exchange Rate can be
determined by reference to the Reuters World Currency Page
or another publicly available service for displaying
exchange rates.

            "Applicable Commitment Percentage" means, with
respect to any Bank, the percentage of the total Commitments
represented by such Bank's Commitment.  If the Commitments
have been terminated or expired, the Applicable Commitment
Percentages shall be determined based upon the Commitments
most recently in effect, giving effect to any assignments.

                                                                171





            "Applicable Percentage" shall mean on any date,
with respect to the Facility Fee or the Loans comprising any
LIBOR Revolving Credit Borrowing, as the case may be, the
applicable percentage set forth in the table below based
upon the Consolidated Interest Coverage Ratio of the
Borrower for the four fiscal quarters immediately preceding
such date treated as a single accounting period (determined
in accordance with Section 2.10(e)):

        FACILITY FEE/LIBOR BORROWING APPLICABLE PERCENTAGE TABLE

  If the Applicable       Applicable         Applicable
Consolidated Interest     Percentage         Percentage
  Coverage Ratio is:     Facility Fee      LIBOR Borrowing

Greater than or
equal to 12.0:1.0           .1000%              .1500%

Less than 12.0:1.0
but greater than
or equal to 7.5:1.0         .1250%              .1750%

Less than 7.5:1.0
but greater than
or equal to 5.5:1.0         .1500%              .2500%

Less than 5.5:1.0
but greater than
or equal to 4.0:1.0         .1750%              .3250%

Less than 4.0:1.0           .2000%              .4250%

            "Assessment Rate" shall mean for any date the
annual rate (rounded upwards, if not already a whole
multiple of 1/100 of 1%, to the next higher 1/100 of 1%)
most recently estimated by the Administrative Agent as the
then current net annual assessment rate that will be
employed in determining amounts payable by the
Administrative Agent to the Federal Deposit Insurance
Corporation ("FDIC") (or any successor) for insurance by the
FDIC (or such successor) of time deposits made in dollars at
its domestic offices.


            "Assignment and Acceptance" shall mean an
agreement in the form of Exhibit E hereto entered into
pursuant to Section 2.24 executed by the assignor, assignee
and other parties as contemplated thereby.

            "Availability Period" means the period from and
including the Effective Date to but excluding the earlier of
the Maturity Date and the date of termination of the
Commitments.

            "Bank" and "Banks" shall mean the financial
institutions listed on Schedule 2.01 and any assignee of a
Bank pursuant to Section 2.24(b) or (c).

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            "Board" shall mean the Board of Governors of the
Federal Reserve System of the United States.

            "Borrowing" shall mean a group of Loans of a
single Interest Rate Type made by the Banks (or in the case
of a Competitive Borrowing, by the Bank or Banks whose
Competitive Bids have been accepted pursuant to
Section 2.04) on a single date and as to which a single
Interest Period is in effect.

            "Business Day" shall mean any day not a Saturday,
Sunday or legal holiday in the State of New York or the
Commonwealth of Pennsylvania on which banks and the Federal
Reserve Bank of New York are open for business in New York
City; provided, however, that when used in connection with a
LIBOR Loan the term "Business Day" shall also exclude any
day on which banks are not open for dealings in dollar
deposits in the London interbank market.

            "Calculation Date" means the last Business Day of
each calendar quarter.

            "Capitalized Lease Obligations" shall mean any
obligation of a Person as lessee of any property (real,
personal or mixed), which, in accordance with generally
accepted accounting principles, is or should be accounted
for as a capital lease on the balance sheet of such Person.

            "Closing Date" shall mean the date of the first
Borrowing hereunder.

            "Code" shall mean the Internal Revenue Code of
1986, as the same shall be amended from time to time.

            "Commitment" shall mean, with respect to each
Bank, the commitment of such Bank hereunder as initially set
forth on Schedule 2.01 as such Bank's Commitment may be
permanently terminated, reduced, increased or extended from
time to time pursuant to Section 2.13.  Subject to
Section 2.13, the Commitments shall automatically and
permanently terminate on the Maturity Date.

            "Competitive Bid" shall mean an offer by a Bank to
make a Competitive Loan pursuant to Section 2.04.

            "Competitive Bid Accept/Reject Letter" shall mean
a notification made by the Borrower pursuant to Section 2.04(d) in the form
of Exhibit A-4.

            "Competitive Bid Rate" shall mean, as to any
Competitive Bid made by a Bank pursuant to Section 2.04(b),
(a) in the case of a LIBOR Loan, the Margin and (b) in the
case of a Fixed Rate Loan, the fixed rate of interest
offered by the Bank making such Competitive Bid.

            "Competitive Bid Request" shall mean a request
made pursuant to Section 2.04 in the form of Exhibit A-1.

                                                                173





            "Competitive Borrowing" shall mean a borrowing
consisting of a Competitive Loan or concurrent Competitive
Loans from the Bank or Banks whose Competitive Bids for such
Borrowing have been accepted by the Borrower under the
bidding procedure described in Section 2.04.

            "Competitive Loan" shall mean a Loan from a Bank
to the Borrower pursuant to the bidding procedure described
in Section 2.04.  Each Competitive Loan shall be a LIBOR
Competitive Loan or a Fixed Rate Loan.

            "Competitive Loan Exposure" means, with respect to
any Bank at any time, the aggregate principal amount of the
outstanding Competitive Loans of such Bank.

            "Competitive Note" shall mean a promissory note of
the Borrower in the form of Exhibit B-1 executed and
delivered as provided in Section 2.09.

            "Consolidated" shall mean, as applied to any
financial or accounting term, such term determined on a
consolidated basis in accordance with generally accepted
accounting principles (except as otherwise required herein)
for the Borrower and each Subsidiary which is a Consolidated
Subsidiary of the Borrower.

            "Consolidated EBITDA" shall mean for any period
"Income from operations" as set forth in the DENTSPLY
International Inc. Consolidated Statements of Income, plus
depreciation and amortization (to the extent previously
deducted), determined in accordance with generally accepted
accounting principles and in a manner consistent with the
accounting principles used to prepare the audited DENTSPLY
International Inc. Consolidated Statements of Income for the
year ended December 31, 1996, and delivered to the
Administrative Agent; provided that there shall be excluded:
          (a) the income (or loss) from operations of any person,
accrued prior to the date it becomes a Subsidiary or is
merged into or consolidated with the person whose income is
being determined or a subsidiary of such person; and

          (b) the income (or loss) from operations of any
person (other than a Subsidiary) in which the person whose
operating income is being determined or any subsidiary of
such person has an ownership interest, except to the extent
that any such income has actually been received by such
person in the form of cash dividends or similar
distributions.

            "Consolidated Interest Coverage Ratio" shall mean,
in respect of any fiscal period of the Borrower,
(a) Consolidated EBITDA divided by (b) Consolidated Interest
Expense.

            "Consolidated Interest Expense" shall mean, for
any fiscal period of the Borrower, without duplication of
expense among fiscal periods (a) the aggregate amount

                                                                174





determined on a Consolidated basis of (i) all interest on
Indebtedness of the Borrower and its Consolidated
Subsidiaries accrued during such period, (ii) all rentals
imputed as interest accrued under Capitalized Lease
Obligations during such period by such person and (iii) all
amortization of discount and expense relating to
Indebtedness of the Borrower and its Consolidated
Subsidiaries which amortization was accounted for during
such period, (b) adjusted downward for capital gains and
upward for capital losses on maturing U.S. Treasury
obligations and (c) adjusted downward for interest income
(to the extent not previously excluded), as determined in
accordance with generally accepted accounting principles.

            "Consolidated Net Income" shall mean the net
income (or net loss) of the Borrower and its Consolidated
Subsidiaries for the period in question (taken as a whole),
as determined in accordance with generally accepted
accounting principles; provided that there shall be
excluded:

            (a) the net income (or net loss) of any person,
accrued prior to the date it becomes a Subsidiary or is
merged into or consolidated with the person whose net income
is being determined or a subsidiary of such person; and

            (b) the net income (or net loss) of any person
(other than a Subsidiary) in which the person whose net
income is being determined or any subsidiary of such person
has an ownership interest, except to the extent that any
such income has actually been received by such person in the
form of cash dividends or similar distributions.

            "Consolidated Net Worth" shall mean, as at any
date of determination, the sum of the capital stock (less
treasury stock) and additional paid-in capital plus retained
earnings (or minus accumulated deficit) of the Borrower and
its Consolidated Subsidiaries on a Consolidated basis.

            "Consolidated Subsidiary" means, in the case of
the Borrower at any date, any Subsidiary or other entity the
accounts of which are Consolidated with those of the
Borrower in the Consolidated financial statements of the
Borrower as of such date.

            "Consolidated Total Capitalization" shall mean the
sum of (a) Consolidated Total Indebtedness and (b) Consolidated Net Worth.

            "Consolidated Total Indebtedness" shall mean the
Consolidated Indebtedness of the Borrower and its
Consolidated Subsidiaries.

            "Contribution Agreement" shall mean a Contribution
Agreement among the Borrower and the Guarantors
substantially in the form of Exhibit C hereto.

            "Credit Exposure" means, in respect of any Bank,

                                                                175





the sum of such Bank's Revolving Credit Exposure and its
Competitive Loan Exposure.

            "Debt Ratio" shall mean the ratio of Consolidated
Total Indebtedness to Consolidated Total Capitalization.

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

            "Des Plaines Lease" shall mean the Amended and
Restated Sale and Leaseback Agreement, dated as of Augusta1,
1991 between McDonough Partners I as Buyer and Midwest
Dental Products Corporation, as Seller.

            "Dollar Equivalent" means (a) as to any Loan
denominated in Dollars, the principal amount thereof, and
(b) as to any Loan denominated in an Alternate Currency, the
Dollar Equivalent of the principal amount thereof, determined by the
Administrative Agent pursuant to Section 1.03(a) using the Exchange Rate
with respect to such Alternate Currency at the time in effect.

            "Dollars", "dollars" and the symbol "$" shall mean
the lawful currency of the United States of America.

            "Effective Date" shall mean the date on which the
conditions to borrowing set forth in Sections 4.01 and 4.02
are first satisfied.

            "Environmental Laws" shall mean all statutes,
ordinances, orders, rules and regulations relating to
environmental matters, including those relating to fines,
orders, injunctions, penalties, damages, contribution, cost
recovery compensation, losses or injuries resulting from the
release or threatened release of Hazardous Materials and to
the generation, use, storage, transportation, or disposal of
Hazardous Materials or in any manner applicable to the
Borrower or any of the Subsidiaries or any of their
respective properties, including the Comprehensive
Environmental Response, Compensation, and Liability Act
(42 U.S.C. ss.9601 et seq.), the Hazardous Material
Transportation Act (49 U.S.C. ss.1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. ss.6901 et seq.),
the Federal Water Pollution Control Act (33U.S.C. ss.1251 et
seq.), the Clean Air Act (42 U.S.C. ss.7401 et seq.), the
Toxic Substances Control Act (15 U.S.C. ss.2601 et seq.), the
Occupational Safety and Health Act (29 U.S.C. ss.651 et seq.)
and the Emergency Planning and Community Right-to-Know Act
(42 U.S.C.  ss.11001 et seq.), each as amended or supplemented, and any
analogous current or future Federal, state or local statutes and
regulations promulgated pursuant thereto.

            "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as the same may from time to time be
amended.

            "ERISA Affiliate" shall mean with respect to the

                                                                176





Borrower, any trade or business (whether or not incorporated) which is a
member of a group of which the Borrower is a member and which is under
common control within the meaning of Section 414 of the Code.

            "ESOP" shall mean the DENTSPLY Employee Stock
Ownership Plan effective as of December 1, 1982 and restated
as of January 1, 1991.

            "Event of Default" shall mean any of the events
described in clauses (a) through (m) of Article VII.

            "Exchange Rate" means, on any day, with respect to
any Alternate Currency, the rate at which such Alternate
Currency may be exchanged into Dollars, as set forth at
approximately 11:00 a.m., London time, on such date on the
Reuters World Currency Page for such Alternate Currency.  In
the event that such rate does not appear on any Reuters
World Currency Page, the Exchange Rate shall be determined
by reference to the applicable Bloomberg System page, or, in
the event that such rate does not appear on such page, such
other publicly available service for displaying exchange
rates as may be agreed upon by the Administrative Agent and
the Borrower, or, in the absence of such agreement, such
Exchange Rate shall instead be the spot rate of exchange of
the Administrative Agent in the market where its foreign
currency exchange operations in respect of such Alternate
Currency are then being conducted, at or about 11:00 a.m.,
London time, on such date for the purchase of Dollars for
delivery twoaBusiness Days later; provided that if at the
time of any such determination, for any reason, no such spot
rate is being quoted, the Administrative Agent may use any
reasonable method it deems appropriate to determine such
rate, and such determination shall be conclusive absent
manifest error.

            "Execution Date" shall mean the date of this
Agreement.

            "Existing Credit Agreements" shall mean the
Existing Revolving Credit Agreement and the Existing Term
Loan Agreement.

            "Existing Revolving Credit Agreement" shall mean
the $175,000,000 Competitive Advance, Revolving Credit and
Guaranty Agreement dated as of November 15, 1993, as
amended, among the Borrower, the guarantors and banks party
thereto and The Chase Manhattan Bank, as Agent.

            "Existing Term Loan Agreement" shall mean the
$60,000,000 Multi-Currency Term Loan Agreement dated as of
May 12, 1995, among the Borrower, the banks party thereto,
and ABN Amro Bank N.V., as Agent.

            "Facility A Credit Agreement" shall mean the
$125,000,000, 364-Day Competitive Advance, Revolving Credit
and Guaranty Agreement dated as of the date hereof among the
Borrower, the guarantors and the banks party thereto, The

                                                                177





Chase Manhattan Bank, as administrative agent, and ABN Amro
Bank N.V. as documentation agent, as amended, modified or
supplemented from time to time.

            "Facility Fee" shall have the meaning given such
term in Section 2.08 hereof.

            "Financial Officer" of any person shall mean its
Senior Vice President-Chief Financial Officer, Treasurer or
Controller.

            "Fixed Rate Borrowing" shall mean a Borrowing
comprised of Fixed Rate Loans.

            "Fixed Rate Loan" shall mean any Competitive Loan
bearing interest at a fixed percentage rate per annum
(expressed in the form of a decimal to no more than four
decimal places) specified by the Bank making such Loan in
its Competitive Bid.




                                                                178





            "Fundamental Documents" shall mean this Agreement,
the Contribution Agreement, the Competitive Notes, the
Letters of Credit and the Revolving Credit Notes.

            "Governmental Authority" shall mean any Federal,
state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, or any court, in each case whether of
the United States or foreign.

            "Guarantors" shall mean all Material Subsidiaries
which are incorporated in the United States, all of which
are listed on Schedule 1.01, and any other Subsidiaries of
the Borrower which become Guarantors pursuant to Section
5.11.

            "Guaranty", "Guaranteed" or to "Guarantee" as
applied to any obligation shall mean and include (a) a
guaranty (other than by endorsement of negotiable instruments for
collection in the ordinary course of business), directly or indirectly, in
a manner, of any part (to the extent of such part) or all of such
obligation and (b) an agreement, direct or indirect, contingent or
otherwise, and whether or not constituting a guaranty, the intention or
practical effect of which is to assure the payment or performance (or
payment of damages or compensation in the event of nonperformance) of any
part (to the extent of such part) or all of such obligation whether by (i)
the purchase of securities or obligations, (ii) the purchase, sale or lease
(as lessee or lessor) of property or
the purchase or sale of services primarily for the purpose of enabling the
obligor with respect to such obligation to make any payment or performance
(or payment of damages or compensation in the event of nonperformance) of
or on account of any part or all of such obligation, or to assure the owner
of such obligation against loss, (iii) the supplying of funds to or in any
other manner investing in the obligor or any other person with respect to
or on account of such obligation, (iv) repayment of amounts drawn down by
beneficiaries of letters of credit or arising out of the import of goods or
(v) the indemnifying or holding harmless, in any way, of a person against
any part (to the extent of such part) or all of such person's obligation
under a Guaranty except for hold harmless agreements with vendors with
respect to product liability and warranties to customers.

            "Hazardous Materials" shall mean any hazardous substances or
wastes as such terms are defined in any applicable Environmental Law,
including (a) oil, petroleum and any by-product thereof and (b) asbestos
and asbestos-containing material.

            "Indebtedness" shall mean, with respect to any
person (a) all obligations of such person for borrowed money, (b) all
obligations of such person evidenced by bonds, debentures, notes or other
similar instruments, (c) all obligations of such person upon which interest
charges are customarily paid, except for debt obligations related to
foreign accounts receivable sold to certain banks, (d) all obligations of
such person for the deferred purchase price of property or services (except
(i) accounts payable to suppliers incurred in the ordinary course of
business and paid within one year, (ii) non-interest-bearing
notes payable to suppliers incurred in the ordinary course
of business and having a maturity date not later than one
year after the date of issuance thereof, and (iii) payroll

                                                                179





and other accruals arising in the ordinary course of business), (e) all
obligations of such person under conditional sale or other title retention
agreements relating to property purchased by such person, (f) all
Capitalized Lease Obligations, including obligations arising from sale and
leaseback transactions which are required to be accounted for as
Capitalized Lease Obligations, (g) all Indebtedness of any third party
which is secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) property or
assets of the person in question (the amount of such Indebtedness taken
into account for the purposes of this clause (g) not to exceed the book
value of such property or assets), (h) all Guarantees of such person, and
(i) all obligations of such person in respect of interest rate protection
agreements, foreign currency exchange agreements, or other interest or
exchange rate hedging transactions (the amount of such Indebtedness for
purposes of this clause (i) to be the termination value of such agreement
or arrangement); provided, however, that there shall be
excluded from this definition (x) Indebtedness between the Borrower and any
Subsidiary and (y) Indebtedness between Subsidiaries; provided further,
however, that any Indebtedness owed to a Subsidiary remaining outstanding
after that Subsidiary ceases to be a Subsidiary shall be included as
Indebtedness hereunder.

            "Interest Payment Date" shall mean, with respect
to any Loan, the last day of the Interest Period applicable
thereto and, in the case of a LIBOR Loan with an Interest
Period of more than three months' duration or a Fixed Rate
Loan with an Interest Period of more than 90 days' duration,
each day that would have been an Interest Payment Date had
successive Interest Periods of three months' duration or
90 days' duration, as the case may be, been applicable to
such Loan, and, in addition, the date of any refinancing or
conversion of such Loan with or to a Loan of a different
Interest Rate Type.

            "Interest Period" shall mean (a) as to any LIBOR
Borrowing, the period commencing on the date of such
Borrowing or on the last day of the immediately preceding
Interest Period applicable to such Borrowing, as the case
may be, and ending on the numerically corresponding day (or,
if there is no numerically corresponding day, on the last
day) in the calendar month that is 1, 2, 3 or 6 months
thereafter, as the Borrower may elect, (b) as to any ABR
Borrowing, the period commencing on the date of such
Borrowing and ending on the earliest of (i) the next succeeding March 31,
June 30, September 30 or December 31, (ii) the Maturity Date and (iii) the
date such Borrowing is refinanced with a Borrowing of a different Interest
Rate Type in accordance with Section 2.07 or prepaid in accordance with
Section 2.14 and (c) as to any Fixed Rate Borrowing, the period commencing
on the date of such Borrowing and ending on the date specified in the
Competitive Bids in which the offer to make the Fixed Rate Loans comprising
such Borrowing were extended, which shall not be earlier than 7adays after
the date of such Borrowing or later than 360 days after the date of such
Borrowing; provided, however, that if any Interest Period would end on a
day other than a Business Day, such Interest Period shall be extended to
the next succeeding Business Day unless, in the case of LIBOR Loans only,
such next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business

                                                                180





Day.  Interest shall accrue from and including the first day of an Interest
Period to but excluding the last day of such Interest Period.

            "Interest Rate Type", when used in respect of any
Loan or Borrowing, shall refer to the Rate by reference to
which interest on such Loan or on the Loans comprising such
Borrowing is determined.  For purposes hereof, "Rate" shall
mean LIBOR, the Alternate Base Rate or the Fixed Rate, as
applicable.

            "Issuing Bank" means The Chase Manhattan Bank, in its capacity
as the issuer of Letters of Credit hereunder, and its successors in such
capacity as provided in Section 2.06(i).  The Issuing Bank may, in its
discretion, arrange for one or more Letters of Credit to be issued by
Affiliates of the Issuing Bank, in which case the term "Issuing Bank" shall
include any such Affiliate with respect to Letters of Credit issued by such
Affiliate.

            "LC Disbursement" means a payment made by the Issuing Bank
pursuant to a Letter of Credit.

            "LC Exposure" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus
(b)athe aggregate amount of all LC Disbursements that have not yet been
reimbursed by or on behalf of the Borrower at such time.  The LC Exposure
of any Bank at any time shall be its Applicable Commitment Percentage of
the total LC Exposure at such time.

            "Letter of Credit" means any letter of credit issued pursuant
to this Agreement.

            "LIBOR" shall mean, with respect to any LIBOR Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the next 1/16th of 1%) equal to the rate at which deposits in the
applicable currency approximately equal in principal amount to (a) in the
case of a Revolving Credit Borrowing, the Administrative Agent's portion of
such LIBOR Borrowing and (b) in the case of a Competitive Borrowing, a
principal amount that would have been the Administrative Agent's portion of
such Competitive Borrowing had such Competitive Borrowing been a Revolving
Credit Borrowing, and for a maturity comparable to such Interest Period are
offered to the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of
such Interest Period.

            "LIBOR Borrowing" shall mean a Borrowing comprised
of LIBOR Loans.

            "LIBOR Competitive Loan" shall mean any Competitive Loan
bearing interest at a rate determined by reference to LIBOR in accordance
with the provisions of Article II.

            "LIBOR Loan" shall mean any LIBOR Competitive Loan
or LIBOR Revolving Credit Loan.

            "LIBOR Revolving Credit Loan" shall mean any
Revolving Credit Loan bearing interest at a rate determined

                                                                181





by reference to LIBOR in accordance with the provisions of
Article II.

            "Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind whatsoever (including any
conditional sale or other title retention agreement, any lease in the
nature thereof, and the filing or agreement to give any financing statement
under the Uniform Commercial Code of any jurisdiction other than a
financing statement filed or given as a precautionary measure in respect of
a lease which is not required to be accounted for as a Capitalized Lease
Obligation and which does not otherwise secure an obligation that
constitutes Indebtedness).

            "Loan" shall mean a Competitive Loan or a Revolving Credit
Loan, whether made as a LIBOR Loan, an ABR Loan or a Fixed Rate Loan, as
permitted hereby.

            "Margin" shall mean, as to any LIBOR Competitive Loan, the
margin (expressed as a percentage rate per annum in the form of a decimal
to four decimal places) to be added to or subtracted from LIBOR in order to
determine the interest rate applicable to such Loan, as specified in the
Competitive Bid relating to such Loan.

            "Material Subsidiary" shall mean any Subsidiary (i) the
consolidated net income of which for the most recent fiscal year of the
Borrower for which audited financial statements have been delivered
pursuant to Section 5.05 were greater than or equal to 5% of Consolidated
Net Income for such fiscal year, (ii) the consolidated tangible assets of
which as of the last day of the Borrower's most recently ended fiscal year
were greater than or equal to 5% of the Borrower's consolidated tangible
assets as of such date or (iii) the net worth of which as of the last day
of the Borrower's most recently ended fiscal year was greater than or equal
to 5% of Consolidated Net Worth as of such date; provided that, if at any
time the aggregate amount of the
consolidated net income, consolidated tangible assets or consolidated net
worth of all Subsidiaries incorporated in the United States that are not
Material Subsidiaries exceeds 15% of consolidated net income for any such
fiscal year, 15% of the Borrower's consolidated tangible assets as of the
end of any such fiscal year or 15% of Consolidated Net Worth for any such
fiscal year, the Borrower (or, in the event the Borrower has failed to do
so within 10 days, the Administrative Agent) shall designate as "Material
Subsidiaries" Subsidiaries incorporated in the United States sufficient to
eliminate such excess, and such designated Subsidiaries incorporated in the
United States shall for all purposes of this Agreement constitute Material
Subsidiaries.

            "Maturity Date" shall mean the fifth anniversary of the
Execution Date, subject to any extension made pursuant to Section 2.13.

            "Multiemployer Plan" shall mean a multiemployer plan as defined
in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate
of the Borrower is making or accruing an obligation to make contributions,
or has within any of the preceding five plan years made or accrued an
obligation to make contributions.

            "Notes" shall mean the Competitive Notes and the
Revolving Credit Notes.

                                                                182





            "Obligations" shall mean the obligation of the Borrower to make
due and punctual payments of principal of and interest on the Loans, the
Facility Fee and all other monetary obligations of the Borrower to the
Administrative Agent or any Bank under this Agreement, the Notes or the
Fundamental Documents.

            "PBGC" shall mean the Pension Benefit Guaranty
Corporation referred to and defined in ERISA.

            "person" or "Person" shall mean any natural person,
corporation, trust, association, company, partnership, joint venture or
government, or any agency or political subdivision thereof.

            "Plan" shall mean any employee plan (other than a
Multiemployer Plan) which is subject to the provisions of Title IV of ERISA
and which is maintained for employees of the Borrower or any ERISA
Affiliate of the Borrower.

            "Pro Forma Basis" shall mean, in connection with an acquisition
or disposition by or merger involving the Borrower or any Subsidiary, a
computation of compliance with the requirements of this Agreement for the
immediately preceding four full fiscal quarters or other relevant period
assuming that such acquisition, disposition or merger had occurred at the
beginning of such period.  Such computation shall take into account the
relevant financial information with respect to the acquired, disposed of,
or merged entity for such period and shall assume that any Indebtedness
incurred in connection with such acquisition, disposition or merger had
been incurred at the beginning of such period; provided, however, in order
to avoid double-counting, it is acknowledged that if the Borrower or any
Subsidiary incurs
Indebtedness in connection with such a transaction and repays Indebtedness
of the acquired, disposed of or merged entity, the Indebtedness so repaid
shall not be included as Indebtedness of such entity for such period.

            "Reduction Date" shall have the meaning given in
Section 2.13(c) hereof.

            "Register" shall be as defined in Section 2.24(e).

            "Regulation D" shall mean Regulation D of the Board, as the
same is from time to time in effect, and all official rulings and
interpretations thereunder or thereof.

            "Regulation G" shall mean Regulation G of the Board, as the
same is from time to time in effect, and all official rulings and
interpretations thereunder or thereof.

            "Regulation T" shall mean Regulation T of the Board, as the
same is from time to time in effect, and all official rulings and
interpretations thereunder or thereof.

            "Regulation U" shall mean Regulation U of the Board, as the
same is from time to time in effect, and all official rulings and
interpretations thereunder or thereof.

            "Regulation X" shall mean Regulation X of the Board, as the
same is from time to time in effect, and all official rulings and

                                                                183





interpretations thereunder or thereof.

            "Reportable Event" shall mean any reportable event
as defined in Section 4043(c) of ERISA or the regulations issued
thereunder.

            "Required Banks" shall mean at any time Banks holding (i) at
least 51% of the Commitments and (ii) at least 51% of the principal amount
of Loans then outstanding; provided that in order to terminate the
Commitments or declare the Notes to be forthwith due and payable pursuant
to Article VII hereof, "Required Banks" shall mean Banks holding at least
51% of the aggregate principal amount then outstanding of Credit Exposures.

            "Revolving Credit Borrowing" shall mean a Borrowing consisting
of simultaneous Revolving Credit Loans from each of the Banks.

            "Revolving Credit Borrowing Request" shall mean a
request made pursuant to Section 2.05 in the form of Exhibit A-5.

            "Revolving Credit Exposure" means, with respect to
any Bank at any time, the sum of (a) the outstanding principal amount of
such Bank's Revolving Credit Loans denominated in Dollars, (b) the Dollar
Equivalent of the outstanding principal amount of such Bank's Revolving
Credit Loans denominated in Alternate Currencies, and (c) such Bank's LC
Exposure at such time.

            "Revolving Credit Loans" shall mean the revolving
loans made by the Banks to the Borrower pursuant to Section 2.05.  Each
Revolving Credit Loan shall be a LIBOR Revolving Credit Loan or an ABR
Loan.

            "Revolving Credit Note" shall mean a promissory note of the
Borrower in the form of Exhibit B-2, executed and delivered as provided in
Section 2.09.

            "Senior Officer" shall mean the Chairman, Vice
Chairman, President and Senior Vice Presidents of the Borrower.

            "Statutory Reserves" shall mean (a) with respect to the Base CD
Rate (as such term is used in the definition of "Alternate Base Rate"), a
fraction (expressed as a decimal), the numerator of which is the number one
and the denominator of which is the number one minus the aggregate rates
expressed as a decimal of (A) basic and supplemental reserve requirements
in effect on the date of effectiveness of the Average Weekly Three-Month
Secondary CD Rate (as such term is defined in the definition of "Alternate
Base Rate") under Regulation D of the Board applicable to three-month
certificates of deposit in units of $100,000 or more issued by a "member
bank" located in a "reserve city" (as such terms are used in Regulation D),
plus (B) marginal reserve requirements in effect on such date of
effectiveness under Regulation D applicable to time deposits of a "member
bank" and (b) with respect to LIBOR, shall mean a fraction (expressed as a
decimal) the numerator of which is the
number one and the denominator of which is one minus the aggregate of the
maximum reserve requirements (including any
marginal, special, emergency or supplemental reserves) established by the
Board or any other banking authority to which a Bank is subject for
Eurocurrency Liabilities (as defined in Regulation D).  Such reserve

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percentages shall include those imposed under Regulation D.  LIBOR Loans
shall be deemed to constitute Eurocurrency Liabilities and as such shall be
deemed to be subject to such reserve requirements without benefit of or
credit for proration, exceptions or offsets which may be available from
time to time to any Bank under Regulation D.  Statutory Reserves shall be
adjusted automatically on and as of the effective date of any change in any
reserve percentage.

            "subsidiary" shall mean, with respect to any person, any
corporation, association or other business entity of which more than 50% of
the securities or other ownership interests having ordinary voting power
is, at the time of which any determination is being made, owned or
controlled by such person or one or more subsidiaries of such person.

            "Subsidiary" shall mean a subsidiary of the Borrower.

            "Total Commitment" shall mean the aggregate amount
of the Banks' Commitments, as in effect at such time.

            "Withdrawal Liability" shall mean liability to a
Multiemployer Plan as a result of a complete or partial withdrawal from
such Multiemployer Plan, as such terms are defined in Part I of Subtitle E
of Title IV of ERISA.

            SECTION 1.02.  Accounting Terms and Determinations.   All
accounting terms not specifically defined herein shall be construed in
accordance with generally accepted accounting principles and practices
consistent in all material respects (except for changes with which the
Borrower's independent auditors concur) with those applied in the
preparation of the financial statements referred to in Section 3.05(a) (and
references herein to generally accepted accounting principles shall mean
generally accepted accounting principles as so applied) and all financial
data submitted pursuant to this Agreement shall be prepared in accordance
with such principles and practices, except as otherwise expressed herein.
The
definitions in this Article I shall apply equally to both the singular and
plural forms of the terms defined.  Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter
forms.  The words "include", "includes" and "including" as used in this
Agreement and any Exhibit or Schedule hereto shall be deemed in each case
to be followed by the phrase "without limitation".

            SECTION 1.03.  Exchange Rates.

            (a)  Not later than 1:00 p.m., London time, on each Calculation
Date, the Administrative Agent shall (i) determine the Exchange Rate as of
such Calculation Date with respect to each Alternate Currency and (ii) give
notice thereof to the Banks and the Borrower.  The Exchange Rates so
determined shall become effective on the first Business Day immediately
following the relevant Calculation Date (a "Reset Date"), shall remain
effective until the next succeeding Reset Date, and shall for all purposes
of this Agreement (other than Section 10.12 or any other provision
expressly requiring the use of a current Exchange Rate) be the Exchange
Rates employed in converting any amounts between Dollars and Alternate
Currencies.

            (b)  Not later than 5:00 p.m., London time, on each Reset Date

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and each date on which a Borrowing or issuance of any Letter of Credit
shall occur, the Administrative Agent shall (i) determine the Dollar
Equivalent of the aggregate principal amount of the Loans then outstanding
that are denominated in Alternate Currencies (after giving effect to any
Loans made or repaid on such date) and (ii) notify the Borrower of the
aggregate Credit Exposures of the Banks.


                               ARTICLE II

                                  Loans

            SECTION 2.01.  Commitments.

            (a)  Subject to the terms and conditions hereof and relying
upon the representations and warranties herein set forth, each Bank agrees,
severally and not jointly, to make Revolving Credit Loans to the Borrower,
in Dollars or one or more Alternate
Currencies, at any time and from time to time during the Availability
Period, in an aggregate principal amount at any time outstanding not to
exceed such Bank's Commitment minus (i) the amount by which the Competitive
Loans outstanding at such time shall be deemed to have used such Commitment
pursuant to Section 2.19, and (ii) the amount which is the product of (y)
the aggregate principal amounts (or the Dollar Equivalent thereof) due
under any loans outstanding under the Existing Credit Agreements and listed
on Schedule 2.02 (the "Scheduled Loans") and (z) such Bank's Applicable
Commitment Percentage, subject, however, to the conditions that (a) at no
time shall (i) the sum of (A) the outstanding aggregate principal amount of
all Revolving Credit Exposures of all Banks plus (B) the outstanding
aggregate principal amount of all Competitive Loans made by all Banks
exceed (ii) the Total Commitment minus the Dollar Equivalent of any
outstanding Scheduled Loans, (b) at all times (except as expressly
contemplated by the last sentence of Section
2.13(d)) the Revolving Credit Exposure of each Bank shall equal the product
of (i) such Bank's Applicable Commitment Percentage and (ii) the
outstanding aggregate Revolving Credit Exposures and (c) the aggregate
Dollar Equivalent of the Revolving Credit Loans denominated in Alternate
Currencies shall not exceed $50,000,000 at any time.

            (b)  Within the foregoing limits, the Borrower may
borrow, pay or repay and reborrow hereunder, on and after the Effective
Date and prior to the Maturity Date, upon the terms and subject to the
conditions and limitations set forth herein.

            SECTION 2.02.  Loans.

            (a)  Each Revolving Credit Loan shall be made as part of a
Borrowing consisting of Loans made by the Banks ratably in accordance with
their Commitments; provided, however, that the failure of any Bank to make
any Revolving Credit Loan shall not in itself relieve any other Bank of its
obligation to lend hereunder (it being understood, however, that no Bank
shall be responsible for the failure of any other Bank to make any Loan
required to be made by such other Bank).  Each Competitive Loan shall be
made in dollars in accordance with the procedures set forth in Section
2.04.  The Competitive Loans comprising any Borrowing shall be denominated
in Dollars in an aggregate amount that is at least $5,000,000 and in an
integral multiple of $1,000,000.  The Revolving Credit Loans comprising any

                                                                186





Borrowing shall be in a minimum amount of $5,000,000 (or the Dollar
Equivalent thereof) and, in the case of Loans denominated in Dollars, an
integral multiple of $1,000,000, or an aggregate principal amount equal to
(or the Dollar Equivalent of which is equal to) the remaining balance of
the available Commitments or the amount required to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.06(e)).

            (b)  Each Competitive Borrowing shall be comprised
entirely of LIBOR Competitive Loans or Fixed Rate Loans, and
each Revolving Credit Borrowing shall be comprised entirely of LIBOR
Revolving Credit Loans, or, in the case of a Borrowing denominated in
Dollars, ABR Loans, as the Borrower may request pursuant to Section 2.04 or
2.05, as applicable. Each Bank may at its option make any LIBOR Loan by
causing any domestic or foreign branch or Affiliate of such Bank to make
such Loan; provided that any exercise of such option shall not affect the
obligation of the Borrower to repay such Loan in accordance with the terms
of this Agreement and the applicable Note.  Borrowings of more than one
Interest Rate Type may be outstanding at the same time; provided, however,
that the Borrower shall not be entitled to request any Borrowing that, if
made, would result in an aggregate of more than 15 separate Revolving
Credit Loans of any one Bank
being outstanding hereunder at any one time.  For purposes of the
calculation required by the immediately preceding sentence, LIBOR Revolving
Credit Loans having different Interest Periods, regardless of whether they
commence on the same date, shall be considered separate Loans and all Loans
of a single Interest Rate Type made on a single date shall be considered a
single Loan if such Loans have a common Interest Period.

            (c)  Subject to Section 2.07 each Bank shall make
each Loan (other than Loans denominated in Alternate Currencies) to be made
by it hereunder on the proposed date thereof by wire transfer of
immediately available funds to the Administrative Agent in New York, New
York, not later than 12:00 noon, New York City time, and the Administrative
Agent shall by 3:00 p.m., NewaYork City time, credit the amounts so
received to the general deposit account of the Borrower with the
Administrative Agent; (provided that ABR Loans made to finance the
reimbursement of an LC Disbursement as provided in Section 2.06(e) shall be
remitted by the Administrative Agent to the Issuing Bank), or, if a
Borrowing shall not occur on such date because any condition precedent
herein specified shall not have been met, return the amounts so received to
the respective Banks as soon as practicable.  Competitive Loans shall be
made by the Bank or Banks whose Competitive Bids therefor are accepted
pursuant to Section 2.04 in the amounts so accepted and Revolving Credit
Loans shall be made by the Banks pro rata in accordance with Section 2.19.
Each Bank shall make each Loan denominated in an Alternate Currency to be
made by it hereunder on the proposed date thereof by wire transfer of such
immediately available funds as may then be customary for the settlement of
international transactions in the applicable Alternate Currency, by 11:00
a.m., London time, to an account designated by the Administrative Agent.
The Administrative Agent will make such Loans available to the Borrower by
promptly crediting the amounts so received, in
like funds, to an account of the Borrower maintained with the
Administrative Agent in London and designated by the Borrower in the
applicable Revolving Credit Borrowing Request or Competitive Bid Request or
to such other account as may be specified in the applicable Revolving
Credit Borrowing Request or Competitive Bid Request.  Unless the
Administrative Agent shall have received notice from a Bank prior to the

                                                                187





date of any Borrowing, the Administrative Agent may assume that such Bank
has made such portion available to the Administrative Agent on the date of
such Borrowing in accordance with this paragraph (c) and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower
on such date a corresponding amount.  If and to the extent that such Bank
shall not have made such
portion available to the Administrative Agent, such Bank and the Borrower
severally agree to repay to the Administrative Agent forthwith on demand
such corresponding amount together with interest thereon, for each day from
the date such amount is made available to the Borrower until the date such
amount is repaid to the Administrative Agent at (i) in the case of the
Borrower, the interest rate applicable at the time to the Loans comprising
such Borrowing and (ii) in the case of such Bank, the Federal Funds
Effective Rate, or, in the case of any amount denominated in an Alternate
Currency, such other rate as shall be specified by the Administrative Agent
as representing its cost of overnight or short-term funds.  If such Bank
shall repay to the Administrative Agent such corresponding amount, such
amount shall constitute such Bank's Loan as part of such Borrowing for
purposes of this
Agreement.

            (d)  Notwithstanding any other provision of this
Agreement, the Borrower shall not be entitled to request any Borrowing if
the Interest Period requested with respect thereto would end after the
Maturity Date.

            SECTION 2.03.  Use of Proceeds.  The proceeds of
the Loans shall be used to refinance outstanding Indebtedness of the
Borrower under the Existing Credit Agreements and for general working
capital and corporate purposes, including acquisitions in the health care
products industry.


            SECTION 2.04.  Competitive Bid Procedure.

            (a)  In order to request Competitive Bids, the Borrower shall
hand deliver or telecopy to the Administrative Agent a duly completed
Competitive Bid Request in the form of Exhibit A-1, to be received by the
Administrative Agent (i) in the case of a LIBOR Competitive Borrowing, not
later than 10:00
a.m., New York City time, four Business Days before a proposed Competitive
Borrowing and (ii) in the case of a Fixed Rate Borrowing, not later than
10:00 a.m., New York City time, one Business Day before a proposed
Competitive Borrowing.  No ABR Loan shall be requested in, or made pursuant
to, a Competitive Bid Request.  A Competitive Bid Request that does not
conform substantially to the format of Exhibit A-1 may be rejected in the
Administrative Agent's sole discretion, and the Administrative Agent shall
promptly notify the Borrower of such rejection by telecopier.  Such request
shall in each case refer to this Agreement and specify (i) whether the
Borrowing then being requested is to be a LIBOR Borrowing or a Fixed Rate
Borrowing, (ii) the date of such Borrowing (which shall be a Business Day)
and the aggregate principal amount thereof, which shall be in an
aggregate amount that is at least $5,000,000 and, in an integral multiple
of $1,000,000, and (iii) the Interest Period with respect thereto (which
may not end after the Maturity Date).  Promptly after its receipt of a
Competitive Bid Request that is not rejected as aforesaid, the
Administrative Agent shall invite by telecopier (in the form set forth in

                                                                188





Exhibit A-2) the Banks to bid, on the terms and subject to the conditions
of this Agreement, to make Competitive Loans pursuant to the Competitive
Bid Request.

            (b)  Each Bank may, in its sole discretion, make one or more
Competitive Bids to the Borrower responsive to a Competitive Bid Request.
Each Competitive Bid by a Bank must be received by the Administrative Agent
via telecopier, in the form of Exhibit A-3, (i) in the case of a LIBOR
Competitive Borrowing, not later than 9:30 a.m., New York City time, three
Business Days before a proposed Competitive Borrowing and (ii) in the case
of a Fixed Rate Borrowing, not later than 9:30 a.m., New York City time, on
the day of a proposed Competitive Borrowing.  Multiple bids will be
accepted by the Administrative Agent.  Competitive Bids that do not conform
substantially to the format of Exhibit A-3 may be rejected by the
Administrative Agent after conferring
with, and upon the instruction of, the Borrower, and the Administrative
Agent shall notify the Bank making such
nonconforming bid of such rejection as soon as practicable.  Each
Competitive Bid shall refer to this Agreement and specify (i) the principal
amount (which shall be a minimum principal amount of $5,000,000 and an
integral multiple of $1,000,000 and which may equal the entire principal
amount of the Competitive Borrowing requested by the Borrower) of the
Competitive Loan or Loans that the Bank is willing to make to the Borrower,
(ii) the Competitive Bid Rate or Rates at which the Bank is prepared to
make the Competitive Loan or Loans and (iii) the Interest Period and the
last day thereof.  If any Bank shall elect not to make a Competitive Bid,
such Bank shall so notify the Administrative Agent via telecopier (i) in
the case of LIBOR Competitive Loans, not later than 9:30 a.m., New York
City time, three Business
Days before a proposed Competitive Borrowing and (ii) in the case of Fixed
Rate Loans, not later than 9:30aa.m., New York City time, on the day of a
proposed Competitive Borrowing; provided, however, that failure by any Bank
to give such notice shall not cause such Bank to be obligated to make any
Competitive Loan as part of such Competitive Borrowing.  A Competitive Bid
submitted by a Bank pursuant to this paragraph (b) shall be irrevocable.

            (c)  The Administrative Agent shall promptly notify the
Borrower by telecopier of all the Competitive Bids made, the Competitive
Bid Rate and the principal amount of each Competitive Loan in respect of
which a Competitive Bid was made and the identity of the Bank that made
each bid.  The Administrative Agent shall send a copy of all Competitive
Bids to the Borrower for its records as soon as practicable after
completion of the bidding process set forth in this Section 2.04.

            (d)  The Borrower may in its sole and absolute discretion,
subject only to the provisions of this paragraph (d), accept or reject any
Competitive Bid referred to in paragraph (b) above.  The Borrower shall
notify the Administrative Agent by telephone, confirmed by telecopier in
the form of a Competitive Bid Accept/Reject Letter in the form of Exhibit
A-4, whether and to what extent it has decided to accept or reject any of
or all the bids referred to in paragraph (b) above, (i) in the case of a
LIBOR Competitive Borrowing, not later than 10:30 a.m., NewaYork
City time, three Business Days before a proposed Competitive Borrowing and
(ii) in the case of a Fixed Rate Borrowing, not later than 10:30 a.m., New
York City time, on the day of a proposed Competitive Borrowing; provided,
however, that (A) the failure by the Borrower to give such notice shall be
deemed to be a rejection of all the bids referred to in paragraph (b)

                                                                189





above, (B) the Borrower shall not accept a bid made at a particular
Competitive Bid Rate if the Borrower has decided to reject a bid made at a
lower Competitive Bid Rate, (C) the aggregate amount of the Competitive
Bids accepted by the Borrower shall not exceed the principal amount
specified in the Competitive Bid Request, (D) if the Borrower shall accept
a bid or bids made at a particular Competitive Bid Rate but the amount of
such bid or bids shall cause the total amount of bids to be accepted by the
Borrower to exceed the amount specified in the Competitive Bid Request,
then the Borrower shall accept a portion of such bid or bids in an amount
equal to the amount specified in the Competitive Bid Request less the
amount of all other Competitive Bids accepted at lower Competitive Bid
Rates with respect to such Competitive Bid Request (it being understood
that acceptance, in the case of multiple bids at such Competitive Bid Rate,
shall be made pro rata in accordance with the amount of each such bid at
such Competitive Bid Rate) and (E) except pursuant to clause (D)
above, no bid shall be accepted for a Competitive Loan unless such
Competitive Loan is in an aggregate amount that is at least $5,000,000 and
an integral multiple of $1,000,000, provided further, however, that if a
Competitive Loan must be in an amount less than $5,000,000 because of the
provisions of clause (D) above, such Competitive Loan may be in an
aggregate amount that is at least $1,000,000 or any integral multiple
thereof, and in calculating the pro rata allocation of acceptances of
portions of multiple bids at a particular Competitive Bid Rate pursuant to
clause (D) the amounts shall be rounded to integral multiples of
$1,000,000 in a manner that shall be in the discretion of the Borrower.  A
notice given by the Borrower pursuant to this paragraph (d) shall be
irrevocable.

            (e)  The Administrative Agent shall promptly notify each
bidding Bank whether its Competitive Bid has been accepted (and if so, in
what amount and at what Competitive Bid Rate) by telecopy sent by the
Administrative Agent, and each successful bidder will thereupon become
bound, subject to the other applicable conditions hereof, to make the
Competitive Loan in respect of which its bid has been accepted.

            (f)  A Competitive Bid Request shall not be made within four
Business Days after the date of any previous Competitive Bid Request.

            (g)  If the Administrative Agent shall elect to submit a
Competitive Bid in its capacity as a Bank, it shall
submit such bid directly to the Borrower one quarter of an hour earlier
than the latest time at which the other Banks are required to submit their
bids to the Administrative Agent pursuant to paragraph (b) above.

            (h)  All notices required by this Section 2.04 shall be given
in accordance with Section 10.01.

            (i)  Notwithstanding any other provisions of this
Agreement, the Borrower shall not be entitled to request any
Competitive Borrowing if the Interest Period requested with
respect thereto would end after the Maturity Date.

            SECTION 2.05.  Revolving Credit Borrowing Procedure.  In order
to effect a Revolving Credit Borrowing, the Borrower shall hand deliver or
telecopy to the Administrative Agent a Borrowing notice in the form of
Exhibit A-5 (a) in the case of a LIBOR Revolving Credit Borrowing, not
later than 12:00 noon, New York City time, three Business Days before a

                                                                190





proposed Borrowing, and (b) in the case of an ABR Borrowing, not later than
10:00 a.m., New York City time, on the day of a proposed Borrowing.  No
Fixed Rate Loan shall be requested or made pursuant to a Revolving Credit
Borrowing Request.  Such notice shall be irrevocable and shall in each case
specify (a) whether the Borrowing then being requested is to be a LIBOR
Revolving Credit Borrowing or an ABR Borrowing, (b) whether such Borrowing
is to be in Dollars or an Alternate Currency (and if in an Alternate
Currency, such Alternate Currency), (c) the date of such Revolving Credit
Borrowing (which shall be a Business Day) and the amount thereof and (d) if
such Borrowing is to be a LIBOR Revolving Credit Borrowing, the Interest
Period with respect thereto.  If no election as to the Interest Rate Type
of Revolving Credit Borrowing is specified in any such notice, then the
requested Revolving Credit Borrowing shall be an ABR Borrowing.  If no
Interest Period with respect to any LIBOR Revolving Credit Borrowing is
specified in any such notice, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.  If the Borrower shall
not have given notice in accordance with this Section 2.05 of its election
to
refinance a Revolving Credit Borrowing prior to the end of the Interest
Period in effect for such Borrowing, then (a) in the case of a Borrowing in
Dollars, the Borrower shall (unless such Borrowing is repaid at the end of
such Interest Period) be deemed to have given notice of an election to
refinance such Borrowing with an ABR Borrowing and (b) in the case of a
Borrowing in an Alternate Currency, such Borrowing shall be due and payable
at the end of such Interest Period.  The Administrative Agent shall
promptly advise the Banks of any notice given pursuant to this
Section 2.05 and of each Bank's portion of the requested Borrowing.

            SECTION 2.06.  Letters of Credit.

            (a)  General.  Subject to the terms and conditions set forth
herein, the Borrower may request the issuance of Letters of Credit
denominated in Dollars for its own account, in a form reasonably acceptable
to the Administrative Agent and the
Issuing Bank, at any time and from time to time during the Availability
Period.  In the event of any inconsistency between the terms and conditions
of this Agreement and the terms and conditions of any form of letter of
credit application or other agreement submitted by the Borrower to, or
entered into by the Borrower with, the Issuing Bank relating to any Letter
of Credit, the terms and conditions of this Agreement shall control.

            (b)  Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions.  To request the issuance of a Letter of Credit (or the
amendment, renewal or extension of an outstanding Letter of Credit), the
Borrower shall hand deliver or telecopy to the Issuing Bank and the
Administrative Agent (reasonably in advance of the requested date of
issuance, amendment, renewal or extension) a notice requesting the issuance
of a Letter of Credit, or identifying the Letter of Credit to be amended,
renewed or extended, and specifying the date of issuance, amendment,
renewal or extension (which shall be a Business Day), the date on which
such Letter of Credit is to expire (which shall comply with paragraph (c)
of this Section), the amount of such Letter of Credit, the name and address
of the
beneficiary thereof and such other information as shall be necessary to
prepare, amend, renew or extend such Letter of Credit.  If requested by the
Issuing Bank, the Borrower also
shall submit a letter of credit application on the Issuing Bank's standard

                                                                191





form in connection with any request for a Letter of Credit.  A Letter of
Credit shall be issued, amended, renewed or extended only if (and upon
issuance, amendment, renewal or extension of each Letter of Credit the
Borrower shall be deemed to represent and warrant that), after giving
effect to such issuance, amendment, renewal or extension (i) the LC
Exposure shall not exceed $25,000,000 and (ii) the sum of the total
Revolving Credit Exposures plus the aggregate principal amount of
outstanding Competitive Loans will not exceed the Total Commitment minus
the Dollar Equivalent of any amounts due under any outstanding Scheduled
Loans.

            (c)  Expiration Date.  Each Letter of Credit shall
expire at or prior to the close of business on the earlier of (i) the date
one year after the date of the issuance of such Letter of Credit (or, in
the case of any renewal or extension thereof, one year after such renewal
or extension) and (ii) the date that is five Business Days prior to the
Maturity Date.

            (d)  Participations.  By the issuance of a Letter of Credit (or
an amendment to a Letter of Credit increasing the amount thereof) and
without any further action on the part of the Issuing Bank or the Banks,
the Issuing Bank hereby grants to each Bank, and each Bank hereby acquires
from the Issuing Bank, a participation in such Letter of Credit equal to
such Bank's Applicable Commitment Percentage of the aggregate amount
available to be drawn under such Letter of Credit.  In consideration and in
furtherance of the foregoing, each Bank hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the account
of the Issuing Bank, such Bank's Applicable Commitment Percentage of each
LC Disbursement made by the Issuing Bank and not reimbursed by the Borrower
on the date due as provided in paragraph (e) of this Section, or of any
reimbursement payment required to be refunded to the Borrower for any
reason.  Each Bank acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit
is absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made
without any offset, abatement, withholding or reduction
whatsoever.

            (e)  Reimbursement.  If the Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse
such LC Disbursement by paying to the Administrative Agent an amount equal
to such LC Disbursement not later than 12:00 noon, New York City time, on
the date that such LC Disbursement is made, if the Borrower shall have
received notice of such LC Disbursement prior to 10:00 a.m., New York City
time, on such date, or, if such notice has not been received by the
Borrower prior to such time on such date, then not later than 12:00 noon,
New York City time, on (i) the Business Day that the
Borrower receives such notice, if such notice is received prior to 10:00
a.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if
such notice is not received prior to such time on the day of receipt;
provided that if such LC Disbursement is not less than $5,000,000, the
Borrower may, subject to the conditions to borrowing set forth herein,
request in accordance with Section 2.03 that such payment be financed with
an ABR Borrowing in an equivalent amount and, to the extent so financed,

                                                                192





the Borrower's obligation to make such payment
shall be discharged and replaced by the resulting ABR Borrowing.  If the
Borrower fails to make such payment when due, the Administrative Agent
shall notify each Bank of the applicable LC Disbursement, the payment then
due from the Borrower in respect thereof and such Bank's Applicable
Commitment Percentage thereof.  Promptly following receipt of such notice,
each Bank shall pay to the Administrative Agent its Applicable Commitment
Percentage of the payment then due from the Borrower, in the same manner as
provided in Section 2.02 with respect to Loans made by such Bank (and
Section 2.02 shall apply, mutatis mutandis, to the payment obligations of
the Banks), and the Administrative Agent shall promptly pay to the Issuing
Bank the amounts so received by it from the Banks.  Promptly following
receipt by the Administrative Agent of any payment from the Borrower
pursuant to this paragraph, the Administrative Agent shall distribute such
payment to the Issuing Bank or, to the extent that Banks have made payments
pursuant to this paragraph to reimburse the Issuing Bank, then to such
Banks and the Issuing Bank as their interests may appear.  Any payment made
by a Bank pursuant to this paragraph to reimburse the Issuing Bank for any
LC Disbursement (other than the funding of ABR Loans as contemplated above)
shall
not constitute a Loan and shall not relieve the Borrower of its obligation
to reimburse such LC Disbursement.

            (f)  Obligations Absolute.  The Borrower's obligation to
reimburse LC Disbursements as provided in paragraph (e) of this Section
shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Agreement under any and all
circumstances whatsoever and irrespective of (i) any lack of validity or
enforceability of any Letter of Credit or this Agreement, or any term or
provision
therein, (ii) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect, (iii) payment
by the Issuing Bank under a Letter of Credit against presentation of a
draft or other document that does not comply with the terms of such Letter
of Credit, or (iv) any other event or circumstance whatsoever, whether or
not similar to any of the foregoing, that might, but for the provisions of
this Section, constitute a legal or equitable discharge of, or provide a
right of setoff against, the Borrower's obligations hereunder.  Neither the
Administrative Agent, the Banks nor the Issuing Bank shall have any
liability or responsibility by reason of or in connection with the issuance
or transfer of any Letter of Credit or any payment or failure to make any
payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error,
omission, interruption, loss or delay in transmission or delivery of any
draft, notice or other communication under or relating to any Letter of
Credit (including any document required to make a drawing thereunder), any
error in interpretation of technical terms or any consequence arising from
causes beyond the control of the Issuing Bank.  Notwithstanding the
foregoing, the Issuing Bank shall not be excused from liability to the
Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to
the extent permitted by applicable law) suffered by the Borrower that are
caused by the Issuing Bank's failure to exercise care when determining
whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof.  The
parties hereto expressly agree that, in the absence of gross negligence or

                                                                193





wilful misconduct on the part of the Issuing Bank (as finally determined by
a court of competent jurisdiction), the Issuing Bank shall be deemed to
have exercised care in each such determination.  In furtherance of the
foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented which appear on their face to be
in substantial compliance with the terms of a Letter of Credit, the Issuing
Bank may, in its sole discretion, either accept and make payment upon such
documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make
payment upon such documents if such documents are not in strict compliance
with the terms of such Letter of Credit.

            (g)  Disbursement Procedures.  The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to
represent a demand for payment under a Letter of Credit.  The Issuing Bank
shall promptly notify the Administrative Agent and the Borrower by
telephone (confirmed by telecopy) of such demand for payment and whether
the Issuing Bank has made or will make an LC Disbursement thereunder;
provided that any failure to give or delay in giving such notice shall not
relieve the Borrower of its obligation to reimburse the Issuing Bank and
the Banks with respect to any such LC Disbursement.

            (h)  Interim Interest.  If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC
Disbursement in full on the date such LC Disbursement is made, the unpaid
amount thereof shall bear interest, for each day from and including the
date such LC Disbursement is made to but excluding the date that the
Borrower reimburses such LC Disbursement, at the rate per annum then
applicable to ABR Loans; provided that, if the Borrower fails to reimburse
such LC Disbursement when due pursuant to paragraph (e) of this Section,
then Section 2.11 shall apply.  Interest accrued pursuant to this paragraph
shall be for the account of the Issuing Bank, except that interest accrued
on and after the date of payment by any Bank pursuant to paragraph (e) of
this Section to reimburse the Issuing Bank shall be for the account of such
Bank to the extent of such payment.

            (i)  Replacement of the Issuing Bank.  The Issuing Bank may be
replaced at any time by written agreement among the Borrower, the
Administrative Agent, the replaced Issuing Bank and the successor Issuing
Bank.  The Administrative Agent shall notify the Banks of any such
replacement of the Issuing Bank.  At the time any such replacement shall
become effective, the Borrower shall pay all unpaid fees accrued for the
account of the replaced Issuing Bank pursuant to Section 2.08(c).  From and
after the effective date of any such replacement, (i) the successor Issuing
Bank shall have all the rights and obligations of the Issuing Bank under
this Agreement with respect to Letters of Credit to be issued thereafter
and (ii) references herein to the term "Issuing Bank" shall be deemed to
refer to such successor or to any previous Issuing Bank, or to such
successor and all previous Issuing Banks, as the context shall require.
After the replacement of an Issuing Bank hereunder, the replaced
Issuing Bank shall remain a party hereto and shall continue to have all the
rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not
be required to issue additional Letters of Credit.

            (j)  Cash Collateralization.  If any Event of Default shall
occur and be continuing, on the Business Day that the Borrower receives

                                                                194





notice from the Administrative Agent or the Required Banks (or, if the
maturity of the Loans has been accelerated, Banks with LC Exposures
representing greater than 51% of the total LC Exposure) demanding the
deposit of cash collateral pursuant to this paragraph, the Borrower shall
deposit in an account with the Administrative Agent, in the name of the
Administrative Agent and for the benefit of the Banks, an amount in cash
equal to the LC Exposure as of such date plus any accrued
and unpaid interest thereon; provided that the obligation to deposit such
cash collateral shall become effective immediately, and such deposit shall
become immediately due and payable, without demand or other notice of any
kind, upon the occurrence of any Event of Default with respect to the
Borrower described in clause (g) or (h) of Article VII.  Such deposit shall
be held by the Administrative Agent as collateral for the payment and
performance of the obligations of the Borrower under this Agreement.  The
Administrative Agent shall have exclusive dominion and control, including
the exclusive right of withdrawal, over such account.  Such deposits shall
not bear interest other than any interest earned on the investment of such
deposits, which investments shall be made at the option and sole
discretion of the Administrative Agent and at the Borrower's risk and
expense; provided that such deposits may be invested only in UnitedaStates
Treasury obligations having a maturity of less than or equal to one year or
other comparable money-market instruments.  Interest or profits, if any, on
such investments shall accumulate in such account.  Moneys in such account
shall be applied by the Administrative Agent to reimburse the Issuing Bank
for LC Disbursements for which it has not been reimbursed and, to the
extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Borrower for the LC Exposure at such time
or, if the maturity of the Loans has been accelerated (but subject to the
consent of Banks with LC Exposure representing greater than 51% of the
total LC Exposure), be applied to satisfy other obligations of the Borrower
under this Agreement.  If the Borrower is required to provide an amount of
cash collateral hereunder as a result of the occurrence of an
Event of Default, such amount (to the extent not applied as aforesaid)
shall be returned to the Borrower within three Business Days after all
Events of Default have been cured or waived.

            SECTION 2.07.  Refinancings.  The Borrower may refinance all or
any part of any Borrowing with a Borrowing of the same or a different
Interest Rate Type made pursuant to Section 2.04 or Section 2.05, subject
to the conditions and limitations set forth herein and elsewhere in this
Agreement, including refinancings of Competitive Borrowings with Revolving
Credit Borrowings and Revolving Credit Borrowings with Competitive
Borrowings.  Any Borrowing or part thereof so refinanced shall be deemed to
be repaid in accordance with Section 2.09 with the proceeds of a new
Borrowing hereunder and the proceeds of the new Borrowing, to the extent
they do not exceed the principal amount of the Borrowing being refinanced,
shall not be paid by the Banks to the Administrative Agent or by the
Administrative Agent to the Borrower pursuant to Section 2.02(c); provided,
however, that (a) if the principal amount extended by a Bank in a
refinancing is greater than the principal amount extended by such Bank in
the Borrowing being refinanced,
then such Bank shall pay such difference to the Administrative Agent for
distribution to the Banks described in clause (b) below, (b) if the
principal amount extended by a Bank in the Borrowing being refinanced is
greater than the principal amount being extended by such Bank in the
refinancing, the Administrative Agent shall return the difference to such
Bank out of amounts received pursuant to clause (a) above, (c) to the

                                                                195





extent any Bank fails to pay the Administrative Agent amounts due from it
pursuant to clause (a) above, any Loan or portion thereof being refinanced
with such amounts shall not be deemed repaid in
accordance with Section 2.09 and, to the extent of such failure, the
Borrower shall pay such amount to the Administrative Agent as required by
Section 2.09; and (d) to the extent the Borrower fails to pay to the
Administrative Agent any amounts due in accordance with Section 2.09 as a
result of the failure of a Bank to pay the Administrative Agent any amounts
due as described in clause (c) above, the portion of any refinanced Loan
deemed not repaid shall be deemed to be outstanding solely to the Bank
which has failed to pay the Administrative Agent amounts due from it
pursuant to clause (a) above to the full extent of such Bank's
portion of such Loan.

            SECTION 2.08.  Fees.  (a)  The Borrower agrees to pay to each
Bank, through the Administrative Agent, on each March 31, June 30,
September 30 and December 31 and on the Maturity Date or any earlier date
on which the Commitment of such Bank shall have been terminated and the
outstanding Loans of such Bank repaid in full, a facility fee (a "Facility
Fee") on the Commitment of such Bank, whether used or unused, and, after
the Commitment of such Bank shall have been terminated, on the outstanding
principal amount of such Bank's Revolving Credit Exposure, during the
quarter ending on the date such payment is due (or shorter period
commencing with the date hereof or ending with the Maturity Date or any
earlier date on which the Commitments shall have been terminated and the
outstanding Revolving Credit Exposure of such Bank eliminated), at the
Applicable Percentage from time to time in effect (as determined in
accordance with Section 2.10(e)).  All Facility Fees shall be computed on
the basis of the actual number of days elapsed in a year of 360 days.  The
Facility Fee due to each Bank shall commence to accrue on the Closing Date
and shall cease to accrue on the Maturity Date or any earlier date on
which the Commitment of such Bank shall have been terminated and the
outstanding Revolving Credit Exposure of such Bank eliminated.

            (b)  The Borrower agrees to pay the Administrative
Agent, for its own account, the fees provided for in the letter agreement
dated September 17, 1997, between the Borrower and the Administrative
Agent.

            (c)  The Borrower agrees to pay (i) to the Administrative Agent
for the account of each Bank a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the Applicable
Percentage used in determining the interest payable on LIBOR Revolving
Credit Loans, on the average daily amount of such Bank's LC Exposure
(excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Effective Date to
but excluding the later of the date on which such Bank's
Commitment terminates and the date on which such Bank ceases to have any LC
Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue
at the rate of 1/8 of 1% per annum on the average daily amount of the LC
Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Effective Date to
but excluding the later of the date of termination of the Commitments and
the date on which there ceases to be any LC Exposure, as well as the
Issuing Bank's standard fees with respect to the issuance, amendment,
renewal or extension of any Letter of Credit or processing of drawings
thereunder.  Participation fees and fronting fees shall be payable on each

                                                                196





March 31, June 30, September 30 and December 31, commencing on the first
such date to occur after the Effective Date; provided that all such fees
shall be payable on the date on which the Commitments terminate and any
such fees accruing after the date on which the Commitments terminate shall
be payable on demand.  Any other fees payable to the Issuing Bank pursuant
to this paragraph shall be payable within 10 days after demand.  All
participation fees and fronting fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).

            (d)  All fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent (or to the Issuing Bank, in
the case of fees payable to it) for distribution, if and as appropriate,
among the Banks.  Once paid, none of the fees shall be refundable under any
circumstances.

            SECTION 2.09.  Notes; Repayment of Loans.  The Competitive
Loans made by each Bank shall be evidenced by a single Competitive Note
duly executed on behalf of the Borrower, dated the Closing Date, in
substantially the form attached hereto as Exhibit B-1 with the blanks
appropriately filled, payable to the order of such Bank in a principal
amount equal to the Total Commitment.  The Revolving Credit Loans made by
each Bank shall be evidenced by a single Revolving Credit Note duly
executed on behalf of the Borrower, dated the Closing Date, in
substantially the form attached hereto as Exhibit B-2 with the blanks
appropriately filled, payable to the order of such Bank in a principal
amount equal to the Commitment of such Bank.  The
outstanding principal balance of each Competitive Loan or Revolving Credit
Loan, as evidenced by the relevant Note, shall be payable (a) in the case
of a Competitive Loan, on the last day of the Interest Period applicable to
such Competitive Loan and on the Maturity Date and (b) in the case of a
Revolving Credit Loan, on the Maturity Date in the currency of such Loan.
Each Competitive Note and each Revolving Credit Note shall bear interest
from the date thereof on the outstanding principal balance thereof as set
forth in Section 2.10.  Each Bank shall, and is hereby authorized by the
Borrower to, endorse on the schedule to the relevant Note held by such Bank
(or on a continuation of such schedule attached to each such Note and made
a part thereof), or otherwise to record in such Bank's internal
records, an appropriate notation evidencing the date, currency and amount
of each Competitive Loan or Revolving Credit Loan, as applicable, of such
Bank, each payment or prepayment of principal of any Competitive Loan or
Revolving Credit Loan, as applicable, and the other information provided on
such schedule; provided, however, that the failure of any Bank to make such
a notation or any error therein shall not in any manner affect the
obligation of the Borrower to repay the Competitive Loans or Revolving
Credit Loans, as applicable, made by such Bank in accordance with
the terms of the relevant Note.

            SECTION 2.10.  Interest on Loans.

            (a)  Subject to the provisions of Sections 2.11 and 2.12, the
Loans comprising each LIBOR Borrowing shall bear interest (computed on the
basis of the actual number of days elapsed over a year of 360 days) at a
rate per annum equal to (i) in the case of each LIBOR Revolving Credit
Loan, LIBOR for the Interest Period in effect for such Borrowing plus the
Applicable Percentage and (ii) in the case of each LIBOR Competitive Loan,
LIBOR for the Interest Period in effect for such Borrowing plus the Margin

                                                                197





offered by the Bank making such Loan and accepted by the Borrower pursuant
to Section 2.04.

            (b)  Subject to the provisions of Section 2.11, the Loans
comprising each ABR Borrowing shall bear interest (computed on the basis of
the actual number of days elapsed over a year of 365 or 366 days, as the
case may be, when determined by reference to the Prime Rate and over a year
of 360 days at all other times) at a rate per annum equal to the Alternate
Base Rate.

            (c)  Subject to the provisions of Section 2.11, each Fixed Rate
Loan shall bear interest at a rate per annum (computed on the basis of the
actual number of days elapsed over a year of 360 days) equal to the fixed
rate of interest offered by the Bank making such Loan and accepted by the
Borrower pursuant to Section 2.04.
            (d)  Interest on each Loan shall be payable on each Interest
Payment Date applicable to such Loan in the currency of such Loan.  The
LIBOR or the Alternate Base Rate for each Interest Period or day within an
Interest Period shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.

            (e)  The Applicable Percentage shall be determined based on the
Consolidated Interest Coverage Ratio at the end of the most recent fiscal
quarter for which financial statements have been delivered under Section
5.05 and based on the period of four fiscal quarters then ended treated as
a single accounting period.

            SECTION 2.11.  Interest on Overdue Amounts.  If the Borrower
shall default in the payment of the principal of or interest on any Loan or
any other amount becoming due hereunder, the Borrower shall on demand from
time to time pay interest, to the extent permitted by law, on such
defaulted amount up to (but not including) the date of actual payment
(after as well as before judgment) at a rate per annum computed on the
basis of the actual number of days elapsed over a year of 365 or 366 days,
as applicable, in the case of amounts bearing interest determined by
reference to the Prime Rate (and a year of 360 days in all other cases)
equal to (a) in the case of any Loan, the rate applicable to such Loan
under Section 2.10 plus 2% per annum and (b) in the case of any other
amount, the rate that would at the time be applicable to an ABR Loan under
Section 2.10 plus 2% per annum.

            SECTION 2.12.  Alternate Rate of Interest.  In the event, and
on each occasion, that on the day two Business Days prior to the
commencement of any Interest Period for a LIBOR Borrowing, the
Administrative Agent shall have determined that deposits in the applicable
currency in the amount of the requested principal amount of such LIBOR
Borrowing are not generally available in the London interbank market, or
that the rate at which such deposits are being offered will not adequately
and fairly reflect the cost to any Bank of making or maintaining such LIBOR
Loans during such Interest Period, or that reasonable means do not exist
for ascertaining the LIBOR Rate, the Administrative Agent shall, as soon as
practicable thereafter, give written or telecopier notice of such
determination to the Borrower and the Banks.  In the event of any such
determination,
until the Administrative Agent shall have determined that circumstances
giving rise to such notice no longer exist, (a) any request by the Borrower
for a LIBOR Competitive Borrowing pursuant to Section 2.04, and any request

                                                                198





for a LIBOR Revolving Credit Borrowing in an Alternate Currency, shall be
of no force and effect and shall be denied by the Administrative Agent and
(b) any request by the Borrower for a LIBOR Revolving Credit Borrowing in
Dollars pursuant to Section 2.05 shall be deemed to be a request for an ABR
Loan.  Each determination by the Administrative Agent hereunder shall be
conclusive absent manifest error; provided, however, that if a
determination is made that dollar deposits in the amount of the requested
principal  amount of such LIBOR Borrowing are not generally available in
the London interbank market, or that the rate at which such dollar deposits
are being offered will not adequately
and fairly reflect the cost to any Bank of making or maintaining such LIBOR
Loans during such Interest Period, or that reasonable means do not exist
for ascertaining the LIBOR Rate, the Administrative Agent shall promptly
notify the Borrower of such determination in writing and the Borrower may,
by notice to the Administrative Agent given within 24 hours of receipt of
such notice, withdraw the request for the LIBOR Competitive Borrowing or
the LIBOR Revolving Credit Borrowing, as applicable.

            SECTION 2.13.  Termination, Reduction, Increase
and Extension of Commitments.

            (a)  The Commitments shall be automatically terminated on the
earlier of (a) the Maturity Date or (b) 30 days after the date hereof if
the Closing Date has not occurred.

            (b)  Subject to Section 2.14(b), upon at least three Business
Days' prior irrevocable written or telecopy notice to the Administrative
Agent, the Borrower may at any time in whole permanently terminate, or from
time to time in part permanently reduce, the Total Commitment; provided,
however, that (i) each partial reduction of the Total Commitment shall be
in an integral multiple of $1,000,000 and in a minimum principal amount of
$10,000,000 and (ii) the Borrower shall not be entitled to make any such
termination or reduction that would reduce the Total Commitment to an
amount less than the aggregate outstanding principal amount of the
Competitive Loans.

            (c)  Each reduction in the Total Commitment hereunder shall be
made ratably among the Banks in accordance with their respective
Commitments.  The Borrower shall pay to the Administrative Agent for the
account of the Banks on the date of each termination or reduction (in the
case of a reduction, the "Reduction Date"), the Facility Fees on the amount
of the Commitments so terminated or reduced accrued to the date of such
termination or reduction.

            (d)  The Borrower may from time to time, and notwithstanding
any prior reductions in the Total Commitment by the Borrower, by notice to
the Administrative Agent (which shall promptly deliver a copy to each of
the Banks), request that the Total Commitment be increased by an amount
that is not less than $25,000,000 and will not result in the Total
Commitment under this Agreement and the Facility A Credit Agreement
exceeding $350,000,000 in the aggregate.  Each such notice shall set forth
the requested amount of the increase in the Total Commitment and the date
on which such increase is to become effective (which shall be not fewer
than 20adays after the date of such notice), and shall offer each Bank the
opportunity to increase its Commitment by its ratable share, based on the
amounts of the Banks' Commitments, of the requested increase in the Total
Commitment.  Each Bank shall, by notice to the Borrower and the

                                                                199





Administrative Agent given not more than 15 Business Days after the date of
the Borrower's notice, either agree to increase its Commitment by all or a
portion of the offered amount or decline to increase its Commitment (and
any Bank that does not deliver such a notice within such period of 15
Business Days shall be deemed to have declined to increase its Commitment);
provided, however, that no Bank may agree to increase its Commitment
hereunder unless it shall have agreed to ratably increase its Commitment
under the Facility A Credit Agreement (if the Facility A Credit Agreement
is then in effect).  In the event that, on the
15th Business Day after the Borrower shall have delivered a notice pursuant
to the first sentence of this paragraph, the Banks shall have agreed
pursuant to the preceding sentence to increase their Commitments by an
aggregate amount less than the increase in the Total Commitment requested
by the Borrower, the Borrower shall have the right to arrange for one or
more banks or other financial institutions (any such bank or other
financial institution being called an "Augmenting Bank"), which may include
any Bank, to extend Commitments or increase their existing Commitments in
an aggregate amount equal to all or part of the unsubscribed amount;
provided that each Augmenting Bank, if not already a Bank hereunder, shall
be subject to the approval of the
Borrower and the Administrative Agent (which approval shall not be
unreasonably withheld) and shall execute all such  documentation as the
Administrative Agent shall specify to evidence its status as a Bank
hereunder.  If (and only if) Banks (including Augmenting Banks) shall have
agreed to increase their Commitments or to extend new Commitments in an
aggregate amount not less than $25,000,000, such increases and such new
Commitments shall become effective on the date specified in the notice
delivered by the Borrower pursuant to the first sentence of this paragraph,
and shall be deemed added to the Commitments set forth in Schedule 2.01
hereof.  Notwithstanding the foregoing, no increase in the Total Commitment
(or in the Commitment of any Bank) shall become effective under this
paragraph unless, on the date of such increase, (i) the conditions set
forth in paragraphs (b) and (c) of Sectiona4.01 shall be satisfied (with
all references in such paragraphs to a
Borrowing being deemed to be references to such increase) and the
Administrative Agent shall have received a certificate to that effect dated
such date and executed by a Financial Officer of the Borrower and (ii) on
the effective date of such increase the Total Commitment under and as
defined in the Facility A Credit Agreement shall be proportionately
increased (if the Facility A Credit Agreement is then in effect) in
accordance with the terms of such Agreement.  Following any increase in the
Commitments of any of the Banks pursuant to this paragraph, any Revolving
Credit Loans outstanding prior to the effectiveness of such increase shall
continue outstanding until the ends of the respective interest periods
applicable thereto, and shall than be repaid or refinanced with new
Revolving Credit Loans made pursuant to Sections 2.01 and 2.05.

            (e)  (i)  The Borrower may, by notice to the Administrative
Agent (which shall promptly deliver a copy to each of the Banks) not less
than 30adays and not more than 60 days prior to the second anniversary of
the Execution Date (the "Anniversary Date"), request that the Banks extend
the Maturity Date for an additional two years from the Maturity Date then
in effect hereunder (the "Existing Maturity Date").  Each Bank shall, by
notice to the Borrower and the Administrative Agent given not more than 15
Business Days after the date of the Borrower's notice, advise the Borrower
whether or not such Bank agrees to such extension (and any Bank that does
not advise the Borrower on or before the 15th Business Day after the date

                                                                200





of the Borrower's notice shall be deemed to have advised the Borrower that
it will not agree to such extension).

            (ii)  The Borrower shall have the right on or before the
Anniversary Date to require any Bank which shall have advised or been
deemed to advise the Borrower that it will not agree to an extension of the
Maturity Date (each a "Non-Extending Bank") to transfer without recourse
(in accordance with and subject to the restrictions contained in Section
2.24, except that the $3,500 processing fee set forth in Section
2.24(b)(iii) shall be paid by the Borrower) all its interests, rights and
obligations under this Agreement to one or more other banks or other
financial institutions (any such bank or other financial institution being
called a "Substitute Bank"), which may include any Bank; provided that (i)
such Substitute Bank, if not already
a Bank hereunder, shall be subject to the approval of the Borrower and the
Administrative Agent (which approval shall not be unreasonably withheld)
and shall execute all such documentation as the Administrative Agent shall
specify to evidence its status as a Bank hereunder, (ii) such assignment
shall become effective as of the Anniversary Date and (iii) the Borrower
shall pay to such Non-Extending Bank in immediately available funds on the
effective date of such assignment the principal of and interest accrued to
the date of payment on the Loans made by it hereunder and all other amounts
accrued for its account or owed to it hereunder.

            (iii)  If (and only if) Banks (including Substitute Banks)
holding Commitments that represent at least 66 2/3% of the Total Commitment
shall have agreed to extend the Existing Maturity Date (the "Continuing
Banks"), then, (i)athe Maturity Date shall be extended to the date two
years after the Existing Maturity Date, and (ii) the Commitment of each
Non-Extending Bank (subject to any transfer and assignment pursuant to
paragraph (b) above) shall terminate (but such Bank shall continue to be
entitled to the benefits of Sections 2.16, 2.18, 2.23 and 9.05), and all
Loans of such Non-Extending Bank shall become due and
payable, together with all interest accrued thereon and all other amounts
owed to such Bank hereunder, on the Existing Maturity Date.

            Notwithstanding the foregoing, no extension of the
Maturity Date shall be effective with respect to any Bank unless, on and as
of the Anniversary Date, the conditions set forth in paragraphs (b) and (c)
of Section 4.01 shall be satisfied (with all references in such paragraphs
to a Borrowing being deemed to be references to such extension) and the
Administrative Agent shall have received a certificate to that effect,
dated the Anniversary Date, and executed by a Financial Officer of the
Borrower.

            SECTION 2.14.  Prepayment of Loans.  (a)  Prior to the Maturity
Date the Borrower shall have the right at any time to prepay any Revolving
Credit Borrowing, or, with the consent of the particular Bank or Banks to
receive the prepayment, any Competitive Borrowing (which consent may be
withheld in such Bank's or Banks' sole discretion), in whole or in part,
subject to the requirements of Section 2.18 and 2.19 but otherwise without
premium or penalty, upon prior written or telecopy notice to the
Administrative Agent before 12:00 noon, New York City time, at least one
Business Day prior to such prepayment in the case of an ABR Loan and at
least three Business Days prior to such prepayment in the case of a LIBOR
Loan or Fixed Rate Loan; provided, however, that each such partial
prepayment shall be in a minimum aggregate principal amount of $5,000,000

                                                                201





(or the Dollar
Equivalent thereof) and, in the case of a Borrowing denominated in Dollars,
an integral multiple of $1,000,000.

            (b)  On the date of any termination or reduction of the Total
Commitment pursuant to Section 2.13, the Borrower shall pay or prepay so
much of the Revolving Credit Loans as shall be necessary in order that the
aggregate Credit Exposures will not exceed the Total Commitment following
such termination or reduction.  Subject to the foregoing, any such payment
or prepayment shall be applied to such Borrowing or Borrowings as the
Borrower shall  select.  All prepayments under this Section 2.14(b) shall
be subject to Sections 2.18 and 2.19.

            (c)  On any date when the aggregate Credit Exposures (after
giving effect to any Borrowings effected on such date) exceed the Total
Commitment minus the Dollar Equivalent of any amounts due under any
outstanding Scheduled Loans, the Borrower shall make a mandatory prepayment
of the Revolving Credit Loans in such amount as may be necessary to
eliminate such excess.  Any prepayments required by this paragraph shall be
applied to outstanding ABR Loans up to the full amount thereof before they
are applied to outstanding LIBOR Revolving Credit Loans.

            (d)  Each notice of prepayment shall specify the specific
Borrowing, the prepayment date and the aggregate principal amount of each
Borrowing to be prepaid, shall be irrevocable and shall commit the Borrower
to prepay such Borrowing by the amount stated therein.  All prepayments
under this Section 2.14 shall be accompanied by accrued interest on the
principal amount being prepaid to the date of prepayment.

            SECTION 2.15.  Eurodollar Reserve Costs.  The Borrower shall
pay to the Administrative Agent for the account of each Bank, so long as
such Bank shall be required under regulations of the Board to maintain
reserves with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (as defined in Regulation D), additional interest
on the unpaid principal amount of each LIBOR Loan made to the Borrower by
such Bank, from the date of such Loan until such Loan is paid in full, at
an interest rate per annum equal at all times during the Interest Period
for such Loan to the remainder obtained by subtracting (i) LIBOR for such
Interest Period from (ii) the rate obtained by multiplying LIBOR as
referred to in clause (i) above by the Statutory Reserves of such Bank for
such
Interest Period.  Such additional interest shall be determined by such Bank
and notified to the Borrower (with a copy to the Administrative Agent) not
later than five Business Days before the next Interest Payment Date for
such Loan, and such additional interest so notified to the Borrower by any
Bank shall be payable to the Administrative Agent for the account of such
Bank on each Interest Payment Date for such Loan.

            SECTION 2.16.  Reserve Requirements; Change in
Circumstances.

            (a)  Notwithstanding any other provision herein, if after the
date of this Agreement any change in applicable law or regulation or in the
interpretation or administration thereof by any Governmental Authority
charged with the interpretation or administration thereof (whether  or not
having the force of law) (i) shall subject any Bank (for purposes of this
Section 2.16, the defined term "Bank" shall be deemed to include as

                                                                202





applicable the Issuing Bank) to, or increase the net amount of, any tax,
levy, impost, duty, charge, fee, deduction or withholding with respect to
any LIBOR Loan, Fixed Rate Loan, or Letter of Credit, or shall change the
basis of taxation of payments to any Bank
of the principal of or interest on any LIBOR Loan, Fixed Rate Loan, or
Letter of Credit made by such Bank or any other fees or amounts payable
hereunder (other than (x) taxes imposed on the overall net income of such
Bank by the jurisdiction in which such Bank has its principal office or by
any political subdivision or taxing authority therein (or any tax which is
enacted or adopted by such jurisdiction, political subdivision or taxing
authority as a direct substitute for any such taxes) or (y) any tax,
assessment, or other governmental charge that would not have been
imposed but for the failure of any Bank to comply with any certification,
information, documentation or other reporting requirement), (ii) shall
impose, modify or deem applicable any reserve, special deposit or similar
requirement (other than requirements as to which the Borrower is obligated
to make payments pursuant to Section 2.15) against assets of, deposits with
or for the account of, or credit extended by, such Bank, or (iii)ashall
impose on such Bank or the London interbank market any other condition
affecting this Agreement or any LIBOR Loan, Fixed Rate Loan, or Letter of
Credit made by such Bank, and the result of any of the foregoing shall be
to increase the cost to such Bank of issuing, participating in, making or
maintaining any LIBOR Loan, Fixed Rate Loan, or Letter of Credit, as the
case may
be, or to reduce the amount of any sum received or receivable by such Bank
hereunder (whether of principal, interest or otherwise) in respect thereof
by an amount deemed in good faith by such Bank to be material, then the
Borrower shall pay such additional amount or amounts as will compensate
such Bank for such increase or reduction to such Bank upon demand by such
Bank.

            (b)  If, after the date of this Agreement, any Bank shall have
determined in good faith that the applicability of any law, rule,
regulation or guideline adopted after the date hereof pursuant to or
arising out of the July 1988 report of the Basle Committee on Lending
Regulations and Supervisory Practices entitled "International Convergence
of Capital Measurement and
Capital Standards", or the adoption after the date hereof of any applicable
law, rule, regulation or guideline regarding capital adequacy, or any
change therein, or any change in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by
any Bank (or any lending office of such Bank) with any request or directive
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 capital or on the
capital of the Bank's holding company, if any, as a consequence of its
obligations
hereunder to a level below that which such Bank (or holding company) could
have achieved but for such adoption, change or compliance (taking into
consideration such Bank's policies or the policies of its holding company,
as the case may be, with respect to capital adequacy) by an amount deemed
by such Bank to be material, then, from time to time, the Borrower shall
pay to such Bank such additional amount or amounts as will compensate such
Bank for such reduction upon demand by such Bank.

            (c)  A certificate of a Bank setting forth in reasonable detail

                                                                203





(i) such amount or amounts as shall be necessary to compensate such Bank
(or participating banks or other entities pursuant to Sections 2.06 and
2.24) as specified in paragraph (a) or (b) above, as the case may be, and
(ii) the calculation of such amount or amounts under clause (c)(i), shall
be delivered to the Borrower and shall be conclusive absent manifest error.
The Borrower shall pay such Bank the amount shown as due on any such
certificate within 30 days after its receipt of the same.

            (d)  Failure on the part of any Bank to demand compensation for
any increased costs or reduction in amounts received or receivable or
reduction in return on capital with respect to any Interest Period shall
not constitute a waiver of such Bank's rights to demand compensation for
any increased costs or reduction in amounts received or receivable or
reduction in return on capital with respect to such Interest Period or any
other Interest Period.  The protection of this Section 2.16 shall be
available to each Bank regardless of any possible contention of invalidity
or inapplicability of the law, regulation or condition which shall have
been imposed.

            SECTION 2.17.  Change in Legality.  (a)  Notwith standing
anything to the contrary herein contained, if any change in any law or
regulation or in the interpretation thereof by any Governmental Authority
charged with the administration or interpretation thereof shall make it
unlawful for any Bank to make or maintain any LIBOR Loan or to give effect
to its obligations to make LIBOR Loans as contemplated hereby, then, by
written notice to the Borrower and to the Administrative Agent, such Bank
may:

            (i) declare that LIBOR Loans will not thereafter
      be made by such Bank hereunder, whereupon such Bank
      shall not submit a Competitive Bid in response to a
      request for LIBOR Competitive Loans and the Borrower
      shall be prohibited from requesting LIBOR Revolving
      Credit Loans from such Bank hereunder unless such
      declaration is subsequently withdrawn; and

            (ii) require that all outstanding LIBOR Loans made
      by it and denominated in Dollars be converted to ABR
      Loans, in which event (A) all such LIBOR Loans shall be
      automatically converted to ABR Loans as of the
      effective date of such notice as provided in Section
      2.17(b) and (B) all payments and prepayments of
      principal which would otherwise have been applied to
      repay the converted LIBOR Loans shall instead be
      applied to repay the ABR Loans resulting from the
      conversion of such LIBOR Loans.

            (iii) declare all outstanding LIBOR Loans made by it
      and denominated in an Alternate Currency due and payable in
      full.

            (b)  For purposes of this Section 2.17, a notice to the
Borrower by any Bank pursuant to Section 2.17(a) shall be effective on the
date of receipt thereof by the Borrower.

            (c)  Notwithstanding the foregoing, if the affected Bank can
continue to offer LIBOR Loans by transferring LIBOR Loans to another

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existing lending office of such Bank, such Bank agrees to so transfer the
LIBOR Loans unless doing so would, in its good faith judgment, subject it
to any expense or liability or be otherwise disadvantageous to it.

            SECTION 2.18.  Indemnity.  The Borrower shall indemnify each
Bank against any loss or reasonable expense which such Bank may sustain or
incur as a consequence of (v) any failure by the Borrower to fulfill on the
date of any Borrowing hereunder the applicable conditions set forth in
Article IV, (w) any failure by the Borrower to borrow hereunder after a
notice of Borrowing pursuant to Article II has been given, (x) any payment,
prepayment or conversion of a LIBOR Loan or Fixed Rate Loan required by any
other provision of this Agreement or otherwise made on a date other than
the last day of the applicable Interest Period, (y) any default in the
payment or prepayment of the
principal amount of any Loan or any part thereof or interest accrued
thereon, as and when due and payable (at the due date thereof, by notice of
prepayment or otherwise), or (z) the occurrence of any Event of Default,
including, but not limited to, any loss or reasonable expense sustained or
incurred or to be sustained or incurred in liquidating or employing
deposits from third parties acquired to effect or maintain such Loan or any
part thereof as a LIBOR Loan or a Fixed Rate Loan.  Such loss or reasonable
expense shall include an amount equal to the excess, if any, as reasonably
determined by each Bank of (i) its cost of obtaining the funds for the Loan
being paid, prepaid or converted or not borrowed (based on LIBOR or, in the
case of a Fixed Rate
Loan, the fixed rate of interest applicable thereto) for the period from
the date of such payment, prepayment or conversion or failure to borrow to
the last day of the Interest Period for such Loan (or, in the case of a
failure to borrow, the Interest Period for the Loan which would have
commenced on the date of such failure to borrow) over (ii) the amount of
interest (as reasonably determined by such Bank) that would be realized by
such Bank in re-employing the funds so paid, prepaid or converted or not
borrowed for such period or Interest Period, as the case may be.  A
certificate of each Bank setting forth any amount or
amounts which such Bank is entitled to receive pursuant to this Section
2.18 shall be delivered to the Borrower and shall be conclusive, if made in
good faith, absent manifest error.  The Borrower shall pay each Bank the
amount shown as due on any certificate containing no manifest error within
30 days after its receipt of the same.

            SECTION 2.19.  Pro Rata Treatment.  Except as permitted under
Sections 2.13, 2.15 and 2.17 with respect to interest, (i) each Revolving
Credit Borrowing, each payment or prepayment of principal of any Revolving
Credit Borrowing, each payment of interest on the Revolving Credit Loans,
each payment of the Facility Fees, each reduction of the Commitments and
each refinancing of any Borrowing with, conversion of any Borrowing to or
continuation of any Borrowing as a Revolving Credit Borrowing of any
Interest Rate Type shall be allocated pro rata among the Banks in
accordance with their respective Commitments (or, if such Commitments shall
have expired or been terminated, in accordance with the respective
principal amount of their outstanding Revolving Credit Loans).  Each
payment of principal of any Competitive Borrowing shall be allocated pro
rata among the Banks participating in such Borrowing in accordance with the
respective principal amounts of their outstanding Competitive Loans
comprising such Borrowing. Each payment of interest on any Competitive
Borrowing shall be allocated pro rata among the Banks participating in such
Borrowing in accordance with the respective amounts of accrued and unpaid

                                                                205





interest on their outstanding Competitive Loans comprising such Borrowing.
For purposes of determining the available Commitments of the Banks at any
time, each outstanding Competitive Borrowing shall be deemed to have
utilized the Commitments of the Banks (including those Banks that shall not
have made Loans as part of such Competitive Borrowing) pro rata in
accordance with such respective Commitments.  Each Bank agrees that in
computing such Bank's portion of any Borrowing to be made hereunder, the
Administrative Agent may, in its discretion, round each Bank's percentage
of such Borrowing computed in accordance with Section 2.01, to the next
higher or lower whole dollar amount (or amount in the basic unit of the
applicable Alternate Currency).

            SECTION 2.20.  Right of Setoff.  If any Event of Default shall
have occurred and be continuing and any Bank shall have requested the
Administrative Agent to declare the Notes immediately due and payable
pursuant to Article VII, each Bank is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Bank to or for the credit or the account of the Borrower against any of and
all the Obligations now or hereafter existing under this Agreement and the
Notes held by such Bank, irrespective of whether or not such Bank shall
have made any demand under this Agreement or such Notes and although such
obligations may be unmatured.  Each Bank agrees promptly to notify the
Borrower after any such setoff and application made by such Bank, but the
failure to give such notice shall not affect
the validity of such setoff and application.  The rights of each Bank under
this Section 2.20 are in addition to other rights and remedies (including
other rights of setoff) which such Bank may have.

            SECTION 2.21.  Sharing of Setoffs.  Each Bank agrees that if it
shall, through the exercise of a right of banker's lien, setoff or
counterclaim against the Borrower including, but not limited to, a secured
claim under Section 506 of Title 11 of the United States Code or other
security or interest arising from, or in lieu of, such secured claim,
received by such Bank under any applicable bankruptcy, insolvency or other
similar law or otherwise, obtain payment (voluntary or involuntary) in
respect of any Revolving Credit Note held by it (it being understood that
each Bank shall be permitted to exercise any such right with respect to any
obligation of the Borrower to it other than the Revolving Credit Notes
prior to the exercise of such right with respect to any Revolving Credit
Note) as a result of
which the unpaid principal portion of all the Revolving Credit Notes held
by it shall be proportionately less than the unpaid principal portion of
all the Revolving Credit Notes held by any other Bank, it shall be deemed
to have simultaneously purchased from such other Bank a participation in
each Revolving Credit Note held by such other Bank, so that the aggregate
unpaid principal amount of each Revolving Credit Note and participations in
each Revolving Credit Note held by each Bank shall be in the same
proportion to the aggregate unpaid principal amount of all
the Revolving Credit Notes then outstanding as the principal amount of all
the Revolving Credit Notes held by it prior to such exercise of banker's
lien, setoff or counterclaim was to the principal amount of all Revolving
Credit Notes outstanding prior to such exercise of banker's lien, setoff or
counterclaim; provided, however, that if any such purchase or purchases or
adjustments shall be made pursuant to this Section 2.21 and the payment
recovered by a Bank giving rise thereto shall thereafter be recovered from

                                                                206





such Bank, such purchase or purchases or adjustments shall be rescinded to
the extent of such recovery and the purchase price or prices or adjustments
paid by such Bank restored to such Bank without interest.  The Borrower
expressly consents to the foregoing arrangements and agrees that any Bank
holding a participation in a Revolving Credit Note deemed to have been so
purchased may exercise any and all rights of banker's lien, setoff or
counterclaim to the extent of the participation so purchased in such
Revolving Credit Note with respect to any and all moneys owing by the
Borrower as fully as if such Bank had made a Loan directly to the Borrower
in the amount of the participation.

            SECTION 2.22.  Payments.  The Borrower shall make each payment
hereunder and under any instrument delivered hereunder not later than 12:00
noon, New York City time (or 12:00 noon, London time, in respect of
payments with respect to any Borrowing denominated in any Alternate
Currency), on the day when due in lawful money of the United States (in
freely transferable dollars) to the Administrative Agent at its offices at
270 Park Avenue, New York, New York 10017, (or at its offices at Trinity
Tower, 9 Thomas Moore Street, London, with respect to any Borrowing
denominated in an Alternate Currency) for the account of the Banks, in
Federal or other immediately available funds.  Any payment received after
such time on any day shall be deemed to be received on the next Business
Day.  The Administrative Agent shall remit each Bank's portion of the
Borrower's payment to such Bank promptly after receipt thereof.  Except as
set forth in the definition of "Interest Period" as applied to LIBOR Loans,
if any payment to be made hereunder or under any Note becomes due and
payable on a day other than a Business Day, such payment may be made on the
next succeeding Business Day and such extension of time shall in such case
be included in computing interest, if any, in connection with such payment.

            SECTION 2.23.  United States Withholding.

            (a)  Prior to the date of the initial Loans hereunder, and from
time to time thereafter if requested by the Borrower or the Administrative
Agent or required because, as a result of a change in law or a change in
circumstances or otherwise, a previously delivered form or statement
becomes incomplete or incorrect in any material respect, each Bank (for
purposes of this Section 2.23, the defined term "Bank" shall be
deemed to include as applicable the Issuing Bank) organized under the laws
of a jurisdiction outside the United States shall provide, if legally able
to do so and if applicable, the Administrative Agent and the Borrower with
complete, accurate and duly executed forms or other statements prescribed
by the Internal Revenue Service of the United States certifying such Bank's
exemption from, or entitlement to a reduced rate of, United States
withholding taxes (including backup withholding taxes) with respect to all
payments to be made to such Bank hereunder and under the Notes.

            (b)  The Borrower and the Administrative Agent shall be
entitled to deduct and withhold any and all present or future taxes or
withholdings, and all liabilities with respect thereto, from payments
hereunder or under the Notes, if and to the extent that the Borrower or the
Administrative Agent in good faith determines that such deduction or
withholding is required by the law of the United States, including, without
limitation, any applicable treaty of the United States.  In the event the
Borrower or the Administrative Agent shall so determine that deduction or
withholding of taxes is required, it shall advise the affected Bank as to
the basis of such determination prior to

                                                                207





actually deducting and withholding such taxes.  In the event the Borrower
or the Administrative Agent shall so deduct or withhold taxes from amounts
payable hereunder, it (i) shall timely pay to or deposit with the
appropriate taxing authority in a timely manner the full amount of taxes it
has deducted or withheld, (ii) shall promptly provide to the Banks written
evidence of payment of such taxes to, or the deposit thereof with, the
appropriate taxing authority and a statement setting forth the amount of
taxes deducted or withheld, the applicable rate, and any other information
or documentation reasonably requested by the Banks from whom the taxes were
deducted or withheld, and (iii) shall forward to such Banks any payment or
deposit of the deducted or
withheld taxes as may be issued from time to time by the appropriate taxing
authority.  Unless the Borrower and the Administrative Agent have received
forms or other documents reasonably satisfactory to them indicating that
payments hereunder or under the Notes are not subject to United States
withholding tax or are subject to such tax at a rate reduced by an
applicable tax treaty, the Borrower or the  Administrative Agent may
withhold taxes from such payments at the applicable statutory rate in the
case of payments to or for any Bank organized under the laws of a
jurisdiction outside the United States.

            (c)  Each Bank agrees (i) that as between it and the Borrower
or the Administrative Agent, it shall be the Person to deduct and withhold
taxes, and to the extent required by law it shall deduct and withhold
taxes, on amounts that such Bank may remit to any other Person(s) by reason
of any undisclosed transfer or assignment of an interest in this Agreement
to such other Person(s) pursuant to Section 2.24 and (ii) to indemnify the
Borrower and the Administrative Agent and any officers, directors, agents,
or employees of the Borrower or the Administrative Agent against and to
hold them harmless from any tax, interest, additions to tax, penalties,
reasonable counsel and accountants' fees, disbursements or payments arising
from the assertion by any appropriate taxing authority of any claim against
them relating to a failure to withhold taxes as required by law with
respect to amounts described in clause (i) of this paragraph (c).

            (d)  Each assignee of a Bank's interest in this Agreement in
conformity with Section 2.24 shall be bound by this Section 2.23, so that
such assignee will have all of the obligations and provide all of the forms
and statements and all indemnities, representations and warranties required
to be given under this Section 2.23.

            (e) In the event that any withholding or similar taxes shall
become payable as a result of any change in any statute, treaty, ruling,
judicial decision, determination or regulation or other change in law
(other than a change in the rate of taxes imposed on the overall net income
of any Bank) occurring after the Initial Date in respect of any sum payable
hereunder or under any other Fundamental Document to any Bank or the
Administrative Agent or as a result of any payment being made by a
Guarantor organized in or subject to any taxing jurisdiction outside the
United States (i) the sum payable by the Borrower shall be increased as may
be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.23)
such Bank or the Administrative Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions and (iii) the Borrower
shall pay the full amount deducted to the relevant taxation authority or
other authority in accordance with

                                                                208





applicable law.  For purposes of this Section 2.23, the term "Initial Date"
shall mean (i) in the case of the Administrative Agent, the date hereof,
(ii) in the case of each Bank as of the date hereof, the date hereof and
(iii) in the case of any other Bank, the date of the Assignment and
Acceptance pursuant to which it became a Bank.

            SECTION 2.24.  Participations; Assignments.

            (a)  Each Bank (for purposes of this Section 2.24, the defined
term "Bank" shall be deemed to include as applicable
the Issuing Bank) may without the consent of the Borrower sell
participations to one or more banks or other entities in all or a portion
of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans owing to it and the Notes held by
it); provided, however, that (i) such Bank's obligations under this
Agreement shall remain unchanged, (ii) such Bank shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) the participating banks or other entities shall be
entitled to the cost protection provisions contained in Section 2.16 and
Section 2.18 but shall not be entitled to receive pursuant to such
provisions an amount larger than its share of the amount to which the Bank
granting such participation would have been entitled and (iv) the Borrower,
the Administrative Agent and the other Banks shall continue to deal solely
and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement; provided further that each Bank shall
retain the sole right and responsibility vis-a-vis the Borrower to enforce
the obligations of the Borrower relating to the Loans or Letters
of Credit and shall retain all voting rights, including the right to
approve any amendment, modification or waiver of any provision of this
Agreement other than amendments, modifications or waivers with respect to
any Facility Fees, the amount of principal or the rate of interest payable
on, or the maturity of, the Loans or Letters of Credit as applicable to the
participating banks or other entities (as to which such participating banks
or other entities may be afforded the right to vote).

            (b)  Each of the Banks may (but only with the prior written
consent of the Borrower and the Issuing Bank, which consent shall not be
unreasonably withheld), and (unless the assignee is a bank or trust company
with a combined capital and surplus of at least $100,000,000) with the
written consent of the Administrative Agent, which consent shall not be
unreasonably withheld, assign to one or more banks or other entities all or
a portion of its interests, rights and obligations under this Agreement
(including all or a portion of its Commitment and the same portion of the
Revolving Credit Loans at the time owing to it and the Revolving Credit
Note held by it); provided, however, that (i) each such assignment shall be
of a constant, and not a varying, percentage of the assigning Bank's rights
and obligations under this Agreement, and (ii) the amount of the Commitment
of the assigning Bank subject to each such assignment (determined as of the
date the Assignment and Acceptance with respect to such assignment is
delivered to the Bank) shall be either the entire Commitment of such Bank
or a portion thereof in a principal amount of $10,000,000 or a larger
integral multiple of $1,000,000, and (iii) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register (as defined below), an Assignment
and Acceptance, together with any Note or Notes subject to such assignment
and a processing and recordation fee of $3,500.  Upon such execution,
delivery, acceptance and recording, from and after the effective date

                                                                209





specified in each Assignment and Acceptance, which effective date shall be
not earlier than five Business Days after the date of acceptance and
recording by the Administrative Agent, (x) the assignee thereunder shall be
a party hereto and, to the extent provided in such Assignment and
Acceptance, have the rights and obligations of a Bank hereunder and under
the other Fundamental Documents and (y) the assigning Bank thereunder
shall, to the extent provided in such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of the
assigning Bank's rights and obligations under this Agreement, such
assigning Bank shall cease to be a party hereto).
Notwithstanding the foregoing, any Bank assigning its rights and
obligations under this Agreement may retain any Competitive Loans made by
it outstanding at such time, and in such case shall retain its rights
hereunder in respect of any Loans so retained until such Loans have been
repaid in full in accordance with this Agreement.

            (c)  Notwithstanding the other provisions of this
Section 2.24, each Bank may at any time assign all or a portion of its
interests, rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment and the same portion of the
Loans at any time owing to it and the Notes held by it) to (i) any
Affiliate of such Bank described in clause (b) of the definition of
Affiliate or (ii) any other Bank hereunder.

            (d)  By executing and delivering an Assignment and Acceptance,
the assigning Bank thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows:  (i) other
than the representation and warranty that it is the legal and beneficial
owner of the interest being assigned thereby free and clear of any adverse
claim, the assigning Bank makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the
execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Fundamental Documents or any other
instrument or document furnished pursuant hereto or thereto; (ii) such Bank
assignor makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower or any of the
Subsidiaries or any other obligor under the Fundamental Documents or the
performance or observance by the Borrower (on behalf of itself or the
Subsidiaries) or any of the Guarantors or any other obligor under the
Fundamental Documents of any of their respective obligations under the
Fundamental Documents or any other instrument or document furnished
pursuant hereto or thereto; (iii) such assignee confirms that it has
received a copy of this
Agreement, together with copies of the most recent financial statements
delivered pursuant to Sections 5.05(a) and 5.05(b) (or if none of such
financial statements shall have then been delivered, then copies of the
financial statements referred to in Section 3.05 hereof) and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon the
assigning Bank, the Administrative Agent or any other person that has
become a Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assignee
appoints and authorizes the Administrative Agent to take such action on its

                                                                210





behalf as the Administrative Agent deems appropriate and to exercise such
powers under the Fundamental Documents as are delegated to the
Administrative Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; and (vi) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the
terms of this Agreement are required to be performed by it as a Bank.

            (e)  The Administrative Agent shall maintain at its address at
which notices are to be given to it pursuant to Section 10.01 a copy of
each Assignment and Acceptance and a register for the recordation of the
names and addresses of the Banks and the Commitments of, and principal
amount of the Loans owing to, each Bank from time to time (the "Register").
The entries in the Register shall be conclusive, in the absence of manifest
error, and the Borrower, the Administrative Agent and the Banks may treat
each person whose name is recorded in the Register as a Bank hereunder for
all purposes of the Fundamental Documents.  The Register shall be available
for inspection by the
Borrower or any Bank at any reasonable time and from time to time upon
reasonable prior notice.

            (f)  Upon its receipt of an Assignment and Acceptance executed
by an assigning Bank and an assignee together with any Notes subject to
such assignment and evidence of the Borrower's written consent to such
assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in the form of ExhibitaE hereto, (i)
accept such Assignment and Acceptance, (ii) record the information
contained therein in
the Register and (iii) give prompt written notice thereof to the Borrower.
Within five Business Days after receipt of the notice, the Borrower, at its
own expense, shall execute and deliver to the Bank, in exchange for the
surrendered Notes, as applicable (x) a new Competitive Note to the order of
such assignee in an amount equal to the Total Commitment and a new
Revolving Credit Note to the order of such assignee in an amount equal to
the portion of the Commitment assumed by it pursuant to such Assignment and
Acceptance and, (y) a new Revolving Credit Note to the order of the
assigning Bank in an amount equal to the Commitment retained by it
hereunder.  Such new Revolving Credit Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such assumed
Commitment and retained Commitment, such new Notes shall be dated the date
of the surrendered Notes and shall otherwise be in substantially
the forms of ExhibitsaB-1 and B-2 hereto, as the case may be.  In addition,
the Borrower will promptly, at its own expense, execute such amendments to
the Fundamental Documents to which it is a party and such additional
documents and cause the Guarantors to execute amendments to the Fundamental
Documents to which it is a party, and take such other actions as the
Administrative Agent or the assignee Bank may reasonably request in order
to confirm
that such assignee Bank is entitled to the full benefit of the guarantees
contemplated hereby to the extent of such assignment.

            (g)  Notwithstanding any other provision herein, any Bank may,
in connection with any assignment or participation or proposed assignment
or participation pursuant to this Section 2.24, disclose to the assignee or
participant or proposed assignee or participant, any information relating
to the Borrower or any of the Subsidiaries furnished to such Bank or the
Administrative Agent by or on behalf of the Borrower; provided that prior
to any such disclosure, each such assignee or participant or proposed

                                                                211





assignee or participant shall agree in writing to preserve the
confidentiality of any confidential information relating to the Borrower or
any of their Subsidiaries
received from such Bank on the terms of Section 10.11.

            (h)  Any Bank may at any time pledge or assign all or any
portion of its rights under this Agreement and the Notes to a Federal
Reserve Bank.


                               ARTICLE III

                     Representations and Warranties

            The Borrower represents and warrants to the Banks
that:

            SECTION 3.01.  Organization; Corporate Powers.


            (a)  Each of the Borrower and the Subsidiaries is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization;

            (b) each of the Borrower, and the Subsidiaries
(i) has the corporate power and authority to own its property and to carry
on its business as now conducted and (ii) is qualified to do business in
every jurisdiction where such qualification is necessary except where the
failure so to qualify would not have a materially adverse effect on the
condition, financial or otherwise, of the Borrower or of the Borrower and
its Consolidated Subsidiaries taken as a whole;

            (c)  each of the Borrower and the Guarantors has the
corporate power to execute, deliver and perform its obligations under the
Fundamental Documents to which it is a party and the Borrower has the
corporate power to borrow hereunder and to execute and deliver the Notes;
and

            (d) each of the Guarantors has the corporate power and
authority to guarantee the Obligations as contemplated by Article VIII
hereof.

            SECTION 3.02.  Authorization.  The execution, delivery and
performance of this Agreement and the other Fundamental Documents to which
the Borrower or any of the Guarantors is or is to be a party, by each such
party; in the case of the Borrower, the Borrowings hereunder and the
execution and delivery of the Notes; and in the case of each Guarantor, the
guaranty of the Obligations as contemplated in Article VIII (a) have been
duly authorized by all requisite corporate action on the part of the
Borrower and each Guarantor; and (b) will not (i) violate (A) any law, rule
or regulation of the United States or any state or political subdivision
thereof, the certificate of
incorporation or By-laws of the Borrower or any of the Consolidated
Subsidiaries, (B) any applicable order of any court or other agency of
government or (C) any indenture, any agreement for borrowed money, any
bond, note or other similar instrument or any other material agreement or
contract to which the Borrower or any of the Consolidated Subsidiaries is a

                                                                212





party or by which the Borrower or any of the Consolidated Subsidiaries or
any of their respective properties are bound, (ii)abe in conflict with,
result in a breach of or constitute (with notice or lapse of time or
both) a default under any such indenture, agreement, bond, note, instrument
or other material agreement or contract or (iii) result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon
any property or assets of the Borrower or any of the Consolidated
Subsidiaries except that, in the case of all the above, for any such
violations, conflicts, breaches, defaults, liens, charges or encumbrances
which would not have a material adverse effect on the Borrower and its
Consolidated Subsidiaries taken as a whole or adversely
affect the rights or interest of the Banks.

            SECTION 3.03.  Enforceability.  This Agreement and each other
Fundamental Document to which the Borrower or any of the Guarantors is a
party, is a legal, valid and binding obligation of each such party thereto,
and is enforceable against each such party thereto in accordance with its
terms, except as the enforceability thereof may be limited by the effect of
any applicable bankruptcy, insolvency or similar laws affecting creditors'
rights generally and by general principles of equity.

            SECTION 3.04.  Governmental Approvals.  No action, consent or
approval of, or registration or filing with, or any other action by any
Governmental Authority is required in connection with the execution,
delivery and performance by the Borrower and any of the Guarantors of this
Agreement or of any other Fundamental Document to which it is a party, the
Borrowings hereunder, the guarantee by the Guarantors of the Obligations
under Article VIII or the execution and delivery of the Notes.

            SECTION 3.05.  Financial Statements and Condition.

            (a)  The Borrower has heretofore furnished to each of the Banks
audited Consolidated balance sheets of the Borrower and its Consolidated
Subsidiaries as of December 31, 1996 and unaudited condensed Consolidated
balance sheets of the Borrower and its Consolidated Subsidiaries as of June
30, 1997 and the related audited (or, in the case of the fiscal period
ended June 30, 1997, unaudited condensed) Consolidated statements of
income, Consolidated statements of stockholders' equity and Consolidated
statements of cash flows for each of the fiscal periods then ended,
together with related notes and supplemental information.  The audited
consolidated balance sheet, statement of income, statement of stockholders'
equity and statement of cash flows are referred to herein as the "Audited
Financial Statements."  The unaudited condensed consolidated balance sheet,
statement of income, statement of stockholders' equity and statement of
cash flows are referred to herein as the "Unaudited Financial Statements."
The Audited Financial Statements and the notes thereto were prepared in
accordance with generally accepted accounting principles consistently
applied, and present fairly the Consolidated financial position and results
of operations and cash flows of the Borrower and its Consolidated
Subsidiaries as of the dates and for the periods indicated, and such
balance sheets and related notes show all known direct liabilities and all
known contingent liabilities of a material nature of the
Borrower and its Consolidated Subsidiaries as of such dates which are
required to be included in such financial statements and the notes thereto
in accordance with generally accepted accounting principles.  The Unaudited
Financial Statements reflect all adjustments (consisting only of normal
accountingaadjustments) which in the opinion of management of the Borrower

                                                                213





are necessary for a fair presentation of the financial position, results of
operations and cash flows of the Borrower for the period presented.

            (b)  The Borrower has delivered to each of the Banks proaforma
consolidated financial forecasts for the years 1997-1999, consisting of an
income statement, balance sheet, and statement of cash flows together with
a statement of the underlying assumptions.  Such proaforma financial
statements are based on good faith estimates and assumptions believed to be
reasonable by senior management of the Borrower as of the Execution Date.

            (c)  None of the Borrower or any Guarantor (each, a "Credit
Party") is entering into the arrangements contemplated hereby and by the
other Fundamental Documents or intends to make any transfer or incur any
obligations hereunder or thereunder, with actual intent to hinder, delay or
defraud either present or future creditors.  On and as of the date of the
initial Borrowing hereunder on a Pro Forma Basis after giving effect to all
Indebtedness (including the Loans hereunder and the Indebtedness incurred
by each Credit Party in connection therewith) (w) each Credit Party expects
the cash available to such Credit Party and its Subsidiaries on a
Consolidated basis, after taking into account all other anticipated uses of
the cash of such Credit Party (including the payments on or in respect of
debt referred to in clause (y) of this Section 3.05(c)), will be sufficient
to satisfy all final judgments for money damages which have been
docketed against such Credit Party and such Subsidiaries or which such
Credit Party believes may be rendered against such Credit Party and such
Subsidiaries in any action in which such Credit Party is a defendant on the
Closing Date (taking into account the reasonably anticipated maximum amount
of any such judgment and such Credit Party's belief  as to the earliest
time at which such judgment might be entered); (x) the sum of the present
fair saleable value of the assets of each Credit Party and its Subsidiaries
on a Consolidated basis will exceed the probable liability of such Credit
Party and such Subsidiaries on their debts (including their obligations
under the Guaranty); (y) no
Credit Party and its Subsidiaries on a Consolidated basis will have
incurred or intends to incur, or believes that it will incur, debts beyond
its ability to pay such debts as such debts mature (taking into account the
timing and amounts of cash to be received by such Credit Party and such
Subsidiaries from any source, and amounts to be payable on or in respect of
debts of such Credit Party and such Subsidiaries and the amounts referred
to in clause (w)); and (z) each Credit Party and its Subsidiaries on a
Consolidated basis have sufficient capital with which to conduct their
present and proposed business and the property of such Credit Party and
such Subsidiaries does not constitute
unreasonably small capital with which to conduct their present or proposed
business.  For purposes of this Section 3.05, "debt" means any liability on
a claim, and "claim" means (i) right to payment whether or not such right
is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed (other than those being disputed in good
faith), 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 is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured.
For purposes of this Section 3.05, "present fair saleable value" means the
amount that may be realized if any person's assets are sold as an entirety
with reasonable promptness in an arm's-length transaction under conditions
for the sale of comparable business enterprises obtaining at the time of

                                                                214





determination.

            SECTION 3.06.  No Material Adverse Change.  There has been no
material adverse change in the business, assets, condition (financial or
otherwise) or results of operations of the Borrower and its Consolidated
Subsidiaries taken as a whole since December 31, 1996 except as previously
disclosed in writing to the Banks prior to the Execution Date.

            SECTION 3.07.  Title to Properties.  All assets of the Borrower
and the Subsidiaries are free and clear of Liens, except such as are
permitted by Section 6.01.

            SECTION 3.08.  Litigation.  There are no actions, suits or
proceedings (whether or not purportedly on behalf of the Borrower or any of
the Subsidiaries), pending or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of the Subsidiaries at law or in
equity or before or by any Federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic
or foreign, which involve any of the transactions herein contemplated, or
which have a reasonable likelihood of being determined adversely and if
determined adversely to the Borrower or any of the Subsidiaries, would
result in a material adverse
change in the business, operations, prospects, properties, assets or
condition (financial or otherwise) of the Borrower and its Consolidated
Subsidiaries taken as a whole and neither the Borrower nor any of the
Subsidiaries is in default with respect to any judgment, writ, injunction,
decree, rule or regulation of any court or Federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which default would have a materially
adverse effect on the Borrower and its Consolidated Subsidiaries
taken as a whole or have an adverse effect on the Borrower's or the
Guarantors' ability to comply with this Agreement or any other Fundamental
Document.

            SECTION 3.09.  Tax Returns.  The Borrower and each of the
Subsidiaries have timely filed or caused to be filed all Federal, state and
local tax returns which, to the knowledge of the Borrower or such
Subsidiary after due inquiry, are required to be filed and have paid or
caused to be paid all taxes required to be paid with respect to such
returns or any assessment received by it or by any of them to the extent
that such taxes have become due, except taxes the validity of which are
being contested in good faith by appropriate actions or proceedings and
with respect to which the Borrower or such Subsidiary, as the case may be,
shall have made such reserve, or other adequate provision, if any, as shall
be required by generally accepted accounting principles, and except for the
filing of such returns as to which the failure to file will not, either
individually or
in the aggregate, have a material adverse effect on the Borrower and its
Consolidated Subsidiaries taken as a whole, or have an adverse effect on
the Borrower's or the Guarantors' ability to comply with this Agreement or
any other Fundamental Document.

            SECTION 3.10.  Agreements.

            (a)  None of the Borrower nor any of the Subsidiaries is
subject to any charter or other corporate restriction materially and
adversely affecting its business, properties, assets, operations or

                                                                215





condition (financial or otherwise) or a party to any agreement or
instrument materially and adversely affecting the business, properties,
assets, operations or condition (financial or otherwise) of the Borrower
and its Consolidated Subsidiaries taken as a whole.  None of the Borrower
or any of the Subsidiaries is in default in the performance, observance or
fulfillment of any agreement or instrument for borrowed money by which it
is bound, or any other agreement or instrument by which it is bound which
individually or in the aggregate materially and adversely affects the
business, properties, assets, operations or condition (financial or
otherwise) of the Borrower and its Consolidated Subsidiaries taken as a
whole.

            (b)  The Administrative Agent has been provided at
or prior to the Execution Date (i) copies of all credit agreements,
indentures and other agreements related to Indebtedness for borrowed money
of the Borrower or any of the Subsidiaries in an amount greater than
$10,000,000 and, to the extent requested by the Administrative Agent,
copies of any other credit agreements, indentures and other agreements
related to Indebtedness for borrowed money of the Borrower or any of the
Subsidiaries and (ii)aaccess to (and copies of, to the extent requested)
any other contracts or purchase agreements (including collective bargaining
agreements) which are material to the Borrower or the Subsidiaries.

            SECTION 3.11.  Employee Benefit Plans.

            (a)  The Borrower and each of its ERISA Affiliates is in
compliance in all material respects with the applicable provisions of ERISA
and the Code and the regulations and published interpretations thereunder.
No Reportable Event has
occurred with respect to any Plan (other than Plans which have been
terminated and as to which the Borrower and its ERISA Affiliates do not
have any significant remaining obligations or liabilities in connection
therewith) as to which the Borrower or any of its ERISA Affiliates was
required to file a report with the PBGC, and the present value of all
benefit liabilities under each Plan maintained by the Borrower or any of
its ERISA Affiliates (based on those assumptions used to fund such Plan)
did not, as of the last annual valuation date applicable thereto, exceed by
a material amount the value of the assets of such Plan.  No plan has
incurred an "accumulated funding deficiency" within
the meaning of Section 412(a) or sought or obtained a waiver under Section
412(d)(1) or an extension of time under Section 412(e) of the Code.  No
suit, action or other litigation or investigation or a claim (excluding
claims for benefits incurred in the ordinary course of Plan activities) has
been threatened or brought against or with respect to any Plan.  To the
best of the knowledge of the Borrower and each of its ERISA Affiliates (i)
no payment required to be made under any Plan would be nondeductible under
Section 280G of the Code, and (ii) in the case of each Plan
intended to qualify under Section 401(a) of the Code, all amendments
required by the Tax Reform Act of 1986 and subsequent legislation for the
continuing qualification of such Plan have been approved and adopted.

            (b)  None of the Borrower or any of its ERISA Affiliates has
incurred any Withdrawal Liability that materially adversely affects the
financial condition of the Borrower and its Consolidated Subsidiaries taken
as a whole.  None of the Borrower or any of its ERISA Affiliates has
received any notification that any Multiemployer Plan is in reorganization
or has been terminated, within the meaning of Title IV of ERISA, and no

                                                                216





Multiemployer Plan is reasonably expected to be in reorganization or to be
terminated, where such reorganization has resulted or can reasonably be
expected to result in an increase in the contributions required to be made
to such Plan that would materially and adversely affect the financial
condition of the Borrower and its Consolidated Subsidiaries taken as a
whole.

            SECTION 3.12.  Investment Company Act; Public Utility Holding
Company Act; Federal Power Act.  None of the Borrower or the Subsidiaries
is or will during the term of this Agreement be (i) an "investment company"
as the term is defined in the Investment Company Act of 1940, as amended,
(ii) subject to regulation under the Investment Company Act of 1940, as
amended, (iii) "holding company" as that term is defined in the Public
Utility Holding Company Act of 1935 or (iv) subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act or any
foreign, Federal or local statute or regulation limiting its ability to
incur indebtedness for money borrowed or
guarantee such indebtedness as contemplated hereby.

            SECTION 3.13.  Federal Reserve Regulations.  Subject to Section
4.01(d), none of the Borrower or any of the Subsidiaries is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any margin stock
(within the meaning of Regulation U).  No part of the proceeds of the Loans
hereunder will be used, whether directly or indirectly, and whether
immediately, incidentally or ultimately, for any purpose that violates, or
is inconsistent with, the provisions of Regulations G, T, U or X.  If
requested by any Bank, the Borrower will furnish to such Bank a statement,
in conformity with the
regulations, on Federal Reserve Form U-1 referred to in said
Regulation U.

            SECTION 3.14.  Defaults; Compliance with Laws.  None of the
Borrower or any of the Subsidiaries is in default under this Agreement or
otherwise in default under any other agreements with respect to borrowed
money in an aggregate outstanding principal amount of $10,000,000 or more.
The Borrower and each of the Subsidiaries has conducted its business and
affairs so as to comply in all respects material to the Borrower and its
Consolidated Subsidiaries taken as a whole with all applicable Federal,
state and local laws and regulations.

            SECTION 3.15.  Use of Proceeds.  Proceeds of the
Loans will be used for the purposes referred to in Section 2.03.

            SECTION 3.16.  Affiliated Companies.  Set forth on Schedule
3.16 hereto is a complete and accurate list of all of the Subsidiaries of
the Borrower and other persons in which the Borrower or a Subsidiary holds
voting stock or a similar interest (other than companies as to which the
Borrower or a Subsidiary, as applicable, owns, directly or indirectly, less
than 5% of the outstanding voting stock), showing as of the Closing Date as
to Subsidiaries (i) the jurisdiction of its incorporation, (ii) the number
of shares of each class of capital stock authorized, (iii) the number of
such shares outstanding, (iv) the percentage of such shares held directly
or indirectly by the Borrower or a
Subsidiary, as applicable, and (v) the number of such shares covered by
outstanding options, warrants, or rights held directly or indirectly by the
Borrower or a Subsidiary, as applicable.  Except as set forth on Schedule

                                                                217





3.16, all of the outstanding capital stock of all of such Subsidiaries has
been validly issued, is fully paid and nonassessable and is owned as set
forth in Schedule 3.16 (directly or indirectly) by the Borrower or a
Subsidiary, except for shares required to be owned by other persons under
applicable foreign law (which shares do not exceed, for any such
Subsidiary, 5% of the total outstanding shares of such Subsidiary), free
and clear of all Liens and any options,
warrants and other similar rights except as contemplated by the Existing
Credit Agreements.

            SECTION 3.17.  Environmental Liabilities.

            (a)  Except as set forth on Schedule 3.17 hereof, the
Borrower and the Consolidated Subsidiaries have not used, stored, treated,
transported, manufactured, refined, handled, produced or disposed of any
Hazardous Materials on, under, at, from, or in any way affecting any of
their properties or assets, or otherwise, in any manner which at the time
of the action in question violated any Environmental Law governing the use,
storage, treatment, transportation, manufacture, refinement, handling,
production or disposal of Hazardous Materials and to the best of the
Borrower's knowledge, but without independent
inquiry, no prior owner of such property or asset or any tenant, subtenant,
prior tenant or prior subtenant thereof has used Hazardous Materials on,
from or affecting such property or asset, or otherwise, in any manner which
at the time of the action in question violated any Environmental Law
governing the use, storage, treatment, transportation, manufacture,
refinement, handling, production or disposal of Hazardous Materials, except
in each instance such violations as in the aggregate would not have a
material adverse effect upon the Borrower and the Consolidated Subsidiaries
taken as a whole.

            (b)  Except as set forth on Schedule 3.17, the Borrower and its
Consolidated Subsidiaries do not have any
obligations or liabilities, matured or not matured, absolute or contingent,
assessed or unassessed, which such would reasonably be expected to have a
materially adverse effect on the business or financial condition of the
Borrower and its Consolidated Subsidiaries taken as a whole and, except as
set forth in Schedule 3.17, no claims have been made against the Borrower
or any of its Consolidated Subsidiaries during the past five years and no
presently outstanding citations or notices have been issued against the
Borrower or its Consolidated Subsidiaries, where such would reasonably be
expected to have a materially adverse effect on the business or financial
condition of the Borrower and its Consolidated Subsidiaries taken as a
whole, which in either case have been or are imposed by reason of or based
upon any provision of any Environmental Laws, including,
without limitation, any such obligations or liabilities relating to or
arising out of or attributable, in whole or in part, to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of any Hazardous Materials by the Borrower or the Consolidated
Subsidiaries, in their respective capacities as such, or any of their
respective employees, agents, representatives or predecessors in interest
in connection with or in any way arising from or relating to the Borrower,
the Consolidated Subsidiaries or any of their respective properties, or
relating to or arising from or attributable, in whole or in
part, to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of any such substance, by any
other Person at or on or under any of the real properties owned or used by

                                                                218





the Borrower, the Consolidated Subsidiaries or any other location where
such would have a materially adverse effect on the business or financial
condition of the Borrower and its Consolidated Subsidiaries taken as whole.

            SECTION 3.18.  Disclosure.  Neither this Agreement nor any
agreement, document, certificate or written statement furnished to any Bank
or to the Administrative Agent for the benefit of the Banks by or on behalf
of the Borrower or any of the Subsidiaries in connection with the
transactions contemplated hereby, at the time it was furnished contained
any untrue statement of a material fact or omitted to state a material
fact, under the circumstances under which it was made, necessary in order
to make the statements contained herein or therein not misleading provided
that no representation or warranty other than that set forth in Section
3.05(b) is made with respect to the
pro forma consolidated financial forecasts of the Borrower for the years
1997-1999.  At the date hereof, there is no fact known to the Borrower
which materially and adversely affects, or in the future is reasonably
expected to materially and adversely affect, the business, assets or
financial condition, of the Borrower and its Consolidated Subsidiaries
taken as a whole (other than facts or conditions affecting the economy
generally).

            SECTION 3.19.  Insurance.  As of the date of this
Agreement, all insurance maintained by the Borrower and its
Subsidiaries on their insurable properties and all other insurance
maintained by them is in full force and effect and all premiums required to
have been paid have been duly paid.


                               ARTICLE IV

                          Conditions of Lending

            SECTION 4.01.  All Borrowings.  The obligations of each of the
Banks to make Loans and the Issuing Bank to issue, amend, renew or extend
any Letter of Credit hereunder on the date of each Borrowing or issuance,
amendment, renewal or extension of any Letter of Credit hereunder,
including each refinancing of any Loan with a new Loan as contemplated by
Section 2.07, shall be subject to the following conditions precedent:

            (a)  Notice.  The Administrative Agent shall have
received a notice of such Borrowing as required by Section 2.04 or 2.05, as
applicable.

            (b)  Representations and Warranties.  The representations and
warranties set forth in Article III (except, in the case of a refinancing
of a Borrowing with another Borrowing that does not increase the aggregate
principal amount of the Loans of any Bank outstanding, the representations
contained in Sections 3.06 and 3.08) shall be true and correct in all
material respects on and as of the date of such Borrowing or issuance,
amendment, renewal or extension of such Letter of Credit with the same
effect as if made on and as of such date, except to the extent that such
representations and warranties expressly relate to an earlier date.

            (c)  No Default.  The Borrower and each of the
Guarantors shall be and the Borrower shall have caused each of the
Subsidiaries to be in compliance with all of the terms and provisions set

                                                                219





forth herein or in any other Fundamental Document on its part to be
observed or performed, and immediately after such Borrowing no Event of
Default or event which upon notice or lapse of time or both would
constitute an Event of Default shall have occurred and be continuing.

            (d)  Margin Requirements.  If the proceeds of any
Loans (or Letter of Credit) are to be used, directly or indirectly, to
purchase or carry any margin stock or to extend credit or refund
indebtedness incurred for such purpose, the Borrower shall furnish to the
Administrative Agent an opinion of counsel reasonably satisfactory to the
Administrative Agent to the effect set forth in paragraph 7 of Exhibit D-1
to this Agreement.

            (e)  Additional Documents.  The Banks and Issuing
Bank shall have received from the Borrower on the date of each Borrowing
such documents and information as they may reasonably request relating to
the satisfaction of such conditions.

Each Borrowing or issuance, amendment, renewal or extension
of Letter of Credit hereunder shall be deemed to be a
representation and warranty by the Borrower on the date of
such Borrowing or issuance, amendment, renewal or extension
of Letter of Credit as to the matters specified in
paragraphs (b) and (c) of this Section 4.01.

            SECTION 4.02. Closing Date.  The obligations of the Banks to
make Loans and the Issuing Bank to issue Letters of Credit hereunder are
subject to the following additional conditions precedent:

            (a)  Closing Date.  The Closing Date shall have occurred on or
before the 30th day following the Execution Date.

            (b)  Notes.  On the Closing Date, each Bank shall have received
a duly executed Competitive Note and Revolving Credit Note complying with
the provisions of Section 2.09.

            (c)  Opinions of Counsel.  On the Closing Date each Bank and
the Issuing Bank shall have received the favorable written opinions of
Morgan, Lewis & Bockius LLP, special counsel for the Borrower and the
Guarantors and of J. Patrick Clark, Esq., Secretary and General Counsel of
the Borrower, dated the Closing Date, addressed to each Bank and
satisfactory to Cravath, Swaine & Moore, counsel to the Administrative
Agent, substantially in the forms of Exhibits D-1 and D-2, respectively.

            (d)  Corporate Documents.  On or before the Closing Date, each
Bank and the Issuing Bank shall have received (i) copy of the Certificate
of Incorporation, as amended, of each of the Borrower and each Guarantor,
certified as of a recent date by the Secretary of State of the state of
incorporation of such person; (ii) certificate of such Secretary of State,
dated as of a recent date, as to the good standing of, and payment of taxes
by, the Borrower and each Guarantor, as applicable, and as to the charter
documents of the Borrower and each Guarantor, as applicable, on file in the
office of each such Secretary of State; (iii) certificate of the Secretary
of each of the Borrower and each Guarantor, each dated the Closing Date and
certifying (A) that attached thereto is a true and complete copy of the
By-laws of the Borrower or such Guarantor, as applicable, as in effect on
the date of such certification, (B) that attached thereto is a true and

                                                                220





complete copy of resolutions adopted by the Board of Directors of the
Borrower or such Guarantor, authorizing the execution, delivery and
performance of the Fundamental Documents to which it is a party, (C) that
the Certificate of Incorporation of the Borrower or such Guarantor, as
applicable, has not been amended since the date of the last amendment
thereto indicated on the applicable certificate of the Secretary of State
furnished pursuant to clause (ii) above and (D) as to the incumbency and
specimen signature of each officer of the Borrower or such Guarantor, as
applicable, executing the Fundamental Documents to which it is a party, or
any other document delivered in connection herewith or therewith, as the
case may be, (each such
certificate to contain a certification by another officer of the Borrower
or such Guarantor, as applicable, as to the incumbency and signature of the
officer signing the certificate referred to in this clause (iii)); and (iv)
such other documents as any Bank or counsel for the Administrative Agent
may reasonably request.

            (e)  Required Consents and Approvals.  Except as noted on
Schedule 4.02, all required consents and approvals shall have been obtained
with respect to the transactions contemplated hereby from all Governmental
Authorities with jurisdiction over the business and activities of the
Borrower and the Subsidiaries.

            (f)  Federal Reserve Regulations.  The Administrative Agent
shall be satisfied that the provisions of Regulations G, T, U and X of the
Board will not be violated by the transactions contemplated hereby.

            (g)  Contribution Agreement.  The Administrative Agent shall
have received the Contribution Agreement, duly
executed by the Borrower and each Guarantor.

            (h)  Fees and Expenses.  All accrued but unpaid
Facility Fees and fees due to the Administrative Agent, all as contemplated
by Section 2.08, and all amounts referred to in Section 10.04 then due,
shall have been or shall be simultaneously paid in full.

            (i)  Existing Indebtedness.  Concurrently with the
transactions contemplated hereby, on the Closing Date the Existing
Revolving Credit Agreement shall have been modified to provide for the
reduction of the Commitments of the Banks thereunder (as defined therein)
to an amount not greater than the amount of the Scheduled Loans outstanding
thereunder at such time and further reduction thereof by the amount of any
payment or prepayment of principal of such Scheduled Loans.


            (j)  Officer's Certificate.  The Banks shall have received a
certificate of a Financial Officer dated the Closing Date certifying
compliance with Section 4.01(b) and (c) hereof.

            (k)  Other Documents.  The Administrative Agent shall have
received such other documents as the Administrative Agent may reasonably
require.


                                ARTICLE V

                          Affirmative Covenants

                                                                221





            The Borrower covenants and agrees with each Bank that, so long
as this Agreement shall remain in effect or the principal of or interest on
any Note or any other expenses or amounts payable hereunder shall be unpaid
or the Commitments are in effect, unless the Required Banks otherwise
consent in writing, it will, and it will cause each of its Subsidiaries to:

            SECTION 5.01.  Corporate Existence.  Do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its
corporate existence, material rights, licenses, permits and franchises;
provided that nothing in this Section 5.01 shall prevent the abandonment or
termination of the corporate existence, rights or franchises of any
Subsidiary or the Borrower if such abandonment or termination would not
have a material adverse effect upon the business, assets, liabilities,
financial condition, results of operations or business prospects 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 Fundamental Document.

            SECTION 5.02.  Maintenance of Property.  At all times maintain
and preserve all property used or useful in working order and condition,
and from time to time make, or cause to be made, all needful and proper
repairs, renewals and replacements thereto, so that the business carried on
in connection therewith may be properly conducted at all times, except to
the extent that the failure to do so would not have a material adverse
effect upon the business, assets, liabilities, financial condition, results
of operations or prospects of the Borrower and its Subsidiaries taken as a
whole or on the ability of the Borrower or any Guarantor to perform its
obligations hereunder or under any other Fundamental Document.

            SECTION 5.03.  Insurance.  (a) Keep its insurable properties
adequately insured at all times; (b) maintain such other insurance, to such
extent and against such risks, including fire and other risks insured
against by extended coverage, as is customary with companies in the same or
similar businesses; (c) maintain in full force and effect public liability
insurance against claims for personal injury or death or property damage
occurring upon, in, about or in connection with the use of any properties
owned, occupied or controlled by the Borrower or any Subsidiary, as the
case may be, in such amount as the Borrower or such Subsidiary, as the case
may be, shall reasonably deem necessary; and (d) maintain such other
insurance as may be required by law.  The Borrower and the Subsidiaries may
self-insure to the extent customary with companies in the same or similar
businesses.

            SECTION 5.04.  Obligations and Taxes.  Pay all its
indebtedness and obligations promptly and in accordance with their terms
except to the extent that the failure to do so would not have a material
adverse effect upon the business, assets, liabilities, financial condition,
results of operations or prospects of the Borrower and its Subsidiaries
taken as a whole or on the ability of the Borrower or any Guarantor to
perform its obligations hereunder or under any other Fundamental Document
and pay and discharge promptly all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits or in
respect of its property (and use its best efforts to do so), prior to the
time penalties would attach thereto, as well as all lawful claims for
labor, materials and supplies or otherwise which, if unpaid, might become a
Lien or charge upon such properties or any part thereof; provided, however,
that none of the Borrower or any of the Subsidiaries shall be required to

                                                                222





pay and discharge or to cause to be paid and discharged any such tax,
assessment, charge, levy or claim so long as the validity or amount thereof
shall be contested in good
faith by appropriate actions or proceedings and the Borrower or such
Subsidiary, as the case may be, shall have made such reserve, or other
adequate provision, if any, as shall be required by generally accepted
accounting principles with
respect to any such tax, assessment, charge, levy or claim so contested.

            SECTION 5.05.  Financial Statements; Reports, etc.
Furnish to the Banks:

            (a) As soon as available, but in any event within 90 days after
the end of each fiscal year of the Borrower, the Consolidated balance sheet
as of the end of such fiscal year of the Borrower and its Consolidated
Subsidiaries, the related Consolidated statements of income and the
Consolidated statements of cash flows for the year then ended of the
Borrower and its Consolidated Subsidiaries, the foregoing Consolidated
financial statements to be (x) examined by, and to carry the report
reasonably acceptable to the Banks of KPMG Peat Marwick or other
independent public accountants of similar nationally recognized standing
reasonably acceptable to the Banks, and to be in the form of the financial
statements included in he Borrower's annual report on Form 10-K filed with
the Securities and Exchange Commission for the fiscal year ended December
31, 1996, and (y) accompanied by a certificate of said accountants stating
that in making the examination necessary for expressing their opinion on
such statements they have obtained no knowledge, of a financial or
accounting nature, of any violation of any of the terms or
provisions of this Agreement or any other Fundamental Document, or of the
occurrence of any condition or event which, with notice or lapse of time or
both, would constitute an Event of Default, or, if such accountants shall
have obtained knowledge of any such violation, condition or event, they
shall specify in such certificate all such violations, conditions and
events, and the nature thereof, it being understood that said accountants
shall not be liable to anyone for failure to obtain such knowledge.  All
such Consolidated financial statements shall be compiled in reasonable
detail in accordance with generally accepted accounting principles applied
on a consistent basis throughout the periods reflected therein, except as
stated therein, and fairly present the financial position and results of
operations and cash flows of the Borrower and its Consolidated Subsidiaries
for the respective periods indicated.

            (b) As soon as available, but in any event within 60 days after
the end of each of the first three fiscal quarters of each fiscal year, an
unaudited Consolidated condensed balance sheet, and the related unaudited
Consolidated condensed statements of income for such quarter and for the
then elapsed portion of the fiscal year, and the Consolidated condensed
statements of cash flows of the Borrower and its Consolidated Subsidiaries
for the then-elapsed portion of the fiscal year, the foregoing Consolidated
condensed financial statements to be in
reasonable detail (comparable to the Consolidated condensed financial
statements for the quarter ended June 30, 1997 heretofore delivered to the
Banks) and stating (with respect
to the unaudited Consolidated condensed statements of income and cash
flows) in comparative form the figures as at the end of and for the
comparable periods of the preceding fiscal year and to be certified by a
Financial Officer of the Borrower in his capacity as such as being to the

                                                                223





best of his knowledge and belief correct and complete and as presenting
fairly the consolidated financial position and results of operations of the
Borrower and its Consolidated Subsidiaries in accordance with generally
accepted
accounting principles (other than the omission of the notes to the
financial statements required by generally accepted accounting principles)
applied on a basis consistent with
previous fiscal years, in each case subject to normal year-end adjustments.

            (c) Concurrently with (a) and (b) above, a certificate of a
Financial Officer of the Borrower, certifying in his capacity as such (i)
that to the best of his knowledge and belief no Event of Default, or event
which with notice or lapse of time or both would constitute such an Event
of Default or event has occurred, and, if so, specifying the nature and
extent thereof and specifying any corrective action taken or proposed to be
taken with respect thereto, (ii) that to the best of his knowledge and
belief the Borrower is in compliance with the covenants set forth in
Sections 6.09, 6.10 and 6.11, (iii)setting forth in reasonable detail
calculations demonstrating compliance with Section 6.01(x), 6.02,
6.04(iii), and 6.06(c), and (iv) setting forth the calculation in
reasonable detail of the Consolidated Interest Coverage Ratio as at the end
of such fiscal quarter and for the period of four fiscal quarters then
ended treated as a single accounting period, and any change in pricing
anticipated to become effective pursuant to such notice.

            (d) Promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent or made
available generally by the Borrower to its public security holders, of all
regular and periodic reports and all registration statements and
prospectuses, if any, filed by the Borrower with any securities exchange or
with the Securities and Exchange Commission, or any comparable foreign
bodies, and of all
press releases and other statements made available generally by any of them
to the public concerning material developments in the business of the
Borrower.

            (e) Promptly, from time to time, such other information
regarding the financial condition and business operations of the Borrower
and its Consolidated Subsidiaries as any Bank may reasonably request (with
a copy of any such written information provided to the Administrative
Agent).

            SECTION 5.06.  Defaults and Other Notices.  Give the
Administrative Agent prompt (but in any event not later than five Business
Days after an officer of the Borrower shall become aware of the occurrence
of such event) written notice of the following:

            (a) any Event of Default and any event which with
      notice or lapse of time or both would constitute an
      Event of Default; and

            (b) any development (other than those specified
      above as to which the Administrative Agent has received
      due notice) which has resulted in, or which the
      Borrower reasonably believes will result in, a material
      adverse change in the business, assets, liabilities or
      financial condition of the Borrower and its

                                                                224





      Consolidated Subsidiaries taken as a whole or the
      ability of the Borrower to perform its obligations
      hereunder.

            SECTION 5.07.  ERISA.  (a)  Comply in all material respects
with the applicable provisions of ERISA and the Code and (b) furnish to the
Administrative Agent (i) as soon as possible, and in any event within 30
days after any officer of the Borrower or any of its ERISA Affiliates knows
or has reason to know that any Reportable Event with respect to any Plan
has occurred that alone or together with any other Reportable Event with
respect to the same or another Plan could reasonably be expected to result
in liability of the Company to the PBGC in an aggregate amount exceeding
$5,000,000, a statement of a Financial Officer setting forth details as to
such Reportable Event and the action that the
Borrower proposes to take with respect thereto, together with a copy of the
notice of such Reportable Event, if any, given to the PBGC, (ii) promptly
after receipt thereof, a copy of any notice the Borrower or any of its
ERISA Affiliates may receive from the PBGC relating to the intention of the
PBGC to terminate any Plan or Plans or to appoint a trustee to administer
any such Plan,
(iii) within 10 days after a filing with the PBGC pursuant to Section
412(n) of the Code of a notice of failure to make a required installment or
other payment with respect to a Plan, a statement of a Financial Officer
setting forth details as to such failure and the action that the Borrower
proposes to take with respect thereto, together with a copy of such notice
given to the PBGC and (iv) promptly and in any event within 30 days after
receipt thereof by the Borrower or any of its ERISA Affiliates from the
sponsor of a Multiemployer Plan, a copy of each notice received by the
Borrower or any ERISA Affiliate of the Borrower concerning (A) the
imposition of Withdrawal Liability by a
Multiemployer Plan in an amount exceeding $5,000,000 or (B) a determination
that a Multiemployer Plan is, or is expected to be, terminated or in
reorganization, both within the meaning of Title IV of ERISA, and which, in
each case, is expected to result in an increase in annual contributions of
the Borrower or any of its ERISA Affiliates to such Multiemployer Plan in
an amount exceeding $5,000,000.

            SECTION 5.08.  Access to Premises and Records. Maintain the
financial records of the Borrower and its Consolidated Subsidiaries in
accordance with generally accepted accounting principles and permit
representatives of the Banks to have access, at all reasonable times upon
reasonable notice, to the Borrower and any of its Subsidiaries and their
properties and to make such excerpts from such financial books and records
as such representatives reasonably request and to discuss the business,
operations, properties and financial and other condition of the Borrower
and such Subsidiaries with officers and employees of the Borrower and such
Subsidiaries and the independent certified public accountants of the
Borrower; provided that no Bank shall purchase, sell or otherwise acquire
or dispose of any interest in a security of the Borrower in the public
markets on the basis of any material nonpublic information so obtained.

            SECTION 5.09.  Compliance with Laws, etc.  The Borrower and its
Subsidiaries shall comply in all material
respects with the requirements of all applicable laws, rules, regulations
and orders of any Governmental Authority, except to the extent that the
failure to do so would not have a material adverse effect upon the
business, assets, liabilities, financial condition, results of operations

                                                                225





or prospects of the Borrower and its Subsidiaries taken as a whole or on
the ability of the Borrower or any Guarantor to perform its obligations
hereunder or under any other Fundamental Document.  If any authorization or
approval or other action by, or notice to or filing with, any
Governmental Authority is required for the performance by the Borrower of
this Agreement or any other Fundamental Document, the Borrower will
promptly obtain such approval or make such notice or filing and shall
provide satisfactory evidence thereof to the Administrative Agent.

            SECTION 5.10.  Security Interests.  If any property of the
Borrower or any of its Subsidiaries, whether now owned or hereafter
acquired, is subjected to any Lien not permitted by Section 6.01, the
Borrower will make, or will cause to be made, effective provision whereby
the Obligations shall be secured equally and ratably with all other
obligations secured by such Lien, and, if such provision is not made, an
equitable lien, so equally and ratably securing the Obligations, shall
exist on such
property to the full extent permitted under applicable law; it being
understood that the Borrower's compliance with the provisions of this
Section 5.10 shall not, in any way, constitute a cure by the Borrower or a
waiver by the Banks of the Borrower's failure to perform or observe any of
the covenants or agreements in Section 6.01.

            SECTION 5.11.  Subsidiary Guarantors.  Promptly upon any person
incorporated in the United States becoming a Subsidiary that is a Material
Subsidiary, or upon any subsidiary incorporated in the United States
becoming a Material Subsidiary, the Borrower agrees that it or the other
direct owner of such Subsidiary shall cause such Subsidiary to sign such an
instrument substantially in the form of ExhibitaC hereto, under which such
Subsidiary shall become a party to the Contribution Agreement as a
Guarantor and assume all obligations of a Guarantor under the Credit
Agreement, all in a manner satisfactory to the Administrative Agent and its
counsel; provided, however, the
Borrower shall be permitted at any time to cause any of its Subsidiaries
not then subject to this Section 5.11 to become a party to this Agreement
and the Contribution Agreement in accordance with the requirements hereof.

            SECTION 5.12.  Environmental Laws.

            (a) Promptly notify the Administrative Agent upon any Senior
Officer of the Borrower becoming aware of any violation or
noncompliance with, or liability under any Environmental Laws which, when
taken together with all other pending violations would reasonably be
expected to be materially adverse to the Borrower and the Consolidated
Subsidiaries taken as a whole, and promptly furnish to the Administrative
Agent all notices of any nature which the Borrower or any Consolidated
Subsidiaries may receive from any Governmental Authority or other Person
with respect to any violation, or potential violation or noncompliance
with, or liability or potential liability under any Environmental Laws
which, in any case or when taken together with all such other notices,
would reasonably be expected to have a material adverse effect on the
Borrower and the Consolidated Subsidiaries
taken as a whole.

            (b)  Comply with and use reasonable efforts to ensure
compliance by all tenants and subtenants with all Environmental Laws, and
obtain and comply in all material respects with and maintain and use

                                                                226





reasonable efforts to ensure that all tenants and subtenants obtain and
comply in all material respects with and maintain any and all licenses,
approvals, registrations or permits required by Environmental Laws.

            (c)  Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and
other actions required under all Environmental Laws and promptly comply in
all material respects with all lawful orders and directives of all
Governmental Authorities.

            (d)  Defend, indemnify and hold harmless the Administrative
Agent and the Banks, and their respective employees, agents, officers and
directors, from and against any claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature, known or unknown, contingent or otherwise, arising out of, or in
any way related to the violation of or noncompliance with any Environmental
Laws, or any orders, requirements or demands of Governmental Authorities
related thereto, including, without limitation, reasonable attorney and
consultant fees, investigation and laboratory fees, court costs and
litigation expenses, but excluding therefrom all claims, demands,
penalties, fines, liabilities, settlements, damages, costs and expenses
arising out of or resulting from (i) the gross negligence or wilful
misconduct of such indemnified party or (ii) any acts or omissions of any
indemnified party occurring after such indemnified party is in possession
of, or controls the operation of, any property or asset.

            SECTION 5.13.  Existing Credit Agreements.  Repay
each Scheduled Loan in full at the end of the Interest Period applicable
thereto, and terminate the Existing Revolving Credit Agreement at such time
as all Scheduled Loans outstanding thereunder have been repaid.


                               ARTICLE VI

                           Negative Covenants

            The Borrower covenants and agrees with the Banks that, so long
as this Agreement shall remain in effect or the principal of or interest on
any Note or any other expenses or amount payable hereunder shall be unpaid
or the Commitments are in effect, unless the Required Banks otherwise
consent in writing, it will not, and it will not cause or permit any of its
Subsidiaries, directly or indirectly, to:

            SECTION 6.01.  Liens.  Incur, create or permit to
exist any Lien on (or sale and leaseback transaction with respect to) any
property, assets or stock owned or hereafter acquired by the Borrower or
any of its Subsidiaries, other than:

            (i) Liens for taxes, assessments or governmental
      charges or levies not yet delinquent or thereafter
      payable without penalty for nonpayment or (if
      foreclosure, distraint, sale or other similar
      proceedings shall not have been commenced) being
      contested in good faith and by appropriate actions or
      proceedings promptly initiated and diligently
      conducted, if such reserve or other appropriate
      provision, if any, as shall be required by generally

                                                                227





      accepted accounting principles shall have been made
      therefor;

            (ii) Liens of carriers, warehousemen, mechanics and
      materialmen incurred in the ordinary course of business
      for sums not yet due or being contested in good faith
      and by appropriate actions or proceedings promptly
      initiated and diligently conducted, if such reserve or
      other appropriate provision, if any, as shall be
      required by generally accepted accounting principles
      shall have been made therefor;

            (iii) Liens incurred or deposits made in the
      ordinary course of business, in connection with
      workers' compensation, unemployment insurance and other
      social security, or to secure the performance of bids,
      tenders, leases, contracts (other than the repayment of
      borrowed money), statutory obligations, surety, customs
      and appeal bonds;

            (iv) zoning restrictions, easements, licenses,
      reservations, provisions, covenants, conditions,
      waivers, restrictions on the use of real property or
      minor irregularities of title to real property (and
      with respect to leasehold encumbrances or interests,
      mortgages, obligations, liens and other encumbrances
      incurred, created, assumed or permitted to exist and
      arising by, through or under or asserted by a landlord
      or owner of the leased property, with or without
      consent of the lessee), none of which materially
      impairs the use of any parcel of real property material
      to the operation of the business of the owner thereof
      or the value of such property for the purpose of such
      business;

            (v) Liens securing purchase money Indebtedness of
      the Borrower and its Subsidiaries provided; that (A)
      such Liens shall not encumber any property other than
      the property acquired, (B) the Indebtedness secured
      thereby does not exceed the purchase price of such
      property, and (C) such transaction does not otherwise
      violate this Agreement;

            (vi) Liens upon assets of a corporation existing at
      the time such corporation is merged into or
      consolidated with the Borrower or a Subsidiary or at
      the time of its acquisition by the Borrower or a
      Subsidiary or its becoming a Subsidiary; provided that
      such Lien does not spread to any other asset at any
      time owned by the Borrower or any Subsidiary;

            (vii) Liens in existence on the date hereof which
      are listed in Schedule 6.01 (which Schedule includes
      all such Liens (other than Liens of the types described
      in paragraphs (i) through (v) above) securing
      obligations in excess of $500,000);


                                                                228





            (viii) Liens arising out of the renewal or refunding
      of any Indebtedness of the Borrower and its
      Subsidiaries secured by Liens permitted by the
      foregoing; provided that the aggregate principal amount
      of such Indebtedness is not increased and is not
      secured by additional assets and the Indebtedness
      secured by the Lien is permitted under this Agreement;

            (ix) Liens in connection with attachments,
      judgments or awards as to which an appeal or other
      appropriate proceedings for contest or review are
      promptly commenced and diligently pursued in good faith
      (and as to which foreclosure and other enforcement
      proceedings shall not have been commenced (unless fully
      bonded or otherwise effectively stayed)); and

            (x) other Liens on assets with an aggregate book
      value for all such assets subject to Liens, which when
      added to the aggregate book value of assets subject to
      Sale and Leaseback Transactions permitted under
      Section 6.06(c), do not at the time in effect exceed
      the lesser of (a) $40,000,000 and (b) 10% of
      Consolidated Net Worth.

            SECTION 6.02.  Indebtedness.  Permit any of the foreign
Subsidiaries or any domestic Subsidiaries which are not Guarantors
hereunder to incur, create, assume, become or be liable in any manner with
respect to, or permit any of such Subsidiaries to permit or suffer to
exist, any Indebtedness, unless after giving effect to such Indebtedness
the total Indebtedness of all such Subsidiaries is no greater than the
lesser of (a) $60,000,000 and (b) 15%  of Consolidated Net Worth; provided,
however, this Section 6.02 shall not apply to any Subsidiary which becomes
a Guarantor hereunder in accordance with Section 5.11 hereof.

            SECTION 6.03.  Mergers, Consolidations, Sales of
Assets and Acquisitions.  Neither the Borrower nor any Subsidiary (in one
transaction or series of transactions) will wind-up, liquidate or dissolve
its affairs, or enter into any transaction of merger or consolidation, or
sell or otherwise dispose of all or any part of its property or assets,
except:

            (a) mergers between the Borrower and a Subsidiary
      or between Subsidiaries;

            (b) sales of inventory, marketable securities,
      receivables owed to a foreign subsidiary and
      receivables of the Borrower or any Subsidiary from
      export sales, in each case in the ordinary course of
      business;

            (c) sales permitted pursuant to Section 6.06;

            (d) subject to Section 6.03(e) below, any merger
      (other than as described in (a) above), consolidation,
      dissolution or liquidation; provided, however, that
      (i) immediately prior to and on a Pro Forma Basis after
      giving effect to such transaction no Default or Event

                                                                229





      of Default has occurred or is continuing, (ii) if such
      transaction involves a Person other than the Borrower
      and its Subsidiaries, the Administrative Agent shall
      promptly receive a certificate of a Financial Officer
      of the Borrower confirming that such transaction
      complies with the requirements set forth in this
      section and (iii) if such transaction involves the
      Borrower, the Borrower is the surviving entity;

            (e) a disposition of less than substantially all
      of the assets of the Borrower and its Subsidiaries,
      taken as a whole, (i) for consideration which
      represents fair market value (as reasonably determined
      in good faith by the Borrower's Board of Directors) or,
      at a price determined by the Board of Directors of the
      Borrower to be in the best interests of the Borrower
      under circumstances where the Board deems a sale on
      terms other than fair market value to be in the best
      interest of the Borrower, (ii) immediately prior to and
      on a Pro Forma Basis after giving effect thereto, no
      Event of Default or Default shall have occurred and be
      continuing and (iii) if the transaction involves
      consideration of $20,000,000 or more, the
      Administrative Agent shall promptly receive a
      certificate of a Financial Officer of the Borrower
      confirming that such transaction complies with the
      requirements set forth in this section; and

            (f) acquisitions of an interest in any business
      from any Person (whether pursuant to a merger, an
      acquisition of stock, assets, a business unit or
      otherwise); provided that (i) immediately prior to and
      on a Pro Forma Basis after giving effect thereto, no
      Event of Default or Default shall have occurred and be
      continuing and (ii) if the transaction involves
      consideration equal to or in excess of $10,000,000, the
      Administrative Agent shall promptly receive a
      certificate of a Financial Officer of the Borrower
      confirming that such transaction complies with the
      requirements set forth in this section.

            SECTION 6.04.  Change of Business.  Engage in any
business activities other than those related or incidental to its present
business activities, namely, the manufacture and wholesale distribution of
(i) dental supplies and equipment, (ii)amedical/industrial supplies and
equipment and (iii) other healthcare products; provided that (x) the
business activities, described in clause (iii) shall not at any time
represent more than 20% of the Consolidated Net Income of the Borrower and
the Subsidiaries as of the end of the then most recently completed fiscal
year of the Borrower, and (y) the assets of the business activities
described in clause (iii) shall not at any time represent more than 20% of
the Consolidated assets of the Borrower and the Subsidiaries.

            SECTION 6.05.  Transactions with Affiliates.  Enter into any
transactions with or provide any employee benefits to any Affiliate of the
Borrower or any Subsidiary except (a) in the ordinary course of business
and upon fair and reasonable terms no less favorable than the Borrower or

                                                                230





the Subsidiary concerned could, in the good faith judgment of senior
management of the Borrower, obtain or could become entitled to in an
arm's-length transaction with a person or entity which was not an Affiliate
of the Borrower or such Subsidiary, (b) transactions involving the Borrower
and one or more Subsidiaries exclusively, (c) transactions involving two or
more Subsidiaries exclusively, (d) transactions with the ESOP or other
similar foreign employee stock ownership plans of Subsidiaries of the
Borrower which do not materially and adversely affect the interests of the
Administrative Agent or the Banks under the Fundamental Documents, and (e)
transactions otherwise expressly permitted hereunder.

            SECTION 6.06.  Sale and Leaseback.  Enter into any
arrangement, directly or indirectly, with any person whereby it shall sell
or transfer any property, whether real or personal, and used or useful in
its business, whether now owned or hereafter acquired, if the Borrower or
any of its Subsidiaries at the time of such sale or disposition intends to
lease or otherwise acquire the right to use or possess (except by purchase)
such property or like property for a substantially similar purpose (a "Sale
and Leaseback Transaction") except:

            (a) the Des Plaines Lease;

            (b) for any such Sale and Leaseback Transaction in
      which the property is sold by the Borrower to a
      Subsidiary or by a Subsidiary to the Borrower or
      another Subsidiary; or

            (c) the Borrower or any Subsidiary may enter into
      any Sale and Leaseback Transaction if (i) at the time
      of such Sale and Leaseback Transaction no Default or
      Event of Default shall have occurred and be continuing,
      (ii) the proceeds from the sale of the subject property
      shall be equal to not less than 80% of its fair market
      value (as reasonably determined by the Borrower's Board
      of Directors) and (iii) after giving effect to such
      Sale and Leaseback Transaction, the aggregate book
      value of all assets of the Borrower and the
      Subsidiaries subject to Sale and Leaseback Transactions
      when added to the aggregate book value of assets
      subject to Liens permitted under Sectiona6.01(x) and
      excluding those described in paragraphs (a) and (b)
      above, shall not at any time exceed the lesser of
      (a) $40,000,000 and (b) 10% of Consolidated Net Worth.

            SECTION 6.07.  Dividends by Subsidiaries.  Create,
incur, assume or permit to exist any agreement or instrument
which has the effect of restricting or prohibiting the power, authority or
legal right of such Subsidiary to declare or pay any dividend or other
distribution other than, prior to the Closing Date, the Existing Credit
Agreements.

            SECTION 6.08.  Amendments to Certain Documents.
Amend, modify or otherwise change (a) any covenant or event of default in
any material indenture or other material agreement or material instrument
relating to any Indebtedness or (b) any of its constitutive documents, in
either case in any manner materially adverse to the interests of the
Administrative Agent, the Banks, or the Issuing Bank under the Fundamental

                                                                231





Documents.

            SECTION 6.09.  Minimum Consolidated Net Worth.
Permit Consolidated Net Worth at any time to be less than (x) $300,000,000
plus (y) 25% of aggregate Consolidated Net Income for each full fiscal
quarter for which such Consolidated Net Income is positive that shall have
been completed during the period from the Closing Date to the date of
determination.

            SECTION 6.10.  Interest Coverage.  Permit the
Consolidated Interest Coverage Ratio at the end of any fiscal quarter to be
less than 3.5 to 1.0 for the period of the four consecutive fiscal quarters
then ended treated as a single accounting period.

            SECTION 6.11.  Debt Ratio.  Permit the Debt Ratio
at any time to be greater than .5 to 1.0.

            SECTION 6.12.  Fiscal Year.  Change its fiscal year or modify
or change accounting treatments or reporting practices except as otherwise
permitted or required by generally accepted accounting principles.


                               ARTICLE VII

                            Events of Default

            In the case of the happening of any of the following events
(hereinafter called "Events of Default"):

            (a) any representation or warranty made by the
      Borrower or any of the Guarantors in connection with
      this Agreement or any other Fundamental Document or
      with the execution and delivery of the Notes or the
      borrowings hereunder or any statement or representation
      made in any report, certificate, financial statement or
      other instrument furnished by the Borrower or any of
      the Guarantors to the Banks, the Issuing Bank or the
      Administrative Agent pursuant to this Agreement or any
      other Fundamental Document shall prove to have been
      false or misleading in any material respect when made
      or delivered;

            (b) default shall be made in the payment of the
      principal of or interest on any Note or of any fees or
      other amounts payable by the Borrower hereunder, when
      and as the same shall become due and payable, whether
      at the due date thereof or at a date fixed for
      prepayment thereof or by acceleration thereof or
      otherwise, and, in the case of interest, such default
      shall continue unremedied for five Business Days;

            (c) default shall be made with respect to the
      payment of any amount due under any agreement or other
      evidence of Indebtedness for borrowed money (other than
      the Notes) of the Borrower or any of the Subsidiaries
      in an aggregate outstanding principal amount of
      $10,000,000 or more; or any other default shall be made

                                                                232





      with respect to any such Indebtedness and such
      Indebtedness shall have been accelerated so that any
      payment in respect of such Indebtedness shall be or
      become due prior to its maturity or scheduled due date;

            (d) default shall be made in the due observance or
      performance of any covenant, condition or agreement on
      the part of the Borrower on its own behalf or on behalf
      of any of the Subsidiaries or any of the Guarantors
      contained in Article VI or Article VIII hereof;
      provided that in the case of a default under
      Section 6.01, resulting solely from incurrence of a
      prohibited obligation by a Subsidiary without the
      approval or knowledge of any officer of the Borrower,
      such default shall continue unremedied for 30 days;

            (e) the guarantee under Article VIII hereof shall
      (i) not remain in full force and effect, be declared
      null and void or shall not be enforceable against the
      Guarantors in accordance with its terms and such
      guarantee shall not be reinstated to full force and
      effect and enforceability against the Guarantors in
      accordance with its terms within 30 days or (ii) be
      disaffirmed or repudiated by the Borrower or any such
      Guarantor;

            (f) default shall be made in the due observance or
      performance of any other covenant, condition or
      agreement to be observed or performed by the Borrower
      on its own behalf or on behalf of any of the
      Subsidiaries or any of the Guarantors pursuant to the
      terms hereof or of any other Fundamental Document and
      such default shall continue unremedied for a period
      equal to the sum of 30 days after such failure shall
      have first occurred plus an additional three Business
      Days after any officer of the Borrower shall become
      aware of such failure, but in no event shall such
      period extend for more than 30 days after any officer
      of the Borrower shall become aware of such failure;

            (g) the Borrower or any Material Subsidiary shall
      (i) voluntarily commence any proceeding or file any
      petition seeking relief under Title 11 of the United
      States Code or any other Federal or state bankruptcy,
      insolvency or similar law, (ii) consent to the
      institution of, or fail to controvert in a timely and
      appropriate manner, any such proceeding or the filing
      of any such petition, (iii) apply for or consent to the
      appointment of a receiver, trustee, custodian,
      sequestrator or similar official for the Borrower or
      any such Material Subsidiary or for a substantial part
      of its property, (iv) file an answer admitting the
      material allegations of a petition filed against it in
      any such proceeding, (v) make a general assignment for
      the benefit of creditors, (vi) become unable, admit in
      writing its inability or fail generally to pay its
      debts as they become due or (vii) take corporate action

                                                                233





      for the purpose of effecting any of the foregoing;

            (h) an involuntary proceeding shall be commenced
      or an involuntary petition shall be filed in a court of
      competent jurisdiction seeking (i) relief in respect of
      the Borrower or any Material Subsidiary, or of a
      substantial part of its property, under Title 11 of the
      United States Code, (ii) the appointment of a receiver,
      trustee, custodian, sequestrator or similar official
      for the Borrower or such Material Subsidiary or for a
      substantial part of its property or (iii) the
      winding-up or liquidation of the Borrower or such
      Material Subsidiary; and such proceeding or petition
      shall continue undismissed for 60 days or an order or
      decree approving or ordering any of the foregoing shall
      continue unstayed and in effect for 30 days;

            (i) a final judgment for the payment of money
      (which alone, or when aggregated with all other such
      unpaid judgments to the extent not fully covered by
      insurance from financially sound and reputable insurers
      against the Borrower and its Subsidiaries at such time,
      is for $10,000,000 or more) shall be rendered against
      the Borrower or any of the Subsidiaries and the same
      shall remain undischarged for a period of 60 days or
      any action is taken by the judgment creditor to levy
      thereon;

            (j) a Reportable Event or Reportable Events, or a
      failure to make a required payment (within the meaning
      of Section 412(n)(1)(A) of the Code) shall have
      occurred with respect to any Plan or Plans that
      reasonably could be expected to result in liability of
      the Borrower to the PBGC or to a Plan in an aggregate
      amount exceeding $10,000,000 and, within 30 days after
      the reporting of any such Reportable Event to the
      Administrative Agent or after the receipt by the
      Administrative Agent of the statement required pursuant
      to Section 5.07(b)(iii) hereof, the Administrative
      Agent shall have notified the Borrower in writing that
      (i) the Required Banks have made a determination that,
      on the basis of such Reportable Event or Reportable
      Events or the receipt of such statement, there are
      reasonable grounds (A) for the termination of such Plan
      or Plans by PBGC, (B) for the appointment by the
      appropriate United States District Court of a trustee
      to administer such Plan or Plans or (C) for the
      imposition of a Lien in favor of a Plan and (ii) as a
      result thereof an Event of Default exists hereunder; or
      a trustee shall be appointed by a United States
      District Court to administer any such Plan or Plans; or
      the PBGC shall institute proceedings to terminate any
      Plan or Plans;

            (k) (i) the Borrower or any of its ERISA
      Affiliates shall have been notified by the sponsor of a
      Multiemployer Plan that it has incurred Withdrawal

                                                                234





      Liability to such Multiemployer Plan, (ii) the Borrower
      or any such ERISA Affiliate does not have reasonable
      grounds for contesting such Withdrawal Liability and is
      not in fact contesting such Withdrawal Liability in a
      timely and appropriate manner, and (iii) the amount of
      such Withdrawal Liability specified in such notice,
      when aggregated with all other amounts required to be
      paid to Multiemployer Plans in connection with
      Withdrawal Liabilities (determined as of the date or
      dates of such notification), exceeds $10,000,000 or
      requires payments exceeding $10,000,000 in any year;

            (l) the Borrower or any of its ERISA Affiliates
      shall have been notified by the sponsor of a
      Multiemployer Plan that such Multiemployer Plan is in
      reorganization or is being terminated, within the
      meaning of Title IV of ERISA, if solely as a result of
      such reorganization or termination the aggregate annual
      contributions of the Borrower and its ERISA Affiliates
      to all Multiemployer Plans that are then in
      reorganization or have been or are being terminated
      have been or will be increased over the amounts
      required to be contributed to such Multiemployer Plans
      for their most recently completed plan years by an
      amount exceeding $10,000,000 in any year;

            (m) (i) a person or two or more persons acting in
      concert (excluding the ESOP and any other person who
      holds 5% or more of the outstanding shares of voting
      stock of the Borrower as of the Closing Date) shall
      acquire beneficial ownership (within the meaning of
      Rule 13d-3 of the Securities and Exchange Commission
      under the Securities Exchange Act of 1934) of more than
      50% of the outstanding shares of voting stock of the
      Borrower, or (ii) the individuals who, as of such
      Closing Date, are members of the Board of Directors of
      the Borrower (the "Incumbent Board") shall cease to
      constitute at least a majority of the Board of
      Directors of the Borrower; provided, however, that if
      the election, or nomination for election of any new
      director was approved by a vote of at least a majority
      of the Incumbent Board or any nominating committee
      thereof, such new director shall, for purposes hereof,
      be considered as a member of the Incumbent Board; and

then, and in every such event and at any time thereafter
during the continuance of such event, the Administrative
Agent may (unless, in the case of each Event of Default
other than that specified in paragraph (b) above, the
Required Banks shall have waived such Event of Default in
writing, and, in the case of an Event of Default specified
in paragraph (b) above, each of the Banks shall have waived
such Event of Default in writing), and, upon direction of
the Required Banks, will by written notice to the Borrower,
take any of the following actions, at the same or different
times:  (i) terminate the Commitments and (ii) declare the
Notes to be forthwith due and payable, whereupon the Notes

                                                                235





and all other fees and amounts owing hereunder shall become
forthwith due and payable, both as to principal and
interest, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly
waived, anything contained herein or in the Notes to the
contrary notwithstanding.  Notwithstanding the foregoing, if
an Event of Default specified in paragraph (g) or (h) above
occurs with respect to the Borrower or a Guarantor, the
Notes shall become immediately due and payable, both as to
principal and interest, without any action by the
Administrative Agent and without presentment, demand,
protest or any other notice of any kind, all of which are
hereby expressly waived, anything contained herein or in the
Notes to the contrary notwithstanding.


                              ARTICLE VIII

                                Guarantee

            SECTION 8.01.  Guarantee.

            (a) Each Guarantor hereby, jointly and severally,
unconditionally and irrevocably guarantees to the Banks (for purposes of
this Article VIII, the defined term "Bank" shall be deemed to include the
Issuing Bank as applicable) and the Administrative Agent the due and
punctual payment by and
performance of the Obligations (including interest accruing on and after
the filing of any petition in bankruptcy or reorganization of the
applicable obligor whether or not post-filing interest is allowed in such
proceeding) by the
Borrower.

            (b) Each Guarantor waives notice of acceptance of this
guarantee and also waives presentation to, demand of payment from and
protest to the Borrower of any of the Obligations, as well as notice of
protest for nonpayment and all other formalities.  The obligations of each
Guarantor hereunder shall not be affected by (i) the failure of the
Administrative Agent or the Banks to assert any claim or demand or to
enforce any right or remedy against the Borrower under this Agreement or
otherwise; (ii) any extension or renewal of any of the Obligations; (iii)
any rescission, waiver, amendment or modification of any of the
terms or provisions of this Agreement or any other agreement or instrument;
(iv) the taking or release of any security held by the Banks or the
Administrative Agent for the performance of any of the Obligations; (v) the
failure of the Administrative Agent or the Banks to exercise any right or
remedy against the Borrower or any other guarantor of the Obligations; (vi)
any stay in bankruptcy or insolvency proceedings of the Borrower or any
other Person; or (vii) the release or substitution of any other Guarantor.

            (c) Each Guarantor agrees that this guarantee
constitutes a guarantee of payment when due and not of collection and
waives any right to require that any resort be had by the Banks or the
Administrative Agent to any security held for payment of the Obligations or
to any balance of any deposit account or credit on the books of the Banks
or the Administrative Agent in favor of the Borrower or any other person.


                                                                236





            SECTION 8.02.  No Impairment of Guaranty.  The
obligations of each Guarantor hereunder shall not be subject
to any reduction, limitation, impairment or termination for
any reason, including any claim of waiver, release, surrender, alteration
or compromise, and shall not be subject to any defense, setoff,
counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality or unenforceability of the Obligations or otherwise.
Without limiting the generality of the foregoing, the obligations of each
Guarantor hereunder shall not be discharged or impaired or otherwise
affected by the failure of the Banks or the Administrative Agent to assert
any claim or demand or to enforce any remedy under this Agreement or any
other agreement or instrument, by any waiver or modification of any thereof
by the Banks or the Administrative Agent, by any default, failure or delay,
wilful or otherwise, in the performance of the Obligations
or by any other act or omission or delay to do any other act
which might in any manner or to any extent vary the risk of any Guarantor
or which would otherwise operate as a discharge of a guarantor as a matter
of law.

            SECTION 8.03.  Continuation and Reinstatement, etc.  Each
Guarantor further agrees that this guarantee shall continue to be effective
or be reinstated, as the case may be, if at any time any payment on any
Obligation is rescinded or must otherwise be restored by the Banks upon the
bankruptcy or reorganization of the Borrower or otherwise.

            SECTION 8.04.  Payment, etc.

            (a) In furtherance of the foregoing and not in limitation of
any other right which the Banks or the Administrative Agent may have at law
or in equity against any Guarantor by virtue hereof, upon the failure of
the Borrower to pay or perform any Obligation when and as the same shall
become due, whether at maturity, by acceleration, after notice of
prepayment or otherwise, each Guarantor hereby promises to and will, upon
receipt of written demand by the Banks or the Administrative Agent,
forthwith pay, or cause to be paid, in cash, to the Administrative Agent,
an amount equal to the sum of (i) the unpaid principal amount of such
Obligations, (ii) accrued
and unpaid interest on such Obligations and (iii) all other unpaid
Obligations of the Borrower to the Administrative Agent and the Banks.

            (b) Each Guarantor agrees that to the fullest extent permitted
by applicable law, all rights against the Borrower arising as a result of
any payment by any Guarantor under this guarantee by way of right of
subrogation or otherwise shall in all respects be junior and subordinate in
right of payment to the prior indefeasible payment in full of all the
Obligations to the Administrative Agent for the benefit of the Banks.  If
after the Borrower has failed to pay any Obligation when due, any amount
shall be paid to any Guarantor for the account of the Borrower, such amount
shall be held in trust for the benefit of the Administrative Agent and
shall forthwith be paid to the Administrative Agent on behalf of the Banks
to be credited and applied to the Obligations when due and payable.

            (c) Each Guarantor waives notice of and hereby consents to any
agreements or arrangements whatsoever by the
Banks or the Administrative Agent with the Borrower, or anyone else,
including agreements and arrangements for payment, extension,
subordination, composition, arrangement, discharge or release of the whole

                                                                237





or any part of the Obligations, or for the discharge or surrender of any or
all security, or for compromise, whether by way of acceptance of part
payment or otherwise, and the same shall in no way impair such Guarantor's
liability hereunder.  Nothing shall discharge or satisfy the liability of
any Guarantor hereunder except the full performance and payment of the
Obligations.

            SECTION 8.05.  Benefit to Guarantors.  Each Guarantor
acknowledges that it has realized a direct economic benefit as a result of
the refinancing of the loans outstanding under the Existing Credit
Agreements of the Borrower and the availability to it of the proceeds of
Loans that have been or may in the future be made hereunder.


                               ARTICLE IX

                          Administrative Agent

            SECTION 9.01.  Appointment of Administrative Agent.  In order
to expedite the various transactions contemplated by this Agreement, The
Chase Manhattan Bank is hereby appointed to act as Administrative Agent on
behalf of the Banks (for purposes of Article IX, the defined term "Bank"
shall be deemed to include the Issuing Bank as applicable).  Each Bank
irrevocably authorizes and directs the Administrative Agent to take such
action on behalf of such Bank under the terms and provisions of this
Agreement and to exercise such powers hereunder as are specifically
delegated to or required of the Administrative Agent by the terms and
provisions hereof, together with such powers as
are reasonably incidental thereto.

            SECTION 9.02.  Exculpation.  Neither the Administrative Agent
nor the Documentation Agent, nor any of
their directors, officers, employees or agents shall be liable as such for
any action taken or omitted by any of them hereunder except for its or his
own gross negligence or wilful misconduct, or be responsible for any
statement, warranty or representation herein, or be required to ascertain
or to make any inquiry concerning the performance or observance by the
Borrower or the Guarantors of any of the terms, conditions, covenants or
agreements of this Agreement.  Neither the Administrative Agent nor the
Documentation Agent shall be responsible to the Banks for
the due execution, genuineness, validity, enforceability or effectiveness
of this Agreement or any other Fundamental Document, the Notes or any other
instrument to which reference is made herein.  The Administrative Agent may
deem and treat the payee of any Note as the owner thereof for all purposes
hereof until written notice of transfer shall have been filed with it.  The
Administrative Agent shall promptly notify the Borrower of any such notice
received by such Administrative Agent.  The Administrative Agent shall in
all cases be fully protected in acting, or refraining from acting, in
accordance with written instructions signed by the Banks, and, except as
otherwise specifically provided herein, such instructions and any action
taken or failure to act pursuant thereto shall be binding on all of the
Banks.  The Administrative Agent shall, in the absence of knowledge to the
contrary, be entitled to rely on any paper or
document believed by it to be genuine and correct and to have been signed
or sent by the proper person or persons.  Neither the Administrative Agent
nor any of its directors, officers, employees or agents shall have any
responsibility to the Borrower on account of the failure or delay in

                                                                238





performance or breach by any Bank of any of its obligations hereunder or to
any Bank on account of the failure or delay in performance or breach by any
other Bank, or the Borrower, of any of their respective obligations
hereunder or in connection herewith.

            SECTION 9.03.  Consultation with Counsel.  The
Administrative Agent may execute any and all duties hereunder by or through
agents or employees and shall be entitled to advice of legal counsel
selected by it with respect to all matters arising hereunder and shall not
be liable for any action taken or suffered in good faith by it in
accordance with the advice of such counsel.

            SECTION 9.04.  The Administrative Agent, Individually.  With
respect to the Loans made by it and the
Notes issued to it, the Administrative Agent in its individual capacity and
not as Administrative Agent shall have the same rights and powers hereunder
and under any other agreement as any other Bank and may exercise the same
as though it were not the Administrative Agent, and the Administrative
Agent and its affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any of the
Subsidiaries or other Affiliate of the Borrower or any such Subsidiary as
if it were not the Administrative Agent.

            SECTION 9.05.  Reimbursement and Indemnification.
Each Bank agrees (i) to reimburse the Administrative Agent in the amount of
such Bank's proportionate share of any expenses incurred for the benefit of
the Banks, including counsel fees and compensation of agents and employees
paid for services rendered on behalf of the Banks, not reimbursed by the
Borrower, and (ii) to indemnify and hold harmless the Administrative Agent
and any of its directors, officers, employees or agents, on demand, in the
amount of its proportionate share, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by or asserted against it or any of them
in any way relating to or arising out of this Agreement, or under the other
Fundamental Documents or any action taken or omitted by it or any of them
under this Agreement or under the other Fundamental Documents, to the
extent not reimbursed by the Borrower; provided, however, that no Bank
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the gross
negligence or wilful misconduct of the Administrative Agent
or any of its directors, officers, employees or agents.

            SECTION 9.06.  Resignation.  Subject to the
appointment and acceptance of a successor Administrative Agent as provided
below, the Administrative Agent may resign at any time by notifying the
Banks and the Borrower.  Upon any such resignation, and with the consent of
the Borrower (which shall be deemed to be granted if an Event of Default
shall have occurred and be continuing), the Required Banks shall have the
right to appoint a successor Administrative Agent.  If no successor
Administrative Agent shall have been so appointed by such Banks and shall
have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may, on behalf of the Banks, appoint a successor
Administrative Agent having a combined capital and surplus of at least
$300,000,000.  Upon the acceptance of any appointment as Administrative

                                                                239





Agent hereunder by a successor bank, such successor shall thereupon succeed
to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent and the retiring Administrative Agent shall
be discharged from its duties and obligations hereunder and under any other
documents executed in connection herewith.  After the Administrative
Agent's resignation hereunder, the provisions of this Article IX shall
continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Administrative Agent.


                                ARTICLE X

                              Miscellaneous

            SECTION 10.01.  Notices.  Notices and other communications
provided for herein shall be in writing and shall be delivered or mailed
(or in the case of telegraphic communication, if by telegram, delivered to
the telegraph company and, if by telex, telecopy, graphic scanning or other
telegraphic communications equipment, delivered by such equipment)
addressed, if to the Borrower at 570 West College Avenue, York,
Pennsylvania 17405, to the attention of J. Patrick Clark, Secretary, if to
the Administrative Agent, to it at One Chase Manhattan Plaza, 8th Floor,
New York, New York  10081, to the attention of Sandra Miklave and to it at
9 Thomas Moore Street, Trinity Towers, LONDON E19YT to the attention of
Steven Clarke, with a copy to Dawn Lee Lum at the Chase Manhattan Bank, 270
Park Avenue, New
York, New York  10017, and if to a Bank (for purposes of Article X, the
defined term "Bank" shall be deemed to include the Issuing Bank as
applicable), to it at its address set forth on the signature pages of this
Agreement.  All notices and other communications given to any party hereto
in accordance with the provisions of this Agreement shall be effective when
received.

            SECTION 10.02.  No Waivers; Amendments.  No failure or delay of
the Administrative Agent or any Bank in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any
other or further exercise thereof or the exercise of any other right or
power.  The rights and remedies of the Administrative Agent and the Banks
hereunder
are cumulative and not exclusive of any rights or remedies which the
Administrative Agent or any such Bank would otherwise have.  No notice or
demand on the Borrower shall entitle the Borrower to any other or further
notice or demand in similar or other circumstances; provided that the
foregoing shall not limit the right of the Borrower to any notice expressly
provided for herein.  No modification, amendment or waiver of any provision
of this Agreement or any of the Notes nor consent to any departure of the
Borrower therefrom shall in any event be effective unless
the same shall be in writing and signed by the Required Banks and then such
waiver or consent shall be effective only in the specific instance and for
the purpose for which given.  Any such modification, amendment, waiver or
consent, so given, shall be effective to bind all the Banks; provided, that
no such modification, amendment, waiver or consent may be made which will
(i) reduce or increase the amount or alter the term of any Commitment of
any Bank hereunder without the written consent of such Bank; (ii) extend

                                                                240





the time for payment of principal of or interest on any Note, or reduce the
principal amount or change the method of calculation provided for herein
for determining the rate of interest on any Note, without the written
consent of the holder of such Note; (iii) vary the amount or time for
payment of fees payable to any Bank hereunder without the written consent
of such Bank; (iv) change the definition of Required Banks set forth in
Article I, or amend this Section 10.02 or Sectiona2.19 without the written
consent of all the Banks; or (v) give any Note preference over any other
Note in payment of principal or interest.

            SECTION 10.03.  Applicable Law; Submission to
Jurisdiction; Service of Process; Waiver of Jury Trial.

            (a) This Agreement and the Notes shall be construed in
accordance with and governed by the laws of the State of New York
applicable to agreements made and to be performed wholly in the State of
New York.

            (b) Each of the Borrower and each Guarantor hereby irrevocably
submits itself to the jurisdiction of the Supreme Court of the State of New
York, New York County, and to the jurisdiction of the United States
District Court for the Southern District of New York, for the purpose of
any suit, action or other proceeding arising out of or relating to this
Agreement, any other Fundamental Document or any related document or any of
the transactions contemplated hereby or thereby, and hereby waives, and
agrees not to assert, by way of motion, as a defense, or otherwise, in any
suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of the above-named courts for any reason whatsoever, that
such suit, action or proceeding is brought in an inconvenient forum or that
the venue of such suit, action or proceeding is improper or that this
Agreement or any other Fundamental Documents or, to the full extent
permitted by applicable law, any subject matter of any thereof may not be
enforced in or by such courts.  Neither this paragraph (b) nor paragraph
(c) below shall restrict the Administrative Agent or any Bank from bringing
suit or instituting other judicial proceedings against the Borrower or any
Guarantor or any of their assets in any court or jurisdiction not referred
to herein or therein.

            (c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notice in Section 10.01.
Nothing in this Agreement will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.

            (d) EXCEPT AS PROHIBITED BY LAW, EACH PARTY HERETO HEREBY
WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT, ANY OTHER FUNDAMENTAL DOCUMENT AND ANY OF THE OTHER
DOCUMENTS OR TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN.

            (e) Except as prohibited by law, each party hereto hereby
waives any right it may have to claim or recover in any litigation referred
to in paragraph (d) of this Section 10.03 any special, exemplary, punitive,
indirect (including loss of profits) or consequential damages or any
damages other than, or in addition to, actual damages; provided that if a
party hereto shall obtain a final, nonappealable judgment that another
party shall have intentionally and knowingly breached its obligations under
this Agreement with an intention of injuring the claimant

                                                                241





party, the claimant party may then seek consequential damages from such
breaching party for its losses suffered as a result of such intentional
breach.

            (f) Each party hereto (i) certifies that neither any
representative, agent nor attorney of any Bank has represented, expressly
or otherwise, that such Bank would not, in the event of litigation, seek to
enforce the foregoing waivers and (ii) acknowledges that it has been
induced to enter into this Agreement by, among other things, the mutual
waivers and certifications herein.

            SECTION 10.04.  Expenses; Documentary Taxes.  The Borrower
agrees to pay all reasonable out-of-pocket expenses (i) incurred by the
Administrative Agent in connection with the preparation, execution and
delivery, waiver or modification and administration of this Agreement, any
other Fundamental Document or any related documents or in connection with
the performance of due diligence by the Administrative Agent or the
syndication of the Loans (whether or not the transactions hereby
contemplated shall be consummated), and (ii) incurred by the Administrative
Agent in connection with the making of the Loans hereunder, or incurred by
the Administrative Agent or the Banks in connection with the enforcement of
this Agreement or the Loans made or the Notes issued hereunder or any other
Fundamental Documents and with respect to any action which may be
instituted by any person against the Banks or the Administrative Agent in
respect of the foregoing (but not with respect to any act of gross
negligence or wilful misconduct of the Administrative Agent or any Bank),
or as a result of any transaction, action or nonaction arising from
the foregoing, including, but not limited to, the fees and disbursements of
Cravath, Swaine & Moore, counsel to the Administrative Agent.  The Borrower
agrees that it shall  indemnify the Banks and the Administrative Agent from
and hold them harmless against any documentary taxes, assessments or
charges made by any Governmental Authority by reason of the execution and
delivery of this Agreement, the Fundamental Documents or any of the Notes.
The obligations of the Borrower under this Section 10.04 shall survive the
termination of this Agreement and the Commitments and/or the payment of the
Notes.

            SECTION 10.05.  Indemnity.  Further, by the execution hereof,
the Borrower agrees to indemnify and hold harmless the Administrative Agent
and the Banks and their directors, officers, employees and agents (each an
"Indemnified Party") from and against any and all expenses, including
reasonable fees and disbursements of counsel, losses, claims, damages and
liabilities arising out of any claim, litigation, investigation or
proceeding (whether or not the Administrative Agent or any Bank is a party
thereto) relating to the financing contemplated hereby and
transactions related thereto, but excluding therefrom all expenses, losses,
claims, damages, and liabilities arising out of or resulting from the gross
negligence or wilful misconduct of any Indemnified Party.  The obligations
of the Borrower under this Section 10.05 shall survive the termination of
this Agreement and the Commitments and/or payments of the Loans.

            SECTION 10.06.  Successors and Assigns.  This Agreement shall
be binding upon and inure to the benefit of the Borrower, the Guarantors,
the Administrative Agent, the Documentation Agent and the Banks and their
respective successors and assigns.  Neither the Borrower nor the Guarantors
may assign or transfer any of their rights or obligations hereunder without
the written consent of the Required Banks.

                                                                242






            SECTION 10.07.  Survival of Agreements, Representations and
Warranties, etc.  All warranties, representations and covenants made by the
Borrower or the Guarantors herein or in any certificate or other instrument
delivered by it or on its behalf in connection with this Agreement shall be
considered to have been relied upon by the Banks and shall survive the
making of the Loans herein contemplated, the issuance and delivery to the
Banks of the Notes and the issuance, amendment, renewal or extension of any
Letter of Credit regardless of any investigation made by the Banks or on
their behalf and shall continue in full force and effect so long as any
amount due or to become due hereunder is outstanding and unpaid and so long
as the Commitments have not been terminated.  All statements in any such
certificate or other instrument shall constitute representations and
warranties by the Borrower hereunder.

            SECTION 10.08.  Severability.  In case any one or more of the
provisions contained in this Agreement or the Notes should be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby.  The parties shall
endeavor in good faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

            SECTION 10.09.  Cover Page and Section Headings.  The cover
page and section headings used herein are for convenience of reference
only, are not part of this Agreement and are not to affect the construction
of or be taken into consideration in interpreting this Agreement.

            SECTION 10.10.  Counterparts.  This Agreement may be signed in
any number of counterparts with the effect as if the signatures thereto
were upon the same instrument.  This Agreement shall become effective when
copies hereof which, when taken together, bear the signatures of each of
the parties hereto shall have been received by the Administrative Agent.

            SECTION 10.11.  Confidentiality.  Each Bank agrees (which
agreement shall survive the termination of this Agreement) that financial
information, information from the Borrower's books and records, information
concerning the Borrower's trade secrets and patents and any other
information received from the Borrower hereunder and designated in writing
as confidential shall be treated as confidential by such Bank, and each
Bank agrees to use its best efforts to ensure that such information is not
published, disclosed or otherwise divulged to anyone other than employees
or officers of such Bank and its counsel and agents with a need to know
such information and who have been informed of the confidentiality
hereunder (as reasonably determined by such Bank); provided that it is
understood that the foregoing shall not apply to:

            (i) disclosure made with the prior written
      authorization of the Borrower;

            (ii) disclosure of information (other than that
      received from the Borrower prior to or under this
      Agreement) already known by, or in the possession of
      such Bank without restrictions on the disclosure
      thereof at the time such information is supplied to

                                                                243





      such Bank by the Borrower hereunder;

            (iii) disclosure of information which is required by
      applicable law or to a governmental agency having
      supervisory authority over any party hereto;

            (iv) disclosure of information in connection with
      any suit, action or proceeding in connection with the
      enforcement of rights hereunder or in connection with
      the transactions contemplated hereby;

            (v) disclosure to any bank (or other financial
      institution) which may acquire a participation or other
      interest in the Loans or rights of any Bank hereunder;
      provided that such bank (or other financial
      institution) agrees to maintain any such information to
      be received in accordance with the provisions of this
      Section 10.11;

            (vi) disclosure by any party hereto to any other
      party hereto or their counsel or agents with a need to
      know such information (as reasonably determined by such
      party);

            (vii) disclosure by any party hereto to any entity,
      or to any subsidiary of such an entity, which owns,
      directly or indirectly, more than 50% of the voting
      stock of such party, or to any subsidiary of such an
      entity; or

            (viii) disclosure of information that prior to such
      disclosure has been public knowledge through no
      violation of this Agreement.

            SECTION 10.12.  Conversion of Currencies.

            (a) If, for the purpose of obtaining judgment in any court, it
is necessary to convert a sum owing hereunder in one currency into another
currency, each party hereto agrees, to the fullest extent that it may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures in the relevant jurisdiction the
first currency could be purchased with such other currency on the Business
Day immediately preceding the day on which final judgment is given.

            (b) The obligations of each party hereto in respect of any sum
due to any other party hereto or any holder of the obligations owing
hereunder (the "Applicable Creditor") shall, notwithstanding any judgment
in a currency (the "Judgment Currency") other than the currency in which
such sum is stated to be due hereunder (the "Agreement Currency"), be
discharged only to the extent that, on the Business Day following receipt
by the Applicable Creditor of any sum adjudged to be so due in the Judgment
Currency, the Applicable Creditor may in accordance with normal banking
procedures in the relevant jurisdiction purchase the Agreement Currency
with the Judgment Currency; if the amount
of the Agreement Currency so purchased is less than the sum originally due
to the Applicable Creditor in the Agreement Currency, such party agrees, as
a separate obligation and notwithstanding any such judgment, to indemnify

                                                                244





the Applicable Creditor against such loss.  The obligations of the parties
contained in this Section 10.12 shall survive the termination of this
Agreement and the payment of all other amounts owing hereunder.

            SECTION  10.13.  European Monetary Union.  (a) If, as a result
of the implementation of European monetary union, (i) any currency ceases
to be lawful currency of the nation issuing the same and is replaced by a
European common currency, or (ii) any currency and a European common
currency are at the same time recognized by the central bank or comparable
authority of the nation issuing such currency as lawful currency of such
nation and the Administrative Agent or the Required Banks shall so request
in a notice delivered to the Borrower, then any amount payable hereunder by
any party hereto in such currency shall instead be payable in the European
common currency and the amount so payable shall be determined by
translating the amount
payable in such currency to such European common currency at the exchange
rate recognized by the European Central Bank for the purpose of
implementing European monetary union.  Prior to the occurrence of the event
or events described in clause (i) or (ii) of the preceding sentence, each
amount payable hereunder in any currency will continue to be payable only
in that currency.  The Borrower agrees, at the request of the Required
Banks, at the time of or at any time following the implementation of
European monetary union, to enter into an agreement amending this Agreement
in such manner as the Required Banks shall reasonably request in order to
reflect the implementation of such monetary union and to place the parties
hereto in the position they would
have been in had such monetary union not been implemented.



                                                                245





            IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of
the day and year first above written.


                              DENTSPLY INTERNATIONAL INC.,

                                 by
                               /s/ Edward D. Yates
                                     Name:  Edward D. Yates
                                     Title: Sr. Vice President/
                                            CFO


                              CERAMCO INC.,

                                 by
                               /s/ Edward D. Yates
                                    Name:  Edward D. Yates
                                     Title: Sr. Vice President


                              CERAMCO MANUFACTURING CO.,

                                 by
                                      /s/ Edward D. Yates
                                     Name:  Edward D. Yates
                                     Title: Sr. Vice President


                              EUREKA X-RAY TUBE CORP.,

                                 by
                                      /s/ Edward D. Yates
                                     Name:  Edward D. Yates
                                     Title: Vice President


                              MIDWEST DENTAL PRODUCTS
                              CORPORATION,

                                 by
                                      /s/ Edward D. Yates
                                     Name:  Edward D. Yates
                                     Title: Vice President


                              NEW IMAGE INDUSTRIES, INC.,

                                 by
                                      /s/ Edward D. Yates
                                     Name:  Edward D. Yates
                                     Title: Sr. Vice President/
                                            CFO

                              RANSOM & RANDOLPH COMPANY,


                                                                246





                                 by /s/ Edward D. Yates
                                    Name:  Edward D. Yates
                                    Title: Sr. Vice President/CFO



                              DENTSPLY RESEARCH & DEVELOPMENT
                              CORP.,

                                 by
                                      /s/ Paul D. Hammesfahr
                                     Name:  Paul D. Hammesfahr
                                     Title: V.P. & Secretary


                              THE CHASE MANHATTAN BANK,
                                individually and as
                                Administrative Agent,


                                 by
                                      /s/ Dawn Lee Lum
                                     Name:  Dawn Lee Lum
                                     Title: Vice President

                              Address:270 Park Avenue
                                          New York, NY 10017

                              Telecopier No.: 212-270-3279


                              ABN AMRO BANK N.V.,
                                individually and as
                              Documentation Agent,


                                 by
                                      /s/ Roy D. Hasbrook
                                     Name:  Roy D. Hasbrook
                                     Title: Group Vice President
                                             and Director

                                 by  /s/ Gregory D. Amroso
                                     Name:  Gregory D. Amroso
                                     Title: Vice President

                                  Address:   One PPG Place,
                                             Suite 2950
                                             Pittsburgh, PA 15222

                                  Telecopier No.: 412-566-2266




                              MELLON BANK N.A.,

                                                                247







                                     Name:  Gil B. Mateer
                                     Title: Vice President

                                Address: 1735 Market Street,
                                         7th Floor
                                         Philadelphia, PA 19103


                                Telecopier No.: 215-553-4899


                              THE FIRST NATIONAL BANK



                                     Name:  Theodore K. Oswald
                                     Title: Vice President

                               Address: 96 S. George St. Box 1867
                                        York, PA 17405

                               Telecopier No.: 717-771-4914


                              HARRIS TRUST AND SAVINGS BANK,


                                 by  /s/ Jeffrey C. Nicholson
                                     Name:  Jeffrey C. Nicholson
                                     Title: Vice President

                                Address:   111 West Monroe-10W
                                           Chicago, IL 60690

                                Telecopier No.: 312-461-5225


                              CORESTATES BANK, N.A.,


                                 by  /s/ John J. Massaro
                                     Name:  John J. Massaro
                                     Title: Asst. Vice President

                                     Address:   600 Penn St.
                                                Redding, PA 19603

                                     Telecopier No.: 610-655-1514


                              BANK OF TOKYO-MITSUBISHI
                              TRUST COMPANY,


                                 by  /s/ Mark M. Marron

                                                                248





                                     Name:  Mark M. Marron
                                     Title: Vice President

                                Address:   1251 Avenue of the
                                           Americas
                                           New York,NY 10116

                                Telecopier No.: 212-782-6440


                              MARINE MIDLAND BANK,


                                 by  /s/ William M. Holland
                                     Name:  William M. Holland
                                     Title: Vice President

                               Address:   140 Broadway, 4th Floor
                                          New York, NY 10005-1196

                               Telecopier No.: 212-658-5109


                              ISTITUTO BANCARIO SAN PAOLO DI
                              TORINO SpA,


                                 by  /s/ Luca Sacchi
                                  Name:  Luca Sacchi
                                  Title: Assistant Vice President


                                 by  /s/ Ettore Viazzo
                                  Name:  Ettore Viazzo
                                  Title: Vice President

                                  Address:   245 Park Avenue
                                             New York, NY 10167


                                  Telecopier No.: 212-599-5303


                                                                249

                          EXHIBIT 21.1

                   Subsidiaries of the Company

I.   Direct Subsidiaries of the Company

     A.   Ceramco Inc. (Delaware)

     B.   Ceramco Europe Ltd. (Cayman Islands)
          i)   Ceramco U.K. Ltd. (Dormant)

     C.   Ceramco Manufacturing Co.

     D.   CeraMed Dental, L.L.C.

     E.   Dentsply Argentina S.A.C.e.I.

     F.   DENTSPLY ASH Inc. (formerly DENTSPLY Manufacturing Inc.)

     G.   Dentsply Dental (Tianjin) Co. Ltd.

     H.   DENTSPLY Equipment Inc.

     I.   DENTSPLY Finance Co.

     J.   Dentsply India Pvt. Ltd.

     K.   Dentsply Industria e Comercio Ltd. (Brazil)

     L.   Dentsply International Preventive Care Division, L.P.

     M.   Dentsply Japan K.K. (Japan)

     N.   Dentsply Philippines, Inc.

     0.   Dentsply Research & Development Corp. ("Dentsply R&D")
          (Delaware)

     P.   Dentsply Thailand Ltd. (Thailand)

     Q.   Dentsply Vietnam

     R.   DeTrey do Brasil Industria e Comercio Ltda.

     S.   Eureka X-Ray Tube Corp. (Delaware)

     T.   Gendex Dental Systems Sr.L. (Italy)

     U.   Midwest Dental Products Corp. (Delaware)

     V.   Stomatologia Dentsply (a/k/a Stomadent)

     W.   Dentsply de Colombia, S.A. (Colombia)

     X.   Dentsply International, Inc. (Chile) Limitada
          d/b/a Dentsply Ltda.


                                                                250





II.  Indirect Subsidiaries of the Company

     A.   Subsidiaries of Dentsply Research & Development Corp.

          1.   Dentsply A.G. (Switzerland)

          2.   Dentsply Australia Pty. Ltd. (Australia (Victoria))
               a)   Dentsply New Zealand Ltd.

          3.   Dentsply Canada Ltd. (Canada (Ontario))

          4.   Dentsply DeTrey GmbH (Germany)

          5.   Dentsply Export Sales Corporation (Barbados)

          6.   Dentsply de Mexico S.A. de C.V. (Mexico)

          7.   The International Tooth Co. Limited (United Kingdom)

          8.   Ransom & Randolph Company (Delaware)

          9.   Tulsa Dental Products Inc. (Delaware)


     B.   Subsidiaries of Dentsply DeTrey GmbH

          1.   Dentsply Limited (Cayman Islands)
               a)   Keith Wilson Limited (U.K.)
               b)   Amalco Holdings Ltd. (U.K.)
               c)   Oral Topics Limited (U.K.)

          2.   Dentsply Holdings Unlimited (U.K.)

          3.   Dentsply Holdings France SEP
               a)   Laboratoire SPAD S.A. (France)

     C.   Subsidiaries of Dentsply Ltd.

          1.   Dentsply Italia Sr.L.

          2.   Dentsply Russia Ltd.

          3.   Dentsply South Africa (Pty) Ltd.

          4.   Maillefer Instruments, S.A.
               a)   Societe Immobiliere du Champs des Echelles (a/k/a
                     SICDE)
               b)   Manuplast (Switzerland)

          5.   Dentsply DeTrey, S.A.
               a)   SIMFRA, S.A.
                                                               251

                        CONSENT OF INDEPENDENT AUDITORS


The Board of Directors
DENTSPLY International Inc.


We consent to incorporation by reference in the registration statements
(Nos. 33-61780, 33-52616, 33-41775, 33-71972, 33-79094 and 33-89786) on
Form S-8 of DENTSPLY International Inc. of our report dated January 22,
1998, relating to the consolidated balance sheets of DENTSPLY International
Inc. and subsidiaries as of December 31, 1997 and 1996, and the related
consolidated statements of income, stockholders' equity, and cash flows and
related schedule for each of the years in the three year period ended
December 31, 1997, which report appears in the December 31, 1997 annual
report on Form 10-K of DENTSPLY International Inc.


                                   KPMG Peat Marwick LLP


Philadelphia, Pennsylvania
March 27, 1998



                                                                252
 


5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS OF DENTSPLY INTERNATIONAL, INC. AT DECEMBER 31, 1997 AND FOR THE FISCAL YEAR THEN ENDED, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000818479 DENTSPLY INTERNATIONAL, INC. 1000 12-MOS DEC-31-1997 JAN-01-1997 DEC-31-1997 9848 0 119003 4637 124748 277027 212153 65023 774376 169349 105505 0 0 542 423391 774376 720760 720760 352034 352034 235680 590 12660 122006 47452 74554 0 0 0 74554 1.38 1.37